How to optimize the supply chain for greater agility, efficiency, and resilience

In an ever-changing market, supply chain management and optimization are key to ensuring agility, efficiency, and resilience. The organizations that stand out today are those that can deliver faster, control costs, adapt to unexpected disruptions, and meet sustainability and technological innovation goals—all at the same time.

The big challenge lies in transforming complex, rigid, and fragmented chains into agile, efficient ecosystems that can cope with uncertainty. This requires redesigning processes, managing risks in a structured way, and fostering a culture of continuous improvement.

This article demonstrates how organizations can take this step, from analyzing the current state to designing and implementing a future vision. The goal is straightforward: to develop a supply chain that can generate value in any situation.

The importance of effective supply chain management

The supply chain refers to the set of processes that ensure the flow of materials, information, and products—from raw material suppliers to final delivery to customers. It is, therefore, the essential link connecting all stages of value creation within an organization.

Effective management of this chain is now a critical factor for business competitiveness. The growing complexity of global markets, demand volatility, supplier risks, and increasing cost pressures make effective supply chain management essential.

Key benefits of supply chain management

Effective supply chain management delivers significant gains for any organization. When the supply chain is well integrated, the main benefits include:

• Greater efficiency: optimizing logistics and production operations reduces waste, accelerates flows, and improves the use of available resources.
• Cost reduction: proper coordination between purchasing, production, and distribution helps avoid overstocking and stockouts, optimizing investments.
• Improved customer service: a well-managed supply chain ensures more reliable delivery times and greater reliability, increasing customer satisfaction and trust.
• Adaptability: with visibility into flows and risks, the organization can respond more quickly to market changes or unexpected events.
• Long-term value creation: beyond short-term gains, integrated supply chain management supports sustainability and helps build lasting competitive advantages.

Managing the supply chain effectively means making the company more efficient and better equipped to face challenges and achieve sustainable growth.

Analyzing the current state of the supply chain

Before redesigning the supply chain based on Kaizen principles, it’s essential to clearly understand the current state. This analysis helps identify inefficiencies, waste, and improvement opportunities, serving as a starting point for building the future vision.

Selecting the team and defining objectives

The first step is to set up a cross-functional team with representatives from all key areas: production, logistics, planning, maintenance, engineering, procurement, and distribution. The group should be small enough to remain agile (typically 7-10 people) but diverse enough to cover the entire value stream.

An essential factor is sponsorship from top management. Having a senior sponsor ensures influence across teams, strategic alignment, and project prioritization. The sponsor should challenge the team to redesign the supply chain and be present during critical decision-making moments.

Objectives must be defined from the outset and tied to tangible outcomes, such as reducing lead time from order to delivery, lowering inventory levels across the chain, increasing process reliability and predictability, or improving customer service levels.

Mapping the current flow of materials and information

The analysis always begins at the Gemba — the place where the work happens. The team physically walks through the processes to closely observe the actual flow of materials and information.

• Material flow: the mapping follows the path from raw materials to the finished product, identifying value-adding activities, waiting times, transportation, and accumulation points. This information is recorded using simple visual symbols representing value-added supply chain operations, movements, quality checks, and inventory. The result is a current-state map that clearly highlights existing inefficiencies.
• Information flow: next, the team analyzes information flows such as forecasts, orders, and work instructions moving through the organization. This mapping is more challenging, as it involves multiple departments and isn’t directly visible at the Gemba. In this case, information flow diagrams are commonly used.

Figure 1 – Current state map

During this process, collecting data is essential — including cycle times, setup times, inventory levels, transportation frequency, processing lead times, and costs for each step. This data provides the basis for defining performance indicators.

Defining key supply chain indicators

With the mapping complete, the team gains an objective view of the current state. At this stage, a set of Key Performance Indicators (KPIs) is established to serve as a reference for measuring future improvements. The most relevant include:

• Total lead time and inventory levels: measure the time and resources required for a product to move through the entire supply chain.
• Service levels: assess the ability to meet promised deadlines and volumes at each logistics loop.
• Efficiency and quality: evaluate process performance, operational stability, and the occurrence of defects or rework.

This step allows the organization to confront reality transparently, without masking problems. Going to the Gemba, mapping flows, and quantifying indicators enables a clear understanding of where the main weaknesses lie.

Only after this rigorous diagnosis can the organization move forward with designing the future supply chain vision, grounded in Kaizen principles.

Designing the vision: pull flow in the supply chain

After analyzing the current state, the next step is to design the future of the supply chain. This involves defining a clear vision of how the chain should operate by applying pull-flow principles, in which supply, production, and delivery are triggered by actual demand. The goal is to build a more agile, integrated, and waste-free system, capable of quickly responding to customer needs.

Creating the future state value stream map

Creating the future-state value stream map enables the team to envision how the supply chain can operate under ideal conditions. The team redesigns both material and information flows, exploring solutions that enable flow creation and eliminate waste. In this vision, the layout of production lines, the placement of part supermarkets, and the use of Kanban systems are rethought to shorten distances, eliminate waiting times, and simplify daily work.

