Most sources trace the origin of the phrase "lean, mean fighting machine" to Army basic training camps, but that same motto can apply to the supply chain as well. Supply chain management teams that practice this philosophy focus on increasing efficiency by removing waste, and when they do it right, they put themselves ahead of the competition.
No major change happens overnight, and supply chain management teams that aim to adopt lean practices must embrace incremental change. According to EBN, organizational leaders would do well to begin by focusing on areas that are most critical to the business. While it's true that all parts of the supply chain play an integral role in overall success, adopting a customer-centric mindset can pinpoint areas that will bring about the most significant change.
For instance, supply chain management may try to reduce waste and enhance efficiency in logistics by delivering smaller loads of packages more frequently. This could potentially allow customers to receive products at a much quicker pace while reducing loads on trucks.
Of course, this type of adjustment will have a ripple effect across the supply chain, and management should view that as a positive result. An infectious energy that starts at one point and moves through other parts of the supply chain will eventually lead to end-to-end lean practices.
While that aforementioned ripple effect can bring positive change, it also means supply chain management must look at the big picture - would going lean in one area lead to greater waste and slower processes in others? Does delivering smaller loads of packages impact the company's carbon footprint?
Inbound Logistics outlined a strategy for this purpose. Specifically, supply chain management must assemble a team with members from all areas of the supply chain. Together, these professionals will lay out current processes and where a SKU goes from start to finish. This step should take several days to complete.
The next stage involves planning for a leaner supply chain - what techniques and new ideas could increase efficiency and reduce waste? An integral part in this step is to evaluate the consequences of each adjustment. For example, how will a change in manufacturing affect suppliers? Or, members can set goals and see what changes would be necessary to reach those objectives.
Once the risk is discovered, supply chain management must come up with a plan to make these transitions, implement it and evaluate the success. Creating an effective course of action on the first try is great, but often teams will come across unforeseen challenges and need to collaborate on a new blueprint.
Cost containment is not the be all and end all of supply chain management. Going with supplies that are cheaper but of lower quality in manufacturing, for example, could lead to faulty products, recalls and a tarnished reputation. It's important, then, to strike a balance that allows for a supply chain that is as lean as possible without negatively impacting business success.
Automated data collection and mobility solutions serve as a great way to strike that important equilibrium, especially when integrated with existing ERP systems. This allows those in supply chain management to get further use out of past investments.
There are three key components in extending your ERP investment in this way:
Revamping an ERP system is just one example of the many options supply chain management has for going lean. Other data collection solutions are also important. Going digital in the supply chain means wasteful, environmentally harmful and inefficient paper-based process are replaced with greener and more effective options. Overall, increasing efficiency while still focusing on quality can drive better customer satisfaction and lead to cost containment.
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