Tuesday, April 27, 2010
Wednesday, April 14, 2010
Monday, April 5, 2010
Sunday, April 4, 2010
Lean supply chain – Is that always good
Often have we heard in various supply chain forums and places “ A good supply chain is a lean machine”meaning that we have minimal inventory, delivery should be Just in time and a Configure to order strategy etc. In most cases a manufacturer would want to have a lean system for the raw materials and the Work in progress. But would he want this for finished products as well at the point of sale, I think not.
Take the case of cell phones, with the lead time to introduce a newer phone getting reduced the manufacturers are wanting to keep minimal inventory levels in the supply chain and hence reduce losses due to dead sales for the product. This leads to a make to order scenario.But, does this hold good in today’s highly dynamic market condition. Today’s market requires the manufacturer to keep sufficient inventory at every Point of Sale and avoid missed business due to product non availability. Even the lead time to introduce a competitive product with better features is decreasing by the day. As another example considering the Personal computer market, the consumers usually have similar requirements with standard configuration. So, as a customer unless my requirements are very specific, I would go for a product that essentially delivers with lowest lead time. It is for this reason that we see ‘Fast track laptops’ from Dell and similar from other vendors. Even in the consumer product groups like ‘Soap’, a customer would rarely wait for a typical soap to arrive on the shelf and move to a readily available brand.
The concept of Lean does not hold true in these cases. Though a company wants to have a lean supply chain at the ‘goods in process’ leg but at the same time it wants to have a ‘fat’ supply chain at the customers end. This means the business requires a hybrid system that caters to both push and pull. Pull in terms of having an agile system that responds quickly to any change in customer demands and Push in terms of maintaining sufficient inventory at the end of the system to be able to push sales by minimizing the losses due to non availability of product.
Continue Reading @:
http://www.infosysblogs.com/supply-chain/2010/03/lean_supply_chain_is_that_alwa_1.html?soc=tw0859
Take the case of cell phones, with the lead time to introduce a newer phone getting reduced the manufacturers are wanting to keep minimal inventory levels in the supply chain and hence reduce losses due to dead sales for the product. This leads to a make to order scenario.But, does this hold good in today’s highly dynamic market condition. Today’s market requires the manufacturer to keep sufficient inventory at every Point of Sale and avoid missed business due to product non availability. Even the lead time to introduce a competitive product with better features is decreasing by the day. As another example considering the Personal computer market, the consumers usually have similar requirements with standard configuration. So, as a customer unless my requirements are very specific, I would go for a product that essentially delivers with lowest lead time. It is for this reason that we see ‘Fast track laptops’ from Dell and similar from other vendors. Even in the consumer product groups like ‘Soap’, a customer would rarely wait for a typical soap to arrive on the shelf and move to a readily available brand.
The concept of Lean does not hold true in these cases. Though a company wants to have a lean supply chain at the ‘goods in process’ leg but at the same time it wants to have a ‘fat’ supply chain at the customers end. This means the business requires a hybrid system that caters to both push and pull. Pull in terms of having an agile system that responds quickly to any change in customer demands and Push in terms of maintaining sufficient inventory at the end of the system to be able to push sales by minimizing the losses due to non availability of product.
Continue Reading @:
http://www.infosysblogs.com/supply-chain/2010/03/lean_supply_chain_is_that_alwa_1.html?soc=tw0859
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