A business can only go as far as the “leanness” of its own supply chain.
The supply chain is a sequential series of processes that occur when distributing a commodity. A lean supply chain rids waste from operations, striving toward the lowest possible cost for individuals in the system. With goods seamlessly travelling through the chain, businesses can meet the precise customer need for the product, thus maximizing profits.
When products move through the supply chain and meet demand with pinpoint accuracy, wasteful overproduction ceases.
A Lean Supply Chain Is Healthy for Business
When Tim Horton’s took on a lean initiative, employees learned each individual’s responsibility in the chain, and productivity improved by approximately 15%. When key members of a supply chain communicate, they can analyse results and set what is called a “future state”, which is the lean supply chain they’ve aimed to accomplish.
If those involved work in harmony, it’ll ensure a smoother flow in operations and make it easier to assess obstacles.
Whether it’s eliminating defects in manufacturing, decluttering the procurement process, reducing unnecessary inventory in the warehouse, or simplifying transportation and shipping, businesses must painstakingly monitor the results with the necessary metrics. It starts with leaning out one logistical process, then creates a blueprint that will reduce waste throughout the entirety of company operations.
Reduce Waste, Increase Profits
There are seven common kinds of waste that truly hinder a business’s profit margins. As a whole, waste in regards to a supply chain involves the superfluous practices only serving to hinder efficiency.
Yet these practices are often embedded into the everyday fabric of a business without being given a second thought. For instance, many larger businesses believe there’s a need for multi-faceted purchasing operations when only one facet is needed. It often leads to unnecessary confusion and hitches in product purchasing, otherwise avoided if they would simply streamline processes with only one level of purchasing.
Businesses grow at a feverish pace and it’s hard to keep up. All they need to do is sit down, analyse the operations, then trim the fat.
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