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Is Supply Chain Redundancy Counter To Lean Initiatives?

Posted by Don Slickman

RedundantSourcesThere are a number of very real threats to every company’s supply chain, like a natural disaster, a major facility accident, and even an intentional subversive act. The likelihood of any of these types of incidents occurring increases for companies with extended global supply chains, short product lifecycles, and unpredictable markets. Today, the number and types of threats that can undermine a supply chain are greater than ever, and the reason redundancy has taken on even more importance in supply chain management.

Of course, there’s no way to prevent disruptive or catastrophic events from occurring, but a company can take smart steps to prepare for and deal with them – and, in the process, ensure business continuity. When it comes to the supply chain, the best way to ensure your company’s ability to quickly get back up and running is to institute redundancies in the supply chain.

Redundancy Is Critical To Lean

Redundancy at first seems counterproductive to a company’s Lean efforts, where the focus is driving out all waste and an efficient JIT flow of goods. But, in fact, redundancy is one of the best ways to ensure Lean operations because redundancy is designed to help facilities avoid the significant waste of time, effort and money involved in a system breakdown.

Organizations build resiliency into their operations by creating redundancies throughout the supply chain. The organization could hold extra inventory, maintain low capacity utilization, use multiple suppliers for each part, etc.

These measures, of course, come at a cost. While keeping inventories low and having few suppliers drives down material costs and maximizes efficiency, if that organization were to encounter a natural disaster or significant plant accident, not having redundancies in those and other areas could cripple production – and the company. 

Redundancies throughout the supply chain act to:

  • Support any weak spots in the supply chain
  • Prevent slowdowns or, worse, shutdowns
  • Provide safety stock in case of delivery failures and/or losses
  • Ensure competition, availability and even design quality when redundancy of suppliers is implemented

Supply Technologies’ programs balance the Lean JIT model with very practical risk mitigation. To do that, we work with a wide range of both global and local suppliers to ensure that no customer is left without the parts it needs should one supplier suffer a shutdown or shortage; our vendor maintenance programs help those suppliers maximize their own efficiencies; and a single ERP system tracks all components of a customer’s supply chain, making it simple to modify when and how necessary.

It’s not enough for companies to put effort only into mitigating today’s risks. Today, companies must implement redundancies as a way to prepare for and deal with an incident if they hope to stay competitive. With the number and severity of crises that have occurred around the globe over the past few years, more and more companies are building redundancy into their supply chains.

Topics: lean, Supply Chain,