The current uproar in Europe over the food supply chain, after horse meat was found in products labelled as beef, shows an immediate benefit of Lean production and supply chain.
To produce something cheaply the traditional supply chain tries to screw suppliers to get raw materials as cheaply as possible. The suppliers in turn will look for any way to provide the goods at the minimum quality possible in order to make as much money as they can.
In this case:
- a Swedish brand and a German supermarket,
- selling goods in the UK and other European Countries, used
- a French company who had a factory in Luxembourg, who
- sourced it through a meat packer in France, which
- purchased beef through an trader in Cyprus, who
- sub contracted to another in Holland, who
- imported from an abattoir in Romania.
- Horsemeat scandal: the ABP and Comigel connections. Graphic: Guardian
With such a long supply chain- all stages of which are taking their cut – it can be hard to see how anyone could have made a profit legally. It seems that since “de-sinewed meat” (scraps mechanically separated from the carcass) was banned in the EU last April, suppliers had to look for other sources of cheap beef. And this coincided with the Romanian government passing a law banning horse drawn carts from highways, which caused the price of horse meat to plummet: Usually horse meat is as expensive as beef so there is no benefit in substituting it for beef.
Compare and Contrast
With Lean you source from suppliers, who once they have tendered for supply, work with you to:
- build continuous improvement through the whole process.
- work to improve the design of components and the manufacturing process to eliminate waste.
- simplify and shorten the supply chain to avoid the need for storage and inventories.
- focus on value and not lowest cost.