Balancing Lean Practices with Supply Chain Resilience

This article is a commentary on the challenges faced by global supply chains, particularly in the context of the pandemic and its impact on resilience. It discusses the operational excellence methodology known as 'lean,' which focuses on minimizing waste and maximizing efficiency. The text outlines the advantages of lean practices, particularly in the automotive industry, where just-in-time inventory management is common. However, it also addresses the need for companies to maintain a balance between lean practices and resilience, especially in light of disruptions such as the semiconductor shortage. The article emphasizes the importance of understanding where to buffer inventory and the risks associated with single sourcing of components. It highlights the growing trend of companies diversifying their supplier base to enhance resilience, while also noting that achieving this resilience is complex and requires in-depth analysis of supply chains. The insights provided are based on industry observations and data from supply chain management solutions.