Lean Supply Chain Improves Profitability And Your Competitive Edge
To understand the concept of running a lean supply chain, let’s start with the basics in defining a supply chain. Put simply a supply chain is the system or process by which all manner of effort from people, actions/activities, information, technology, facilities and resources used in getting a product or service from the one phase to another. This type of system impacts all industries, their inventory management, warehousing, manufacturing, order fulfillment, production planning, you name it. With this many different factors involved, waste is inevitable and where there is waste there is a possibility for improvement.
Lean supply chain management requires an organization that is willing to embrace lean thinking. It requires a company to look at each process and each touch point in that process to evaluate its efficiencies and deficiencies. The streamlining of this waste can have extreme effects on a company; faster deployment of product to market, improved profit margins, improved logistic data and operations, and happier employees.
Some simple ways to look at your supply chain is to consider the staples of any process.
Time. How long does it take for your entire supply chain to reach fruition? Breakdown each step to get a clear understanding of your streamlined steps and those taking too much time.
Resources/Inventory. Do you have enough warehousing? Enough shipping resources? How many people are involved along the path of your supply chain? Are you carrying too much stock?
Technology. Still faxing everything? What is your ability to track shipments? Orders? Fulfillment?
Information. How many information feeds do you get through your chain? When the product or service reaches the end of your supply chain can you tell someone the story of how it got there? All steps?
One can go far deeper than this, but this is a good start. If you come away with more questions than answers while asking any of these questions, that’s a good indicator that you are dealing with a potential waste/improvement.
The greatest challenge in value stream mapping an organization is most companies need help through a third party. On top of that, this type of sea change requires upper management support and a solution to maintain suggested improvements. However, companies can also go lean by providing a quality environment that strategically demands and rewards improvements to their organization. In most cases, successful deployment of a lean supply chain results in a business of savings. This makes it difficult for some companies to achieve an immediate return, but the smart ones keep at it.
To be clear, streamlining a corporation’s supply chain does not necessarily result in an expense. In fact there are many solutions today that serve both the large organization and the small to medium sized company. Sometimes an organization simply needs to embrace change through supply chain technology, warehousing management, logistics software or employing periodic logistics consulting from outside parties. In the past you would hear scary words like EDI, which can have significant upfront costs and changes to the overall operation of a company. Today there are web based solutions that allow you to organize your sales force, track inventory, point of sale systems, distribution, and operations.
Without a doubt, there will be many businesses that have extremely complicated operations with larger companies in particular possessing more complexities than their more nimble, smaller competitors. However with a lean supply chain it is possible for any company to experience tremendous competitive and financial improvements. What’s more, today’s businesses (big and small) are relying more and more on using the latest supply chain technology, running lean production, better inventory control and order fulfillment to get that competitive edge.
The road to better margins and creating a competitive edge can come from a lean supply chain and improved internal processes. I knew of a company where it took six months to deploy a new product to a client (after a long sales cycle). Just by deploying a smarter management program and streamlining their tools they were able to deliver that same product in 4 weeks. Cost of deployment went down significantly, more sales were completed each year, customer satisfaction went up, and more time was allocated to R&D for future products. Sounds like a win to me.
[...] successful in improving this process, then the company might call this a lean supply chain. As the name implies, a lean supply chain is one that has been managed to the point of having [...]
[...] to improve the business may start at the supply chain. This is an improvement commonly called the lean supply chain where as a company has been able to reorganize or restructure its processes in order to employ a [...]