6 Facts About a Lean Supply Chain Process
In a competitive and cut-throat market, organizations must do all they can to increase productivity, reduce waste, and increase bottom line profitability. As a response to increased competition, many companies today are focusing on a lean supply chain process.
By focusing on value, which is the primary emphasis of the lean methodology, they can reduce resources, time, and costs. Implementing a lean supply chain process can help improve all aspects of the supply chain, including inventory, material handling, work processes, freight, and more.
Becoming leaner isn’t as easy as it may seem, however; that’s why more business leaders are taking lean supply chain management course to gain the skills they need to implement the lean approach in all parts of their supply chain operations.
With lean leadership principles, businesses gain many advantages, such as the ones described below.
1. Reduced Risk
In the lean supply chain process, many poorly performed tasks are identified and subsequently outsourced. This not only helps the company gain efficiency and possible cost savings, but it also transfers many risks to the outsourcing experts. Rather than performing tasks poorly, which could lead to poor customer satisfaction, defects, and more, the company can focus on what it does best to deliver better value to the end customer.
2. Customer Satisfaction
With the lean approach, wasted time and long lead times are reduced, which ultimately leads to greater customer satisfaction. Customers receive the products faster, which ensures their needs are met as quickly as possible. The customer experience is more important today than ever before. Increasing satisfaction improves loyalty, which translates into more revenue.
3. Lead Time Reduction
Long lead times are described as the gaps between steps in the supply chain. If you’re waiting between the time you receive raw materials to the time you make it into a functioning product, or the time your product is created to the time it’s shipped to the end user, you’re wasting time and resources. By making your supply chain leaner, you can cut these lead times, which improves efficiency and saves time and money.
4. Productivity Increases
One of the biggest wastes in modern supply chain management is time. If your employees must wait for certain parts to be delivered before they can start work, for example, you lose out. You increase labour costs and reduce productivity. By increasing the efficiency of your supply chain through lean principles, you can effectively increase productivity as well. At the end of the day, this leads to a healthier bottom line. When you strip down your processes to the bare essentials and re-arrange your processes and workflows into a value stream map, you can identify weak links and strengthen them to reduce waste.
5. Inventory Reduction
Many companies try to cut costs through mass production. Unfortunately, this often increases costs, particularly if the goods are not sold. They may also deteriorate while in storage. Too much inventory also takes up too much space and increases storage costs. With lean supply chain management, you can improve mass production or focus on just-in-time processes, which will reduce your inventory levels.
6. Applicable at All Supply Chain Levels
The value-focused mindset of the lean methodology can be applied across all levels of the supply chain, including forecasts and orders, production and transport, and storage and information systems. By reorganizing your workflows, you can improve efficiency, eliminate waste, and reduce costs in all aspects of your supply chain operations. When you focus on improving value, savings and improvements inevitably follow, regardless of which process you’re talking about.
To gain the skills needed to implement the lean methodology in your operations, take a reputable supply chain management course.