Key steps for a lean supply chain

The prospect of a lean supply chain is the objective of any manufacturer who wishes to eliminate waste and improve efficiency.

While the term itself is simple, achieving lean processes can be challenging. While waste is often found across manufacturing and office practices, as well as in the supply chain, very few businesses put in the time to lean processes and reduce supply chain waste.

If you want to take the first step towards a lean supply chain, you’ll need to strive for perfection and focus on making 1% gains across a wide range of areas.

But what are the key areas where waste can be eliminated and what can you do to set the wheels in motion, optimise processes, and ultimately, save costs?

Keep reading for more.

 

Lean customer relationship forecasting

Lean supply chains must be customer-oriented.

The first step towards a lean supply chain is to use your ERP modules to manage both customer relationships and supplier relationships.

This means using your CRM to move past simply prospecting for new business and generating leads (although this should remain a fundamental part of your sales process, of course).

Get in touch with your customers as often as possible to ask about expected and suspected changes to order patterns and to discuss how you and your customer can work together for shared gains.

Once you do this, you are more fully utilising your CRM capabilities.

A simple step would be to merge your ERP system with their order management systems to see, as a minimum, planned orders from their side.

In doing so, you can get to grips with forecasting in an accurate and proactive way that is bound to result in significant improvements to your bottom line given enough time.

 

Integrate your business intelligence

The benefit of lean ERP is that it can combine business intelligence from numerous areas. One example might be to combine macro-economic forecasts and point-of-sale data that can be paired with data from the customer base to develop more accurate and wide-ranging order forecasts.

 

Supplier performance measurements

Another tip would be to use your supplier relationship management (SRM) module to learn what changes your suppliers see or are forecasting.

Many of these changes might be characterised as soft data, but don’t underestimate the effects they can add up to. When put together, they can work as valuable predictors.

If you’re not convinced, look at the value stream from your customer’s perspective.

Do all your purchasing actions add value? Do all your supplier’s activities add value? You can put your supplier audits to use to see how well they have eliminated waste.

Record your findings in your ERP SRM module and agree targets to measure improvement.

Another step is to Integrate your SRM with your customer’s communications systems to allow them to report on progress. Share the improvements with customers to demonstrate your desire to reduce your selling price and improve your delivery to them.

What can you expect? We would argue longer, more prosperous relationships with suppliers and customers. This can be extended to include lower costs for the products and the transactions involved.

It is important to monitor supplier performance in your ERP from all directions. What number of orders? What number of lines? What delivery targets have been achieved or failed? Answering these questions will allow you to reduce your transaction costs to the lowest possible amount.

 

Supply chain modelling

Here you might want to ask what you and your suppliers need to do to become more responsive. ERP is already a place where your transactions are stored. Perhaps it can be expanded by utilising user-defined tables and fields to store exactly the information that you need and support the supply chain model you you’re pursuing.

Follow these simple steps and you’ll be well on the way to better forecasting, lower costs and a lean supply chain that serves you and your customers better than ever before.

Want to learn more about lean supply chains and the benefits of ERP? Get in touch with a CBO expert here and get the ball rolling.

 

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