Role of Lean in improving the supply chain
Filed Under Blog
While the benefits of the systematic method of Lean is well versed in the land of manufacturing, Supply Chain teams have much to gain from its approach.
The key mantra of Lean, and it’s principles of Value and Waste can bring key insight into Supply Chain improvement opportunities.
I’m not going to cover the key principles as they are covered in some excellent details at sights like https://www.isixsigma.com/ and lean.org but instead consider how they are applied to our particular industry.
Supply Chain by its very nature is very process orientated. Consider the humble purchase order and its process. From the origins of the requisition through to delivery of the goods themselves there are various steps to be taken (and often further steps within those). Such processes are ripe for value analysis with a view to honing the process to drive benefit.
Understanding the difference between steps that add value and create waste is at the heart of where you’ll get benefits.
I’ve been lucky enough to work for clients who have undergone value stream assessments where each area of the process is critiqued (through tools such as 5 why and 5s) to ensure that value is derived and when comparing processes from businesses that haven’t undergone such process transformation the difference is often stark.
If we think about the broader supply chain reducing waste creates both efficiencies and usually cost reduction (and who doesn’t want both of those). Consider for example how lean principles can impact elements such as:
- Lead Time reduction
- Product Quality
- Inventory
- Visual Management/Analytics
Consider Inventory, for many companies, it’s a buffer against supplier lead time, schedule adherence and an inability to forecast properly. Yes that’s right it’s a waste. And a particular waste that comes at a significant cost to the business.
Understanding the route cause of why that waste is there, breaking it’s contributory factors down and then honing/correcting can provide a systematic approach that can shed light on all areas of the supply chain.
One of my favorite aspects of using lean is visualization. I guess many of us will have seen visual management boards on shop floor areas of manufacturing centers but these fantastic tools can also be put to effective use in an office based environment. For example, visual management boards can be used to highlight critical actions / performance or visual tools used to identify the flow of work.
Fundamentally, it’s all about the benefits. Through implementing lean tools you can get quicker, reduce costs and improve quality. The trick is getting there. While there are plenty of “self-help” websites that can teach you the basics part of the problem if often understanding what “great” looks like and understanding how to get there. Because of this, it’s worth drawing on professional practitioners, people who have been there and done that, who can take you on your lean journey whilst improving your skills and knowledge at the same time.
Looking for further inspiration? Take a look at this article which explains how one hospital used lean tools to trim it’s supply chain costs by 2% and you know what they say, if they can then so can you.