8 Lean Operating Strategies for An Efficient Supply Chain
By Allegiance Staffing
August 4, 2020
Before lean supply chain management was implemented, manufacturing businesses would stock up on a lot of supplies so they could get better prices on materials. So, they ordered everything in bulk and let that inventory sit there until they needed to pull it.
Most companies no longer do this, and instead, they have begun lean supply chain practices to avoid overspending on inventory that is not being used. Lean supply chain management strips away unnecessary elements from a process. Instead of back stocking, management is responsible for identifying these unnecessary elements and focusing on keeping only the valued parts within their supply chain. Keep reading for the key lean operating strategies critical to running an efficient supply chain.
Identify What’s Valuable for an Efficient Supply Chain
Great managers determine what systems can be used to be the most successful and profitable. This also means trimming away the unnecessary and wasteful stuff. There are a lot of methods and tools to assist with this. Here are some examples:
1. Advancements in Technology
Older technology can slow things down in a multitude of ways. The most important examples are it could not work as well as it used to and newer technology optimizes systems by providing quicker solutions. It can be tempting to stick with older technology if it still works well and you don’t want to invest in something new. But the investment will be worth it because the newer technology can fix roadblocks or unnecessary steps you’re paying your team to take.
2. Reduce Lead Time
Satisfy your customer base by reducing unnecessary time spent on inbound and outbound logistics. This will also help to reduce reliance on forecasting, increase flexibility, and avoid overproduction waste. It will take some brainstorming to figure out how lead time can be reduced, but the end result will be worth it.
3. Collaborate with Process Discipline
The most productive way to identify unnecessary systems in processes is to have all members of the supply chain focused on the same goal. This will allow you to:
- Identify more problems that not every person experiences.
- Determine root causes.
- Develop the most effective solutions.
4. Consider Total Cost of Fulfillment
The goal is to satisfy your customers at the lowest possible cost without sacrificing the quality of your product. What can be eliminated that will seriously reduce the money you are spending and still provide the results you need to remain successful?
5. Integrate Sustainability into Supply Chain Operations
It has become more and more important that companies consider their effect on that planet and the way their profit is also impacted. Companies that work for social and environmental sustainability are able to achieve major competitive advantages. Some examples of opportunities to address sustainability within the supply chain are:
- Embedding sustainability as a requirement within processes.
- Reducing carbon inefficiencies.
- Minimizing energy consumption.
- Producing less waste by using recycled or refurbished materials.
- Optimizing travel and transportation.
6. Use Spaghetti Diagrams
Also known as workflow diagrams, spaghetti diagrams reveal the workflow for the processing of materials and the unneeded travel time. The diagram shows this with crisscrossed lines where there have been visits to the same locations or multiple areas, indicating where backtracking has occurred unnecessarily. Analyzing such details can greatly reduce travel times and result in major cost savings.
7. Consider Lean Accounting
Lean accounting is beneficial because it:
- Provides information that is relevant to the cause, giving you actionable tools to improve every level of your organization.
- Helps to eliminate waste within the accounting process while also establishing financial control.
- Reveals accurate and timely information that will activate growth, profitability, and higher cash flow.
8. Hire a Strong Team
A strong, fully committed team member is worth the value of 3 average ones. Furthermore, you only have to pay one person for the same end results. It is easy to hire average employees because the hiring process can be grueling and you need to fill vacant positions quickly, but is it really worth it when you’re paying more for average work? Spending the time to find the quality employees you need will give you faster and stronger results and a leaner payroll, too.
Allegiance Can Help
Allegiance Staffing finds hardworking employees that fit your standards for you. This is what we specialize in, so you can depend on us to build a strong team for you while you use your time on more demanding tasks. Since opening in 2002, we have expanded to 14 states and have over 30 locations. We know what it takes to find employees that are dependable, reach out to us today to learn more.