Supply chain management involves any tactic that decision-makers think will improve the manufacturing process and show return on investment. This can include making a supply chain larger and more elaborate, with vendors all over the wold, emergency backups and the ability to sell quickly through multiple channels. It has also increasingly come to mean lean and efficient supply processes.
While it is commendable to create a system strong enough to withstand disaster, it is also important to avoid unneeded redundancy and bloat. The quest for this balance has preoccupied supply chain managers lately, leading to a new round of innovative supply strategies.
According to the Daily News, a recent gathering at Memphis University's FedEx Institute of Technology brought together supply chain experts to discuss ways to reduce supply chain bloat. They conceded that the process can be difficult. Ernie Nichols, professor of supply chain management and the director of the FedEx Center for Supply Chain Management, stated that taking a lean philosophy to heart could cause some trouble.
The problem that Nichols found, according to the news source, is the way that quarterly reports are formulated. Companies adopting lean supply chain strategies may find that their short-term numbers are suffering. Nichols encouraged such companies to stay the course and wait for long-term savings and benefits.
"The companies that do a good job with lean - their perspective on timeframe tends to be a bit different," Nichols said, according to the source. "They are willing to take a longer-term perspective on a particular initiative instead of that quarter-to-quarter mentality that tends to characterize how a lot of businesses do business here."
Don Stuart of the Dunavant Global Logistics Group told the Memphis Business Journal that the trend of lean processes began in manufacturing, but have slowly infiltrated the other areas of supply chain management. Stuart's own talk at the FedEx Institute of Technology was based on how new supply chain technology has enabled and enhanced lean procedures.
According to the source, Stuart gained valuable insight into technology in the supply chain when working with the National Science Foundation. Stuart was present for one of the first supply chain optimizations. The question faced was how to reduce the overall number of distribution centers by placing them in optimal strategic locations. Stuart stated that the computers used at the time were extremely primitive compared to modern systems, which can work with a wide variety of numbers to create detailed models of consumer demand and arrange a lean, efficient supply chain accordingly.