Tuesday, October 6, 2015


It did not start out as a lean supply chain project for a global manufacturing firm. It began about high logistics costs and a possible outsourcing project. But as we assessed their supply chain activity and process, the issues—and project--expanded.
Through interviews we mapped the supply chain value stream process from receipt of a customer order through to delivery of it—the steps and time for each step and between each step. Then we went through actual orders to confirm the process. We found variations, especially for the times, between what we were told and what actually happened. Much of it was on the “inbound” side with issuing purchase orders and receiving the materials.
What we saw were inconsistencies in what was done, how it was done, how long it took, and the results—and all with no measurement or metrics with the overall activity or subsets. This situation, if not corrected, would create problems with implementing the outsourcing. It would transfer existing problems to an outside party.
With our real-world global supply chain experience, LTD Management understood the complexities and issues with what was happening and why. International lean supply chain management was needed. Traditional lean techniques struggle with international supply chains. A realistic approach was needed. Also, the number of products and suppliers meant the entire process could not be easily fixed. Using analysis of suppliers and discussions with staff, we identified and got agreement on key areas and suppliers that needed prioritization and attention.
The purpose was to compress time and to increase reliability. To achieve lean improvements, the program centered on extending the supply chain upstream for the selected suppliers. This was more than collaboration; it was aligning the company supply chain with key suppliers’ supply chains--a de facto vertical integration as to the relationships.
We did maps of the revised processes for the key, selected suppliers and logistics providers. Then we folded that information into a new supply chain value stream map. This gave a picture of what was achievable in this initial phase. Changes were made, corrected, and reinforced. Much of the desired VSM was achieved as to reducing time waste.
With positive results, two steps were the next phase. First, they were to continue what was done in Phase 1. It could not be allowed to slip back with focusing on too many other suppliers. Second, the next tier of suppliers was identified and agreed to—and the program was expanded.
The program went forward with emphasis on not exceed the management and operations reach of the internal and external stakeholders. And the original outsourcing project with these changes was successful.
The biggest opportunity with lean—whether the firm is Build To Order (BTO) or Build To Stock (BTS)—is the international supply chain, often the importing. It is not within the 4 walls of the factory and warehouse. The length and complexity of international require different techniques than traditional lean.