Logistionary: Genchi Genbutsu

Genchi Genbutsu is a core principle of the Toyota Production System that translates to "go and see for yourself."

It emphasizes firsthand observation to understand situations deeply, solve problems accurately, and make informed decisions.

Instead of relying on second hand reports or data alone, leaders and team members are encouraged to go to the actual place where value is created, such as the factory floor, the customer site, or the development environment.

The Genchi Genbutsu approach involves:

• Visiting the gemba: Physically going to the site of the issue or process.

• Observing without assumptions: Understanding the facts directly through observation.

• Engaging with people: Talking to employees, operators, or customers involved.

• Asking “Why?” and using the “5 Whys” technique to get to the root cause.

 
Genchi Genbutsu promotes situational awareness, empathy, and fact-based leadership. It bridges the gap between strategy and execution, ensuring leaders stay grounded in operational realities.

Finally, a word to clarify the difference between Genchi Genbutsu and Gemba; Gemba means "the real place" where work happens and value is created (like a factory floor) Genchi Genbutsu means "go and see for yourself" and emphasizes firsthand observation to understand problems deeply.

Gemba is the location, Genchi Genbutsu is the mindset and method of investigation.

Lean vs Agile Supply Chains: Which One Fits Your Business?

In today’s rapidly evolving global market, supply chain organizations face unprecedented challenges ranging from fluctuating consumer demands to disruptions caused by geopolitical tensions and pandemics. To stay competitive, companies must adopt supply chain strategies that align with their business goals and market conditions.

Two dominant paradigms in supply chain management are Lean and Agile. Understanding their differences and applications is crucial for businesses navigating the current landscape.

What is Lean Supply Chain?

Lean supply chains focus on efficiency and cost reduction by minimizing waste, reducing inventory levels, and streamlining processes. The goal is to create a smooth, predictable flow of materials and products by optimizing every step, often through just-in-time (JIT) manufacturing and strong supplier partnerships. Lean is ideal for industries with stable demand and long product life cycles.

The most recognized example of Lean organization is Toyota. They pioneered the lean manufacturing philosophy with its Toyota Production System (TPS) in the eightlies, and even today, Toyota exemplifies lean principles by continuously reducing waste and improving process efficiency, which has helped it maintain low production costs and high product quality despite recent supply chain disruptions.

What is Agile Supply Chain?

Agile supply chains prioritize flexibility and responsiveness to rapidly adapt to changing market demands, uncertainties, and disruptions. This approach often involves maintaining buffer inventories, using multiple suppliers, and leveraging advanced analytics and digital tools for real-time visibility and decision-making. Agile supply chains thrive in industries with high variability and short product lifespans.

Fashion retailer Zara is one of the best examples of Agile Supply Chain. Zara’s ability to design, produce, and deliver new styles within weeks allow them to meet customer demands swiftly while minimizing markdowns, showcasing how agility can be a competitive advantage in volatile markets.

But which alternative is best in the Current Context?

The COVID-19 pandemic and recent global trade tensions exposed vulnerabilities in overly lean supply chains, especially those relying on single suppliers or minimal inventory buffers. Companies purely focused on lean efficiency struggled with shortages and delays. Conversely, firms with agile supply chains demonstrated better resilience but often at higher operational costs.

In response, many companies are now blending lean and agile strategies a concept known as “leagile” supply chains, combining lean efficiency in the upstream, predictable segments with agile flexibility closer to the customer.

The one company has examplified Leagile in recent times is Amazon, that leverages lean principles in its massive, efficient fulfillment centers while maintaining agile capabilities through vast delivery networks and dynamic inventory management. This hybrid approach enables Amazon to offer fast delivery with cost control, setting a high standard in e-commerce logistics.

Choosing between lean and agile supply chains, or adopting a hybrid model, ultimately depends on your industry, product characteristics, and market volatility.

Lean supply chains are ideal for cost-driven, stable environments, while agile supply chains shine in unpredictable, customer-centric markets.

In the post-pandemic era, the best-performing companies are those that balance efficiency with flexibility to build resilient, future-proof supply chains. 

The Hidden Factory: The Silent Killer of Supply Chain Efficiency

In supply chain operations, we pride ourselves on precision, efficiency, and continuous improvement.

But what if I told you there’s an entire shadow process operating inside your workflows quietly consuming time, resources, and money and it’s not even on your radar?

