Lean Supply Chain Is Customer-Driven

Understanding the Lean Supply Chain

At its core, the concept of lean is customer-driven, in opposition to the older business design of supply-driven manufacturing. The supply chain is every step from the procurement of raw materials through the finished product in the hands of the customer. So, lean supply chain refers to a model in which each phase of the supply chain is optimized according to lean principles.

While originally developed in manufacturing industries, the concept of lean can actually be applied to any business. It’s as simple as evaluating each phase of the process from concept to customer for waste, then developing a strategy to cut that waste. The essential elements of each process are distilled through the consideration of customer needs. Any step which does not contribute directly can be eliminated.

Lean Supply Chain is Customer-Driven

Supply Chain Lean principles hold that by considering the needs of the end user, a better product will result, leading to increased profits. A focus on profit alone – for example, by cutting staff to save on production costs – may not succeed in generating more profit, if the product isn’t what the customer wants. Lean supply chains are the way business is done today, and any organization which neglects to adopt it will no longer be competitive.

Because customer needs are always changing, lean manufacturing is by necessity agile. Processes are redesigned to eliminate bottlenecks and to be flexible in response to unscheduled down time or other production delays. This flexibility contributes to profit by eliminating losses due to down time and wasted or redundant effort.

Another aspect of the lean supply chain involves inventory. Keeping too many raw materials on hand can be a waste of space, and can lead to losses if materials expire before they can be used. Finished product inventory, as well, can face the same issues. Lean principles streamline the purchasing process so that materials are available when needed, but not hoarded, and that enough finished product is on hand to satisfy demand, without being excessive. Idle product isn’t profit.

Lean Supply Chain is an Ongoing ProcessLean Supply Chain Consulting Services

Built in to the concept of lean supply chain is that it is never complete. Every phase is constantly being reevaluated for improvement opportunities. Employees at all levels are empowered to share their ideas. Supplier, vendor, and customer feedback are solicited and reviewed on an ongoing basis.

Because human nature is naturally resistant to change, many companies that try to implement a lean supply chain on their own do not meet with success. Upper management or financial officers may not be completely committed, or systemic disconnects prevent lean practices from being adequately implemented. Without the discipline to maintain the flow and capability that are mandated, even the most well-intended organization will meet with failure.

Lean Supply Chain Consulting Services for Success

Supply Chain Consultants make all the difference. They’ve got the expertise and understanding of the essential elements of lean. And because they are coming from outside, they’ll be able to see opportunities for improvement which employees – being so close to, and familiar with, the processes – may not be able to do.

Additionally, a consultant can be helpful for implementing any already identified lean projects.

Contact Supply Chain Consulting USA for any help you may need for a lean supply chain.

Logistics Consulting Trends

A management consulting colleague recently had an uncomfortable event that I would like to share with supply chain, logistics consulting and supply chain management professionals.

His client asked him, at a board meeting, to give a fifteen-minute speech (he was not given time to prepare) on the trends in his industry that are affecting the company.

This raises a good point to be prepared to “be an expert” in your industry on short notice.

Experts in Supply Chain / Logistics Consulting and Senior Supply Chain Managers need to know the trends.


The following are the logistics consulting industry trends I would speak about:

The first logistics consulting trend is the need for cost reduction with the current economy.  Companies are identifying best practices and revising poor practices.  Labor is retrained after any process is revised.  From doing this simple exercise, I have seen a 5% labor reduction.  Another simple labor saving process companies have been completing is slotting and re-profiling.  Re-slotting has typically saved companies 10-20% on their picking labor.  Another cost savings trend is renegotiating Distribution Center / Warehouse leases that are coming due in the next couple of years. Landlords in current economy are motivated to be resourceful to keep tenants and find new ones.  The warehouse must be in a favorable location and the correct size to take advantage of the situation.

Logistics Consulting Trends by Supply Chain Consulting USA
Logistics Consulting Trends

Volatility of energy prices and its related effect on transportation costs change optimumized domestic distribution networks.  The price of diesel was at a low of $2.44 a gallon in 2006 rose to $4.76 a gallon in 2008. In 2009, it went down to $2.02 and then shot back up to $2.62 a gallon by midyear. At the end of the first quarter 2010, diesel prices were $2.94 per gallon.  Global demand drives oil and diesel prices. That demand is driven by the economical situation, and the experts predict that when the global economy returns to “normal,” oil and diesel will rise.

