One of the benefits of outsourcing, whether you are looking for cost reductions, shorter order cycles, increasing control, improving your processes, customer service or overall visibility of your supply chain, is leveraging the experience, the talent, the processes and the technology that a 3PL can provide. In all cases it all falls back on lean principles and the execution of these. A 3PL can help you achieve the goals and continued improvements you are looking for in your supply chain by implementing a lean culture. Whether you are executing a supply chain with a 3PL or in-house, implementing a lean culture is crucial for any company striving to deliver long-term value and outstanding business performance. Lean practices improve quality and productivity by taking cost and waste out of all facets of an operation, from the procurement of raw materials to the shipment of finished goods.It’s based on a fundamental approach that every step in every process must add value for the customer. At Ryder, five lean guiding principles govern every activity the company conducts in its own and its customers’ warehouses. These principles are:
1. People Involvement 2. Built-in Quality 3. Standardization 4. Short Lead Time 5. Continuous Improvement.
People are Key Involving people in a lean culture means creating an atmosphere that fosters mutual trust and respect. In a lean organization, employees receive formal training to learn how to recognize and eliminate workplace waste and to solve problems. Employees are also cross-trained, so they understand how different jobs work together and they can better identify opportunities for improvement. Another critical element of People Involvement is recognition. Celebrating successes by thanking employees for great suggestions can keep everyone motivated to do their best.
Get it Right the First Time Getting a job done correctly the first time sounds obvious and simple. But many would be surprised how often this element is overlooked. A company should first mistake-proof its processes by engineering supply chain tasks so any worker can perform them correctly. Processes should be tested and assigned metrics for success. A company should also document standards for performing work, using text and photos or illustrations. Instant feedback is also important here. Supervisors should not only address issues immediately with an employee who is struggling to meet production goals or schedules, but should also provide instant positive feedback when they observe employees performing well.
The Best Way is the Only Way In a lean facility, everyone is trained and expected to follow the documented best practice, using exactly the same steps. Standardization can take many forms. Keeping the workplace organized for efficiency, and using signs, symbols, colour codes and other visual tools to inform people about how to do their work, are simple yet effective strategies. Documenting the only acceptable way to perform a task and conducting regular audits also helps to ensure work meets the metrics for quality, cost, speed and safety.
Keep it Moving Lead time is the period that elapses from the moment a customer places an order until that customer receives the goods. There are a number of ways that a company can reduce lead time in a lean operation. First warehouses can be designed to allow work for flow as efficiently as possible from point A to point B. Breaking big jobs into smaller ones is another strategy that helps employees work more efficiently and get orders out the door faster. Planning the pace of work and clearly communicating expectations can help employees stick to their schedules and meet goals. Matching inventory to customer demand, without keeping buffer stock (whenever possible), also ensures that a distribution center can deliver just what customers need, on time.
Continuous Improvement Continuous Improvement is based on the idea that it is more effective to make many small gains over time than to try to accomplish massive gains all at once. This doesn’t happen by chance, however. Continuous improvement requires a structured practice for identifying a problem, analyzing its root causes and implementing solutions to keep it from occurring again. Employees can be trained to do this.
A lean supply chain culture offers tremendous rewards, but also requires a significant commitment. Luckily, becoming lean doesn’t mean a company has to re-engineer its operations. By working with a supply chain partner that has woven lean principles into its very fabric, a business can gain the benefits of lean culture without incurring the associated up-front costs. A 3PL with lean experience already has made the investments, hired the necessary talent and climbed the learning curve. As a result, one can reap the returns of greater efficiency, exceptional quality and the capacity to deliver outstanding value to customers.