Daily Archives: December 18, 2024

Don’t Abuse Lean and Mean — The Four Horsemen of the Shipocalypse Don’t Need Any Help!

If you are in Procurement or Logistics, you know that the time of cheap, fast, and reliable — which we had for almost two decades, is now long gone and likely to never return. That is because the four horsemen have turned their attention to global trade … specifically, global logistics … and have brought:

  • war: the conflict in the Red Sea, one of the two most important waterways in the world, has made most transport almost impossible
  • famine: the droughts in Panama, the other of the two most important waterways in the world, have reduced its capacity by at least 1/3 for at least 1/3 of the year
  • pestilence: plague has returned, taking down the necessary workers (and closing the necessary ports) with it
  • death: corporate greed and union response have stepped in here to bring certain death to global supply chains if things don’t change:
    • oil prices: the more they go up, the more unaffordable our dirty ocean freight becomes
    • limited capacity: greedy corporations scrapped ships during the pandemic for insurance claims, sometime ships that hadn’t even made a single voyage … and now that they’ve learned they can raise prices up to 10X pre-pandemic prices for a single container during peak season, and the richer (luxury good) companies will still pay the rates, they have no incentive to bring capacity back
    • union demands: inflation has been rampant, workers have been impacted, and they want their pre-pandemic buying power … and, as I’ve noted before, labour unrest and strikes is now one of the biggest risks in your global supply chain

As a result, the last thing you want to do is help the horsemen bring your supply chain to a a halt, but that’s exactly what you keep doing day in and day out as you keep pursuing, and applying, lean, mean, and JIT (just-in-time) where it doesn’t belong.

As noted by the author of this recent LinkedIn article on how you have (less than) two weeks to stave off supply chain chaos, we’re at the point where a one day stop in any part of the supply chain turns into one week to recover from, a one week stop in any part of the supply chain turns into one month to recover from, and a one month stop in any part of the supply chain totally f*cks us for a year! (Since the effects are not linear but exponential!) And it’s all your fault.

Lean and mean was supposed to be about efficiency in manufacturing and lack of waste, not slashing inventory to dangerous levels, not slashing capacity to dangerous levels, and was certainly NOT meant to be used by idiot MBAs (which stands for Master of Business Annihilation) with no concept of what the corporation does running global corporations off of spreadsheets alone!

So stop applying it to inventory and capacity! Thank you.