Apply lean thinking to your supply chain

It’s often said that the best ability is availability.

In a machine shop, this saying can have many interpretations. Whether it’s machine capacity, indexable inserts, or even coffee, supply must immediately follow demand. They need to be available when they are needed.

In other words, when a job is ready in your setup station, the machine should be prepared for it. When you are assembling your tooling, inserts should be available in your tool crib or dispensing machine. If you run out of coffee, well, then you’re in serious trouble.

Each of these scenarios describes a supply chain at the most local level possible: Inside your shop.

If the pandemic taught us anything, it’s that supply chains are fragile. And the longer the chain, the more likely it is to break. One way to keep this from happening is applying the theory of lean manufacturing to your supply chain.

At its heart, lean manufacturing essentially is a set of practices that reduces waste while still maintaining—even maximizing—productivity and quality. It traditionally occurs inside the confines of your shop environment, within your manufacturing processes themselves. However, by employing the same principles and techniques to your supply chain that you learned while making your production leaner, you can reduce the waste found there as well.

By thinking lean while managing both your suppliers and your customers, you eliminate non-value-added time and reduce lead times. If you get this right, productivity and profitability increase.

Four other “Ps” can help create a lean supply chain:

1. Purchase. Poor purchasing decisions mean you won’t get the right combination of materials, tooling, and labour to the correct machine at the correct time. This creates work-in-process (WIP) and excess inventory, both lean no-nos. Proper purchasing procedures also create valuable supplier contacts and contracts. Lean purchasing isn’t about the lowest price. It instead builds long-term, mutually beneficial supplier relationships.

2. Pull. After the purchase, integration of a lean supply chain into your operations “pulls” raw materials into your shop as they are required. When it’s dialed in, it reduces lead times and works best when your suppliers are close to your shop. Long, complex, global supply chains are fairly incompatible to this approach.

3. Process. After the pull you need to process. These day-to-day manufacturing operations also need monitoring to help ensure every machine is running well. This monitoring provides data that can be used to forecast material, consumables, and labour requirements by reviewing historical trends. The lean scheduling tool kanban can be applied in this part of your supply chain management.

4. Pack. The shop-level supply chain ends when parts are packed and ready to go out the door. Delivery to the customer, and payment, is the last link in the chain. Don’t forget to apply lean theory to your shipping department and warehousing, either.