Even though I’m married to a Six Sigma black belt who wants to run Kaizen events to improve my personal organization and process efficiency both in the office and out, I’ll be the first to suggest that lean principals can introduce material risk into the supply chain — especially in volatile and risky economic markets. A short column penned by APICS New Hampshire Chair Dave Turbide does a quick and commendable job of pointing out some of these risks from a supply chain perspective. In the piece, Dave captures the essence of a point I and many others have made over the years that “Lean supply chains contribute to keeping costs and prices down, but they also present more risk, since there is less slack in the chain. A disruption like the volcano or a strike at a component plant can quickly ripple down the chain and stop production or cause stock-outs at the store.”
In other words, the more inventory you and your suppliers have on hand during a disruption, the greater the likelihood you’ll emerge unscathed from the perspective of keeping your production lines running and customer orders filled. One way of looking at the problem is that inventory, which for many years was the enemy of supply chain professionals, is really just a form of insurance…
