5 Pillars of Effective Supply Chain Management

Photo by Norma Mortenson on pexels

Have you ever wondered how that phone in your pocket, the shirt you are wearing, or even the meal on your plate got there? The answer lies in a web of networks called supply chains. Supply chain management is the management of all the logistics of a business and its providers, from acquiring raw materials to delivering the final product to the consumer. But what is the key to having this process operate daily? In this article, we unravel the five critical pillars of supply chain management that ensure a seamless delivery of your goods. 

Supply Chain Visibility

Supply chain visibility is the foundation of proper supply chain management. It refers to a holistic and up-to-date view of all factors, ranging from purchase, manufacturing, transportation, and supply. This complete view, if facilitated by advanced technologies like radio frequency identification (RFID), barcoding, and delivery management software like Milenow, allows you to:

• easily feature the shipping of products

• monitor inventory levels

• pinpoint possible problems before they inflate

Increased visibility leads to more informed decision-making and streamlines resource allocation to enhance operational efficiency. In this context, a clear and visible supply chain is crucial for a competitive advantage that helps develop customer trust.

Supplier Relationship Management

Suppliers are essential to the supply chain since they facilitate procurement of raw materials necessary to manufacture goods and services. They ensure a constant supply of material to the production line so that the manufacturing process does not stop. 

A good supplier relationship management model begins with the rigorous screening of potential partners. However, it is also important to identify quality or standard, reliability, and deliverability, as well as aspects of sustainability and the costs incurred. Working with suppliers who provide premium-grade products results in a clear value – a better and cheaper supply chain operation.

However, the benefits of supplier relationship management don’t end here. Its core advantage lies in promoting collaboration. This holistic cooperation model goes beyond the goal of gaining the best price. Thus, sourcing professionals and supplier partners can open new frontiers for product innovation, joint creation, and a more flexible approach to responding to dynamic market conditions. In the end, solid and long-term supply chain relationships support supply chain development for organizations and their suppliers, granting a win-win situation within the supply chain network.

Inventory Optimization

Keeping the inventory track from becoming overstocked or understocked is another crucial factor in supply chain management. When stored in large quantities and for a long time, inventory takes up capital and incurs high costs. On the other hand, having too little inventory creates the problem of stock-out and customer dissatisfaction. 

Businesses may use approaches like forecasting to address this problem. Along with this, they can adjust the safety stock correctly, that is, have adequate stock to ensure that customer demands are met without having to order ample stocks. 

While cost reduction benefits the company's bottom line, it also ensures that customers are offered quality services, thus improving the firm's market position. Moreover, the company can follow concepts like J.I.T. inventory to minimize wastage and enhance its business operations. 

Risk Management

Globalization is a reality! Practically all modern supply chains must navigate its ever-complicating landscape. Many factors, such as natural disasters, geopolitical changes, cyber risks, and supplier unavailability, might hinder an organization's smooth operation. Risk assessment and contingency measures are significant strategic assets that any business needs to have to be ready for such difficulties. 

This is the only way to be on the right side of the equation to prevent setbacks. Businesses need to:

• Consider all possibilities of risk at any level along the entire chain.

• Evaluate the level of each risk on a scale of low to high.

• Employ the services of several suppliers and employ cloud security.

• Develop contingency plans that outline specific actions to identify risks.

Risk mitigation measures also help contain risks and minimize likelihood and impact. With contingency plans, companies can reduce the effects of interruptions to a minimum and continue business operations. In turn, they protect their operations and reputations.

Continuous Improvement

Today, the pace of business is breakneck. Therefore, for supply chains to compete effectively and remain relevant, they have to be dynamic. Constant improvement and innovation are the premise of the overall goal.

This could be described as supply chain flexing. Organizations always need to evaluate and review different activities and establish areas for improvement. This strategy enables the firm to be flexible and adapt to situations in the market as they exist since markets are constantly changing.

Supply chain management is a complex process, but by adopting these pillars and implementing practices, it will be possible for companies to tackle the challenges involved and gain a lasting edge in the current dynamic business environment.

Author Bio:

Rabab Toor is a content manager at Squarepeg and a freelance writer. With a keen interest in technology, the latest trends in digital marketing, logistics, and crypto, she enjoys sharing her insights and expertise on Medium.

