From the outset, it may not seem relevant to someone who has never applied lean manufacturing processes to their manufacturing methods. On the other hand, lean manufacturing processes can really help the supply chain perform a lot better.
In fact, some of the core principles of lean can also be applied directly to supply chains for making them more productive and efficient. Stay with us as we explain the connection between the two.
A Basic Introduction to Lean Manufacturing
Lean manufacturing is based around a series of guiding principles which can be successfully applied to any manufacturing process to see better productivity, profits, cost-effectiveness. The idea is to define the value of any product being manufactured, based on what the customer wants or expects from the manufacturer.
Once the value has been established, it’s then all about eliminating all the things that are unnecessary for achieving that defined value in the final product, within the shortest time possible.
It’s a revolving, continuous cycle of assessments, reassessments, and improvements in the manufacturing process. Even after establishing the perfect process, this established manufacturing process will be evaluated periodically. However, any changes at that point will be implemented incrementally and only if that change does not interrupt the workflow attained.
Supreme Inventory Management
The last core principle of supply chain management states that wastage of resources must be eliminated from the manufacturing process itself, by adopting the famous “Just-In-Time (JIT)” strategy. This is directly related to the supply chain of course, as the principle directly improves inventory management.
JIT is, in many ways, the same as the first lean principle which states that it is a waste of resources and loss of value to both parties if the customer’s needs and expectations from the final product isn’t properly defined. In place of defining value, however, the last principle instructs the manufacturer to define demand and manufacture accordingly.
If you know what the demand is and how much you need to manufacture in order to meet that demand without surplus, then that leaves no chance of overproduction and excess inventory. Managing the inventory and the supply chain becomes easier as the supply chain manager already knows when to deliver what and where in advance. This means that even on the busiest day, the lean manufacturer’s supply chain is going to be ready and on time with the right deliveries.
Elimination of the Mad Rush
When a manufacturing unit adopts lean, they are already aware of the orders that they need to meet, even in times of extreme rush. For example, let’s take the example of a TV manufacturer during the holiday season, who has adopted the lean manufacturing process.
The Issue: Television sets these days are huge and extremely fragile. People working in the supply chain often have trouble with loading, unloading, and delivering them in a rush, without damaging the TVs. Consequently, rushing and safe delivery doesn’t go hand-in-hand here.
The Solution: Data analytics has progressed to a stage where the estimated demand can be projected quite accurately by analysts who are adept with the latest digital tools. Therefore, the television manufacturing unit will only manufacture the number of TV sets likely to be ordered from them.
Once they have the inventory and the orders, they will initiate deliveries to the concerned stores, well in advance. By the time the mad rush arrives, the unit will have made most of the deliveries that they needed to make, and their delivery trucks will be preloaded with the rest. The trucks will be ready to arrive at any destination that they need to, without having to wait for the loading.
Given that only the estimated number of TVs were manufactured, their chances of being left with loaded trucks at the end of the day are almost absent. Even if they run out of inventory by a few TVs, they will not incur any losses and unless their analysts were way off the mark, the lost revenue should not be large enough to matter.
This is just one example, but the same can be said about furniture, Christmas trees, and cars among other heavy products as well. The idea is that by estimating and manufacturing only what is needed, a manufacturing unit can take the load off their supply chain and eliminate the unnecessary rush, which costs the company more money in overtime and product loss due to rush hour truck accidents during the holiday season every year.
By avoiding the mad rush, we are able to establish a smooth, seamless workflow within the supply chain as well, which is also one of the core principles of lean.
Application Requires Education and Training
It should make perfect sense as a concept to anyone who has any idea about working in manufacturing or the supply chain. However, applying the same in a real factory requires proper education and training. The Manufacturing Systems Engineering Course was developed by Kettering Global and GM for that exact purpose.
It should be understood that in order to apply the lean manufacturing process in any manufacturing environment, you need experience in the industry first. The education and training are not meant for beginners, but experienced executives in charge of operations and decision making in particular.
Lean and Supply Chain Technology Work in Perfect Sync
As mentioned in the introduction, lean is not just about manufacturing, although it originated there. Some of the principles can be directly applied to the supply chain as well. A few examples of the same are as follows:
- The supply chain manager knows in advance what they need to deliver, where and when
- This allows them to plan the best possible routes for every truck with the help of AI-assisted GPS systems
- The A-GPS system eliminates unnecessary delays by automatically finding the shortest, least congested routes in real time
On top of everything, the supply chain manager can track the progress and status of each truck on their monitor in real-time and make changes as necessary to reduce any chance of congestion, a delay, or an accident.
Nothing works 100% of the time unfortunately, but massive reduction of any chance that something might go wrong is certainly possible with smart technology and lean principles.