In supply chain management, industry players think of production, distribution, delivery, customer satisfaction, and other things connected to the industry. However, one often neglected area that needs more attention is supply chain waste. Are there wastes in the supply chain industry? Yes, there are! Waste in the supply chain process is beyond money and time: it encompasses unnecessary and excessive packaging, leftover materials in factories, damaged goods, waste of employee's time due to general inefficiency of the system, inadequate route planning, transportation emissions due to poorly managed transportation and logistics system, and unnecessary supply chain processes or stages.
Whatever is in the supply chain system and does not add value is a waste.
The competitive and dynamic nature of the business landscape today makes it paramount for businesses to optimise their processes and operations by minimising waste and maximising value creation throughout the entire supply chain process to remain competitive in their industry and possibly gain an edge over other competitors and to achieve this, Lean Supply-chain Management is necessary.
What Is Lean Supply Chain Management?
This supply chain management concept seeks to minimise waste and maximise value creation throughout the supply chain process to streamline operations, reduce costs, and enhance customer satisfaction.
The framework aims to successfully deliver products from the point of production to the final customer most efficiently with the least waste, thereby reducing lead time and enhancing supply chain resilience.
With proper application of the Lean Supply Chain Concept, there will be,
Reduced supply chain costs.
Lead time reduction.
Enhanced customer satisfaction.
Businesses will develop a competitive edge in the market, positioning themselves for growth.
Maintaining a Lean Supply Chain
While some businesses are already adopting the concept of a lean supply chain, others are interested in it but need help understanding the process. The steps below will enable any company to keep the supply chain lean and optimised.
Use the services of experts: So many businesses today aim to save costs and maximise profit, hence why they prefer to handle the business's supply chain themselves. However, in most cases, they incur more loss than necessary. It is always advisable for companies to incorporate the services of experts like Third Party Logistics 3PL partners in managing their business's supply chain.
Incorporate the use of technology into your supply chain: The adoption of technology and Artificial Intelligence AI into the supply chain processes has resulted in a high level of efficiency and reduction of waste, especially in areas such as data collection and analysis, real-time tracking of shipments, communication, information dissemination, lead time reduction, error reduction, and order fulfillment.
Plan accurately: It is always essential for businesses to have accurate data; this way, they can plan and forecast accurately, especially in areas like customer demand, stock level, supplier capacity, lead time, and other ideas that influence the supply chain. This idea helps them better align their customer's demand and timing with production and shipping schedules.
Efficient inventory management: Proper inventory management is another critical factor in maintaining a lean supply chain. By closely monitoring stock levels and incorporating automated inventory management processes, businesses can avoid having excess inventory or stock not required in the market.
Internal process optimisation: Businesses should look inward into their internal processes and functionalities to identify areas where errors and wastage occur often and then put measures in place to improve on them, probably by recruiting experts or using technologies and artificial intelligence.
Collaboration with other industry players: No business is an island, and in some cases, there may be the need to collaborate with other industry players to get things done efficiently. For example, collaboration with suppliers and Third-Party Logistics partners allows for better communication and coordination throughout the supply chain network.
Benefits of Lean Supply Chain
Adopting a lean supply chain does not guarantee instant business success, but it does more good than harm to a business as it has many benefits, which include,
Increased efficiency: With a lean supply chain, businesses can identify and eliminate unnecessary or repetitive processes within the supply chain by enhancing efficiency and improving performance within the system.
Cost reduction and profit maximisation: As unnecessary processes are eliminated, waste will be reduced, processes will be streamlined, and overall operational costs will be reduced, thus maximising profit.
Improves customer satisfaction: Lean supply chain will help a company understand it's customers better, and this way, it will be able to analyse the customer's needs and align its processes to meet the demand and expectations of the customer, especially in the areas of order fulfillment, product packaging, and delivery time. It also helps improve the communication process between the business and its customers, thereby giving the customer a sense of belonging and maximum satisfaction.
Improved communication and collaboration: With improved technology in the system, businesses will be able to communicate with every party involved in the industry promptly and transparently. Practical cooperation between manufacturers, sellers, and consumers will be enhanced by improved communication.
Waste reduction: The Lean supply chain focuses on eliminating all unnecessary waste within the system, which is done using the different measures highlighted above.
To ensure that the supply chain aspect of your business is free from any form of waste, partner with an experienced supply chain expert like SARA PROCUREMENT SERVICES LIMITED.
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