Every five to 10 years I write a piece on applying lean principles to supply chains. Each piece takes a slightly different slant based on the times and what I see as the areas of biggest need. This blog will focus on looking at your supply chain through the lens of lean metrics—cost, quality and time.
Recent experience has taught me that while quality and time are critical, the metric that people truly focus their attention on is cost. This metric seems to far outweigh the others when people evaluate their supply chains and make decisions about outsourcing, processes improvement and the expenditure of resources. This is not a bad choice, but I would prefer a more balanced approach to judging a supply chain and what is most important.
I certainly understand making cost a major determining factor in a supply chain. Cost is how most supply chain leaders are measured, but we need to also pay attention to the quality and time dimensions of lean. Reducing waste in the supply chain is at the heart of applying lean concepts to the flow of materials and goods around the globe to the consumer.
Quality in the supply chain means doing everything right the first time, from placing an order for materials and products to final delivery to a consumer. Regardless of what aspects of the supply chain your firm participates in, the mantra of “do it right the first time” applies. This includes the quality of the materials, processes, products and even the paperwork and documents used for delivery. So, when we look at the supply chain as small elements of the broader whole, we can see many opportunities to reduce wasteful processes and practices that impact the overall quality provided by the supply chain.
We frequently see companies ignoring the aspect of time with respect to their supply chain. This is becoming more and more important over time, as customer expectations for faster delivery is required. Product companies have made major strides in meeting the needs of end users with a reduction in delivery time. There is still a long way to go to meet the expectations now in place across the world. The days of allowing one week or more from order to delivery are fading as companies continue to target same- or next-day delivery. Personally, I see this trend continuing to accelerate with more pressure being put on supply chains to deliver faster than ever before.
The applications of lean processes and practices have made marked differences in all metrics of supply chains and will be a driving force in the future. Keeping up with the leaders in supply chain from a cost, quality and time perspective will become critical to overall company success and profitability. I urge you to evaluate your supply chain and look for ways to apply lean principles to reduce waste and improve cost, quality and time.