Lean Supply Chain Expert Aidan Magner answers Linkline’s ‘Five on the Fly’ on lean principles in the supply chain.
What is the lean supply chain and what have the challenges been in this area?
Lean supply chains to me are those that holistically focus on the customer to deliver extreme value. I believe in the definition of a supply chain as that living breathing entity that starts and finishes at the customer’s customer and loops via the suppliers supplier maintaining clear line of sight on delivering value, eliminating waste and doing it right first time every time.
The challenges that face supply chains has been in the willingness and transparency in sharing such information. We traditionally build firewalls and segment our supply chain. Vendor lists have been seen as proprietary information. We have shadowed suppliers from customers and saw ourselves as the sole proprietor of what constitutes value. The net results is that our supply chains are disjointed and aren’t facing the true estimator of value… the end user.
How do businesses adapt to this and where can they find some inspiration?
Essentially supply chains need to evolve or devolve. Supply chains need to evolve into living breathing entities where information is the lifeblood. The concept works on the premise that partnerships are a win win scenario. When we have a supply chain that is functioning from the supplier’s supplier through to the customer, it requires us to look beyond the idea of “beating down price” or forcing one link of the chain to bear all the risk.
Instead we look at how can we share the challenge of offering supreme value for the customer. We need to recognise that the true voice of the customer can vary
depending on time and location, therefore the levers we need to pull to deliver that value needs to change also. Developing a true voice of the customer (VoC) and overlaying that with the true voice of the supply chain (VoSC). Only when these are aligned can we ensure that the supply chain is truly working in sync to deliver true value.
What lessons can we learn from this going forward?
I think we need to start truly sharing the “demand” that is flowing through the supply chain. Whether that demand is in terms of widgets shipping per month, number of discrete customers that need to be serviced, seasonality, or the need to end of life products and services. We have to acknowledge
that if information is the lifeblood of the supply chain, then accuracy of that information is the critical aspect of that. We have a tendency to pool information and re-interpret it, because we may not like it or trust what the raw data has told us. We artificially alter it and consequently send false signals around our supply chain.
Everytime we “touch” the data we parse it and dilute its accuracy so the net result is that the visibility that we have from the customer often bears little resemblance to that propagated through the supply chain. We need to utilise technology to allow our supply PARTNERS unfettered access to the same raw data and work collaboratively to interpret how best to exceed the needs and expectations of the customer.
What advice can you give to businesses thinking of implementing this?
Trust the supply partnerships that we have. Identify the critical links in the supply chain and forge partnerships and relationships with them. Liaise with the true customer to understand what they define as value and invite them to propagate that to the supply partners. Blast through the silo walls and untangle the supply chain.
What does the future hold?
Locally, within Western Europe Brexit is both an opportunity and a threat. There is an opportunity to really dig into the supply chain and understand what the needs of the customer are, we can use this to really build lean and agile supply chains. We are essentially being forced to rebuild our supply chains and we can now build partnerships that really focus on delivering to the customer values right first time every time.
For more information on how Lean Management can help improve your businesses visit www.simplesupplysolutions.com.
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