COVID, Musings, News

COVID Diary Day 3: Death of Lean?

Frankly, this whole quarantining had me more worried about the implications of business rather than my own well being. Into my third day of quarantine, I was bingeing on TED Talks, ANC, The Economist, Harvard Business Review, to better understand the implications of business.

I listened to this TED speaker stated that Coronavirus has exposed the weaknesses of lean, wherein factories produce on demand, thereby mitigating business risk.

Lean Manufacturing, or simply ‘lean’ has been ingrained into our Operations Management course in business school, Toyota being the favorite case study in lean manufacturing or just-in-time delivery. Low costs, lean inventory. Cost-cutting and optimizing the supply chain.

Low costs, lean inventory. Cost-cutting and optimizing the supply chain.

Lean became the gospel to global manufacturing.

However, all hell broke loose because of the pandemic.

The speaker argues that lean method is good in times of non-crisis, we can readily produce by demand and thereby reduce wastage. However, now flaws have started to emerge when we are under crisis. Hospitals are beyond capacity. We’re on a toilet paper shortage. Lean seems to be fragile during crisis.

Thankfully I had listened to my professors (Hi, Prof Domingo), because now it seems to have come back to haunt us in this time of COVID-19. Just-in-time principle has posed a logistical, production and supply chain nightmare.

So does this mean we should abandon lean?

Rather than merely exposing the weaknesses of lean, COVID-19 has in fact strengthened the need of lean. Sure, there are symptoms of low inventories, overcapacity, manufacturing fallout, etc., But because of lean thinking, we see how organizations are able to pivot fast and meet demand:

China was able to build hospitals in just over a week in order to accommodate the spillover of coronavirus patients (Wall Street Journal). LVMH is now using some of its factories to manufacture hand sanitizers (CNBC).

Sure, COVID-19 has shown us weaknesses of how business is done these days. The upside is, we can make some changes to business operations post-pandemic, when it’s back to business as usual:

  • Remodeling of Supply Chains – spreading out and mitigating risk by getting suppliers across nations / countries and not exclusive of China
  • Local plants or companies to make contingency plans rather than over-reliance to one global supplier or manufacturer
  • Restructure Activities and adopt Lean thinking across all sectors – react better, pivot faster, re-route and address problems in real time. Lean thinking is about solving small problems daily and making incremental improvements.

What business improvements do you plan to implement after the COVID-19 lockdown? Share your thoughts and let me know how you are all holding up!

More COVID-19 Diary Entries

  • COVID Diary Day 1: Shit Just Got Real
  • COVID Diary Day 2: Love in the Time of Corona
  • COVID Diary Day 3: Death of Lean?
  • COVID Diary Day 4: The Stock Market Closes
  • COVID Diary Day 5: Prophets and Wizards
  • COVID Diary Day 6: Learning Never Ends
  • COVID Diary Day 7: No One Knows It Yet, But Everything Has Changed

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