"basic rule...long supply chains are bad.. short ones are good!"
Its a provocative statement being used by us LEAN and sustainable supply chain advocates and being embraced by many experts... its not an absolute but one to put high on the checklist to drive better options..
Its a comparative statement... of course where resources dont exist in one part of the world to support an economy elsewhere then they have to be supplied from where they orginate .. sometimes whatever the supply distance...but where local options exist... the short chain will start to rule and the tipping point is moving more toward transportaion costs in all its compoenents rather than labor differential.. hence the amount of reshoring and source rebalancing going on in some supply chains. Also we will see local resouce applications being developed to replace those that do not exist in that location...
One study stated that the only things China and NAQFTA need to trade is rare earths for fertilizer.. everything else can be found or substitued in the respective local trade region.
go figure why we have a 40 footer each second docking on our tired shores
True... the only profession that can have a shot at telling the future with accuracy are historians..
What we as manufacturers need to start to understand is that all we are selling is "capacity" and the more we place that real time directly in front of the consumer the more waste free we can become... then if our capacity is ultra-flexible we gain another level of a waste free state.
Have a look at the article called Lean Thinking for Sustainable Supply Chains for what I am driving at.... We got to all start re-learning Lean thinking.
Strategic supply chain forecasting for manufacturers based on historical data has existed for years and they are assumed to be able to predict what will occur in the future based on the demand that has occured in the past. However, no forecast is totally accurate and the planner's experience of the present and the future environment is still necessary to determine the future demand for a company's products.
You highlight and important issue regarding the fact that computers are not a panacea for solving the supply chain communication issues . It is true that the machine can not take the place of the human agent in creating a sustainable relationship between customers and suppliers.
Yes.. but with long unsustainable supply chains you have to work these tools harder and increase risks
I see significant redeployment in the works to return to basics of LEAN shorter supply chains and more hands on human communications.. complex communication and planning algorithms are a very poor substitute.. would you like some examples?
Of course computers and such systems have a significant place but they need better management than our application success so far..
This is not a rage against the machine :-) its a realization of how far we have drifted from the prime economic objective of providing need to the consumer/stakeholders at less cost/waste to both of them and also society without screwing up the planet.
@Nigel, i agree that shorter supply chain is better as the probability of anything unplanned happening decreases. But in case one has to deal with long supply chain such as in typical manufacturing then different scenario planning can help in adverse conditions. Here historical data and IT tools can help.
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