A lean supply chain & logistics process has been streamlined to reduce and eliminate waste or non-value added activities to the total supply chain flow and to the products moving within the supply chain. Waste can be measured in time, inventory and unnecessary costs. Value added activities are those that contribute to efficiently placing the final product at the customer. The supply chain and the inventory contained in the chain should flow. Any activity that stops the flow should create value. Any activity that touches inventory should create value.
Supply chains gain waste and non-value added activities for many reasons, both internal to the company and external. Regaining the lean supply chain may mean addressing many of the same issues that created the problems of extra and unneeded time, inventory and costs.
The ideal approach is to design the perfect supply chain and fit your company’s operation onto it. Supply chain management is meant to reduce excess inventory in the supply chain. A supply chain should be demand driven. It is built on the pull approach of customers pulling inventory, not with suppliers pushing inventory. Excess inventory reflects the additional time with the supply chain operation. So the perfect supply chain would be lean with removing wasteful time and inventory.
A supply chain, with demand pull, flows back from point-of-sale demand (resulting in deliveries to the store) to the customer distribution center, back through to purchase orders placed on suppliers and onwards, up the supply chain. Anything that delays or impedes this flow must be analyzed as a potential non-value added activity.
Lean supply chain management is for all companies. It is not just for manufacturers who practice lean management. It is also for non-manufacturers, wholesalers, distributors, retailers and others.
Lean Transformation in the Supply Chain & Logistics environment can result in benefits such as:
- Reduced inventory
- Reduced space
- Maximized inventory investment
- Minimized stock outs
- Reduced schedule changes
- Minimized expediting
- Increase flexibility and responsiveness
- Reduce lead time
- Reduce errors and extra processing
- Improve utilization of personnel
- Reduce transactions
- Simplify processes
The re-design of key business processes and the implementation of new processes and systems that will improve overall performance of the business which may include:
- Lean Opportunity Assessment – Identify Lean opportunities in the Supply Chain & Logistics function.
- Lean workshop(s) – Introduction to Lean and other specific training such as needed such as Setup Reduction, Batch Size Reduction, 5S – Workplace Organization, Kanban/Pull System,, Total Productive Maintenance, etc.
- Value Stream Mapping (VSM) – A map of the current state for key value streams is developed that serves as a basis for re-designing the various business processes. A future state map is then developed that serves as a “to be” vision.
- Kaizen Events – Process improvement events based upon priorities set in VSM future state map(s).
- Lean Project Management – Start to finish Lean project management including facilitation, training and advice.