Professor Dan Jones once referred to the automotive supply chain as ‘the most complex feat of human endeavour on the planet’ and whether you believe this or not probably depends on your own views and experiences. But logistics professionals are under pressure to respond to ever changing customer demands, requiring them to create far more agile and flexible supply chains.
Such demands engage the whole supply chain, to ensure continuously improved quality and added value for customers by adopting and refining the ‘lean’ approach, previously the domain of manufacturing.
The supply chains of all major organisations have undergone massive change over the last 10 years and the customer remains as demanding as ever. Price deflation is still evident in the majority of retailers (even in the face of an increasing global cost base) and logistics and supply chain directors are being asked by CEO’s as to where the next competitive enhancement will come from.
The term lean manufacturing has been alive in automotive for over 20 years and lean and agile supply chain centres and organisations have sprung up from these roots. Supply Chain directors are looking at new solutions where flexibility, agility and responsiveness are set against how their business will view the management of global supply chain risk (the impact of the current UK measures for passengers on the movement of airfreight is a good example of this). Lean logistics is about two clear things: The absolute focus on a customer need and creating a pull system to match this (customer intimacy) and; the removal of waste in every part of the chain, where it does not add value to the first objective (operational excellence).
There are many examples where a continuous improvement focus on these two objectives have created outstanding growth in shareholder value. Toyota is the best example in automotive and increasingly organisations, such as Tesco in retail, are looking to emulate this process change by embracing lean as a way of doing business ‘better everyday’.
Creating an enduring focus of improvement in supply chain operations can be tough. Winning the hearts and minds of key middle management layers is the secret of success in ‘lean operations’. Every DC, whether automated or manually operated, can benefit from a significant level of ongoing engagement and improvement. Waste eradication is based on the seamless integration of people, process and technology. Placing DC’s in the right place and choosing the right partners is absolutely critical, however, an organisation cannot change this infrastructure every year. Success is about changing teams to focus on improvement, unlocking potential through robust yet flexible business processes and then enabling these new ways of working through the application of appropriate technology.
Once the strategic change has been made, keep going, lean logistics is about never standing still and never accepting second best.
Frank Burns, is MD of both Unipart Logistics and Unipart Manufacturing Group