How the Supply Chain Benefits from a Lean approach?

There is More Competition Than Ever:  

As a matter of facts, it does not (or will not soon) exists any more unique companies on their market (Rockets, aircrafts,  electrical cars, electronics…).

Even niche markets are threatened by competition if profitable.


It is a Global Marketplace: 

Competition is not limited to local, to frontiers… Even for medium and small companies now, the competition is coming from everywhere; It is a global market and we need to be prepared for it.


Dynamics are Changing: 

The World is changing fast, Customers needs are changing with it. Companies need to be  flexible enough to survive, adapt and evolve in this changing environment.


The global market can be describded like a round about …  as the demands on your products and processes increase, they evolve and adapt accordingly, which often results in processes that end up inefficient and wasteful compared to what the competition is doing. Lean is about challenging the way things are done and  identifying and removing waste and inefficiencies to become more competitive. The environment in which an organization operates will continue to change; Lean is helping organizations to become more competitive, to improve their profitability and to deliver more value to customers.


Benefits form Lean - Industry examples :

  • 99.9% Customer Schedule Attainment
  • 15 PPM or Better
  • 4-6 Inventory Days of Supply
  • 92%+ Operational Availability
  • Leveled, Sequenced Production
  • Order to Customer Use - 4 1/2 Hours
  • Functioning Supplier Partnership
  • Strong Production Control Function

Lean versus traditional :

  • Half the hours of engineering effort
  • Half the product development time
  • Half the investment in machinery, tools and equipment
  • Half the hours of human effort in the factory
  • Half the defects in the finished product
  • Half the factory space for the same output
  • A tenth or less of in-process inventories


Building a Lean Supply Chain - Roadmap derived from Lean Principles :

  • Focus on the supplier network value stream
  • Eliminate waste
  • Synchronize flow
  • Minimize both transaction and production costs
  • Establish collaborative relationships while balancing cooperation and competition
  • Ensure visibility and transparency
  • Develop quick response capability
  • Manage uncertainty and risk
  • Align core competencies and complementary capabilities
  • Foster innovation and knowledge-sharing


Building a Lean Supply Chain - From Lean Principles to deployment elements :


Design supplier network architecture

  • Design of supplier network driven by strategic thrust
  • Fewer suppliers; “clustered control”
  • Supplier selection based on Performances

Develop complementary supplier capabilities

  • Ensured process capabilities (certification)
  • Targeted supplier development (EN9100, EFQM, Lean, kaizen)
  • Greater responsibilities delegated to suppliers 

Create flow and pull throughout the supplier network

  • Linked business processes IT / IS infrastructure
  • Two-way information exchange & visibility
  • Synchronized production & delivery (JIT)

Establish cooperative relationships & effective coordination mechanisms

  • Joint problem solving ; mutual assistance
  • Partnership & strategic alliances
  • Open & timely communications
  • Increased interdependence & “shared destiny” 

Maximize flexibility & responsiveness

  • Seamless information flow
  • Flexible contracting
  • Rapid response capability

Optimize product development though early supplier integration

  • Integrate suppliers early into design & development IPT’s
  • Collaborative design; architectural innovation
  • Open communication & information sharing
  • Target costing ; Design-to-Cost 

Integrate knowledge and foster innovation

  • Knowledge-sharing; technology transfer 
  • Aligned technology roadmaps

Key enablers & practices :

  • Synchronised production & delivery
  • Early supplier integration into design and development IPT’s
  • Partnership & strategic alliances


 Examples of Lean benefits from a synchronised production & delivery as key enabler to a Lean Supply Chain : 

  • Integrated supplier lead times and delivery schedules
  • Flow from supplier pulled by customer demand (using takt time, load leveling, line balancing, single piece flow)
  • Minimized inventory through all tiers of the supply chain
  • On-time supplier delivery to point of use
  • Minimal source of incoming inspection
  • Effective two-way communication links to coordinated production & delivery schedules
  • Striving for zero quality defects essential to success
  • Greater efficiency and profitability throughout the supplier network


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