Lean SCM in VUCA Times

As Supply Chain Management became a staple in logistical practice around the world, many related business processes were optimized according to lean management principles. They revolve around growing efficacy and/or efficiency and therefore cutting process costs. In SCM, this was and is often realized by eliminating perceived waste and streamlining aspects of the supply chain. Just-in-time deliveries (saving warehousing costs) or wide-ranging reduction of lead times (elimination of wasted time) could be examples of this. This style of management is obviously beneficial: In a competing environment, it was and is vital to use resources as efficiently as possible – an attitude which also resonates with the reality of the looming climate catastrophe. While the logistics sector is not the most climate friendly, the lean management of its supply chains (beyond logistics) can cut costs dramatically and secure the success of lean practicing Logistics Service Providers, who are able to provide competitive options in transportation and warehousing.

The term VUCA describes an environment characterized by volatility, uncertainty, complexity and ambiguity. These factors signify unpredictability – an obvious enemy of lean management, which relies heavily on a flow of demand and supply, which, if not completely constant, is required to at least be foreseeable in nature (e.g. seasonal). Recent events could make the case for a VUCA environment in SCM: Financial collapses, inflation of prices and growing interest rates make for a volatile fiscal environment. Wars and unrest, embargoes and sanctions make logistical processes uncertain. Related fast changing political relationships cause complexity and ambiguity in legal aspects, not just for Jordan and Germany.

The combination of this current environment with the lean management trend causes a growing fragility of the chain’s links. This is (at least partially) due to one sided optimization, which usually exclusively takes the overall financial costs into consideration. Therefore, it perceives buffers and wiggle room in processes as a waste of resources, the elimination of which occasionally does not even stop for safety stock, as its holding is perceived as an unnecessary expense. This practice proves to be a nightmare for the management of associated risks, which rise with every tightening of the supply chain, as the pressure on each link grows. A commonly cited risk influencing the supply chain’s performance is single sourcing, highlighting the shaky reliance on a low number of suppliers to realize low prices through high volume and exclusivity – while insufficiently considering the threat of an outage. Other lean tactics involving different parts of the supply chain contain their own risks, be it in sourcing, production or delivery. As environments become more volatile, uncertain, complex or ambiguous, risks of a tight supply chain multiply, causing ruptures in a streamlined system that is laid out for a predictable setting. 

The combination of lean SCM and an extensive VUCA environment poses a growing threat to reliable processes and is a potential risk factor in a time of multiple uncertainties. Logisticians on the ground have to consider these new circumstances in their activities. Closely timed sequences are to be reviewed regularly in changing conditions, safety measures are to be reevaluated constantly to guarantee a robust and functional supply chain. It could be helpful to keep in mind that just like in tackling the climate catastrophe, the short-term profits and costs are not the only worthwhile measurement. 

Research on the relationship of lean methods and uncertain environments is an immensely important field to ensure the integrity of supply chains. Innovative projects on this topic can be conducted in the developing JOINOLOG center. 

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JOINOLOG Survey Results: Different Output Groups – Different Outlook

The goal of JOINOLOG is the coordination of logistical stakeholders. With JOINOLOG’s support, they are encouraged to conduct projects together. The output of these projects was the topic of JOINOLOG’s first survey: What should the logistical project partners aim for? What is needed and, equally important, what is doable in a limited framework of temporary cooperation?

To answer these questions, the first survey by the JOINOLOG project was conducted. Professionals in the logistical field were presented with the collected possible project outputs. They were asked to rate the item’s value of the logistical sector in Jordan and the feasibility of the output by collaboration among stakeholders.

Four groups of possible output are distinguished:

Innovation as Output – Improvements in logistical products or processes

Trainings as Output – Transfer of skills and knowledge between logistics business and academia

Scientific Output – Academic discussion of and solutions to practical challenges

Start-Ups as Output – Fresh businesses aimed towards logistics in Jordan

The matrix below shows the survey’s results in respect to the four groups:

All output proposals were rated on average above the score of 7, no proposed outputs were considered not valuable or not feasible.

JOINOLOG Survey Results: Average Feasibility and Value of Outputs

Apparently, outputs in each group were always considered of similar values to each other. The best ratings were given to the trainings that could be conducted throughJOINOLOG, close second would be the innovations the projects could achieve.

Both scientific output and start-ups as output were considered slightly less valuable and feasible. This could be due to the survey’s audience, consisting of mostly business focused logistical experts on LinkedIn. Trainings and innovation will most likely be of more value to this demographic.

These results will help the JOINOLOG project to present future cooperations with appropriate project goals, which they can achieve and will be of value to the logistical landscape of Jordan.

The project team thanks all participants for taking part in the survey!

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Introducing Members of the Project Advisory Board (PAB)

We are delighted to welcome the following members to the JOINOLOG Advisory Board! This first structural part of the emerging JOINOLOG network regularly meets to decide on strategic issues brought forward by the project team. This way, the PAB forms the center’s aspects since its foundation in May 2021. 

