Background
Most of the buzz and activity around the adoption of lean manufacturing concepts within an enterprise has been linked to the shop floor. Production operations have been the target of most lean manufacturing deployments, but lean manufacturing principles and techniques can be extended beyond the shop floor to processes that are unique to and transcend efficient production operations and supply chain operations. Stretching lean manufacturing principles toward a lean supply chain is a tall order, and only a few early adaptor enterprises such as Toyota, Lockheed-Martin, Nokia, Delphi, and Honeywell can speak to the challenges and successes of lean initiatives. To date, over 50 percent of all U.S. manufactures report some type of lean manufacturing initiative in process, while less than 10 percent report transition of lean principles beyond plant production.
However, these progressive companies show that the extension of lean manufacturing concepts across the interdependent supply chain network of suppliers, customers, and partners can result in real value creation for the savvy enterprise. Lean supply chain operations require continual planning, monitoring, and refinement. They can also undergo transformational changes in response to technological developments. Creating a lean supply chain by streamlining business and production processes to significantly reduce cycle time, increase production yields and quality levels, decrease inventories, minimize waste, lower costs, and increase customer satisfaction are the potential rewards.
But this is changing as leading manufacturers turn to interdependent supply networks which embody back-end business planning and operations in conjunction with lean methodology and practices across the supply chain. Modern supply chain strategies driven by lean manufacturing tools and concepts will distinguish the performance-driven enterprise. Traditional manual pull systems fall short when applied to a networked supply chain model for the following reasons:
As companies deploy lean strategies in the production environment, the following points should be considered as an expansion of the scope of the project.
Focusing on improving lean methodologies and practices through technology can result in enhanced supply chain network communication and collaboration among its participants. Lean enablers in the form of software applications, in conjunction with best practices, are evolving but adoption has been slow. Managing the business process change cycle has been a primary challenge.
Profitably building a lean supply chain network requires that manufacturing operations synchronize with customer demand and produce acceptable quality products as needed. A manufacturing strategy that is based on reduced variability, production to demand, waste elimination, and optimal cycle time will drive over all supply chain success. Manufacturers that cannot control variability will not be able to move toward lean demand driven replenishment strategies cost effectively.
Meeting the requirements of customer driven demand with its implied uncertainty and variability through interdependent supply networks is not a small undertaking and will take time, especially for the cultural aspects of the required change in mindset. Manufacturers must start now by building a cross-functional team to define their manufacturing and supply chain network strategy, and designing a roadmap for deployment of applications that incrementally build manufacturing and supply chain agility.