A plethora of innovative ideas for supply chain management and procurement were showcased at London’s SupplyFest, held on Wednesday, May 15th. The event, designed for supply chain directors and senior practitioners, focused on ways that businesses, big or small, can gain a competitive edge by regulating and streamlining their supply chain. Executives are encouraged to be versatile, forward-thinking and creative when managing their business, but ultimately, one must-have trait rose above the rest: flexibility. How is it defined and why is it so important?

Lego spoke on the topic and defined a flexible supply chain as one that’s fluid and agile. It rolls with the punches and isn’t averse to a few tweaks here and there, or a major overhaul when necessary. In essence, flexibility is what separates good supply chains from the bad. Operations director at Lego, Calum Lewis, said: “What will differentiate one supply chain from another is its ability to flex people, processes and systems.”

For example, when Lego realised it could cut costs and streamline manufacturing by reducing individual components, the company reduced total pieces from 16,000 to 6,000. This simple change drastically improved their supply chain, allowing them to minimise shipping costs and respond more directly to proven customer demand, rather than forecasted trends – an adjustment that helped maximise profits for the company.

Nimbleness and adaptability have greatly enhanced the way Lego does business. Following poor performance at the turn of the millenium, Lego has completed changed its business strategy in favour of versatile, innovative operations. As a result, sales have increased dramatically over the past few years.

Mr Lewis sees the supply chain as the ‘core’ of the business, and the new, flexible strategy has helped boost revenue in a sustainable way. Figures are expected to remain steady in the future as the company has developed a responsive model which adapts to changing needs.

Other businesses, from large corporations to small enterprises, can benefit in the same way by changing their supply chain operations to mesh with a flexible, streamlined overall strategy.

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