Lean - "Demand" element in 21st century

Taking it forward from the previous post (http://blog.think-spark.com/2017/04/lean-people-element-in-21st-century.html) the second most important need for Lean is "Demand". 

Going by the philosophy in its true sense it states that Demand variability should be low & the  variety to be handled should not be very high. Both these have real life sense in the mid 70's & both were valid. (this also coincides with the time when the philosophy received a wide recognition around the world). The rapid change in the business environment over the past three decades has ensured that the rate of change & the variables impacting the change both have upward trajectory. A mid size organization today handles a few thousand SKU's. Applying any of the Lean principles or its techniques either on the Shop floor or in the Supply Chain under estimates the core element of Lean i.e. the ability to handle variety & variations.

Most of the Supply Chains have evolved on non lean principles. Hence many of the Supply Chains are "A" (large input variety) Supply Chains. Coupled with the fact that the organisational thinking process, particularly the Asian way of thinking, is extremely inclined to be Customer "obliging". In my personal experiences i have seen multiple instances of the topmost management deciding to service an "out of the turn" customer demand(s) which has no strategic impact but makes up for the monthly or quarterly "sales" numbers. This drives the entire Supply Chain to be non lean as each member has to "guess" and hence add buffers. Buffers either in terms of Capacity, Inventory or Time. In the strict sense of Lean, the first of the three is still acceptable but the rest two are not.

Demand Variability is one more dramatic change in the 21st century which contrasts with the late 70's when Lean became a world accepted improvement philosophy. The ability of an organization to use "Pull" has changed its meaning. Advent of technology, availability of information & most importantly "instant gratification" are shaping up the society of the 21st century. The customer approach to purchase, which primarily is driven by the social values that evolve, have changed dramatically. It also means that for Supply Chains the challenge is multi-fold as the the waiting time available with the customer is a fraction of the total lead time of the Supply Chain. Courtesy competition, even the supplying organizations have started committing delivery times which are much lesser than the total lead time. e.g. A large retailer offers a one day delivery promise. Imagine the amount of demand variability he has to "buffer" for. The mechanism to achieve the delivery is to substitute lead time with inventory. That may make Lean Supply Chain in 21st century undergo a lot of tactical approach changes.  Should inventory then be called a waste? Or eagerness to oblige the customer with shorter times creating "waste" which hopefully is compensated through pricing. 

The 21st century will need to move away from traditional "Pull" systems to "Sense & Respond". Demand variability will only increase with time, industrial cycles will ensure that the demand cycles will get shorter and most importantly customer being treated to feel what he is made to will ensure demand for lesser and lesser lead time. In my opinion, 21st century Lean will have to evolve and in some cases change the premises of the Lean of the 20th century Lean.

* I intend to continue writing on other elements of Lean.