The board consists of four expert professionals working across the breadth of a diverse logistics landscape.  
Each of our four Advisory Board members brings with them a wealth of relevant experience developed at the highest levels of logistics focused organizations.  

 These members are: 

  • Hakam Abul Feilat, representing AQABA Logistics Village (ALV) 

The general manager of Aqaba Logistics Village and an all around professional with over 20 years of experience in logistics, shipping, transport, and warehousing with international and local companies in the region. Mr. Hakam obtains excellent organizational skills with a unique combination of strength in sales and processes, in addition to knowledge and responsibility for Production and Logistics in various fields. 

  

  • Dr. Mahmoud Abuhussein, representing The Higher Council for Science and Technology (HCST) 
Dr. Mahmoud Abuhussein

The Director of the International Cooperation Department at the Higher Council for Science and Technology with more than 7 years of extensive experience in the field of research and technical project research. Dr. Mahmoud has an extensive set of skills in research and development (R&D), technology transfer and Inter-departmental Cooperation.

 

  • Fares L. Abudayyeh, representing the Ministry of Transport 
Mr. Fares L. Abudayyeh

A highly accomplished freight forwarding and clearance expert with progressive experience in management roles within multiple areas. Mr. Fares has extensive managerial experience in the international freight & logistics business, mainly in Jordan and Middle East. He joins the PAB as current Director of Transport and Trade Facilitation Unit at the Ministry of Transport. 

  • Martin Ohlsen, former Logistics Director of the World Food Programme 
Mr. Martin Ohlsen

An international expert in supply chain management, Mr. Martin has spent much of his professional life leading humanitarian efforts for the UN World Food Program (WFP) across diverse geographies, organizing food assistance in the most challenging of environments, including Bosnia-Herzegovina, Iraq and various Central and West African countries. As a Director at its Rome HQ, he ran the WFP’s worldwide transport & logistics division, and as a Country Director in the Democratic Republic of the Congo he managed a large country program. 

Mr. Martin offers international consultancy services related to the coordination and management of project in the humanitarian context and has a variety of strengths in advisory, consultancy, mentoring & humanitarian supply. 

We at JOINOLOG are thrilled to have such national and international knowledgeable and talented professionals forming our Advisory Board. Their expertise will play a valuable role in guiding JOINOLOG in future success and expansion. 

JOINOLOG’s Origin

Idea to Innovation Center

The journey of the Jordan Innovation Center for Logistics started in 2018. In a Flying Faculty cooperation between Hochschule Fulda and German Jordanian University (GJU), a discrepancy was discussed: How come Jordan has so many bright young students and innovators, but still many challenges and little innovation in the logistical sector? One answer to this question could be the apparent lack of coordination and cooperation in the logistical field, especially regarding research and innovation. Other conclusions could point out the insufficient representation of logistics as an academic field – no university but the GJU was offering related degrees.

Following these learnings, the idea to bundle all stakeholder groups, from logistical forwarders to political actors and start-ups, in one collaboration network was born. An imagined Jordan Innovation Center for Logistics was going to tackle the challenges in logistical practice by bringing together all interest groups of the sector. Their combined strengths were to initiate research projects and trainings to ultimately improve the applied logistics in the whole Hashemite Kingdom.

A grant scheme regarding innovation in the Middle East by the German Federal Ministry of Education and Research (BMBF) was applied for and granted. Between November 2018 and October 2019, the preparation phase of JOINOLOG was conducted. The feasibility of such an innovation platform was the focus of this year: Can a center like this sustainably exist in the Jordanian logistics landscape? How does the Jordanian landscape in research and logistics look like in detail? Which actors were required in this endeavor? Hochschule Fulda led the research in this phase, visiting Jordan and conducting workshops, while staying in close coordination with GJU. Multiple students from the Jordanian university were working on the project in Germany, providing valuable insight exceeding their research. The preparation phase was supported by associated partners in both countries as well, representing the different stakeholder groups in logistics. Private companies took part just like public actors and associations, all participating in workshops to describe the circumstances, in which they can imagine JOINOLOG coming into existence.  

The preparation phase’s results were distinct: Yes, an innovation center for logistics is possible, needed and wanted by the local logisticians and researchers. By adequately communicating these results to the Federal Ministry, Hochschule Fulda secured funding for another three years for JOINOLOG, which is considered the second phase of the project.

This so-called implementation phase in JOINOLOG’s development was started in February 2021. Since then, GJU is officially co-conducting the project and a Project Advisory Board (PAB) was chosen.

The next three years will bring the Jordan Innovation Center for Logistics into existence, with initial research projects and trainings taking place within this timeframe as well. A network of Jordanian logisticians of all professions will collaborate to improve the practice of logistics sustainably, using innovative technology and research-based procedures. The logistical start-up will find a home in Jordan’s rich innovation landscape, working tirelessly on the future of the sector.