Using Lean Principles to Improve Logistics and Supply Chain Management

Using Lean Principles to Improve Logistics and Supply Chain Management

Introduction

What is the measure of a company’s competitive strength? Simply put, it is the value of its products or services as perceived by its customers. And value creation is the focus of the lean philosophy, first adopted from Toyota’s famed Production System in the late 1980s. An organization applying the lean approach pursues greater value for customers while using fewer resources.

Whether lean is embraced completely and embedded into the culture of an organization, or used as a tool to improve specific aspects of a company’s operations, it has the potential to knit together the parts of a supply chain so that it becomes more than a sub-optimized collection of siloed technologies and processes.

In lean’s early days, only large volume manufacturers, particularly automakers, found application for their production processes, especially where those processes were repetitive. The target of lean was seen mainly as the elimination of waste in manufacturing. If a company required fewer parts or operations to make the same quality product, then lean was doing its part to drive down costs and adding value.

During the past decade, however, with the explosion of international trade and the establishment of more sophisticated work streams — from conception and production to final delivery — customers have become increasingly value-conscious and companies more interested in the lean philosophy. Today lean is seen by many as a valuable tool that can be used in any department or operation to increase value.

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