Many companies and organizations are constantly finding ways to improve their supply chain processes. This is done in order to reduce stress from costs, time and productivity problems. One method that they are implementing is introducing Lean Logistics to their supply chain process
Understanding Lean Logistics
Lean logistics can be defined as recognizing and eliminating wasteful activities from the supply chain process in order to increase workflow and productivity. Introducing lean logistics can improve customer service, reduced environmental impacts, and overall corporate self-regulation. As the supply chain evolves to meets the needs of today’s consumers, finding ways to reduce waste is a big step towards efficiencies.
Lean logistics stems from Lean Thinking – an internal process to optimize supply chain and logistics.
What is Lean Thinking?
Lean thinking is a business methodology of delivering benefits to an organization while eliminating waste. It involves a constant cycle of seeking perfection to maximize product value. This process aims to eliminate inefficiencies and wastes that may end up affecting the final costs for customers.
Lean thinking involves four principles:
- Specify value.
- Map out value stream.
- Create a product flow map.
- Establish customer pull.
Customer value is identified and added to the supply chain network. It is best to label out their desired and perceived values. The desired value refers to what they “desire” in the product. The perceived value is the benefit they believe they will receive after purchase.
Map Out Value Stream
Identify all processes along the supply chain network to eliminate those that do not create value to the final product. Mapping helps organizations understand how value is created into the product from a customer’s perspective.
Create a Product Flow Map
Mapping out the factors and processes will ensure processes are going as intended. This creates a smooth system that minimizes interruptions, inventory problems, and downtime.
Establish Customer Pull
To establish a “Pull-Approach” to supply chain, organizations should only manufacture products when there is customer demand. Doing so enables them to control when they spend their resources to limit waste.
Each of the four processes works together to seek perfection in the supply chain. Lean thinking acts to improve an organization’s structure, minimize their wastes and maximize value.
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