LEAN: SUPPLY CHAIN MANAGEMENT AND SOFTWARE

The focus of lean manufacturing is execution—the actual transformation of materials into a product valued by customers. Today, however, lean thinking is increasingly moving into other areas of the enterprise to reduce non-value-added administrative processes and achieve benefits similar to those gained on the shop floor.

At one level, all administrative processes could be considered waste, since they don't add value for which the customer is willing to pay. Yet a minimal level of administrative operations is required, if only to know what the customer has ordered and to ensure delivery of the right product. Moreover, high-mix/low-volume manufacturing pull systems that rely on visual controls—and often have uneven customer demand pull and long back-end supply chain lead times—are not well-suited to lean initiatives. In those more complex manufacturing environments, software can complement lean initiatives for supply chain management by:

Providing the tools to design and manage the production resources, such as dynamic modeling of an "authorized quantity" of material as the methodology of multi-tiered pull implementation

Determining customer order promise dates

Andrew Gort is the former executive vice president of global supply chain management for Celestica and has more than 30 years of experience in material sourcing, procurement, production planning and control, inventory management, logistics, and order fulfillment in both the OEM and CM manufacturing environments.
Contact Andrew at Andrew@andrewgort.com.

Communicating requirements (e.g., part, quantity, date) throughout the value chain

Ensuring that orders are started only when clear to build

Preventing overload of the master schedule

Unfortunately, enterprise resource planning (ERP) and demand management systems aren't run frequently enough to provide the speed of information needed to support lean supply chain initiatives. Instead, lean practitioners need a new approach—one with tools that offer real-time supply chain visibility and facilitate design for flow by replacing inventory with information.

A growing number of industry leaders are turning to Response Management for the answer. Response Management is a new solution category with a flexible, powerful platform for lean manufacturing that enables all supply chain participants to access information and simulate the effects of potential change. For example, a division of a leading aerospace company reports using Response Management to convert a production area making 30 products on the same line to lean, then recalculating Kanban sizes and optimizing work area material storage. The results are impressive:

Lead time shortened from more than 17 days to fewer than 1 (94 percent reduction)

Improvement of on-time product completion from 70 to 100 percent

Significant quality improvements

Lean is a philosophy, not a tool. To succeed with lean, companies must adopt the philosophy first, then obtain the tools needed to apply it. The adaptable, enabling technology provided by Response Management delivers exactly what they need.