Five Steps to a Leaner Supply Chain

Five Steps to a Leaner Supply Chain

The lean manufacturing model pioneered by Toyota may be far too fat for today’s recession-wracked companies. Today’s definition of “lean” needs to extend beyond discrete industrial manufacturing and run up and down supply chains, says JDA Software, a supply chain software company in Scottsdale, Ariz.

JDA has five strategic suggestions for shippers:

1. Commit to “Lean” on an enterprise-wide basis.
This goal need to be embraced across the extended enterprise, JDA says – both internally and externally with supply chain partners.

2. Understand what drives your supply chain.
That sounds obvious, but it's not always easy in a chaotic and fast-changing marketplace. Reexamine your enterprise’s forecasting and demand planning processes and challenge historical assumptions to gain a better understanding of what really drives demand in your business.

3. Tie demand signals tightly to managing supply.
Once those demand drivers are clearly understood, use that knowledge to drive the development of a connected supply chain plan from distribution to production, to raw materials through to optimized sourcing.

4. Leverage the power of IT for global visibility and flexibility.
Of course, you'd expect JDA Software to say this - it is an IT company that sells supply chain software … but this is a really, really good point. I’ve found many companies are turning to technology for help in this recession.

5. Align the lean initiative closely to operational plans and corporate financial goals.
Tightly align demand and supply chain operations with the enterprise’s strategic business plan, and other departments, especially financial management, JDA advises.

You can be sure many companies are taking steps like these right now not only to survive the recession but to position themselves for a recovery. There's no time like a bad time to pursue best practices.

For more on JDA's five suggestions, click here.

What strategic steps do you think shippers should be taking to realign supply chains? What is your company doing to get leaner and get ahead despite this recession? Let us know.