Lean Supply Chain By Dave Turbide

Written by Dave Turbide

We are used to talking about Lean in the context of Lean Manufacturing and the techniques that are used to achieve Lean within our own plant – things like 5-S, Poka-Yoke and Kaizen. But can Lean extend beyond the plant? Is the Lean Supply Chain a realistic concept?

Extending Lean makes logical sense. Once we trim our own operations, reduce lead time and improve responsiveness, the path to further improvement leads outside of our own doors to the suppliers, customers, warehouses, transportation providers, and other supporting entities that can help get materials to us sooner and more in line with our needs, and can help speed products through the distribution chain to the end customer.

Some aspects of Lean naturally extend beyond our own four walls. Kanban replenishment, for example, works best when the suppliers are linked in to receive and respond to replenishment triggers directly. In most cases, this involves a blanket purchase agreement and a mechanism to signal releases (electronic kanban) directly to the supplier. Other techniques that support Lean within the plant are not easily moved out into the broader world, however.

It's important not to confuse the techniques with the philosophy. Lean is a focus on adding value and eliminating those activities that don't add value (waste). Lean principles can be applied far beyond the plant floor – throughout the enterprise in such areas as customer service, administration and engineering – and throughout the supply chain. But the specific techniques used within the plant may or may not apply, or may need major rethinking to generate the kinds of improvements that we might expect and demand.

Applying Lean principles to the supply chain means enlisting trading partners in our efforts to drive out waste – it's not something we do by ourselves. The path to Lean in the supply chain can be summed up as CO-CO-CO-Collaboration

CO-operate – establish the kind of close relationship with trading partners that will foster real cooperation to drive waste out of all activities both internal to the partner's operation and ‘in the seams' where product and information move between organizations. There has to be a certain level of trust between partners to enable such cooperation

CO-mmunicate – open communication is the key to close cooperation. Electronic kanban is one example of communication on an operational level, but there also must be communication on a management and process improvement level to open new doors to waste elimination.

CO-ordinate – collaboration is most visible in coordinated activities – smooth hand-offs of data and materials supported by joint efforts to link information and activities to eliminate delays, errors, miscommunication, or surprises.

All this adds up to collaboration, which the dictionary defines as working together, especially in a joint effort. Lean transformation within the plant can pay big dividends but the benefits of extending Lean thinking through the supply chain can be huge.

For more than twenty-five years, Dave Turbide has been a consultant specializing in manufacturing technologies, consulting, and education. He has extensive first-hand knowledge of manufacturing functions and management practices, automated information systems, and vendor manufacturing software offerings. He also has experience in industry analysis, writing, engineering, project management, technical analysis, and management. He has exceptional analytical and communication skills as demonstrated by his published books, articles, papers, and speeches.