Figure 2 – Future state map

Identifying key internal logistics loops

After designing the production flow, it’s essential to structure the internal logistics loops that ensure consistent and efficient replenishment between internal supermarkets, supply chain management, production lines, and warehouses. The goal is to build a stable and predictable system that balances customer demand with production capacity.

The starting point is analyzing the border of line, where the supermarkets supplying operators directly are located. The size and placement of these supermarkets must ensure easy access to parts and materials, reducing unnecessary movement and time loss.

A key element in this phase is the Mizusumashi — a logistics operator following a cyclical replenishment route, stopping at defined points to restock materials at regular intervals. The route must be calculated based on the takt time, ensuring the line receives exactly what it needs at the right moment, avoiding both overstocking and shortages. Another critical factor is choosing the most appropriate synchronization method: Kanban or Junjo (sequential supply).

In addition, tools such as supply chain management, leveling boxes, and line sequencing systems help coordinate material flow, ensuring smooth, leveled production.

By properly sizing supermarkets, defining Mizusumashi routes, and selecting the proper synchronization method, the company establishes robust internal logistics loops that directly connect customer takt time to production rhythm. These loops thus become the core of internal logistics, ensuring stability and eliminating waste.

Planning production in pull

For the supply chain to operate as a proper pull system, it is necessary to carefully plan how customer orders trigger production. The objective is to mobilize resources only when actual demand exists, avoiding excess inventory and enabling quick market response.

Pull-based production planning involves three main steps:

• Strategy definition: clarify which products will follow a Make to Order (MTO) model and which will follow a Make to Stock (MTS) model.
• Capacity management: plan logistics and production resources to align them with real demand.
• Efficient execution: release production orders in a leveled and synchronized manner.

Once the supermarkets and Mizusumashi routes are defined, the information flow can be designed based on customer orders. The new information flow map can then be created.

Defining the flow strategy for the source

Within supplier (source) operations, one of the main challenges is eliminating waste caused by excessive inventory and long lead times. The future state should optimize:

• Order frequency and size.
• Transportation lead time and shipping methods.
• Container and packaging size.
• Coordination with suppliers to implement pull systems.

Engaging partners in this phase is essential to ensure integration and resilience throughout the entire supply chain.

Defining the flow strategy for delivery

The outbound flow (delivery), directed to customers, also needs to be redesigned. The objective is to align delivery frequency with actual demand, reduce transportation lead times, and improve service levels. Key practices include:

• Cross-docking, which avoids unnecessary storage.
• Picking optimization methods to prepare orders more efficiently.
• Milk runs in distribution, enabling more frequent deliveries at lower cost.

It is also advisable to involve customers in defining this strategy, encouraging them to adopt processes that enable more accurate forecasts and shorter delivery cycles.

Implementing the vision: Gemba Kaizen workshops

After designing the future supply chain vision, the next step is to define the implementation plan. This is done through Gemba Kaizen workshops — short, high-impact events conducted at the Gemba by cross-functional teams, focused on problem solving and the immediate application of improvements.

SMED Workshop

SMED (Single Minute Exchange of Die) is essential for reducing setup times and increasing production flexibility. Faster changeovers make smaller batches feasible, improving flow and reducing waste. This workshop involves on-site observation, testing of improvements, standardizing changeover steps, and training employees on the new method. Setup times can often be reduced by more than 50%.

Standard Work workshop

The Standard Work workshop focuses on eliminating waste from unnecessary motion and improving the efficiency of manual work. Through clearly defined methods, 5S, and task standardization, it aims to reduce waiting times, simplify flows, and increase productivity. It applies to both production lines and warehouses, involving teams, supervisors, and support roles.

Kobetsu Kaizen workshop

Kobetsu Kaizen (focused improvements) targets critical problems affecting flow, such as high defect rates, equipment failures, or efficiency losses. Using a structured methodology, teams work directly with operators and maintenance to improve OEE (Overall Equipment Effectiveness).

Line Design workshop

In the Line Design workshop, teams create detailed layouts for new production lines or for redesigning existing ones, based on one-piece flow principles. Physical mock-ups in cardboard or wood are often used to test and validate solutions before full implementation. The goal is to ensure an ergonomic, efficient design aligned with the future flow vision.

Internal Logistics workshop

This workshop focuses on internal logistics flows, implementing elements such as supermarkets, Mizusumashi (standardized replenishment cycles), and synchronization methods. The objective is to ensure that materials flow smoothly and steadily, supporting production without excess inventory or shortages.

Pull Planning workshop

The Pull Planning workshop engages planning and logistics teams in creating replenishment algorithms and processes based on actual consumption. It uses testing, simulations, and digital systems to replace traditional planning practices, ensuring full implementation of the pull system from end to end.