Lean Quote: Circles of Influence vs Circles of Power

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"Never mistake the power of influence."   —  Jim Rohn

Influence is how you get things done as a leader. In order to influence others, you must build trusting relationships and show genuine concern on an individual level.

Just as managers have subordinates and leaders have followers, managers create circles of power while leaders create circles of influence.

The quickest way to figure out which of the two you’re doing is to count the number of people outside your reporting hierarchy who come to you for advice. The more that do, the more likely it is that you are perceived to be a leader.

Management consists of controlling a group or a set of entities to accomplish a goal. Leadership refers to an individual’s ability to influence, motivate, and enable others to contribute toward organizational success. Influence and inspiration separate leaders from managers, not power and control.

Be respectful in all of your interactions. Earnestly motivate your employees to accomplish noteworthy tasks and provide recognition rather than seek it. Become a good listener, then follow through and follow up. Share your wisdom and be transparent in your words and actions. When you become someone who employees look up to, you will have the influence you need to lead.

Lean Moonshine – A Powerful Improvement Method

https://www.arcar.org/video-10it6hpcloo

No this is not what you’re thinking if you’ve seen the show Moonshiners or tried some moonshine before. During prohibition in the United States, individuals illegally produced liquor mostly at night under the light of the moon. Raw materials used to make the liquor (called Moonshine) were varied, some poisonous, and the equipment was most likely constructed of re-used bits and pieces of copper and other metals. No two stills were identical, and the moonshiners used a bit of creativity to create a working system.

At Wiremold (where I worked) we used the Shingjiutsu Consulting Company to transform the business and teach us kaizen. Mr. Chihiro Nakao, founder Shingijutsu, transformed the Moonshine concept into a tool and method to innovate and create new ideas and solutions with a focus on production processes. This kaizen (continuous improvement) tool is a practical method to use your critical thinking skills to drive to a solution. Traditional methods, creating a project task force, analyzing/evaluating the problem are tedious and ineffective. Instead, pursue a “no excuse” attitude and create a solution to the problem. Moonshine enables the team to create prototypes through “trystorming” and as referred to by some as “cardboard engineering” using examples from nature as input.

Employees use simple and inexpensive materials to find solutions to problems they encounter in their day-to-day work. Using affordable materials means fewer budget constraints and lets employees give free rein to their creativity.

Focus of the Moonshine

• Emphasis on creativity, using only materials that are directly available. ‘Doing a lot with a little.’
• Encourage experimentation, using simulations, prototyping, and trials to explore and inspire. ‘Try-storming.’
• Collaboration and observation of how peers work.
• Get out of the typical workspace. A change of scenery can help stimulate new ideas.
• Little to no structure helps the flow of creativity flowing smoothly.
• Leader enabled, but not directed.

What’s more, that fear of failure doesn’t hinder creativity. Quite the opposite—failure is a normal part of the creative process. You just roll up their sleeves and find a way to make it better. They use ingenuity to create simple physical prototypes quickly.

At Wiremold we had a Moonshine shop that focused on rapid prototyping and design solutions that aided in many trial-and-error testing iterations. This team was used in all kaizen activities and was big asset in our trystorming culture.

I think all companies can benefit from space and where they tinker and make mistakes. It should contain all sorts of tools, old equipment and machinery at a minimum. And management needs to trust them enough that they can be left to figure things out in there. Otherwise where does creativity come from.

Meet-up: 5 Questions from Within the Lean Community With Ron Pereira

In May 2024 A Lean Journey Blog turned 15 and as I look back on how I got started and who influenced my journey I wanted to revisit a previous series I started in 2012 called the Meet-up. One of the things I am so fond of in the Lean community is the general wiliness to share with each other. I have learned so much from my very experienced colleagues since I have been an active contributor. Every month I roundup the best Lean related posts and articles I found particularly valuable from these fellow bloggers and contributors. Each one has their own story and opinions to share.

The goal of Meet-up is provide you an opportunity to meet some influential voices in the Lean community. I will ask these authors a series of questions to learn about them, their lessons, and get their perspective on trends in industry.