Company executives need to estimate the future cost of transportation.  In a few network optimization studies I have seen, just a 25% increase in transportation costs changes the distribution center (DC) network by an additional DC.

From our logistics consulting engagement we have noticed that everybody is going green from reducing packaging to more recycling programs, to replacing warehouse metal halides lighting with T-5 or T-8 high bay fixtures, to using waterless urinals in Distribution Centers.

Insurance companies have become more active in warehouse design.
When using pneumatic conveyors, insurance companies usually tell the insurer where they want the dust collectors located.  When designing a recent storage rack layout, the insurance company demanded the use of “z pallet stops” to make sure the flue space is maintained between the back-to-back pallet racks.

Many companies are Outsourcing their Transportation Management functions. The outsourcing usually includes transportation analysis, rate negotiations, procurement of transportation, both contractually and in the spot market, shipment execution and tracking, carrier management, reporting and compliance, executive dashboard presentations and detailed shipment reports, freight bill audit and payment, claims processing and service refund management, design and management of inbound client freight programs and customized web portals and self-service data warehouses.

The last noteworthy trend I have seen is the move to the use of slip sheets for transportation instead of pallets and instead of floor loading.  Slip sheets save on the wood pallets and the storage of wood pallets in a distribution center. When compared to floor loading, slip sheets save on the labor of loading and unloading floor loaded trailers when an automated palletizer and push-pull attachments are used.

Please comment on any different logistics consulting trends you have seen or confirm above trends in Logistics and Supply Chain Management.  Additionally, please comment on any 2012 logistics consulting trends that may be emerging.

Services Offered by Supply Chain Consulting USA

Supply Chain Consulting USA’s team is an expert in guiding the successful development of your supply chain management.  We offer practical solutions through providing you with different advantages that have been proven to be beneficial for our previous clients mostly from the packaged goods industries. We aim to provide you with solutions and additional guidelines for industrial distribution, service parts logistics, direct marketing, catalog, wholesale, e-commerce, and retail.

Our consulting team is continuously updated with newly available technologies and newly formulated methods that will help us successfully determine, specify, assess, and formulate proficient solutions for the improvement of our client’s overall operation. Our ability to maintain our capabilities for effective project implementation, engineering, conceptual design, and management is further improved with our use of appropriate systems, procedures, equipment, and technology to ensure your boost when it comes to operations.

Our aim is to provide you with consultants that can focus on providing you with the results you will need on a specified time and also to solve your problems about management issues.

Supply Chain Consulting USA offers the following services: Supply Chain Maturity Assessment, Opportunity Gap Assessment, Cost Savings Assessment, Operations Planning, Supply Chain Strategy, Project Management, Facility Design and Layout, and Software Solutions.

Effective Project Management Approach

Our team provides you with an effective and communicative approach through clearly stating every detail of the project. The project will be closely tracked when it comes to the budget and project issues so that we can provide you with a detailed and fully developed project plan that will be reviewed and updated for further improvement.

Concept Development

In order for our team to provide solutions for effective concept improvement, development of performance and operating requirements and forecasts are needed prior to initial data collection. From the data gathered, our team will provide possible implementation schedules, concept drawings, initial block layouts, risk and feasibility analysis, high level costs and benefits development, and evaluation and identification of possible alternatives.

Detailed Conceptual
Design Development

Our team will provide detailed schedules for the development of various aspects like equipment specifications,  requests for proposal, product flows, building layouts, equipment fixtures, and detailed engineering.

Strong Implementation

Our team strongly implements work which can be done both in-house and on-site to effectively focus on supplier selections and bid reviews, drawing reviews and approvals, integrating the scheduling for material handling suppliers and builders, field checking progress, installation coordination, start-up and testing.

