The Lean approach does not limit itself on those factors, infact brings to the surface at least two more advantages, maybe even more important.
The first one is related to the Organisational flexibility which, as consequence, is the enabler for quicker reactions to succesfully cope with the changes happening to the market heartbeats. That’s a “must have” for most of the businesses, currently.
This result can be achieved in an easier way whenever the warehouses are not plenty of goods, accumulated mostly as safety stocks but without linkage to lead times, consumption rates and supplier reliability.
The second advantage here is the improved visibility of the existing problems, to enable their identification and resolution. Not being able to identify problems means to act like the head-under-the-sand described in the popular belief about ostriches (actually ostriches are not acting that way, maybe they don’t know about this legend).
The approach, quite far from being a strategy, of storing a lot of material in our warehouse so “something to produce or to ship can be easily foud” belongs to the old-minded approaches which hardly fit into the current market dynamics.
By Applying the Problem Solving into an Organisation, what you can discover is definitively an eye opener and, why not, a lesson learned.
At first, the problem solving approach in some cases confirms that to improve the supply chain responsiveness is possible even without putting in place a strong pressure politics over the supplier’s necks.
We may learn that this improvement goal can be achieved thanks to a systematic and cyclical research for the causes responsible for every and each delayed line.
When we look at the supply chain which is the ring we know better than the others? our one? well, let’s start here. The result will convince the most skeptical ones, as the following case is going to show us.
Let’s see together what may happen, based on the analysis of the scenarios and the measured supplier’s On Time Deliveries, monitored period by period through more problem solving loops, looking for the root causes and for effective countermeasures against the poor OTD performances.
To better understand the incremental changes you may do it is mandatory to embrace more months and smoothen out hte fluctuations, as shown in the example represented by the Run Chart at the end of this post.
In the very beginning of the problem solving loops the main causes which may contribute for an important part of the problem, are causes internal to the buying organisation, as shown in the following histogram, in which the blue bars are internal contribution and the red ones external contribution to the delays.
This partially justified the reason why it was not possible to improve the preformances by just telling to the suppliers: “You have to be on time!”
The analysis may reveal an unexpected scenario: the causes for the delays are not completely under the suppliers responsibilities, but can be related to a bad organised workflow, both from a sourcing process perspective and from a sourcing documentation standpoint.
As consequence, the first campain of actions should be initiated internally, which has also the advantage of being more controllable.
Only after becomes possible to perform new problem solving sessions on the remaining issues, when the residual causes for the OTD gap (which was already improving a lot in the meantime) should definitively to be fixed by looking into the suppliers side.
By working with the single suppliers those which contribute more to the gap you may find that some fixes can be done again internally in our organisations, by improving the professionality of the buyers and their personal skills to obtain an higher performance from the supply chain.
In other words, after more and more problem solving approaches, all the actions may be taken inside the sourcing organisation, even if the bad performers were apparently the external ones.
This is the concious-full learning out from this situation, and is also valid as a good milestone to re-think of how we normally evaluate situations in which “if the supplier is late is just his fault”.
It is (again) not by blaming someone (sometimes without a proper assessment) that the problems get fixed. It is the research for the consensus around the real causes which enables the continuous improvement.
By measuring the tasks of each and every buyer, and by improving their softskills, the management of the deadlines with the external suppliers can be dramatically improved.
Expecially in the cases in which the root cause analysis shows up some issues in the suppliers processes, you may find them more collaborative as soon as they will understand the effort made in your organisation, at first.
I believe the lesson learned in here, more than the specific message that a better supplier OTD is possible, is that only by starting blamelessly in measuring and improving the internal processes enable a virtuous environment in which the external organisations are willing to cooperate towards the overall improvements.
A solid and reliable problem solving approach is the perfect partner to maximise the results and to keep the focus on the objective, managin and avoiding every single risk of gold plating or scope creeping, typical of every long lasting project.