In today's edition, we are going to meet-up with Ron Pereira, Co-founder and Managing Director of Gemba Academy. I met Ron online early on in my blogging journey from his online blog and early days at Gemba Academy. The value of continuous learning has been a lifelong pursuit of mine and something we've shared. Listen to Ron's words of wisdom regarding Lean and the scientific method.

Lean Quote: America (and Lean) is Land of Opportunity

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

"America is another name for opportunity."   —  Ralph Waldo Emerson

America is known as the land of opportunity, where one could achieve anything they put their mind to, no matter who they are. Thousands of people immigrate to the United States every year from different parts of the world to have access to these kinds of opportunities. This is what is known as "the American dream". One of the many reasons America is such a great country is the diversity you see all around.

Change brings new opportunities, new people, and a new perspective. It can be a difficult thing and people commonly resist change. It can be stressful especially when it is unknown and uncertain. However, change is necessary for growth.

Change takes courage and commitment. Courage means trusting yourself to overcome your fears and doing what you are afraid to do. Courage increases conviction and inspires others to confront their fears.

Lean is about building a culture, one that respects all employees and enables them to pursue opportunities to improve their work and share ideas for continuous improvement. Changing your mindset to inspire a culture of continuous improvement and the act of making something better provides a new way to think and uncover all kinds of opportunities.

Change can be very healthy and liberating. It leads to opportunities. Those opportunities represent progress. Keep moving forward.

Happy Independence Day – Lean’s Freedom Lesson

Today, we celebrate Independence Day in the US. The 4th of July is an extremely patriotic holiday where we celebrate the independence of our country. People celebrate with family and friend gatherings, barbecues, parties, games, food, fun, festivals, parades, musical events and fireworks.

Freedom is not just the natural right of every human. It is the state of mind that enables people to create the greatest and the most inspiring things. The spirit of freedom gives us the power to conquer new heights, whether it is a real mountain peak or a bold business challenge.

Lean is all about finding better ways to do things, so that they require less effort, less time and fewer resources. It is not about cost reduction – penny-pinching, cutting investment, taking out people – it is about finding better ways to get work done. It is about developing a mindset, methods, and tools to identify and eliminate waste in all its forms at every opportunity. It is about freeing up resources because you no longer need to use them.

Lean manufacturing provides your workforce the freedom that they need to own and maximize their productivity. In a Lean production plant, the "freedom to control one's work" replaces the "mind numbing stress" of mass production. Armed with the skills they need to control their environment workers have the opportunity to think actively, even proactively to solve workplace problems.

Lean is more than the traditional metrics of improved efficiency, reduced costs and increased throughput. The people-centric approach to the application of Lean creates a better future, driven by empowered individuals working in teams, committed to continuous improvement. It is this culture of responsible freedom and trust that allows employees and their organization to realize the positive benefits of Lean and achieve a successful outcome.

Lean Manufacturing is a business method that extends employees independence.  It provides more employees with the tools, methods, and authority to make decisions. It creates teams to measure progress and devise new techniques. This leads to higher employee motivation and productivity as workers are asked to come up with solutions to problems as opposed to having to work with flawed procedures. There is much to be said for greater worker independence in the execution of a lean philosophy. We may not have a day to celebrate like the US but the message is no less important.

Meet-up: 5 Questions from Within the Lean Community With Tim McMahon Re-visited

As you’ve seen I have been revisiting a previous series I started in 2012 called the Meet-up.

One of the things I am so found of in the Lean community is the general wiliness to share with each other.  I have learned some much from my very experienced colleagues since I have been an active contributor.  Every month I roundup the best Lean related posts and articles I found particularly valuable from these fellow bloggers and contributors. Each one has their own story and opinions to share.

The goal of Meet-up is provide you an opportunity to meet some influential voices in the Lean community.  I will ask these authors a series of questions to learn about them, their lessons, and get their perspective on trends in industry.

Today I thought it would be fun to share my responses and thoughts.

1.  Who are you, what organization are you with, and what are your current lean-oriented activities?

I'm the founder and principal contributor of A Lean Journey Blog, a site dedicated to sharing lessons and experiences regarding Lean thinking, improvement practices, and leadership.  

