Sunday, April 22, 2012

Lean Doesn't Work: Revert Back to the Old Days of Excess Inventory

A new article from the Boston Globe is out entitled "Crises Make Automakers Rethink Lean Parts Supplies."   Whenever a natural disaster, financial, or other disaster wreaks havoc on a supply chain, lean thinking always seems to get the brunt of the blame.  "If we weren't using lean principles, this horrible situation would have been avoided."  In this latest article, which you can read here, automakers are said to be rethinking lean parts supplies.  The principle of just-in-time, providing the next downstream customer with what is needed when it is needed doesn't work well in today's world.  Instead, the only alternative, according to the article, seems to be "stocking up," or, in other words, reverting back to the old way of doing things.  I would respectfully disagree with this analysis. 

One pitfall that we should always avoid when we encounter a problem is that of jumping to solutions.  Instead, we should define the problem well and gain a full understanding of the current situation.  The problem here isn't just-in-time or lean thinking.  And the solution shouldn't necessarily be to stock up. The problem is the potential for a shortage of supply, particularly in cases where parts come from one supplier or one region.  If we define the problem this way, we might find other solutions such as alternative suppliers, designs that allow for alternative components, and a number of other potential solutions that do not require scrapping the concept of just-in-time.

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