Welcome to the world of the Hidden Factory.

What is a Hidden Factory?

A Hidden Factory is the collection of all the rework, corrections, and unofficial fixes that happen behind the scenes to make a process appear like it's working smoothly. These aren’t logged as defects. They don’t show up in your dashboards. But they exist.

These might look like:

• Warehouse staff quietly relabeling mis-picked items before shipping.
• Customer service reps manually adjusting inventory levels in the system to correct errors.
• Planners double-checking forecasts with spreadsheets because they don’t trust the MRP output.

Individually, these “workarounds” seem harmless even helpful. But collectively, they signal process gaps that are eating into your margins and scalability.

Hidden factories are dangerous because they create the illusion of control. Everything looks good on paper, but under the surface, people are compensating for broken processes.

The good news is, Hidden factories can be found and fixed. Here are some ways to shine a light on them:

1. Listen to the “Off-the-Record” Conversations; pay attention when someone says:

“Oh, I always fix that before it causes a problem.” “It’s faster if I just do it this way.”

2. Map the Actual Process (Not the SOP)

Use value stream mapping to compare how the process is supposed to work versus how it actually works. You'll often find extra steps that aren't documented anywhere, that's your hidden factory.

3. Look at Cycle Time Variance

If your standard cycle time says an order takes 3 hours, but in practice it’s closer to 5, that discrepancy is usually where the rework is hiding.

4. Involve the Front Lines

Your team knows. Engage operators, planners, and support staff early and often, they live the day-to-day realities that KPIs can’t always capture.

How tariffs impact Supply Chains?

In today's globalized economy, supply chains are increasingly complex and interconnected, stretching across countries and continents. As businesses source materials and goods from around the world, they must also navigate a constantly shifting landscape of regulations, trade policies, and tariffs. These trade barriers can have a profound impact on the flow of goods, production timelines, and overall costs.

But what exactly are tariffs, and how do they affect supply chains?

Tariffs are taxes or duties imposed by a government on imports and exports. Governments use tariffs to regulate trade, protect domestic industries, or retaliate against trade imbalances or unfair trade practices. While tariffs serve as a source of revenue for governments, they also increase the cost of goods that cross borders. These added costs are typically passed along the supply chain, ultimately impacting consumers.

One of the most direct impacts of tariffs is the increase in the cost of goods. When a government imposes tariffs on imported goods, it raises the price of those goods for businesses importing them. For supply chains that rely on foreign suppliers for raw materials, components, or finished products, this results in higher production costs.

In response to tariffs, many businesses reevaluate their sourcing strategies to mitigate increased costs. This often means shifting production or sourcing to countries with lower or no tariffs. However, moving production or sourcing to a new country isn't always a simple solution. The decision to relocate production can involve significant capital investment, operational changes, and the development of new supplier relationships all of which can take time to implement.

Tariffs can also affect consumer behavior. Higher prices on imported goods due to tariffs may lead consumers to reconsider their purchasing decisions. If goods become more expensive, they may seek alternatives or reduce their spending altogether.

All in all, tariffs are more than just a political or economic issue they have tangible impacts on global supply chains. Increased costs, disruptions, and the need for strategic adaptation are just a few of the challenges businesses face in navigating tariff-related obstacles.

Active, passive, and hybrid thermal solutions in cold chain packaging

Choosing the best temperature-controlled packaging solution has grown more difficult and important as there are more packaging alternatives available.

Choosing the best packaging option is a crucial choice that can affect the effectiveness and safety of the items being carried in the field of life sciences logistics.

Cold chain packaging is an essential part of temperature-controlled shipping since it serves as the initial line of defense for perishable goods. 

Active, passive, and hybrid are the three primary categories of cold chain packaging technologies.

Active

These systems use mechanical or electric systems powered by an energy source to keep product temperatures consistent.

These systems are expensive to buy, operate, and maintain and due to their weight, potential need for repair while in route, and availability, they are also more expensive to ship.

Having said this, these are also simple to use and very precise and reliable devices, guaranteeing the temperature is maintained throughout the duration of the journey.

Passive

Insulating materials are used in passive cold chain packaging to shield items from ambient temperatures.

The lower level of accuracy can be an issue with this system, and the risk of product damage exists if a cargo is delayed and the transportation duration exceeds the packaging’s capacity to maintain temperature control, on the flip side this method is substantially simpler and more affordable than refrigerated units.