I'm the Senior Manager of Strategy & Operational Excellence for Mirion’s Technologies North America Group. Currently, I am leading the continuous improvement initiatives to proliferate a “Lean” culture at Mirion’s Technologies Group, offering radiation measurement, personnel protection, advanced safety and search, and decontamination and decommissioning solutions for a variety of worldwide applications. I have a passion for teaching problem solving skills, Lean philosophy, and quality improvement methods by actively learning, thinking and engaging people.

For over 25 years, I have been implementing lean within operations management, continuous improvement, and quality disciplines for innovative high tech manufacturing companies such as Lucent Technologies, JDSU, Legrand Wiremold, and Mirion. I've held a number of leadership positions within operations management, Lean, and quality disciplines of innovative high tech manufacturing companies.

2.  How, when, and why did you get introduced to lean and what fueled and fuels the passion?

My introduction to lean manufacturing is probably somewhat typical.  After coming from a research and development role to an operations role I discovered Lean.  In 1999 I started learning what Lean manufacturing was all about and I have been learning about it ever since.   In the beginning Lean was a way for me to meet operational objectives. Now I know it is a profound way of thinking that encompasses all I do. Lean is the best business performance system I have seen.

Looking back now I was so fortunate to have a number of great coaches or sensei as we call them. One of my early teachers was David Stec. He was the co-author of “Better Thinking, Better Results” with Bob Emiliani, who is a great Lean practitioner/teacher in his own right (plus he is a local guy to me) David taught me Lean basic.

I was also fortunate to have had Toyota Production System Sensei named Motoo Usui-san who taught new TPS correctly. He worked in the same office as Taiichi Ohno. Usui-san never gave you an answer only a question. I had to solve the problem myself.   

I had the pleasure to work and lead lean efforts and Wiremold a Shingo Prize winning facility. There are a number of books and a great many practitioners who cut their teeth in that factory who went on to greatness. It was a great sandbox of learning and development.

I have sought out many opportunities to learn along the way.  I hold a Lean Certification and a Six Sigma Black Belt from Central Connecticut State University, Lean Bronze Certification from Society of Manufacturing Engineers, a Master Lean Six Sigma Black Belt from the Management and Strategy Institute, and is a Shingo Institute Alumni.

By drawing on my experience in Lean, Six Sigma, and Quality Management Systems I co-authored ASQ's Lean Handbook, an educational reference guide to support Lean Certification. I have also published 12 articles. I’ve had the pleasure of presenting at 6 conferences, doing 2 radio shows, and hosting more than a dozen webinars.

My passion is fueled by those wonderful "a-ha" moments.  Those times when I see the light turn on for someone, a new lean thinker, a new problem solver, someone that can see wastes and opportunities all around them.  I also enjoy the opportunities I get to meet some great people on similar journeys of their own.  Everyone you meet is another opportunity to learn more.

3.  In your opinion what is the most powerful aspect of lean?

I think my answer to this question has probably changed over last 15 years. While there are a number of powerful aspects of Lean if done well, I am going to focus on two: 1) Use daily management to engage employees in the Gemba and 2) Empower improvement with Kaizen.

 Lean organizations make use of Daily Management systems, a structured process to focus employee’s actions to continuously improve their day-to-day work. Daily Management empowers employees to identify potential process concerns, recommend potential solutions, and learn by implementing process changes. Daily Management, if done right, can be a critical tool in any organization’s toolbox to engage frontline staff in problem-solving and to deliver customer value.

Lean Daily Management includes three components: (1) alignment of goals and effort; (2) visual data management, daily huddles, and problem-solving; and (3) leader standard work.

Kaizen events are a powerful improvement tool because people are empowered to come up with new ideas to help the business. Employees are isolated from their day-to-day responsibilities and allowed to concentrate all their creativity and time on problem-solving and improvement.

The purpose of kaizen is to involve everyone, everywhere, every day in making simple improvements. These small improvements add up overtime and result in an extraordinary and never-ending transformation of processes. Companies which use Kaizens have found they generate energy among those who work in the area being improved and produce immediate gains in productivity and quality.

