Tips for lean supply chain management
How a manufacturing business manages its supply chain will in large part determine how successful and profitable its production process will be. Because of the importance of this factor many manufacturers are using lean supply chain management.Lean supply management can help manufacturers streamline their manufacturing process. When the production process has been streamlined it can bring about an improved efficiency rate and a reduction in the cost of production. In order to begin manufacturers will need to closely identify areas of the supply chain that are using unnecessary resources. Keep in mind that these unnecessary resources can be measured in actual time or materials used, or money spent. The bottom line is that when a manufacturer can successfully implement lean supply chain management it will not only improve their ability to be profitable but increase their competiveness in the market. Here are some tips for lean supply change management-
- Begin in the procurement area-One of the most important areas to begin with lean supply chain management is in the procurement area. Purchasing can be an especially complex operation for many manufacturing companies. This is especially true for large manufacturing companies that often use corporate based purchasing in conjunction with local purchasing. What often happens with this kind of system is that vendors are given multiple contracts with wide variations in price depending on their location. If a manufacturing business is going to institute lean supply chain management they will focus on reducing their procurement function. This will mean that each vendor has one specific point of contact, along with one contract and one price for all locations that are involved. Keep in mind that there is lots of new technology that can help to streamline the purchasing function of any manufacturing business. Some of these changes that can be done using technology include:
1. Internet based purchasing that allows purchasers to buy items, from vendor's catalogs containing company wide contract prices.
2. Changes in payment options to vendors which can also streamline processes and help to create a more lean supply chain management.
3. Using a two-way match, which is defined as payment on receipt rather than payment on invoice, will reduce resources in their purchasing department as well as improve supplier relationship.
- Look at the warehouse-Another viable place for lean supply chain management is the warehouse of any manufacturing business. You should closely examine whatever processes are being used in your warehouse to identify and eliminate any areas of waste, and steps that do not add value to your final production process. It is also crucial that manufacturers work to make sure that their inventory is closely managed. There should be a reduction of inventory that is deemed unnecessary. Not only does having too much inventory tie up valuable cash reserves an overload of inventory takes up to many resources to maintain and store it. A manufacturing business can reduce their need for warehouse space, inventory handling, and inventory costs just by reducing inventory that is not crucial to the production process.
- Consider all transportation-If it's used to move people or materials then its part of the supply chain. Manufacturers who are looking at instituting a lean supply chain need to look at all transportation within their business. Transportation should be carefully streamlined in order to avoid wasting resources. It is extremely important that shipping decision are made carefully with a focus on preserving a lean supply chain management. When shipping is done it should be sent with other orders in the most cost effective way possible. When most manufacturers look closely at their shipping they often find that they can reduce both their shipping options and the overall cost.