by Keith Carruthers MBA, SCMP

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Saturday, July 31, 2010

Lean Thinking vs. Supply Chain Management

Supply Chain Management is becoming talked about more and more, and has become the common language of our profession. We once talked more with terminology such as Purchasing or Logistics, but the shift to Supply Chain terminology is becoming more apparent with the passage of time. I have even heard it referred to as "the next great Profession" by some colleagues. It would certainly seem that today's Supply Chain professionals are in the "right place at the right time", so to speak.
When I look back on my career, I describe it to people as "very unorthodox". Like many in the Supply Chain profession, I did not dream at a younger age of becoming a Purchasing, Logistics, or Operations expert. After all, the Mick Jaggers, Paul McCartneys, and Bobby Orrs of the world didn't know much about such topics, and then seemed to be making out OK.
Like many others, I went through the academic ranks, and afterwards found myself in the manufacturing world. I spent about 15 years or so in various operational positions in the manufacturing sector, and then one day I was asked to move into the world of materials management, then purchasing, then distribution, and on and on. When the profession of Supply Chain Management began to gain steam, it looked like this "unorthodox" career path had actually put me in an enviable position to succeed in this "next great Profession".
During my years in Operations, I spend a significant amount of time in the pursuit of productivity, efficiency, effectiveness, continuous improvement, and Lean manufacturing. Since that time, I have often seen people present on the topic of Lean Purchasing, Lean Supply Chain, and other similarly branded topics of expertise. This has made me reflect on these two seemingly different worlds, and why I was seeing more and more discussion of how the two could be somehow combined to leverage opportunities for the organization.
So what really is the difference between these two professions, and how can they be combined in some meaningful way to take advantage of opportunities for the organization?
In the Lean world, we are on a constant journey/war against waste. We talk about taking a "systems view", or "holistic approach" to this war on waste, looking at all processes, both inside and outside of our organizations, that do not add value for the end consumer. The key points being the "systems view" and "value for the end consumer". Once we have made major gains within the organization, we often look towards our supplier base, or to delivery to the customer, to try to help them reduce their costs (or increase service, flexibility, etc) so that the entire value stream benefits. It is all about increasing the value for the end consumer.
So what is it that the Supply Chain profession does? Is it not that we take a "systems view", a "holistic approach" to the Supply Chain? When we talk supply chain, we talk about looking both inside and outside of our organizations, looking both upstream and downstream, and looking at how the entire system interacts with one another. We are, in fact, looking through the same lens at the Lean practitioner, and attempting to find opportunities to eliminate cost, or improve service that adds value for the end consumer. In other words, we are looking to find the expenditure of resources that are wasteful, in an effort to try to eliminate them. Sound familiar?
The conclusion that I have come to is that the goals and objectives, as well as the approach taken by these two professions, is very much the same thing. We are all on the same team, trying to accomplish the same thing. Just as the Lean practitioner often looks outside of the "operations group", what many would consider to be their main area of focus, downstream to the distribution side of the business, or upstream to the supply side, we in the Supply Chain Management profession look outside of what many would believe to be our normal areas of focus, to either upstream or downstream to find opportunity for the end consumer.
So, when I sit and listen to people talking about "Lean Supply Chain", "Lean Purchasing", or "Lean Logistics", I wonder how new or special the topic actually is. Maybe it is simply putting more of a "marketing slant" on the topic, branding this new "concept", when in reality, it may be nothing more than leveraging opportunities in the day-to-day world of Strategic Supply Chain Management.
Definately something to think about....................