People Innovation Excellence

Applying Lean Methods to Supply Chains

Lean Method

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Those of us who have lean thinking in our DNA always look for ways to apply these concepts to our work, whether in manufacturing, financial and sales processes, or across the supply chain. The key question is, “Does this activity or process create value or does it contain waste?” If it is like most activities processes, some parts add value, while others are wasteful and can be improved.

A lean supply chain is more efficient and will operate at less cost. Our goal is to provide customers exactly what they want, where they want it, when they want it. There is no cookie cutter approach to applying lean to the supply chain, but we have used some general principles for many years.

  1. Specify what does and does not create value from the end customer’s stand point.
  2. Identify all steps necessary to create order and deliver a product across the whole value stream.
  3. Line up or link value-creating steps so they flow without interruptions, detours, backflows, waiting or defects.
  4. Only have available what is pulled by the customer through the supply chain when it is needed.
  5. Do not allow the “leanness” of your link to result in a waste elsewhere in the supply chain.
  6. Strive for perfection by continuously improving processes through waste removal.

Remember, lean aims to optimize the entire system, not isolated parts. Therefore, correctly executed lean processes are about making the supply chain better one processes at a time. We want the product and information to flow in order to create a supply chain that seamless to the end customer. Technology will help by creating the visibility to let people and processes function at a high level, all while improving supply chain performance.

Applying lean to the supply chain requires leadership direction, involvement and ongoing support. A clear lean vision and strategy must be developed that is tied to the company’s business strategy. Leaders need to communicate the vision and create a sense of urgency about making supply chain improvements.

The true skill here is the ability to build tension without creating stressful environment. Teams from the lowest levels of the company must be involved in the changes and operate without fear or discomfort. Leaders must participate in the lean journey. Responsibility and accountability for process improvement results need to be shared by leaders and the implementation teams.

Applying lean concepts to the supply chain provides opportunities to improve customer service, reduce supply chain cost, improve product and process quality, strengthen employee morale, and engage employee in a rewarding improvement process. Focusing on the end customer and supply chain performance are critical to future success.

Today’s companies are competing on the performance of their supply chains. Don’t wait too long to begin applying lean concepts to your supply chain. It’s time to start now.

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