What are the requirements to establish the lean supply chain?

9 Steps to Establish the Lean Supply Chain: A System of Interconnected & Interdependent Partners

1.       Eliminate All Waste in the Supply Chain So That Only Value Remains

2.       Consider Advancements in Technology To Improve The Supply Chain

3.       Make Customer Usage Visible To All Members of The Supply Chain

4.       Reduce Lead Time

5.       Create a Level Flow/Level Load

6.       Use Pull Systems, Like Kanban

7.       Increase Velocity, Throughput and Reduce Variation

8.       Collaborate and Use Process Discipline

9.       Focus on Total Cost of Fulfillment

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.

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

PLANNING, SOURCING JUST IN TIME, PRODUCING -QUALITY, OPTIMIZE DELIVERY, MINIMISE DEFECTS