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Posted on 1/6/2021

Enhancing Lean Supply Chain Execution Results

William Crane

Great methodologies are timeless, but their applications must evolve. Most Lean Systems are based on Toyota Production System core principles developed in the 1970s. 

These principles, although timeless, have a bias toward manual paper and spreadsheet tools to maintain and continuously improve operations; rightfully so as the technology of the day did not enable the efficient collaboration required to reduce waste real time. 

Our supply chain approaches have rapidly evolved since Lean’s development. Supply chain leaders today are leveraging a host of new business models and organization structures to create value. The unintended consequence of this innovation is exponential expansion of supply chain data inputs. This problem is complicated further by ever increasing environmental changes from geopolitical shifts and health crises which cause our data inputs to change more frequently. 

“Everything I see indicates that the ride will only get faster. The changes will be fundamental. The journey will therefore require a hard and honest look at the ability of organizations to operate with speed and agility,” outlines Klaus Schwab in his aptly titled book The Forth Industrial Revolution. 

Unfortunately, up to 90-percent of the input data that goes into forming our supply chain plans is stored in our team's heads and spreadsheets. This offline data causes a host of problems from costly increased workload to wasted rework when change inevitably occurs. 

Leaders are left with two paths forward; hire more people or get more productive. 

Digitizing for Productivity 

It is important that the same long-term thinking applied to Lean be applied to our supply chain digitization journey. To maximize our efforts, we must focus on a crawl-walk-run approach that empowers us to build on daily small successes. 

The dynamic nature of global business today also requires more agile supply chains. To accomplish this, we need flexible productivity tools to collaborate inside and outside our four walls. Our ability to view real-time our suppliers’ inventory, issues, and opportunities is imperative to driving waste out of our lean extended enterprise.

In addition, companies’ roles in the value chain are dramatically shifting from linear Buyer-Supplier transactional relationships into ecosystems of various partners that co-create value. Thus, our ability to control end customer value creation is less and less over time. We must instead seek ecosystem influence by becoming a “Buyer of choice.” 

The housing supply chain offers a harbinger of innovations. In the home building and building products industries supply is at historic lows. Builders, power tools manufacturers and materials suppliers alike are working closer than ever to maintain supply. Technology is playing a larger role in partnering for mutual success up and down the value chain. Shortages on materials from treated lumber to HVAC systems are providing a helpful nudge that is bringing Buyers and Suppliers closer together. Companies today are not only competing to work with suppliers with the best prices but are vying for access to production capacity and technology innovation. 

Industry 4.0 technology advancements in 1) cloud software for productivity, 2) digitizing data for collaboration, 3) application programming interfaces (APIs) for automation and 4) artificial intelligence (AI) for insights now reduce workload waste required to maintain Lean supply chains. Embracing these new technologies to form a Lean Management System 4.0 is the next natural continuous improvement that is poised to unlock a new productivity boom. 

We have realized success automating select manufacturing operations to drive productivity. Today, we must view digitizing our offline supply chain data as a treasure trove of continuous improvement data that can enable competitive advantage. 

Realizing Results More Quickly 

Hiring freezes have many executives turning to Supply Execution Systems (SES) software, sometimes referred to as Supply Performance Systems (SPS). These systems are similar to Manufacturing Execution Systems (MES), except focused on increasing team collaboration and daily productivity of supply chain execution. Newer purpose-built SES cloud software can be deployed quickly to act as a standalone continuous improvement collaboration tool or connected efficiently to legacy on-premise ERP or newer cloud ERP systems.

Typically, SES software functionality focuses on four core areas: 1) real-time dashboards, 2) automated Plan for Every Part, 3) Agile project and task management and 4) supplier data management. SES value streams are intended to be a system of record for traditional offline and daily supply chain execution data. Further, SES software acts as a daily macro insight tool across the enterprise for supply chain leaders while also serving as a micro daily analysis tool for individual team member tasks. 

Lightweight SES tools can also be extended to suppliers to realize a digital Lean extended enterprise that allows more agile exchanges of data which is critical during times of rapid change. 

Your Supply Chain Digitization Journey 

The internet is overflowing with Industry 4.0 buzz words like automation and AI. View digitizing supply chain data through the lens of core Lean principles. Focus on empowering teams with technology to increase productivity. 

Supply chains are getting more complex as our data exponentially grows. We need to capture all this invaluable supply chain input data and leverage it to make better daily supply chain decisions that consider multiple plans so we can thrive no matter what changes in the world around us. 

Proven Lean methods pared with a practical digitization framework and focused collaborative productivity SES software stands to empower your team to drive supply performance in the days ahead. 

About the Author

William Crane | IndustryStar

William Crane, CEO of IndustryStar, an Ann Arbor, Michigan-based supply chain software and services technology company that empowers leaders with greater supply chain agility and company profitability. William is a trusted advisor in supply chain with demonstrated results starting, launching and enhancing procurement, logistics, supplier quality and manufacturing organizations.

His work has appeared frequently in the Institute for Supply Management (ISM), American Production and Inventory Control Society (APICS), Council of Supply Chain Management Professionals (CSCMP) and Sourcing Industry Group (SIG), among others. William’s passion for bringing technologies to market that have a positive impact on the world can be found via his blog Supply Chain for Tomorrow’s Technology.

William is also Host of the Supply Chain Innovation podcast where he interviews top industry change-makers to uncover strategies, tactics, and tools to expedite, optimize, and de-risk supply chain operations. William may be contacted at william.crane@industrystar.com.

 
 

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