Lean supply chain needs to connect purpose, processes and people
Supply chain performance in any organization depends on the effective connection between three fundamental elements: purpose, processes and people. This triad aims, in principle, to produce and deliver value to society, through a combination of efforts, rewards and commitments involving customers, suppliers, shareholders, employees, among others.
This becomes more strategic every day because of a series of current challenges and “pains” that practically “demand” an ever greater and better pursuit of the lean journey in the supply chain.
For example, the macroeconomic contexts, both international and Brazilian, which for a long time have been exerting, increasingly and continuously, strong pressure toward higher logistics costs.
This is a bigger problem in the Brazilian case because our logistics is still heavily concentrated on road transport, to the detriment of various other possibilities – rail, river, sea – that are used and even prioritized in other countries.
Another point is the ever greater importance that society has been giving to issues related to ESG, which stands for environmental, social and governance sustainability. No less important are emerging social issues, such as valuing ethnic and gender diversity, etc., which require a fine-tuning of the way organizations practice management.
In addition, there is an emerging need for ongoing qualification of logistics professionals in different management positions. This is because developments, both technological and managerial, occur every day and need to be assimilated by everyone.
Not to mention the specificities of each sector. For example, in agribusiness, whose continuous growth is a challenge for moving output during harvest windows, since the use of different transport modes remains practically unchanged.
At the “other end”, e-commerce, whose accelerated growth in recent years now poses the challenge of increasing efficiency and, therefore, competitiveness. Having long since become a habit for many consumers, digital commerce must, in general, improve its structures, further stabilize its operations and refine its management models. This will allow it to increase and deepen its “capillarity”, not only in large centers, where we still find problems, but also in medium-sized and small localities, especially those close to large urban conglomerates.
Amid all this, the customer-centric trend is growing ever stronger in the markets. That is, the customer determines when, how and where they want to buy, increasingly demanding a multichannel strategy to serve them the way they want and need.
Therefore, there is immense room for lean management to contribute to increasing efficiency and, at the same time, improving responsiveness throughout the entire logistics network. To face these challenges, the lean system has a series of concepts and practices that can make supply chain management much better prepared.
For example, making the organization's purposes, which we call “true north”, more precise and clear every day. Besides being absolutely transparent, they need to be deployed, in the right way, to all levels of the operation. For this, the lean system has specific methods, such as Hoshin Kanri and Daily Management (DM).
In this context, lean management works with a “situational” approach. That is, analyzing problems, bottlenecks, challenges... according to each business segment, taking its specificities into account. And working “one step at a time” to solve problems and move toward the purpose.
All this while fine-tuning and strengthening, day after day in the company, the collaboration and integration of the “links” in the chain. Always starting from inside the company (sales, marketing, operations, procurement...) and moving outward (suppliers, distributors, logistics service providers, customers), without ever losing the value stream perspective.
A prerequisite for this is working to continuously develop the organization's people, so that they reveal and solve problems at all times. In this way, agility and responsiveness in addressing countermeasures are intensified. To this end, lean management has evolved the PDCA cycle, which can and should be used by everyone.
However, for all this to actually happen, leaders must be developed. This means deepening our ability to “lead with respect”, improving leaders' profile and behavior so that they can effectively deal, in a lean way, with the increasing complexity of the variables involved in decision-making.
Amid this and as a consequence, the lean system works to strengthen the capacity for critical analysis of processes. The aim is to “think lean” and be agile in solving problems before moving on to adopting technology.
It is important to understand that when we refer to lean applied to the supply chain, we are pursuing specifically this challenge: combining the three elements – purpose, processes and people – in a balanced way, always seeking the best possible integration between the different links of the supply and value creation chain – extended or door-to-door –, embracing interdependencies and recognizing limitations.
The value an organization delivers to society, in turn, brings together a series of attributes associated with the offering itself, such as the perceived quality of the product or service, the price charged, availability, etc., but also the way the organization deals with environmental issues, sustainable practices, etc. The greater its capacity to deliver value to society, the greater its contribution to the progress of the whole.
If we are able to move forward in this direction, we will considerably improve our ability to deliver value to society as the “ecosystems” that we in fact are, keeping the “shelves” of different sectors of the economy ever more stable and well stocked. And we know that an important part of the challenge is linked to the way we manage.
