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 Process

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.