AI Procurement. Comparison of Traditional vs. Philosophy-Inspired Supply Chain Approaches
AI Procurement
Comparison of Traditional vs. Philosophy-Inspired Supply Chain Approaches
10.01.2025
Traditional Approach
Core Philosophy: Maximize efficiency, minimize cost, optimize shareholder value
Key Characteristics:
- Transactional supplier relationships
- Cost-driven decision making
- Just-in-time inventory (minimal buffers)
- Standardized, scalable processes
- Hierarchical control structures
- Risk transfer to suppliers
- Key metrics: Cost savings, ROI, on-time delivery
Pros:
- Predictable, measurable outcomes
- Scalable across global operations
- Proven frameworks and technologies
- Clear accountability structures
- Efficient in stable environments
Cons:
- Fragile during disruptions
- Human elements often overlooked
- Sustainability as add-on, not core
- Innovation stifled by standardization
- High burnout rates in operations
Philosophy-Inspired Approaches Comparison
| Philosophy | Core Focus | Procurement/SCM Application | Pros | Cons |
|---|---|---|---|---|
| Ikigai | Purpose-driven balance | Align processes with meaning, mission, profit | – Holistic value creation – Strong employee engagement – Balanced metrics |
– Can dilute financial focus – Complex to measure “purpose” |
| Lagom | “Just the right amount” | Balanced inventory, fair relationships, sustainable sourcing | – Resilient buffers – Sustainable by design – Reduces waste |
– May appear “unambitious” – Hard to quantify “enough” |
| Hygge | Comfort & human connection | Trust-based partnerships, pleasant work environments | – Strong supplier loyalty – Low team turnover – Collaborative innovation |
– May slow tough decisions – Could enable complacency |
| Sisū | Grit & resilience | Extreme preparedness, crisis-hardened networks | – Unbreakable during disruptions – Innovative under pressure – Strong crisis leadership |
– Risk of burnout – Can over-invest in redundancy |
| Ubuntu | Interconnected humanity | Community-centric sourcing, stakeholder inclusion | – Deep social license to operate – Unparalleled local resilience – Ethical brand strength |
– Highest cost structure – Complex stakeholder management |
| Wabi-Sabi | Embracing imperfection | Flexible systems, natural variation acceptance | – Adapts beautifully to flux – Reduces perfectionism waste – Authentic sustainability |
– Challenges quality standards – Difficult to scale uniformly |
| Jugaad | Frugal innovation | Resource-constrained problem solving | – Extreme cost efficiency – Hyper-local adaptability – Rapid crisis response |
– Quality control challenges – Difficult to systematize |
Effectiveness Analysis
Which is “More Effective”?
The answer depends entirely on the company’s context:
1. For Multinationals in Stable Markets:
- Primary: Traditional + Lagom hybrid
- Why: Maintains efficiency while adding resilience buffers and sustainability
- Effectiveness: High for predictable ROI with reduced disruption risk
2. For Socially-Conscious Brands:
- Primary: Ubuntu + Ikigai fusion
- Why: Authentic alignment with ethical consumer expectations
- Effectiveness: Creates powerful brand differentiation and loyalty
3. For Operations in Volatile Regions:
- Primary: Jugaad + Sisū combination
- Why: Maximizes survival and adaptation in constrained environments
- Effectiveness: Exceptional for maintaining operations against odds
4. For Luxury/Artisanal Businesses:
- Primary: Wabi-Sabi + Hygge blend
- Why: Values craftsmanship, story, and human relationships
- Effectiveness: Creates premium perceived value and customer connection
5. For Post-Crisis Recovery:
- Primary: Sisū + Jugaad with Ikigai
- Why: Combines resilience, resourcefulness, and renewed purpose
- Effectiveness: Rapid rebuilding with stronger foundations
Integrated Framework: The “Adaptive Purpose” Supply Chain
Most effective approach for the 21st century company:
Core Architecture:
1. Purpose Foundation (Ikigai) – Why do we exist beyond profit?
2. Balanced Operations (Lagom) – “Just right” inventory, partnerships, growth
3. Human Core (Hygge/Ubuntu) – Trust, dignity, and well-being at center
4. Resilience Layer (Sisū) – Grit and preparedness for disruptions
5. Adaptive Mindset (Wabi-Sabi/Jugaad) – Flexibility and frugal innovation
Implementation Strategy:
Stage 1: Traditional efficiency (financial viability)
Stage 2: + Lagom balance + Hygge relationships (stability)
Stage 3: + Ubuntu ethics + Ikigai purpose (meaning)
Stage 4: + Sisū resilience + Wabi-Sabi flexibility (adaptation)
Stage 5: + Jugaad innovation (thriving in constraints)
Pros of This Blended Approach:
- Addresses financial, social, environmental, and operational needs
- Creates both efficiency and resilience
- Attracts talent and builds brand across stakeholder groups
- Functions well in both stable and volatile conditions
- Continuously evolves through learning
Cons:
- Extremely complex to implement and measure
- Requires exceptional leadership and cultural maturity
- May face investor skepticism about “soft” metrics
- Integration challenges between conflicting priorities
Conclusion: The Evolution of Effectiveness
Traditional approaches are no longer sufficient in a world of climate disruption, pandemics, social inequality, and geopolitical volatility. However, pure philosophy-based approaches often lack the financial discipline required for survival.
The most effective modern supply chain is a hybrid: It begins with traditional financial discipline but layers on purpose (Ikigai), balance (Lagom), humanity (Ubuntu/Hygge), resilience (Sisū), and adaptive creativity (Wabi-Sabi/Jugaad) in proportions appropriate to the business context.
Effectiveness Metric Shift:
- Past: Cost savings + On-time delivery
- Present: Resilience + Sustainability + Profit
- Future: Regenerative impact + Stakeholder well-being + Adaptive innovation + Financial health
The company that masters contextual integration of these philosophies—knowing when to apply which principles—will build not just a supply chain, but a living business ecosystem that thrives through whatever challenges the 21st century presents. This requires moving from “either/or” thinking to “both/and” thinking—where a supply chain can be both efficient AND humane, both profitable AND purposeful, both standardized AND adaptable.
Final verdict: No single philosophy is “most effective.” The future belongs to philosophically intelligent organizations that can dynamically apply the right principles to the right situations, creating supply chains that are as wise as they are efficient.
morokoff 