Hybrid

Hybrid methods use a combination of phase change materials (PCMs) or passive systems (such as water/ice or dry ice) and thermostatic controls or active systems.

It has all the pros of combining both methods, but it also has some of the cons, including the limited availability or the higher cost.

FMCG growth VS shareholder returns

 
The highest ranking of consumer goods companies based on 2023 revenue have been recently announced.

Top 100 consumer goods companies 2024
 
Over the past year, the companies on this list have balanced cost-saving measures with bold investments in technology, AI, and consumer engagement to improve efficiency and stay competitive amid challenges like inflation, supply chain issues, and shifting consumer priorities. 
The largest FMCG companies in the world have invested in OpenAI’s GPT-4, Instacart etc, piloted VR for R&D, used 3D tech for better retail shelving, launched new digital platforms or acquired new enterprises to name a few initiatives that have contributed to its growth.
 
However, this has not translated in the performance of its shares and the trajectory of most of this companies have been spiraling down leading to negative returns to shareholders over the last 365 days.
 
It can be surprising that the size and growth of these companies does not match their performance in the stocks market, and it would be an interesting debate to understand why.
 
Trust? Expectations? Overall macro-economic performance? ….
 

The Largest Courier Companies in the World

Interesting infographic showing by market capitalization the largest courier companies in the world.

It´s no surpirse that the “big three” global couriers, United Parcel Service (UPS), FedEx, and DHL continue to dominate transport services with closer to 70% of market cap.

Having said that, other carriers that operate more regionally have still attained a lot of value, including Japan Post Holdings and China’s S.F. Express and ZTO Express.

Logistionary: Kitting

 

Kitting is a technique where complementary items are ordered, packaged, or shipped together as a single "kit" with a unique SKU. 

Inventory kitting is a method of organizing inventory into kits.

From a production point of view, this would mean putting and storing together all the relevant ingredients for the manufacture of a given product.

This technique can also be used to pack together individual complimentary products to create one product that’s ready to ship to a single customer.

The goal of kitting is to assemble products ahead of time as a way to streamline the order fulfillment process. Companies can kit together products in anticipation of customer orders or as a marketing strategy to drive sales volume.

Before kitting, the traditional inventory model involved packaging separate SKUs on their own and sending them out as multiple different shipments, increasing both the cost and time involved for the company and the customer.

Product kitting has numerous benefits, including: 

• Minimize pick-and-pack time by preparing ahead ingredients or final products.
• Streamlining warehouse activities and lowering shipping costs
• Optimizing inventory management by reducing slow moving stock (items that don't sell well as individual can be included in a kit that customers are more likely to buy)
• Increasing customer satisfaction and convenience
• Increase sales by pairing together items that may have not been bought separatedly.

Gartner Supply Chain Top 25 for 2024

Gartner has once more released the results from its annual Global Supply Chain Top 25, identifying leading supply chain organizations, highlighting trends and sharing best practices.

Schneider Electric mantained the top position in the list this year after crowning the list in 2023, followed in second place by Cisco Systems for the scond year in a row. Colgate-Palmolive, Microsoft and Johnson & Johnson rounded out the top five positions, with PepsiCo dropping from the top 10 in 2024.

Some interesting moves over the years with companies joining the list and some others being relegated; in these links you can check how the ranking has evolved over the last few years:

2016

2018

2021

2023

Gartner continues to recognize sustained supply chain performance via the “Masters” category, introduced in 2015. To be considered Masters, companies must have attained top-five composite scores for at least seven out of the last 10 years (2024-2024). Amazon, Apple, P&G and Unilever all qualified for the category this year once more.

Lean 8 wastes

  

Before we dive into the eight types of wastes, it is important to understand what waste is.

Waste is any action or step in a process that does not add value to the customer.

Originally seven wastes (Muda) were identified, and a methodology was developed by Toyota, as part of the Toyota Production System (TPS).

The seven wastes were; Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects. They are often referred to by the acronym ‘TIMWOOD’.

The 8th waste of non-utilized talent or ‘Skills’ of workers was later introduced in the 1990s when the Toyota Production System was adopted in the Western world. As a result, the 8 wastes are commonly referred to as ‘TIMWOODS’.

We can now deep dive into each of these eight wastes and understand how we can reduce or eliminate them as part of a leaner and more efficient operations.