Thinking Lean, Acting Lean = Being Lean...

Says Bruce Tompkins in ...Lean Thinking for the Supply Chain

A lean supply chain is one that produces just what and how much is needed, when it is needed, and where it is needed.

That's brevity for you that masks the utter transformation that an entire firm - its supply chain, manufacturing, personnel, accounting, finance, sales and management, have to go through in order to be lean. And that's the destination - being lean.
There are two conceptual definitions in Lean thinking - Value and Waste.
What is Value?

Value, in the context of lean, is defined as something that the customer is willing to pay for. Value-adding activities transform materials and information into something a customer wants. Non-value-adding activities consume resources and do not directly contribute to the end result desired by the customer.

So then, what is Waste?

Waste, therefore, is defined as anything that does not add value from the customer's perspective.

If anything else, Lean is really about letting your customer define conceptually, what the firm is all about. Well, not quite that way. It is really the firm's understanding of how the customer(s) would conceptually define the firms' activities.
So while a customer might be willing to pay for feature A which require Processes X,Y and Z, a customer doesn't really wish to pay for the time that it spends waiting and being transported between Processes X, Y and Z.
How does lean thinking figure into the Supply Chain space?
If Value is what the customer wants, then Value is what the customer gets.

Lean principles focus on creating value by:

• Specifying value from the perspective of the end customer


• Determining a value system by:


• Identifying all of the steps required to create value


• Mapping the value stream


• Challenging every step by asking why five times


• Lining up value, creating steps so they occur in rapid sequence


• Creating flow with capable, available, and adequate processes


• Pulling materials, parts, products, and information from customers


• Continuously improving to reduce and eliminate waste

This is where getting the customer into the lean initiative makes a lot of sense. Instead of specifying it from the customer's perspective which is equivalent to the firm's understanding of the customer's perspective, it makes a whole lot of sense to get a few key customers involved in the lean process - not easy but it can't hurt.

If the customer doesn't want Waste, then the firm has to find it and kill it.

The "Waste" reduction process begins with the question "What can we do to improve?" Some answers may include:

• Stop defective products at their source


• Flow processes together or change the physical relationship of components of the process


• Eliminate excess material handling or costly handling steps


• Eliminate or reduce pointless process steps


• Reduce the time spent waiting for parts, orders, other people, or information

My interest in Quick Response methodology (which is a kind of lean thinking put into action) exposed me to certain kinds of software based on applied queuing theory that is very helpful in just the above.
All of the above is internal to a firm's activities and its quest to being lean but a supply chain involves actors within and without the firm. So how does lean thinking rework the supply chain?

Lean suppliers (and Lean procurement)

• Lean manufacturing


• Lean warehousing


• Lean transportation


• Lean customers

Of all the above, Lean manufacturing, warehousing and transportation (depending on the extent of outsouring, 3PL involvement and 3rd party warehousing) are the only activities within direct control of the firm. Lean suppliers and procurement as well as lean customers are only within the influence of the firm but outside direct control. Lean customers don't stress the lean system from a delivery and requirements point of view while a lean supplier doesn't stress the system from an input into the firm point of view.

posted by AJ @ 11:25 AM