3.26.2007

Lean Supply Chain is a Key Initiative

Growing numbers of industry executives are making a lean supply chain one of their top priorities, but their use of outdated technologies is a barrier to achieving that goal.


            Those are some of the findings from a survey conducted by software company E2open at the recent SAP Logistics and Supply Chain Management conference, an annual event. Attendees from more than 160 companies completed the survey, ranking their top supply chain initiatives.


            (As an aside, using conference attendees is not a scientific approach to conducting a survey, but the results can still provide some insights.)


            Lean supply chain was the top initiative, identified by 48 percent of the respondents. Close behind was operational improvement programs, identified by 45 percent. The survey defined operational improvement as, for example, obtaining visibility into supply chain information by replacing manual processes with automation.


            Globalization – leveraging economies of scale across multiple operating units – was third at 39 percent. And fourth, at 29 percent, was improvement in trading partner integration by migrating from legacy systems to multi-enterprise supply chain platforms.


            (It’s not surprising that the results of a survey conducted by a software company at another software company’s conference have a bias toward technology issues.)


            Asked to name the top business objectives for their supply chain initiatives, respondents cited:


 



  • Reducing operating costs (66 percent)
  • Reducing inventory (52 percent)
  • Improving on-time delivery (41 percent)
  • Improving availability and cycle times (39 percent)

 


            But what an E2open news release called “significant capability gaps” stand in the way of achieving improvement. That statement is based on what respondents said when asked how they synchronize their supply networks on inventory data, forecasted and actual demand and supply, and other information.


 



  • 44 percent use EDI
  • 42 percent use email
  • 29 percent use Excel spreadsheets

 


            And according to the news release, “numerous respondents indicated that they are still using paper and fax.”


 


            I’m a little startled, though I probably shouldn’t be, that so many companies have not moved up to the most modern technologies. You don’t hear a lot of mention of technology in lean discussions, but we all know technology is essential to a smoothly functioning supply chain.


 


            Is achieving a lean supply chain a key priority at your company? Are you using the best technologies to make that happen? What’s your experience?


 

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