Lean Supply Chain

A lean supply chain is, by definition, an efficient supply chain. The supply chain process is streamlined to systematically reduce and eliminate waste or non-value adding activities. All activities that contribute to delivering goods or services to the customer should create value otherwise they are wasteful. Waste can be found in each step of the supply chain process, in time and in inventory.

Lean principles are well established in manufacturing but the same principles can be applied throughout the supply chain in the wholesale, retail and distribution industries.

What to do to become more lean

The best supply chains are demand driven, i.e. the customer defines how much inventory there should be in the system, not the supplier who can cause a company to hold excess inventory. Leveraging existing technology can assist with making a leaner supply chain but other elements such as management commitment, visibility of information and understanding supplier risks can also deliver efficiencies.

Contributors to a lean supply chain

Understand your whole supply chain. First analyze and map the total process, both inbound and outbound. Be aware of the complexity and inter-dependencies with multiple suppliers, distribution centers and the end customer.

Top management commitment. Continuous improvement requires ongoing support from senior sponsors who need to visibly demonstrate their support, offer continued skills training and provide the means to track accomplishments.

Technology is only an enabler. Incorporating new and updated technology is part of process improvement but it is only an enabler. ERP systems or other specialist software may make a difference but know that technology cannot overcome process flaws.

Visibility. Widespread visibility and integration of data throughout the supply chain will deliver the best results. Information blind spots can be areas of waste.

Know the risks. External events can have a devastating effect on the supply chain, some of these are avoidable. Analyze and mitigate internal and external risks both because it makes business sense and is a legal requirement.

People and organizational culture. People are the key to success and can make or break any planned changes. Involve your employees, suppliers and service providers in designing improvements and include change management in your lean program requirements.

Supplier relationship management. Cost savings are always attainable in the sourcing process. Collaboration with suppliers on continuous improvement can deliver savings in raw materials, fabrication and logistics. Formalized measurement of supplier performance will deliver benefits.

Companies are going to continue to squeeze supply chains. The tendency may be to reduce flexibility to save costs during the process of achieving a lean supply chain but finding the right balance between flexibility and efficiency is the challenge.

Supply chain services in Belgium, Clear Vantage, offers lean supply chain solutions, purchasing and procurement consulting solutions and trainings to secure best cost of ownership.

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