LGT's Profit Sense
When we think of lean manufacturing, we generally associate this production methodology with “The Toyota Way” or “Just-In-Time production” as it offers flexibility, a feasible competitive advantage by reducing waste and non-value-added time/activities, and optimizes production processes in order to exploit high efficiency within the company. If you’re in the for-profit sectors, wouldn’t you and your organization strive to build your processes on the principle that reduces unnecessary waste to yield higher productivity and efficiency?
Similar to the Walgreen’s and CVS’s accompanying each other in every imaginable corner of the working roads, lean manufacturing’s pros usually come with its cons as well especially during this recent COVID-19 pandemic. COVID-19 disrupted the global supply chain industry at large which is directly responsible for product shortage.
The global pandemic posed major challenges for supply chains, and lean manufacturing drew the short straw every time there is an inventory problem. Paper towels, toilet paper, hand sanitizer, canned foods, and many more are striking examples of all of our experiences during the peak of the pandemic. Where am I going here? More likely than not, we were part of the consequences of COVID-19 impacting our daily lives around mid-2020. During the early stage of the global pandemic, local convenience store shelves (yes, including Walgreen’s and CVS) were short of paper towels, toilet paper, and many more essentials for weeks or months at a time across the country.
These essentials could not be found within hundreds of miles of your favorite Walgreens or CVS. Even laptops were in high demand as more and more employees transferred their working station home. Another familiar phenomenon is the chip shortage in the auto dealership industry.
But it is absurd to blame lean manufacturing or the Just-In-Time process for worldwide shortage during these hard times, right? Not exactly, but it would also not be unreasonable to assume that lean manufacturing had a significant role to play. Companies that run lean focus so much on minimizing their outputs for the needs/demand from consumers and maximizing their profits – meaning they don’t have the capacity or excess inventories to fill during the COVID-19 pandemic. Consequently, the unprecedented experience of the supplies shortage was quickly to single out lean manufacturing as the bad guy here.
Where does Lean Manufacturing go from here?
Is it still applicable for the future? Will it be sustainable for current and future manufacturing companies? The answer is yes…not only is lean manufacturing not the culprit here but this production method will get us out of the shortage phenomenon and stabilize the industry back to pre-COVID 19 times faster. Furthermore, lean manufacturing is not one-dimensional…meaning the idea is not solely based on mitigating excess inventories, minimizing waste, and reducing cost, but lean manufacturing is also about being flexible.
Flexibility allows lean companies to adapt to unprecedented events by quickly modifying or changing their processes, adjusting to new production schedules, cross-training employees, and implementing new technologies to increase transparency in real-time.
What exactly does this mean? Real-time/transparency in data is the key driver for lean companies to be successful in the post-COVID-19 world. Lean companies need to be able to continually monitor whether their production goals are being met and to do so, they must be able to visibly see the demand and supply chain in real-time by exploring available raw materials or any other available data related to the production through sophisticated technology that would allow this type of practice to be carried out. Lean manufacturing companies must adjust after what we learned through COVID-19.
Companies that are slow to react will find themselves at the short end of the straw while those that invest in new technology will have the ability to create more transparency and real-time visibility to thrive during the next crisis.