- March 31, 2015
- 9:31 am
- John Caltagirone
- no comments
How lean can be adopted
The key principle of lean transformation is to maximize customer value while minimizing and reducing waste. As stated in Supply Chain 247, both the automotive and manufacturing world have adopted lean transformation processes when manufacturing goods. The question is posed why such processes haven’t been adapted for by distribution centers in the fulfillment of orders.
The video below will discuss the difference between lean pull versus traditional push in terms of the fulfillment of orders. Moreover it goes to explain the efficiencies of lean processes.
Lean practices can be beneficial in not only leading to better quality, productivity and capacity operations, but create a positive impact on the financials on the supply chain. The core values of lean are: completely meet demand, fulfil at minimal cost, and deliver at promised time. All of these cores continuously stay balanced for the most part without inferring the other negatively. The measurement of each of the values in a distribution operations varies from business to business, but a definition of each value and its measurements must be applied to implement the process.
The following chart taken from the article, “Ecommerce Order Fulfillment 101: Applying Lean Practices to a Distribution Process” displays the financial benefits that emerge from lean practices. The chart summarizes 3 facilities with all similar builds and profiles and the fourth uses Vargo Companies real-time COFE (Continuous Order Fulfillment Enterprise) outbound order fulfillment system.
COFE takes advantage of current conditions to “pull” orders through the fulfillment process; completely demand means delivering ONLY everything required in an expected condition. Delivery at promised time with COFE allows orders to consistently prioritized for activation. Lastly, fulfilling minimal cost is easily seen as a result of eliminating waste along the entire value stream.
The Supply and Value Chain Center is hosting a Lean Transformation workshop on April 16, 2015 at Loyola University Chicago. It is a great program to attend if you are looking to understand more about lean processes or have questions on how to integrate your company into the lean process. For more information, please click here.
-Riti Patel, Assistant, Supply & Value Chain Center
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