It is clear that the supply chain does not end at purchasing and inventory management. Supply chain management SCM encompasses all of operations to include planning, engineering, manufacturing, logistics and service. One can view the extended supply chain from the suppliers all the way through to the customer. An additional element to SCM is Lean Enterprise. Incorporating continuous improvement to SCM is a perfect union to meet the customer’s requirement. By viewing the customer’s requirements through the value and non value added perspective we can continually improve every link within the supply chain.

I keep a section of chain on my desk as a visual tool. When someone ask what it’s for I will ask them to try to push the chain keeping it straight and properly spaced. It quickly becomes obvious that it’s almost impossible. The chain needs to be pulled for it to remain straight and properly spaced. In lean terms this is called the pull system. The customer pulls and the supply chain reacts to the demand. Making sure demand is met at the right time in the right quantity is the basis of supply chain excellence SCE.

Just like increased cash flow is a result of lower inventory the same holds true in reduced lead time through operational excellence will result in improved customer performance, increased flexibility and response time.

The Sales & Operations Planning process is a perfect tool for the executive leadership to review all the links of the supply chain enabling the team to make the decisions that will meet current and future demand in the most efficient cost effective manner. This requires an executive team that is led by a CEO that is informed about each link of the supply chain.

These are all areas that impact both the top line and bottom line. It doesn’t matter what type of business you’re in, removing waste from your process will help you meet your customer’s requirements faster, better and at a lower cost.