I enjoyed Tara Parker-Pope’s recent Well column in the New York Times: Getting Doctors to Think About Costs by Pauline Chen, M.D. Dr. Chen opined about how doctors have been typically unaware of how much various procedures, such as CT scans and MRIs, cost when they order them and even whether they are always necessary. She [...]
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In my last post, 9 Ways to Fight a Supplier Price Increase, I listed approaches to handling a supplier price increase. These involved pushing back. These days, commodity prices may be at the heart of increases. They can be volatile and unpredictable and offer little room for black and white approaches. Besides using hedging, [...] I was reading the recent blog post at the Spendmatters: Beyond Shedding the Deadweight in Procurement and Operations. Instead of just cutting headcount, particularly in procurement, Jason Busch suggests other ways to approach cost reduction. Among the suggestions are: driving better efficiency by fully using software solutions in the Procure-to-Pay cycle; using third [...] McKinsey recently published the results of its global survey on managing global supply chains. To boil down a seven-page article: they aren’t managing the risk. Or to quote the article: “relatively few respondents…say that their companies are translating the importance they place on these [risk] factors into corporate action.” Are we surprised at this [...] In a rush of enthusiasm about a lean supply chain, some firms expect that their suppliers will embrace lean with equal passion. Passion for lean can be contagious, but getting suppliers to adopt lean requires much more work than lean inoculation or indoctrination. Before rushing off and sending out an announcement that suppliers should [...] When my company was a small supplier to Boeing, I was of course happy to have landed them as a customer. Our relationship was excellent and added value to both parties. Boeing took a chance with my company, an emerging technology business. And the initial bureaucracy that we had to go through to become a supplier [...] Many companies are concerned about suppliers who are larger than they are. How do you get a 500-pound gorilla to cooperate with you? Can you actually use the term “manage” in relation to a big supplier company? Actually, can you ever really manage even small suppliers? Not really. You can try to manage and [...] In an effort to flow lean to suppliers, firms are often internally focused. They are concerned with how suppliers can support their needs and tend not to view the situation from a systems perspective. Often it is about what suppliers need to do to satisfy their customers — which is certainly an essential ingredient. [...] Some of the hidden cost drivers in the supply chain are relatively easy to uncover, measure and address by adopting classic lean approaches. However, many supply chain problems begin and end with the customer-supplier relationship. The extent to which critical issues, wastes and cost drivers can be identified and [...] The wastes that are part of lean thinking are well-documented, waste being defined as anything that doesn’t add value to the customer or that a customer would not be willing to pay for. The classic seven wastes in lean thinking include: unnecessary transport, inventory, wasted motion, waiting, [...] |
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