November 18, 2007

Eliminating Waste In The Supply Chain

At its essence, “lean” is about eliminating waste, which in Japanese is called muda, DC Velocity reports. Lean manufacturing programs, for example, target eight specific types of waste: unused creativity, defective parts, waiting, overproduction, overprocessing, unnecessary movement of products, unnecessary movement of people, and ineffective inventory control.

According to the article, unused creativity are the same in any business endeavor. DC Velocity says that the rest of the list is easily adaptable to supply chain processes:

Defective parts translates to supply chain errors of all kinds—from picking errors to incorrect order quantities.

Waiting, for example, can be seen in the way trucks sitting idle awaiting their turn at the dock.

Overproduction has counterparts in over-ordering at both the macro and micro levels of supply chain operations.

Quality inspections, redundant approvals, and order reviews at the conclusion of pick/pack are examples of overprocessing.

The unnecessary movement of products can occur within a warehouse, within a factory, or throughout a distribution network.

The unnecessary movement of people can be seen in warehousing.

Ineffective inventory control is seen in excess inventory based on bad inventory data.

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