While some of the challenges COVID brought to the business world have been left behind, others still linger in the background of today’s workforce, including supply chain issues. According to some experts, businesses should expect to continue to face supply chain issues until at least 2025.
In some ways, the challenges presented by disruptions in the supply chain are worse now than they were during the height of the pandemic. Customer demand has returned to pre-COVID levels in several industries, but the materials and processes that are needed to meet this revitalized demand continue to be affected by problems within global supply chains.
To navigate this season and achieve a high-performing workforce, businesses should consider turning to a lean supply chain management strategy. Lean logistics focus on identifying and reducing waste that’s occurring across the supply chain. As this waste is cut, companies can not only alleviate pressure resulting from material shortages but also increase efficiency and save money.
Evaluate Waste Reduction in Four Key Areas
There are opportunities for waste reduction in every aspect of the supply chain, but there are key areas that should be prioritized by businesses conducting lean logistics evaluations, including:
- Resource management: This can include everything from inventory management to HR management to the care and maintenance of equipment. Together, these factors can provide abundant opportunities for reducing waste. For example, supply chain delays may be resulting in increased wait times for workers, but finding ways to repurpose that time for other tasks reduces waste and improves productivity.
- Product design: When businesses lack raw materials, redesigning products can be the key to continuing production. This can involve reducing the materials needed for both the product and its packaging or redesigning to utilize comparable materials that are readily available.
- Product quality: Pre-pandemic, it was common for businesses to focus their quality control evaluations on final products, but quality issues and opportunities for improvement can be found all along the supply chain. Expanding quality control efforts beyond the final product can help reveal areas where there’s waste.
- Recycling: When raw materials are in short supply, waste from production processes becomes more valuable. Businesses may find their waste can be recycled or reused to make additional products, offering a potential solution to materials shortages. Waste that can’t be reused can become a product for another business if it’s found to be useful.
As companies evaluate these areas for waste, they should include interviews with employees at all levels. The more intimately someone knows a particular area of the supply chain, the more insight they may have regarding waste that exists in that area and ways to reduce it.
Shift to Just-in-Time Production
Pre-COVID, many businesses had the necessary data to project the number of products needed to meet market demand. However, the pandemic disrupted normal market patterns, causing projections to become unreliable—if not impossible—as a result.
A pull strategy for production, which is sometimes known as a “just-in-time” strategy, uses orders rather than projections to determine how much of a product is needed. In essence, pull strategies seek to replace what’s purchased. They make the supply chain more efficient by reducing waste in a number of areas, including excess inventory of raw materials, defects caused by overproduction, and time wasted on producing inventory that isn’t needed. Pull strategies can also empower businesses to thrive in an environment where positions are difficult to fill, as has been the case since the pandemic.
For some companies, shifting to a lean logistics strategy has been the key to remaining profitable despite supply chain limitations. Such a shift can provide further benefits beyond the current challenges being experienced in the workplace. The efficiency and waste reduction provided by lean strategies empower companies to be more profitable regardless of the market conditions they’re facing.
Isidro “Izzy” Galicia, President and CEO of Incito Consulting Group, has over 25 years of expertise in driving Lean and Six Sigma enterprise transformation for a wide range of Fortune 100 and 500 businesses and industries across the globe. He’s highly regarded as a subject matter expert in Lean and Six Sigma transformation, with decades of hands-on experience with the Toyota production system. He’s the recipient of the distinguished Shingo Prize, The National Association of Manufacturers Award, and the JD Powers Gold Award. He’s also a certified Six Sigma Master Black Belt.