How to set up lean supply chain management
The supply chain management of your manufacturing organization will play a large role in how ultimately successful your business is. It is important to know that the type of supply chain management that you use will play a direct part in how profitable your production line will be. This is why most manufacturers choose to set up a lean supply chain. You can streamline your manufacturing process and the supply chain by basing is on principles of lean manufacturing. When the supply chain is managed with lean principles there will not only be a reduction in the cost of production but an improvement in the efficiency of the entire production process.
Manufacturers will need to first determine where waste is occurring on the supply chain. This can be actual waste or the overuse of resources that are necessary to the production process. This waste can be measured in time, materials, or money that was spent on the production process. Keep in mind that while it can be tedious to try and determine these areas by implementing lean supply chain management you can improve your overall competitiveness in your market. Here is what you need to know about how to set up lean supply chain management-
- Start with purchasing-Most manufacturers begin the process of implementing lean supply chain management in this area. This is important since purchasing can be a complex process for many manufacturers. This is especially true if your company uses local purchasing along with corporate based purchasing. This can result in large variations in price between vendors which can generate large amounts of waste. One way to implement lean supply chain management is by having one purchasing contact, one contract, and one price for all purchasing at all locations. If this sounds daunting keep in mind that there is technology that can help to not only put this process in place but keep it streamlined.
- Consider all of the shipping- It is important to keep in mind that if it is used to move materials (either raw or finished), or people then it is part of the supply chain and worthy of examination for implementation of lean supply chain management. If you are the owner of a manufacturing company who is wanting to use a lean supply chain then it is crucial to look at all transportation that goes on within your company. You want to make sure that all transportation either in-house or shipping outside of the company is done in the most carefully streamlined way in order to reduce the chances of waste. All shipping decisions should be made with an emphasis on using lean supply chain management principles. You want to make sure that everything and everyone is moved in the most cost effective way. This often means that shipping options will need to be reduced in order to obtain a reduction in the overall cost.
- Examine the warehouse-There is another place within most manufacturing companies that should be closely examined in order to look for waste and implement improvements in the supply chain management. This place is the warehouse. Warehousing is an important part of the manufacturing process but lack of management can mean that large amounts of waste are occurring. You want to make sure that whatever steps are being used in the warehouse only add value to the final production process. In addition, any inventory that is being warehoused needs to be managed closely. Lean supply chain management means reducing any inventory that is not necessary. Keep in mind that too much inventory not only takes up valuable cash but costs the company money to maintain and store it. There are many different ways that lean supply chain management can be applied to the warehousing side of the production process and save the company considerable amounts of money.