Lean Supply Chain Management: What Is It and Why Should You Care?

Nov. 27, 2012
There are many areas in the supply chain where waste can occur, and lean supply chain management can help root out those problem areas.

The concept of “Lean,” which is essentially a team-based approach to continuous improvement focused on eliminating non-value added activities or “waste” from the viewpoint of the customer, has been around in one form or another for many years, at least in manufacturing. It is only recently that it has been applied to the supply chain & logistics management area.

My new book from McGraw-Hill entitled “Lean Supply Chain & Logistics Management” explores this subject in great detail. It offers explanations of both basic and advanced Lean tools, as well as specific Lean implementation opportunities. The book then describes a Lean implementation methodology with critical success factors. Real-world examples and case studies demonstrate how to effectively use this powerful strategy to realize significant, long-term improvements and bottom-line savings.

In the first Chapter (available at the above web page on the left side menu under “Downloads”), we look at what Lean is, why in many cases it fails, how to successfully implement it and the SCOR model of “Plan, Source, Make, Deliver and Return” which is a nice way to identify Lean opportunities in the Supply Chain, and in fact is used for that purpose later in the book.

In terms of the SCOR model, we can look for areas where “waste” might exist such as:

Plan – Sales and Operations Planning (S&OP) process (or lack thereof)

Source – Procurement and the use of JIT principles (including Vendor Managed Inventory or VMI)

Make – (light) Manufacturing, Assembly and Kitting (much of which is done in the warehouse or by a 3PL these days)

Deliver – Transportation optimization (especially important with high fuel prices)

Return – Shipping mistakes, returns, product quality and warranty issues often ignored or an afterthought

It is also discussed why Lean is (or should be) of such great interest to supply chain & logistics professionals and how it can help to give your company a competitive advantage by supporting strategies based upon one or more of the following concepts:

Differentiation – your product is better or different than the competition in some way

Cost Leadership – a low-cost strategy

Response – a quick-response strategy

Over the coming months, this blog will discuss concepts, opportunities, methodologies and applications in the supply chain that will hopefully get you excited about the chance to “energize” your supply cThere are many areas in the supply chain where waste can occur, and lean supply chain management can help root out those problem areas. hains.

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