Lean Sourcing and Supply Chain Management is a Strategy of the Past

On MFG.com a blog was posted by founder Mitch Free entitled “Lean Sourcing and Supply Chain Management is a Strategy of the Past” that shows how “with tools available today, global connectivity and the digitalization of design software and machine tools you have more flexibility to create disruptive supply chain and sourcing strategies that will leave your laggard thinking competitors in the dust.”

Free refers to an article he wrote in the Business Xpansion Journal, “Disruptive Supply Chain – Re-Thinking Your Strategy.”  There he reports that, according to MFG.com, supply chain disruptions are on the decline. His reasons for why this is happening lies in the development of disruptive supply chain strategies. These strategies include using computer-aided design (CAD), computer numerical control (CNC), and local manufacturing in order to increase profit and enter new markets.

“A perfect example of a company doing this in America is Great Lakes Case & Cabinet Co. Inc. in Edinboro, Pa. The company is in what could arguably be called a commodity market, yet they have figured out how to let their customers configure their cases and cabinets to their exact needs and specifications. Their supply chain reacts quickly and delivers a custom configured cabinet faster than their competitors can deliver a one-size-fits-all cabinet.”

According to Free, this sort of customization allows manufacturers to get away from thin profit margins.

“When companies morph from a one-size-fits-all product to one that is more tailored to individual customer needs, it means you can no longer mass produce in a factory on the other side of the world.  Perhaps you can mass produce components or sub-assemblies, but the configurable part will need to be produced quickly and ideally as close to the customer’s needs as possible.”

This is where reshoring comes into play. When companies locate their manufacturing centers closer to the customers not only do they make it possible for such tailor fit products, but they can “take advantage of local economies and reduce logistics costs.” In addition to this, as opposed to the old lean sourcing strategy companies can use the Internet, CAD, and CNC to utilize all possible local suppliers in the event of a disruption or unforeseen event that may affect their supply chain.

“An analogy would be printing a picture on your printer. Think of the digital photo as a design file and your printer as the production tool. If you sent that design file to your friends they could all print an exact copy locally and on demand. This is the same type of progress that has been made in the manufacturing industry and is making disruptive supply chains possible…This is an exciting time for sourcing and supply chain professionals who are willing to challenge the status quo and develop disruptive supply chain strategies.”

For a complete reading of Mitch Free’s blog, you can find it here.