The Supply Chain Strategy

We make use of the Supply Chain Strategy which heavily focuses on the reviews of the efficiencies of our client’s logistics networks and supply chains, costs for operation, levels of service, facilities, and organization. Analysis of operations is also done to help determine the most efficient supply chain and to also figure out a more optimized network configuration. The strategy will include these scenarios for us to determine the best possible number of distribution locations. The following services are also included:

  • Project Scheduling

  • Inventory Deployment Strategies

  • Cost Reduction Assessment

  • ROI for Recommendation

  • Implementation Management

  • Location Demographics
  • Distribution Center Sizing

  • Location Evaluation and Selection Support

  • Customer Service Analysis

  • Move Strategy Planning

  • Reverse Logistics

  • Demand/Movement Analysis

Assessment of Supply Chain Management

Our Supply Chain Management Assessment will provide a boosting improvement in your distribution center with the help of  an Opportunity and Maturity Assessment. Constructive comparisons of different distribution centers, Warehouse Management Systems (WMS), and operating procedures are also being provided against the best practices of relate industries and management systems available. Our goal in providing this type of assessment is to provide you with a substantial increase in warehouse productivity, labor cost reductions, improved utilization of space and improvement of accuracy. Our assessment will also include the following services:

  • Effective Methods

  • Material Flow

  • Receiving Through Shipping Operations Observation

  • Product Slotting

  • Equipment/Technology Usage

  • Staff and Order Scheduling

  • WMS Functionality and Equipment

  • Interview Operations and IT Staff

  • Material Management

  • Review Layout/Material Flow/Methods

  • Consider Equipment/Technology Usage

  • Factor WMS Capabilities

  • Estimate High-level Savings and Benefits

  • Space Utilization

  • Material Layout

  • Best Practices

  • Develop Gap Assessment Report

Operations Planning Services

Our team offers effective operations planning services through Concept development, detailed planning and implementation capabilities to existing and expanding facilities. Evaluation of available alternatives which can range from fully automated solutions to low investment options is also done by our team in order for us to provide our clients with equipment solutions which are unbiased and also for us to recommend them with technology that suits their needs best. Our team offers the following services for Operations Planning:

  • Estimate Facility, Equipment, and Systems

  • Data Gathering and Analysis

  • Process Improvement

  • Material Handling/Storage Equipment Concepts

  • Material and Information Flow Analysis

  • Determine Right Technology (RF, Pick/Put to Light, Voice, etc.)

  • Best Practices and Benchmarking

  • Space and Layout Planning

  • Staffing Estimates/Workforce Schedule Planning

  • Product Slotting Improvements

  • Investment Costs

  • Productivity Rates Development

  • Estimate Space, Inventory, and Labor Savings

  • Project Implementation Plan (Schedule/Resource Planning)

  • Detailed Layout Planning/Simulation Modeling

  • Supplier Evaluation/Selections

  • Write Standard Operating Procedures

  • Create Detailed Equipment Elevations

  • Equipment RFP Development

  • Facility Conceptual Engineering/Architecture Coordination

  • Product Slot Assignments

  • Project Management

  • Benchmark Performance to Plan

  • Go Live Support

  • Schedule Management of Equipment Installation

  • Post-Implementation Performance Audit

Transportation Management Outsourcing

Our team provides an effective and popular transportation solution for effective transportation management through the following services:

  • Pre-engagement freight analysis on all major types of transportation

  • Negotiation of Rates

  • Transportation procurement, both in the spot market and contractually

  • Shipment execution and tracking

  • Carrier management, compliance and reporting

  • Executive dashboard presentations

  • Detailed shipment reports

  • Freight bill payment and audit

  • Claims processing

  • Service refund management

  • Design and management of inbound client freight programs

  • Customized web portals

  • Self-service data warehouses

  • ERP integration with transactional shipment data

  • Integration of shipping applications into client’s e-commerce sites

The  solution analyzes the shipment information and gives the amount of savings (up to 20%; we have seen 3% to 5%) they expect and most times they guarantee it, plus it frees up traffic personnel to work on other projects.

Our team in Supply Chain Consulting USA offers the best services available in terms of Supply Chain Consulting.

We service clients all over the world but mostly in the Americas.  We service the cities of Miami, Boca Raton, Ft. Lauderdale, Pompano Beach, and West Palm Beach locally without travel expenses in most cases.

Please contact John.Sills@supplychainconsultingusa.com if you are interested in our services or you have questions how we can help you.

