Supply Chain Management Blog : Lean

The Tangibles and Intangibles of Supply Chain Collaboration

christianverstraete — Mon, 02 Nov 2009 11:38:00 GMT

The latest recession has gotten a profound impact on many supply chains and forced rethinking strategies . In a quest to reducing costs, many have diminished safety buffers, established lean thinking, and redesigned their flows. In that process they have...(read more)

Can companies learn from space & submarine collisions?

christianverstraete — Wed, 25 Feb 2009 09:55:00 GMT

A couple weeks ago I got my attention drawn to two different events that happened at one week's interval. The first was about the collision of two satellites in space. Indeed, an obsolete Russian military satellite crashed into one of Iridium's...(read more)

Lean and Risk Management, Compatible or Antagonistic?

christianverstraete — Mon, 29 Sep 2008 14:43:00 GMT

I'm currently preparing a presentation to be given at the European Supply Chain Council conference in Budapest in early October. The subject will be how to balance efforts to establish a lean supply chain with risk management. Indeed, in the process of making the supply chain truly lean, there is a danger to diminish the responsiveness of the value chain and as such reduce its capability to respond to an unexpected event.

So, the question really is how "lean efforts" can be balanced with risk mitigation while assessing the implications of the decision that has been taken. To do so, a clear understanding of how the supply chain operates is required. Gaining insight in what happens at suppliers sites is part of that, so they need to share information. And here is where the partnership, discussed in the previous blog, actually comes in.

Building Supply Chain Visibility consists in gathering data from the players in the supply chain for two purposes. First, detailed information allows a clear understanding of what happens at the moment itself. It provides data on inventory levels, material availability/shortage, cycle times, delays in production or transportation etc. This allows spotting potential problems, and initiating the appropriate response to the event, as established in the risk mitigation plan.

Consolidating the gathered data and maintain it over longer periods of time allows to gain understanding of the variances in the system and spot trends. This is really the basis for gaining a better understanding of how the supply chain operates and what its vulnerabilities are. It's those that risk management will have to address.

Mastering the capability to manage variance at the lowest costs is really the Holy Grail these days. It requires the deep understanding of the supply chain I discussed above, and a series of simulation tools to establish how the system reacts to changes. Nothing fancy is required, but a systematic review of the options open.

For example, when discussing with our supply chain team, we reviewed whether it was possible to address the fluctuation in demand by combining a stable, efficiency focused supply chain to deliver the bulk of the requirements with an agile one that would deliver the deltas. This requires the development of a flexible manufacturing facility that can build multiple models cost efficiently, recognizing that there is no way this supply chain will be as efficient as the base one.

Balancing lean and agility is increasingly becoming the focus of the most advanced supply chains, as it seems the only way to address the antagonistic requirements of customers, to have a large variety of products delivered very quickly. If you have any comments or ideas to share, don't hesitate.

Is RFID mainstream?

guillaumeoget — Thu, 21 Aug 2008 19:17:00 GMT

The topic of RFID has been approached a few times in this blog. RFID, being a technology, is supporting a number of usage scenarios and its maturity depends on the area we are looking at. Access control and retail and certainly not at the same place.

Still the middleware space has changed significantly over the last year, with the Oracle/BEA deal, steady progress from Microsoft and SAP, and the Checkpoint/OAT deal more recently. I found this article to be quite interesting about this and trying to look at the future of middleware…http://www.rfidupdate.com/news/07082008.html#editorsNoteWhile the functions provided by the middleware themselves are certainly going to stay in some form, it will be interesting to see if some of the larger players are able to use this as a differentiator versus a “need to have” type set of features.

Why isn't a 60 years old technology more mainstream?

To See or not to See

christianverstraete — Thu, 03 Jul 2008 07:21:00 GMT

At the end of May I had the privilege to participate in AMRResearch’s Supply Chain conference. During the plenary session several presenters spoke about how they were improving their supply chains, and to my great astonishment, all spoke about the need to improve visibility up and down the eco-system. Having been advocating this for a couple years now, I was really surprised to hear the same message from so many companies in different industries.

After having spent years and millions implementing their ERP system, it looks like the more advanced companies are shifting their focus to the operations not just of the company, but of its eco-system. Indeed, these days ERP is no longer a competitive advantage. I remember a conference a couple years ago where a CIO presented its ERP project starting by saying “there are 35 companies in our industry sector; we are the 32^nd to implement SAP”. Sure, that in its own right says it all.

A number of companies have shifted to lean and six sigma, using IT to understand and improve the operations within the enterprise. Unfortunately, many of those have done so by pushing inventory and tasks to suppliers and distribution channels. What they did not envisage was that the end customer has to pay for the inefficiencies in the supply chain, regardless where they are. So, improving one’s own operation without looking at the overall eco-system does not really add value as far as the end customer is concerned.

It is easy to walk through the factory and spot waste; it’s more difficult to do that through the supply chain. And here is where visibility comes in again. To understand the supply chain and where the inefficiencies are, gaining visibility of what happens is mandatory. This can be achieved by sharing information between partners. But that requires a willingness to collaborate, which often implies a different attitude towards suppliers and partners. This is a good subject for a separate entry, so we will come back to that.

When implementing a visibility platform, make sure to separate operational data, the details of what happens in “real-time” in the supply chain, from historical data, typically condensed, but maintained for a long period of time in a data warehouse. The operational data will provide you with insights of potential issues and allow you to react quickly, while the historical data will provide you with trends and allow you to understand how the eco-system works and what could be done to improve it.

Don’t hesitate to react to the above. It will open up the dialogue.