Lean Supply chain

 Hi, I am Rakesh, Welcome to my blog......

A lean supply chain defines how a well-designed supply chain should operate, delivering products quickly to the end customer, with minimum waste. A lean supply chain is a great enabler for firms striving to be more efficient. To make an already existing supply chain  leaner and more efficient systematic process needs to be followed: 

Develop a system perspective- If every single element in the supply chain try to optimise their operation in isolation, in the long run, it will adversely affect the efficiency of the supply chain. So it is important to adopt a global view. The Theory of Constraints (TOC) avoids the pitfalls of such local thinking by adopting a global perspective, with the objective of maximizing the organization's profit. Application of TOC principles provides a number of levers for systems thinking and supply chain coordination.

Value stream mapping- A comprehensive map which illustrates the flow of physical goods as well as the flow of information. The areas for improvement are highlighted. The weak links in the value chain need to be analysed and the factors hindering the efficient working of these areas are eliminated or modified.

Tackling demand volatility- Uncertainty in customer demand is on the barriers to an organisation's quest to become lean. Understanding this uncertainty can pay high dividends, the experienced demand volatility is mainly caused by the bullwhip effect. Intermediaries stocking huge buffer stock will project a huge demand, while the actual demand stays low. A very useful approach to tackle this is to maximize external variety with minimal internal variety. The idea is to work with a small number of standard products (Modules) in the semi-finished and finishing stage, Which can be combined in various ways to offer a large variety of products.

Develop Metrics Using a Systems Perspective- The performance of a supply chain is the result of policies and procedures that drive various critical segments of the supply chain. As a useful guideline, when developing metrics, it is worth asking whether a metric under consideration:

 a) helps sell more products, profitably, 

b) helps reduce investments in resources or, 

c) helps reduce payments or expenses over the long term. 

If the answer to all these questions is no, then that metric must be modified or a new metric must be developed.