What is Lean Supply Chain?
Lean supply chain management is about reducing costs and lowering waste as much as possible. This methodology is important for organizations with high volumes of purchase orders since waste and costs can accumulate quickly.
Additionally, companies with high volumes of low variability purchase orders, such as food items, benefit their efficiency greatly by utilizing the lean supply chain methodology.
What is Agile Supply Chain?
Agile Supply Chain is built to be highly flexible for the purpose of being able to quickly adapt to changing situations. This methodology is considered important for organizations that want to be able to adapt to unanticipated external economic changes, such as economic swings, changes in technology, or changes to customer demand.
Implementing an agile supply chain allows organizations to quickly adjust their sourcing, logistics, and sales.
Deciding on Agile vs Lean Supply Chain
All things considered, you have to think about whether inventory or information is more important.
Richard Wilding, professor of Supply Chain Strategy at the Cranfield School of Management in the UK, says if you have low volumes but high variability you need agility.
He uses Kimberly Clark, owners of such brands as Kleenex and Huggies, as an example.
When Kimberly Clark has a product promotion they need market information. They collaborate with customers, learn about their market forecast and integrate with commercial teams to ensure that manufacturing has a must respond mentality. For products that aren’t on promotion, Kimberly Clark can use a more traditional lean supply chain methodology.
Agile supply chains demand good processes – and processes are established by people.
Can your partners integrate with an agile supply chain system? And, finally, can you wait until the very last possible minute to buy?
So, as you can see, both agile and lean supply chain management have benefits. But, the choice is up to you! You just have to know when to use either method! By applying the correct functions, your company will be able to save money and be able to easily adapt to rapid fluctuations.