Management – John Sills

A common question often asked is who manages Supply Chain Consulting USA.com?

Mr. Sills is a degreed Industrial Engineer and business process consultant with more than twenty years of experience in materials handling engineering, distribution operations, project management, and systems implementation.  John has significant expertise in supply chain management, distribution systems design, facility planning and layout, process and flow improvement, productivity programs, operations consulting, and transportation management.

——————————–  Professional Background ————————————————
Mr. Sills’ recent assignments involved facility layout and capacity improvements, equipment specifications, Requests for Proposal (RFP) and supplier bids evaluation and selection, and project management for new and existing distribution centers.  John led the design of an e-commerce order processing system for a direct-to-consumer television network using advanced automated order selection systems.  He assisted in the detailed conceptual design, specifications, RFPs, and bid evaluation for a $60 million equipment purchase for a direct-to-consumer client and developed upgrades and redesigned layouts for nine distribution centers for a major retail chain store operator.  He managed capacity evaluation and design for a 1 million square foot Greenfield warehouse and re-engineered the order selection and shipping systems for a major regional supermarket chain’s frozen foods distribution center.

As Senior Project Implementation Manager for DHL’s Express Logistics Group, Mr. Sills was responsible for logistics solutions for in-house and customers’ warehouse management systems and systems integration.  He led the process design, network analysis and design, and implementation of 23 strategic parts centers with call center for 4-hour deliveries to the end-customer and directed detailed design and implementation of strategic parts centers and distribution centers for forward and reverse logistics.  He led the design of a global solution for spare parts delivery with distribution centers in Europe, Asia, and North America.  As Senior Program Manager at Ryder Systems, he led complex integrated business logistics programs.
At GE Medical Systems, he was responsible for Productivity, Manpower Modeling, Warranty, Regional Import/Export, Quality and Six Sigma, Global Distribution Purchasing, Service and Parts Strategy, and domestic and international transportation.  His teams benchmarked regional successes and developed measurement improvement programs, productivity and customer satisfaction improvement programs and laptop debriefing process implementation.  He led the Latin America Six Sigma Service Uptime program and managed the distributor logistics staff, improving domestic and imports operations and reducing imports cycle times 40%.  He increased customer satisfaction for parts delivery from 37% to 84% in 3 years, by re-designing the warehouse network and outsourcing the warehouses.

——————————–  Education and Honors —————————————————-
B.S., Industrial Engineering, Lehigh University
M.B.A., Transportation & Distribution Management and Finance, Syracuse University

  • GE Medical Systems Management Awards – 1994, 1996, GE Elfun Membership – 1996
  • Quarterly Business Driver Award – Air Express Carrier – 1993
  • Research Assistant Award – Syracuse University – 1989,
  • Delta Nu Alpha Transportation Fraternity National Paper Award – 1989

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Have a question? Just contact me at John.Sills@supplychainconsultingusa.com

Contact Us – SupplyChainConsultingUSA.com

If you have any questions regarding the content in this website, about the products and services that are mentioned, or just any questions at all don’t hesitate to contact me at the following address. I’d also love to hear any feedback on the site if you’ve found it helpful or have some ideas about how I can improve the site in some way.

Please contact me at John.Sills@supplychainconsultingusa.com or call me at 954-907-4508.  We service clients all over the world but our local cities we service is Miami, Ft. Lauderdale, Pompano Beach, Boca Raton, West Palm Beach.

I will reply to all messages as soon as possible.

John Sills

About Supply Chain Consulting USA

SupplyChainConsultingUSA.com is dedicated to providing quality information on the subject of Supply Chain Management and in particular, on how Supply Chain Consulting can help your company obtain the best Logistics Solutions.

Here you will find helpful reviews, informative information and tips and much more. This site is in the format of a ‘weblog’ so that each time I post new information, it will come to the top of the front page. This means that you can check back here frequently to see new updates to the information found here.

You can navigate through the site by using the menus on the sides of the page. Also don’t hesitate to follow the links you see in bold throughout each post to learn more about the product or service being spoken about.

This site has keyword luv, comment luv and do follow blogs with top commenter running.  Quality comments will allow “do follow” links.

I hope you find the information I provide valuable and helpful.

All the best,

John Sills