Supply chain trade-off

Recently one of our Mavens, Subir Majumdar, was invited to speak as an expert advisor in an online business forum on supply chain strategy organized by Business Clinique.

Among many things he mentioned, a basic concept stood out. Supply chain management always requires conscious attention to balance efficiency with responsiveness. Going solely after efficiency is neither efficient nor effective. With many business having a high service component, responsiveness becomes business critical.

Some readers may be interested in a related concept discussed Prof Michael Pollan of UC Berkeley when he warned about the dangers of sacrificing very thing at the alter of efficiency. He was specifically talking about food supply chain in the developed world and referred to the trade-off between efficiency and resilience. Recently we got to see what happened to the hyper-efficient supply chains during the pandemic.

Experts say designing the system with attention only to maximum efficiency would be dangerous if the degree of uncertainty in either supply or demand variables is high. Time relook at some of our basic concepts?