Supply Chain Excellence: Series 2 – Excellence through Lean Thinking! by Vishnu Rayapeddi

Lean Supply Chain in essence can act as a competetive weapon by enabling the member companies to align themselves with each other and to coordinate their continuous improvement efforts. This synthesis enables even small firms to participate in the results of lean efforts. Competitive advantage and leadership in the global marketplace can only be gained by applying lean principles to the supply chain. Thought, commitment, planning, collaboration, and a path forward are required.

Based on the SCOR model I mentioned in the previous article, we can say that every aspect of the  supply chain has to go through a “lean” transformation...a) Supply Chain Strategy, b) Lean Planning, c) Lean Suppliers, d) Lean Manufacturing, e) Lean Warehousing, f) Lean Transportation and finally g) Lean Customers. But all along we have another component called the “Lean Office”. Please note that, Lean Thinking for the Office is important wherever there are administrative processes.

Path Forward to a Lean Supply Chain

  • Lean is a cooperative process for survival and for success. Supply chains that want to grow and continue to improve must adopt lean.
  • Lean concepts require an attitude of continuous improvement with a bias for action.
  • The concepts of lean apply to all elements of the supply chain, including support departments such as product development, quality, human resources, marketing, finance, purchasing, and distribution.
  • The challenge is to bring all of these areas out of their traditional silos and make them work together to reduce waste and create flow.
  • Duplication and a lack of appropriate and timely communication run rampant in these traditional organizations.
  • A lean supply chain is proactive and plans for the unexpected by positioning all resources for effectiveness.
  • Downturns in demand can be addressed without layoffs or significant productivity losses.

Lean Supply Chain Design

  • Lean it out! - Select or develop lean sources;
  • Eliminate Duplication! - Move from “buying” to allowing suppliers to manage delivery;
  • Let Demand Drive the Supply Chain! - Allow consumption not forecast drive the supply chain;
  • Optimize! - Eliminate waste in the supply chain, Outsource non-core competencies – Not core business, Compress – balance freight, cost of value, quality, Collaborate to reduce total costs;
  • Focus! - on the customer;

Delivery Frequency! - Deliver only cost drivers more frequently.

This article is written by Vishnu Rayapeddi, a Lean Manufacturing & Supply Chain Operations Specialist, who works as a volunteer Executive Committee Member of NZPICS, the only Premier Channel Partner of APICS in New Zealand.  NZPICS Offers the following courses in Supply Chain in affiliation with APICS: CPIM (Certified in Production & Inventory Management, CSCP (Certified Supply Chain Professional) and Principles of Operations Management, which is a fully customisable solution to businesses. For further information, please visit www.nzpics.org.nz or call on 09-525 1525.