Combining Lean and Agile Supply Chains for Top Results
As a shipper, you know the supply chain is complex and ever-changing with many parts along the way that can impact your bottom line and customer results. To make it even more perplexing, recent technology innovations — including augmented reality, artificial intelligence and other solutions — have created both opportunities and challenges for shippers who try to keep up with competition in a quickly evolving shipping world.
At one point, many shippers incorporated lean supply chain methodologies into their manufacturing and supply chain management operations with great success. More recently, companies have adopted the newer solutions found in the agile supply chain philosophy.
However, many successful shippers take a hybrid approach to supply chain management, using both lean and agile methods, combining the most effective tools from each to create a robust supply chain strategy. This combination offers a best-in-class approach to supply chain management and logistics. Partnering with a reputable third-party logistics (3PL) provider can help with this sometimes-difficult task.
What is lean supply chain management?
As the name suggests, lean supply chain management allows companies to work and ship more efficiently by removing unnecessary steps and procedures. In other words, the goal is to eliminate waste. The outcome allows companies to ship a steady stream of maximum volume and provide discounted rates for customers. It also allows shippers to deliver better customer service by responding quicker and more efficiently.
It does require companies to analyze every part of their supply chain. But in the end, the result is a well-oiled operation that delivers products to customers at optimal cost and price. Goals of lean supply chain management include:
- Eliminate all waste and unnecessary steps in the supply chain
- Continuously look for technology and automation solutions
- Ensure increased visibility for all members of the supply chain
- Reduce lead time and meet customer delivery expectations
- Increase speed of production and reduce supply chain variation
- Focus on total cost of the fulfillment for long-term cost savings
- Create a culture of team communication and collaboration
Lean supply chain strategies are ideal for:
- Types of products – Low variability such as personal items and food products
- Product demand – Predictable and consistent with little potential change
- Life cycle of product – Longer than the average product
- Cost – Products priced, produced and delivered at lower costs
What are agile supply chain strategies?
Agile supply chain methodology is different than its lean counterpart because it focuses on the flexibility and quickness in which a supply chain reacts to variation and disruption in the marketplace. In other words, supply chain agility is responsive to what is happening, where lean tries to create consistent patterns in which its supply chain operates.
In fact, agile supply chain relies on real-time data, automation and team collaboration to respond quickly to changes in demand and customer preference and is designed to account for unpredictability in the market. Goals of agile supply chain strategies include:
- Respond quickly to market changes
- Make better use of resources
- Focus on accurate information
- Integrate planning and forecasting
- Emphasis on risk management
- Comprehensive control strategies
Agile supply chain management is ideal for:
- Types of products – Products that are currently in demand
- Product demand – Changing or based upon the current market
- Life cycle of product – Short and quick-to-market
- Cost – Varies by product and its demand.
Utilizing Agile and Lean Supply Chain Management Together
Generally, shippers like you have implemented either agile or lean supply chain methodology depending on your business model and product types. Today, however, it is possible and sometimes necessary to implement both and take a combination approach to your supply chain.
In fact, shippers should use every agile and lean supply chain tool at their disposal to save money and increase efficiency. They should also focus on creating supply chain processes that provide consistency and are flexible enough to change in the face of market fluctuation. That means utilizing supply chain agility to respond to unpredictable consumer/market demands (agile supply chain) while cutting waste for better efficiency (lean supply chain). With this hybrid approach, you can:
- Focus on reducing costs along the supply chain and pass on cost savings to the customer
- Constantly learn from the market and implement both long-term and short-term strategies
- Ensure you are meeting customer demand while remaining flexible to market change
- Utilize both real-time and collective data to make informed supply chain decisions
- Create a shipping strategy that is effective for a wide variety of product types
GlobalTranz Is an Industry-Leading 3PL in Supply Chain Management
Managing a supply chain is a difficult task for shippers. There is great fluctuation in the market that can make profitability elusive. Perhaps it’s time to consider a shipping partner like GlobalTranz. We are an industry-leading 3PL that provides an extensive vendor network and logistics expertise to optimize your supply chain. We also provide a full suite of tools, resources and expertise for shippers.
This allows us to lower your costs and streamline your operations and supply chain management while you focus on your strategic goals. Our expert team creates and implements custom supply chain management solutions that make a positive impact on your bottom line and drive improved customer satisfaction. If you are ready to connect with an expert, reach out to our team today.