Lean but Smart

20th October 2020

Logistics BusinessLean but Smart

Staying lean but getting smarter: Biju Kewalram of Agility says that wrap-around technology is taking ERP systems to the next level.

The pandemic has led to some soul-searching about approaches to inventory. Have we been too quick to embrace ‘lean’ and ‘just in time’? Could the idea of ‘safety stock’ – largely dismissed some time ago as inefficient and old-fashioned – make a comeback? Companies have struggled to optimise their inventories during such a turbulent time: how much stock do they need, where should it be kept, and how much should be in the pipeline at any one time? The calculation is different for each industry, and the level of preparedness greatly varies, too. Automotive manufacturers with
their large, complex supply chains are among the most sophisticated in terms of agile supply chain management and using data for optimisation. The nature of the industry means that they are
used to shifting production between different parts suppliers and moving components from all around the world to assembly locations. Carmakers are therefore well-equipped to loosen their
definition of ‘just in time’ if they need to, but other industries have had more of an uphill climb. Every industry has had to get smarter and to think about post-corona optimisation and risk mitigation strategies.

Now is the time to move forward at a faster pace than ever before. Companies need to have a good idea of how much buffer stock they need, the cost of that, and how this impacts efforts to be efficient with working capital. Inventory management technology can help to restore supply/demand balance and rethink the way we approach supply chain optimisation. As the impacts of the crisis have ricocheted around the world, sophisticated enterprise resource planning (ERP) systems, which came into their own in the 1990s, are being extended with modern wrap-around
technology to play an even greater role. You can read the whole story, from our September issue here: