The global pandemic and the disruption of foreign production is driving many manufacturing organizations to explore re-shoring of raw material sourcing, product components and finished goods. In our conversations, we are finding that C-Suite leaders are spending as much as half their time focused on solving issues in their network. Bringing production closer to the manufacturing base improves geographical access and mitigates the risks associated with an overseas failure.
Meanwhile, the pressure is on lean-focused supply chain experts expected to examine internal processes and accommodate supply chain shortfalls. Their perspective is integral not just to the continuous improvement of in-house activities, but, importantly, to the network adjustments that come with the re-shoring of supply production.
Unfortunately, just as COVID-19 disrupted manufacturing networks, it also created new challenges for keeping lean supply chain teams engaged. Workforce reductions and remote operating environments create hurdles for maintaining the close awareness required to identify wasteful activity and efficiency improvement opportunities.
As manufacturers focus on a new normal, a lean perspective supports supply chain corrections, and the timeline for turnaround does not need to be limited by social distancing and remote environments. An expert partner can help you identify and execute the most effective supply network strategy, so you can keep focus on advancing your business.
New Manufacturing Normal Begins to Emerge
Midway through a year of disruption, we are hearing common refrains among manufacturers across diverse industries. It seems that, regardless of the supply chain network, the comments are very similar:
- Manufacturing is moving toward reshoring to reduce supply chain disruption and distance.
- Constant supply chain focus is needed to eliminate current and future supply chain disruptions.
- Supply chain failure is the No. 1 reason a company is having issues in start-up or restart activities.
- Adjusting product mix and production set-up is a struggle.
- Lean training and learning is difficult outside the facility “Gemba”
Focused on cost, some companies furloughed or laid off their lean teams. This leads to significant impact across the organization, often requiring executive attention to resolve emerging network problems. Losing the process visibility provided by these experts can lead to costly misalignment across your existing network and in any future supply chain adjustments.
Problem Solving for Inventory Management, Network Changes
Looking deeper at these trends, some of the specific emerging problems can be resolved through the total supply network awareness your lean expert maintains.
Inventory management drives the biggest questions manufacturers encounter as they reset to serve a new normal. Common inventory problems in our assessments of manufacturers include:
- Too much of it, not balanced or not accurate.
- Too much of the wrong inventory for the manufacturing product family mix.
- Not enough of the correct inventory to manufacture replacement parts and service clients.
- Never adjusted parts inventories for major equipment repairs.
- Single sourcing from Asia, Europe, etc.
Losing the visibility of your supply chain expert can quickly impact your transportation cost, especially in a volatile environment following a significant disruption.
Organizations that scaled back their lean team during COVID-19 experienced common outcomes:
- Quickly lost awareness to inbound ocean transportation and ensuing TL freight moves
- Unprepared for spike in air freight costs for productions and parts inventory
- Increased costs such as detention fees resulting from misaligned lead times and production planning
- Reduced capacity for problem solving
In the “old” normal environment, while your lean resources maintained process awareness required to exert continuous improvement, ongoing training also offered perspective for global practices that are applicable within your organization. Losing access to those resources – usually provided on-site – impedes your ability to evolve your processes.
Leverage a Master Partner to Evolve Processes
There is no doubt that a loss of process monitoring inside the operational environment leads to reduced visibility. Lean operators need to be in the Gemba to be most effective.
In a quarantine or remote environment, it is not always possible to have that consistent on-site presence – but, you don’t always need it. Some organizations have achieved success with lean supply chain teams of two that maintain social distance and COVID-19 protocols. While this has slowed Kaizen work, there has been success, it just takes longer than planned. As a positive outcome, lean leaders have executed administrative items for each Kaizen, a process that can be carried forward.
A problem solver’s mentality supports these types of in-the-trenches adjustments, and they are vital not only to your disruption response, but to the ongoing evolution of your supply chain. We offer our clients access to that mentality on an ongoing basis, using supply chain data analysis to provide awareness of emerging improvement opportunities.
At the same time, we offer organizations the ability to develop their own internal lean expertise. While protocols of a contact-conscious environment can limit on-site activity, the power of modern technology not only supports classroom-like digital learning, it also grants virtual visibility on par with physical presence.
For more information about invigorating your organization’s supply chain capabilities to support reshoring or other new practices for a new normal, schedule your lean supply chain consultation today. Whether you want to bolster the expertise of your internal resources or plan and design a supply chain network suitable for serving your customers tomorrow, we apply our mastery to help you establish efficient processes that control cost and improve service.