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LEAN SUPPLY CHAIN MANAGEMENT PATH TO PROFIT

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Marino Associates, LLC
Marino Associates, LLC

Lean Supply Chain

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LEAN SUPPLY CHAIN MANAGEMENT: A CLEAR PATH TO PROFIT IMPROVEMENT Dan Marino, CPIM Senior Partner Marino Associates, LLC
One of the most aggressive approaches in achieving excellence in Operations is to develop and implement a Superior Lean Supply Chain Management process.
Supply Chain Questions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Best In Class Supply Chain Companies Are Realizing Financial and Operating Advantages over Their Competition ,[object Object],[object Object],[object Object],MORE PROFITABLE
WHAT IS LEAN SUPPLY CHAIN MANAGEMENT? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The process of managing the flow of material and information beginning at the lowest raw material level of the supply chain to the ultimate consumption of the finished product.
Supply Chain Management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
SUPPLY CHAIN MANAGEMENT Raw Material 2nd Tier Suppliers 3rd Tier Suppliers Transportation Direct Suppliers Single Plant Multiple Plants & Warehouses Customer Warehouses Consumer Retail Transportation Distribution MES APS MRP II ERP SUPPLY CHAIN MANAGEMENT (SCM)
SUPPLY CHAIN MANAGEMENT SUCCESS ,[object Object]
Supply Chain Management Needs to be Company Specific ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
LEAN SUPPLY CHAIN BALANCE TO PROFIT ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
THE RESULTS OF AN UNBALANCED SUPPLY CHAIN ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
TO BRING YOUR SUPPLY CHAIN IN BALANCE COMPANIES NEED TO ASK THESE QUESTIONS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
PROFIT IMPROVEMENT STRATEGY Cost Optimization Supplier and Product Development Consolidate Suppliers Pool volume across units Redistribute volume among suppliers Combine commodity volume Compare total costs Model should-cost Renegotiate prices Unbundled pricing Expand geographic supply base Develop new suppliers Profit from global supply/demand imbalances Product and value engineering Substitute materials Buying alternatives Optimize life cycle cost Value Mapping Share information Integrate logistics Support supplier improvements Establish/develop key suppliers Employ strategic alliances Examine make versus buy Develop integrated supply chain Best Price Evaluation Global Sourcing Relationship Restructuring Joint Process Improvement Product Spec. Improvement Volume Concentration Profit Improvement Strategy
[object Object],BARRIERS TO PROFIT IMPROVEMENT Inconsistencies in Business Practices Inconsistencies in the Operation Inconsistencies in New Product Introduction Inconsistencies in Systems Applications Inconsistencies in the Organization
SUPPLY CHAIN TOOLS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
SUPPLY CHAIN RULES ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
SUPPLY CHAIN MANAGEMENT BUSINESS FORCES ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
CRITICAL ELEMENTS OF LEAN SUPPLY CHAIN MANAGEMENT ,[object Object],[object Object],[object Object],[object Object],[object Object]
PROCUREMENT ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
MANUFACTURING ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
MANUFACTURING – Cont'd . ,[object Object],[object Object],[object Object],[object Object]
LOGISTICS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
LOGISTICS – Cont'd. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
LOGISTICS – Cont'd. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
DEMAND MANAGEMENT ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
DEMAND MANAGEMENT – Cont’d. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
DEMAND MANAGEMENT – Cont’d. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
TECHNOLOGY ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
TECHNOLOGY QUESTIONS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
KNOWLEDGE CIRCLE CUSTOMER KNOWLEDGE SCM KNOWLEDGE CIRCLE SUPPLIER KNOWLEDGE INFORMATION KNOWLEDGE PROCESS KNOWLEDGE PRODUCT KNOWLEDGE
CUSTOMER KNOWLEDGE ,[object Object],[object Object],[object Object],[object Object],[object Object]
PRODUCT KNOWLEDGE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
PROCESS KNOWLEDGE ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
INFORMATION KNOWLEDGE ,[object Object],[object Object],[object Object]
SUPPLY CHAIN ASSESSMENT Evaluates Performance and Identifies Opportunities For Improvements in Eight Areas: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Organization and Structure ,[object Object],[object Object],[object Object],[object Object]
Business Systems Environment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Customers ,[object Object],[object Object],[object Object],[object Object]
Suppliers ,[object Object],[object Object],[object Object],[object Object]
Training and Education ,[object Object],[object Object],[object Object]
Performance Measurements ,[object Object],[object Object],[object Object],[object Object]
Product Design and Development ,[object Object],[object Object],[object Object]
Quality ,[object Object],[object Object],[object Object]
Managing your company's most expensive asset, material flow, utilizing a supply chain that can rapidly flow information and material can be a significant competitive differentiator.
Stay on the Path to Profit with Key Performance Indicators ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Days of working capital-DWC (Working Capital/Annual Revenue x 365) Days Sales Outstanding-DSO (Accounts Receivable/Annual Revenue x 365) Days of Inventory- DIO (Inventory Value/COGS x 365) Days Payable Outstanding- DPO (Accounts Payable/Annual Revenue x 365)
FORWARD THINKING MANAGERS ARE IMPLEMENTING AGGRESSIVE LEAN SCM PROGRAMS AS A PRIMARY STRATEGY TO: ,[object Object],[object Object],[object Object],[object Object]
MARINO ASSOCIATES, LLC ,[object Object],[object Object],[object Object],[object Object]

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LEAN SUPPLY CHAIN MANAGEMENT PATH TO PROFIT

  • 1. LEAN SUPPLY CHAIN MANAGEMENT: A CLEAR PATH TO PROFIT IMPROVEMENT Dan Marino, CPIM Senior Partner Marino Associates, LLC
  • 2. One of the most aggressive approaches in achieving excellence in Operations is to develop and implement a Superior Lean Supply Chain Management process.
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  • 7. SUPPLY CHAIN MANAGEMENT Raw Material 2nd Tier Suppliers 3rd Tier Suppliers Transportation Direct Suppliers Single Plant Multiple Plants & Warehouses Customer Warehouses Consumer Retail Transportation Distribution MES APS MRP II ERP SUPPLY CHAIN MANAGEMENT (SCM)
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  • 13. PROFIT IMPROVEMENT STRATEGY Cost Optimization Supplier and Product Development Consolidate Suppliers Pool volume across units Redistribute volume among suppliers Combine commodity volume Compare total costs Model should-cost Renegotiate prices Unbundled pricing Expand geographic supply base Develop new suppliers Profit from global supply/demand imbalances Product and value engineering Substitute materials Buying alternatives Optimize life cycle cost Value Mapping Share information Integrate logistics Support supplier improvements Establish/develop key suppliers Employ strategic alliances Examine make versus buy Develop integrated supply chain Best Price Evaluation Global Sourcing Relationship Restructuring Joint Process Improvement Product Spec. Improvement Volume Concentration Profit Improvement Strategy
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  • 30. KNOWLEDGE CIRCLE CUSTOMER KNOWLEDGE SCM KNOWLEDGE CIRCLE SUPPLIER KNOWLEDGE INFORMATION KNOWLEDGE PROCESS KNOWLEDGE PRODUCT KNOWLEDGE
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  • 44. Managing your company's most expensive asset, material flow, utilizing a supply chain that can rapidly flow information and material can be a significant competitive differentiator.
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