The benefits of lean manufacturing are known far and wide. Several organizations have achieved operational efficiency and profitability by merely using lean manufacturing in their production processes. Following a lean manufacturing methodology simply means eliminating waste or the activities that do not add any value to the process, resulting in a shorter lead time and improved quality. Similarly, a lean supply chain helps the organization in streamlining processes, creating a sustainable competitive advantage and increase its share of wallet in the market. Lean is in they say, but how would it help you in supply chain management, you wonder? Here’s how.
What is Lean All About?
Thanks to the widespread proliferation of technology including Web 2.0, big data and analytics, social networking, cloud computing and development of mobile technologies, supply chains have moved from an exclusively internal system to a more complex system of people, processes and technologies beyond the four walls of the organization. A lean supply chain helps in maintaining a balance across organizations and among stakeholders, thereby proving to be one of the best practices for supply chain. In order to improve efficiency, reduce wastage, drive profitability and eliminate supply chain risks, one of the best practices is to apply the five lean principles to not only the supply chain but also to the warehouse and logistic operations, retailers and suppliers.
- People involvement, right from the top management to the lower level management, including everyone is the key to ensure efficiency.
- A lean supply chain requires continuous improvement from time to time in order to reduce wastage.
- Shorter lead times are a result of people involvement and continuous improvement practices that help identify the loopholes in the supply chain.
- As everyone in the organization is involved, they know what is expected from them and are responsible for the output, hence, this leads to improved product quality.
- Standardization in terms of product quality, turnaround time, process and supplier relations, etc. helps in identifying the best practices for an efficient supply chain by eliminating supply chain risks.
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Time to Lean on your Supply Chain
Why is a lean supply chain a good option, you ask? Because it is more likely to be flexible enough to adapt itself to the changes in market conditions and consumer preferences. While adopting a lean supply chain model, there are a few things a business should keep in mind that will help in creating an efficient lean supply chain.
- The management should identify the priority areas by assessing the entire organizational landscape.
- The essential part of a lean supply chain is minimizing on-hand inventory levels, enable real time trend and demand forecasting and collaborate with suppliers and distribution centers to eventually reduce the safety stock levels.
- In case of logistics, negotiating the terms and creating a long term agreement for an efficient transportation solution is vital.
- Shifting to a leaner supply chain model means that it demands constant review, monitoring and adjustment to evaluate performance against pre-set standards.
Last but not the least, you can create a lean supply chain only if the entire organization commits to it and the lean vision and expectations are communicated to everyone within the organization.