External Logistics workshop

Finally, the External Logistics improvement workshop addresses flows involving suppliers and customers. It includes defining milk run routes, optimizing transportation and warehouse operations (including inbound and outbound), and reviewing packaging and returnable containers. These workshops often involve external suppliers and logistics providers and are key to expanding Kaizen principles beyond the organization’s boundaries.

The role of technology in value chain management

Technological transformation is redefining how supply chains are managed. Today, efficient processes are not enough — real-time visibility, more reliable forecasting, and end-to-end digital integration are essential. Technology has become a critical accelerator for building supply chains that are more agile, resilient, and competitive.

Real-time tracking systems for complete supply chain visibility

Real-time tracking systems allow companies to monitor the location and condition of raw materials, components, and finished products throughout the supply chain. In addition to improving inventory control and management, this end-to-end visibility helps companies identify delays, predict stockouts, and respond quickly to disruptions.

Continuous monitoring not only increases operational efficiency but also enhances transparency for customers and partners, strengthening trust in the service provided.

AI-powered forecasting to improve demand planning

Using Artificial Intelligence (AI) algorithms in demand planning enables companies to analyze large volumes of historical data, consumption patterns, and external variables, such as seasonality and market trends. With more accurate forecasts, companies can plan capacity more effectively. This approach helps create more efficient supply chains.

Risk management and resilience in the supply chain

In a global context marked by geopolitical uncertainties, economic fluctuations, environmental crises, and rapid technological change, supplier risk management is no longer just a competitive advantage — it’s a strategic necessity. Organizations that can anticipate risks, adapt quickly, and maintain operational continuity are better equipped to withstand disruptions and protect long-term competitiveness.

Supplier risk management as a pillar of supply chain resilience

Suppliers represent one of the most critical risk points in supply chain management. Issues such as over-reliance on a single supplier, lack of visibility into compliance practices, or logistical vulnerabilities can jeopardize the entire operation.

Supplier risk management involves continuously identifying, assessing, and monitoring these risks, developing contingency plans, and promoting supplier base diversification. It also requires close collaboration with partners to ensure quality, sustainability, and responsiveness in times of crisis.

Supply chain risk management strategies for a sustainable future

Implementing a structured Supply Chain Risk Management (SCRM) approach helps balance efficiency with robustness. Key strategies include:

• Mapping the supply chain to identify hidden vulnerabilities, including second- and third-tier suppliers.
• Using real-time monitoring technology to anticipate risks related to transportation, inventory, and external events.
• Managing supplier risk by assessing reliance on critical partners, financial stability, and responsiveness to disruption scenarios.
• Developing contingency plans and alternative scenarios to ensure a fast response to supply disruptions.
• Integrating ESG (Environmental, Social, and Governance) criteria, aligning the supply chain with responsible practices that build trust among customers, investors, and regulators.

By combining risk management practices with sustainability principles, companies not only protect themselves from unexpected disruptions but also build supply chains that are more ethical, transparent, and resilient.

Building an agile, resilient, and competitive supply chain

To thrive, tomorrow’s supply chains must be agile, resilient, and competitive. An agile supply chain can respond quickly to market changes by adjusting volumes, routes, and production strategies without compromising deadlines or cost. This agility depends on flexible processes, collaborative planning, and the use of real-time data.

Resilience means preparing the entire supply chain to withstand disruptions — from supplier failures and raw material shortages to global crises. This requires supplier base diversification, creation of strategic redundancies, and a strong capacity to adapt to unexpected scenarios.

Competitiveness comes from integrating cost efficiency, innovation, and sustainability. Competitive supply chains align short-term goals — such as lead time reduction and lower operating costs — with long-term goals like reducing environmental impact, adopting responsible practices, and leveraging technology innovation.

Building this balance means transforming the supply chain into a strategic asset — where each link is managed collaboratively, driven by data, and guided by continuous improvement principles.

Still have questions about supply chain management and optimization?

What is supply chain management?

Supply chain management is the process of coordinating all the steps required to deliver a product or service — from raw material suppliers to the end customer. It includes activities such as purchasing, production, logistics, distribution, inventory management, and supplier relationship management. The goal is to ensure efficiency, reduce costs, increase reliability, and create value throughout the chain.

What is Value Stream Analysis?

Value Stream Analysis is a methodology for mapping every step — both material and information-related — required to deliver a product or service to the customer. The goal is to distinguish between value-adding activities and waste, and to identify improvement opportunities. The result is typically represented through current-state maps and future-state maps, which guide supply chain transformation efforts.

What’s the difference between a push and pull system?

In a push system, production and supply are based on forecasts — inventory is produced or moved in advance to anticipate demand. The risk is overstocking or running out of inventory when forecasts are inaccurate. In a pull system, each step is triggered by actual customer demand. Production and material movement occur only when there is a concrete signal of consumption. This reduces waste, increases flexibility, and improves responsiveness to market needs.