Lean Supply Chains – What Are They?

The term “lean supply chain” is bandied about by many to the point where the term is becoming a bit generic or even meaningless. Just like the lean enterprise, the lean supply chain is easy to understand, but harder to deploy — and, in many cases, is more consultant-speak than anything. But that doesn’t make a lean supply chain any less desirable for companies to pursue. A study by a research team from Accenture, INSEAD and Stanford University showed a statistical correlation between companies with a successful supply chain strategy and significant financial success.

What really is a lean supply chain and how do you develop one?  Lean supply chains have been approached from many angles. Sometimes, from a logistics and transportation or the “planes, trains and automobiles perspective”: how do you keep goods and services flowing in a smooth, uninterrupted and cost-effective fashion from suppliers to customer firms to end customers? Another is the buckets of inventory perspective: how do you keep minimal, but sufficient inventory in the supply chain pipeline in order to provide good service levels without disruptions? A third approach is lean procurement: how can procurement scale and improve its processes to minimize transactions, reduce total cost, and work with the best possible suppliers who meet its requirements? Another approach is adopting lean within both customer and supplier firms: how can each business work to eliminate waste while adding value to its customers?

I am planning to write a few posts to this blog about lean supply chains including more thoughts on such aspects as what are the hidden cost drivers in the supply chain and how to find them as well as ways to reduce supplier risks.

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