L E A N S U P P LYC H A I N
with important activities such as rationalising the
involves developing relationships with the bigger
supplier base so that meaningful relationships
transporters in order to reduce costs and improve
can be formed with suppliers. Also, changes are
delivery performance.
implemented that reduce the time and cost involved supply so that the processes are neither starved
Challenges in the lean supply chain
nor flooded with stock. Procurement is a two-way
The first and most obvious problem that people
process – it involves suppliers and customers.
face when attempting to make improvements
Making communication easier between the two,
across an entire supply chain is a lack of robust
combined with selective introduction of technology
and professional relationships with suppliers and
to improve ordering and the introduction of
customers. Another main problem is the chaotic
changes reduces costs and increases the flexibility
and undefined processes that are the driving forces
of the entire supply chain.
behind the wrong behaviours in every one of the Big
in placing orders, while introducing flexibility in
Lean in procurement leads to reduced
Five elements. This is often compounded by a history
purchasing costs, greater flexibility and fewer stock
of adversarial management styles that have created
emergencies; meaning that the rest of the supply
a supply chain culture that resists change, does not
chain is lean-enabled.
allow for open discussions and inhibits innovation.
Lean in manufacturing
challenges is not easy�. There is no quick fix or a
Lean in manufacturing is extremely common.
magic wand. Instead, we propose that there are
What is less common is the consideration that lean
seven elements to a lean supply chain that build up
manufacturing can be applied not just to factories,
over time to deliver improved performance, reduced
but also to areas such as production engineering
costs and greater flexibility for all organisations that
and planning.
are involved.
We emphasize the phrase: “Overcoming these
When lean is applied in manufacturing, it has a positive impact on the lead-time of the whole supply chain, as well as on product costs and quality.
Lean in warehousing The lean concepts applicable to warehousing include reducing stock levels, increasing pick rates and accuracy and reducing damage, whether it be to staff or to products. The effective introduction of lean in the warehouse will incorporate concepts such as reducing movement distances and handling activities, eliminating delays in unloading and loading and focusing on delivering parts on time, in full (OTIF). Lean-enabled warehouses
1. Remain focused on the voice of the ultimate customer. Think about what they would say was value-adding, and then eliminate anything else. 2. Understand the true end-to-end supply chain using value stream mapping. 3. Create a supply chain that flows, with activities being triggered only when required. 4. Design processes that are able to respond to volatility. 5. Introduce a culture of continuous improvement that is based on measures that drive the right behaviours and create openness and collaboration. 6. Find the suppliers that you can work with and
tend to have higher pick rates, lower returns and
change or eliminate as many of the rest of them as
improved staff motivation.
you can.
Lean in transportation Counterintuitively, efforts to improve customer service can have a major impact on the quality
7. Build the capability of your team and those of your supply partners to enable them to understand how to get the benefits of a lean supply chain.
using multiple shipping channels and a tendency
How the Institute of Operations Management can help
towards expensive delivery options are symptoms
The Institute of Operations Management (IOM),
of poor communication between the manufacturer
in partnership with Amnis and Unipart provides a
and the transporter, and inefficiency in the
wide range of training and support options to help
transportation process.
you develop a lean supply chain. Examples of the
of shipping decisions. Failure to combine orders,
Lean transportation is about introducing concepts
workshops we are running in 2011 that will help you
like combined multi-stop loads, cross-docking, right
benefit from the seven elements of a lean supply
sizing equipment and packaging solutions. It also
chain are detailed below:
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