What is in this article?:
- Three Strategies to Start Your Lean Supply Chain Journey
- Pursue True Efficiencies
As you lean out your supply chain, focus on your customers even as you work toward achieving total efficiencies while eliminating waste.
Spend any amount of time working with supply chains, and one thing becomes clear: The traditional environment of the supply chain is mostly one of competition. That’s because, in an effort to earn a customer’s business and meet their demands, suppliers are often pitted one against the other to offer the lowest cost possible. But when it comes to overall success of the supplier/client relationship, this short-term competitive approach leaves untapped opportunities in terms of improved quality, cost and lead time, as each along the chain pursues what’s best for themselves as opposed to what’s best for the whole.
What’s the alternative? Foster a cooperative relationship between supplier and customer that allows for greater efficiency and innovation across the board, and makes the need for trade-offs between quality, cost and lead time a thing of the past.
While at first glance this may seem like a monumental undertaking, the fact is that the seeds to your success can be found right under your feet. After all, your supply chain relationships might span the globe, but in order to nurture cooperative working relationships with each member of that chain, it’s easiest to begin at home.
Here, the name of the game is efficiencies. Achieve the three types of efficiencies outlined below, and you’ll be well on your way to meeting the needs of your customers as you enjoy a more cooperative, mutually rewarding working relationship.
Make It Your Goal to Achieve Total Efficiencies instead of Individual Efficiencies
As the term implies, individual efficiencies seek to satisfy the efficiencies of individual assets. In a marketplace that chases ROI, this is the approach that informs (and infects) the decision-making process. For this reason, it’s also one that misses the mark because all too often, maximizing ROI of individual assets isn’t what's needed for the success of the whole. Here’s where working to achieve total efficiencies serves the interests of the entire supply chain.
To get there, begin by seeking to understand your customers’ needs and wants and then designing assets and developing organizational know-how that offers the flexibility to quickly adapt to changes in volume, specification and variety. Even during high growth and economic expansion, avoid falling into the trap of acquiring expensive mass production equipment that forces individual asset ROI based on economy of scale (i.e., equipment that forces large-batch manufacturing regardless of customer demand). Armed with this understanding, you’ll be ready to pursue a customer-driven mindset and establish a spirit of cooperation in your supply chain.