May 2007 | How-To | Ten Tips

Leaning Out Your Supply Chain

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Moving toward a lean supply chain means eliminating waste in three ways: reducing working capital; enhancing operational productivity; and improving "build-in" quality and reliability (implementing quality controls on the front end of any process or procedure). Here are 10 ways to get lean, according to Ian Truesdale and Glen Clark of CEVA Logistics, a Jacksonville, Fla.-based global logistics company.

1. Make your supply chain more compact.Optimize the flow of goods and information through the supply chain. Implement plant and warehouse layouts and designs that streamline inbound and outbound flows.

2. Reduce stock at point-of-use. To support a flexible production schedule, keep a variety of part numbers on hand in the warehouse. By executing lean logistics techniques such as sequencing and sub-assembly you can avoid large inventory stocks and their associated costs.

3. Balance the receipt and delivery of goods. Matching the incoming and outgoing flow of material to customer demands minimizes the amount of material stored in the supply chain, resulting in lower costs.

4. Reduce capital expenditures by closely managing your empty container flow. The reverse logistics process of handling empty containers can be complex, so it needs to be well-managed to guarantee reliable supply and the lowest level of damage. At the same time, a well-managed empty container flow can significantly reduce maintenance and container replacement costs.

5. Balance the work so your cycle time hits close to Takt Time. Every task performed by an operator needs to fall close to Takt Time—the pace of production in each process that is necessary to satisfy customer demand. This scheduling will help ensure minimal waiting time and maximum productivity.

6. Optimize transportation routes. Employ recognized transportation best practices to improve the efficiency of moving goods off the production line and into delivery. By applying concepts such as segregating flows into small and large lots, direct dock-to-line feeding, and combining cycles (one full against one empty), you can avoid wasteful internal transportation processes and optimize available resources.

7. Optimize delivery. Avoid unnecessary replenishment through the use of Kanban and other pull systems. These systems result in replenishment based on consumption, keeping inventory lean.

8. Standardize warehouse processes.Implement stable and repeatable processes, and standardize the time it takes to perform tasks such as picking, packing, and putaway. Standardization helps the warehouse interface more accurately and efficiently with operations outside the four walls, such as transportation.

9. Use visual management aids for information flow. Visual aids are an important part of tracking the physical flow of materials in a plant or warehouse. If everyone on the shop floor can "see" the current production status, they can more easily react to peaks and valleys.

10. End and correct line stoppages. Stopping the production line is costly and often unnecessary. When a problem arises, don't let it go and plan to fix it later. Stop and correct the problem now. You might temporarily slow productivity, but in the long run recurring problems should end.

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