4.  In your opinion what is the most misunderstood or unrecognized aspect of lean?

Too many think Lean is just about apply tools. Most fail to fully understand the people aspect of a Lean organization. This is a myth perpetuated by less than knowledgeable leaders. Most companies miss the point that 90% of Lean is about people and culture change and only 10% is about the tools. They expect Lean to be the “silver bullet”, which, even if it does not solve all their problems, will at least aid in short-term gains. There are thousands of Lean tools, because each problem requires its own unique tool to help solve it. People are needed to solve problems. Tools don’t apply themselves. Basically, leaders have to learn to think differently and see their customers and business differently, that’s people development, not tools development.

Lean which is commonly referred as TPS (from it's originators) is the "Thinking People System" for me. It is about learning to see waste and solve problems through the development of people. This is a frequently missed and even understated purpose in lean. Lean is truly about people because tools don't solve problems, people solve problems.

As in the namesake of my blog "A Lean Journey - The Quest for True North" Lean is not about the destination but the direction or path you take toward this idealistic place. Lean is not something you check off your "To Do List".  It is about the constant, persistent, even relentless pursuit of improving your current situation. And this improvement brings you to the next current state and so on. Usually, it means doing something you haven’t done before because your old habits will not work in your new system. Lean is not technique you apply to your business system but rather a methodology that replaces your business system.

In my opinion leaning out the waste is not necessarily the difficult part but rather the identification of the wastes.  Waste is all around us, yet many cannot recognize it.  I like to say that "activity does not equal productivity".  The real challenge is to break status quo, get out of your comfort zone, and learn to "see". This means observing the actual condition at the actual place at the actual time.

If you can educate and engage your workforce to relentlessly identify and eliminate waste by solving problems, you will be well on your way to embracing the full power of Lean.

5.  In your opinion what is the biggest opportunity for lean in today's world?  How can that be accomplished?

Every industry can benefit from Lean process improvement, but I would have to say that the biggest opportunity for Lean is in our service industries.  Lean has a proven track record in many manufacturing operations.  I think we all see things every day in our lives as we interact with businesses that bug us.  These are things that cause poor service, higher costs, less value and more waiting.  It would be nice to live in place where continuous improvement is commonplace.   Maybe that sounds utopian, but this is happening in many service industries already.

Government - Government agencies have found that when Lean is implemented, they see an improved understanding of how their own processes work, that it facilitates the quick identification and implementation of improvements and that it builds a culture of continuous improvement. Lean for government focuses on governing and serving citizens with respect and continuously improving service delivery by cutting out "waste" and "inefficiency" in processes; this in turn will result in better services overall, engaged civil servants as well as more value for tax-supported programs and services.

Education - The demand for schools to operate more efficiently and direct more resource to the classroom means Lean methodologies are becoming more and more recognized in education. They can be used to reduce variance and streamline administrative processes, such as admissions and enrollment, certification, grant administration and repair and maintenance practices.

Healthcare - Instilling a Lean culture and implementing Lean processes vastly improves service delivery. In the healthcare industry specifically, the application of Lean can reduce the amount of time nurses spend looking for wheelchairs, patient records or medicines, and increase the amount of time they spend taking of patients.

Retail - The retail and hospitality industry is reliant on excellent customer service, timely delivery of products, and accurate inventory counts. Lean provides a useful strategy for improving these important elements.

Insurance & Financial Services - As another process-driven service industry, companies in financial and legal services are ideally positioned to leverage the benefits of Lean. An application for a bank loan, a request for an insurance quote, or conveyancing for example, may go through many systems and hands before the process is completed. Removing non-value adding tasks and eliminating errors can greatly increase the ability to meet customer requirements faster and more accurately.

Office - Lean can easily be applied to office environments where lots of non-value adding tasks are being carried out. Insufficient equipment, over-ordering of stationery, duplicating processes, having to wait for multiple signatures and underutilized personnel are all examples of waste. The result of removing this waste and streamlining processes is greater productivity, a happier workforce, and a better service for customers.

In fact, any administrative function of a business can benefit from Lean, such as Accounting, Operations, Sales, Marketing, HR and IT. Delivery in all these areas involves processes which can be improved with Lean principles.

There are many more opportunities for Lean to be successful.  Lean focuses on processes; has a measurable impact on time, capacity and customer satisfaction; and involves all employees.  This formula will help many organizations to be more successful.