Lean supply chain management

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Lean supply chain management
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Methods and techniques

Lean supply chain management (lean SCM) uses principles of lean manufacturing in order to reduce waste and increase value for customer and every enterprise in the chain. Lean manufacturing is limited to one company and can cover relations with supplier, while lean SCM works throughout the chain. It is applicable to:

  • Procurement,
  • Manufacturing,
  • Warehousing and
  • Freight management
  • Reverse logistics.

Lean supply chain management is applicable in the case of products characterized by the following features:

  • Long life cycle
  • Predictable demand
  • Low frequency of introduction of new variants

A typical example is the automotive industry.

Supply chain integration

Integration of enterprises in the supply chain becomes more and more popular approach to business. It helps reducing costs and increasing performance. In order to optimise integrated supply chain lean supply chain management methods can be applied. The enterprises can share information systems (see below), research and development (R&D), quality control, etc.

Supply chain management improvement

Lean Supply Chain Management is used in the production process, and logistics and distribution of products. For each process, the basic idea of Lean SCM is the prevention or reduction of all actions or events which do not increase the value of the end product. Those events are called waste. There are several lists of waste types:

The most important element for the application of Lean Supply Chain Management in the production process is a good knowledge of the organization and its functioning. It involves obtaining and providing the necessary information, and consequently making the right decisions based on it.

Tools of lean supply chain management

Lean supply chain management uses all tools of lean manufacturing and some tools of lean development including:

  • Jidoka - allowing immediate removal of production problems
  • Hansei - self-awarenes in order to improve
  • Andon - visualisation of process and problems related to quality
  • Just in time - pull production system; reducing inventory kept during the production process
  • Poka yoke - reducing number of occasions for defects
  • Heijunka - production levelling
  • Kaizen - continuous improvement
  • Genchi genbutsu - modification of organizational culture
  • Nemawashi - change management
  • Kanban - organization of production process
  • Muda mura muri - concept of removal of waste
  • Gemba - transparency of processes and work in workplace

Information systems used in lean SCM

In case of lean SCM in the logistics and distribution, information is very important. The process of its acquisition and use, which aims at minimizing transportation costs and inventory. The most commonly used IT systems are:

  • ECR
  • VMI
  • CPFR
  • Quick Response

See also:

References