Today the buzz word in supply chain management is a lean supply chain. Question is, although lean supply chain offers many benefits, it has its own set of management challenges. Lean supply chain management is not only for the manufacturing companies but for any setups which need to streamline processes by eliminating non-value added activities.

Firms have a number of areas in their supply chain where wastes such as time, labor, materials and inventory, may be identified. To create a leaner supply chain companies must examine each area of the supply chain and eliminate these wastes. With a lean supply chain, manufacturing processes can be improved to reduce resources wastage while maintaining a high level of operational performance. A few tips are suggested for managing a lean supply chain effectively.

  • Focus on a clear cut long term objective. Try and analyze how each waste category (time, labor, materials and inventory) form a barrier to meet that objective and strategize changes in implementation. A “meeting the numbers” game may not be wise.
  • Cost reduction is the mantra for lean supply chain success. Identify processes which tend to take more resources than expected or form a bottleneck.
  • Change management is critical for your success. Educating employees and getting their confidence is a crucial factor. Always remember, they implement your strategy. Unless they are convinced of the benefits of the change, your strategies will fail.
  • Check you warehousing. Most of the slacks happen there. Loading up of inventory is a sign of added costs.
  • Logistics is a crucial player in your success. Poor shipment can lead to delays in fulfillment of customer orders and hence lower customer satisfaction. This can kill your business. Ensure that the transportation is in place.

Lean supply chains are the need of the day to ensure that the firm achieves higher profitability without losing out on quality or performance. But the risks of disturbing the organization processes are there, and so the managers have to be appreciative of the factors at stake.

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By Kar

Dr. Kar works in the interface of digital transformation and data science. Professionally a professor in one of the top B-Schools of Asia and an alumni of XLRI, he has extensive experience in teaching, training, consultancy and research in reputed institutes. He is a regular contributor of Business Fundas and a frequent author in research platforms. He is widely cited as a researcher. Note: The articles authored in this blog are his personal views and does not reflect that of his affiliations.