The document discusses the Lean supply chain philosophy which aims to eliminate waste from processes. It notes that non-manufacturing tasks in the supply chain represent 50-80% of lead time but 95% of that time adds no value. Implementing Lean principles like value stream mapping can help identify waste like excess inventory, motion, transportation and help companies meet customer requirements more efficiently. Process mapping and focusing on continuous improvement are key to reducing cycle times and costs through the elimination of non-value added activities across the entire supply chain.

1. helpdesk@construction-productivity.co.uk
htt://www.construction-productivity.co.uk

2. LEAN SUPPLY
CHAIN
•Change is needed to
increase competitiveness
LEAN SUPPLY
CHAIN
•If we stand still, our
competitors will pass us by

3. LEAN SUPPLY
CHAIN
• In hard economic conditions, only
the fittest will survive
LEAN SUPPLY
CHAIN
• Reducing costs and providing the
highest value to our customers is
crucial for success

4. LEAN SUPPLY
CHAIN
•“Lean” is
one way
forward

5. A process
management
philosophy
Derived mostly
from theToyota
Production
System (TPS)
A set of principles with
the goal of cost
reduction through the
elimination of waste

6. Known for its
focus on reducing
waste
Can be applied
anywhere
– Production
– Distribution
– Office and
administration
– Anywhere that work
exists

7. Waste is
everywhere
• Companies have
traditionally
worked to
maximize shop
floor efficiency
Waste is
everywhere
• Companies have
ignored the
importance of
functions outside
the shop floor

8. Non-manufacturing tasks in the
supply chain represent from 50%
to 80% of the total lead-time,
from receiving the request for
products through to delivery

9. These tasks consist of as
much as 95% non-value
added time and represent
more than 25% of the
operational costs

10. Value
• Any action that enhances the
fit, form or function of a product
or service in accordance with
customer requirements
• What the customer is prepared
to pay for

11. Waste
• Any action that does not
enhance the fit form or function
of a product or service in
accordance with customer
requirements
• What the customer doesn’t
want to pay for

12.  T forTransportation-Movement of goods or
information that is not required to perform
the processing
 I for Inventory -Components, work-in-
process and finished product not being
processed
 M for Motion -People or equipment moving
more than is required to perform the
processing

13. Expediting of late
orders
Correction of billing
errors
Returns and warranty
costs
Write-down and
disposal of excess
inventory

14. Rework of
purchased
material
Parts
inspection and
testing
Re-keying data
into multiple
systems
Export and
manual
analysis of data

15. Kaizen
Process reengineering
Value stream mapping
Kanban Poka-yoke

16. Measurement of outputs
Each output in the chain must add value
Focus on customer requirements
Management of tasks to achieve outputs

17. Inputs
Task Task Task
Customer
Requirements
Output s

18. Why do we accept failure in other processes as being less
important?
What would be the result if 99% of orders arrived successfully?
Consistency
99% is not good enough—would you fly in airplanes if they landed
safely 99% of the time?

19. What happens if requirements are exceeded?
Can you think of an example of a requirement being
exceeded that would not be favourable?
Precision
Must meet requirements exactly

20. Process time typically comprises less than x % of the cycle time
Value is only added during the process time
Cycle time is the elapsed time to complete a single cycle of work
Process time is the working time within the cycle

21. The goal is to get
cycle time to equal
process time

22. 1. Select team members
2. Prepare a value stream map
3. Identify process requirements
4. Collect process statistics
– Volumes
– Cycle times
– Process times
– Staffing

23. 5. Identify waste
– Conduct a detailed walk-through
– Determine if requirements are met
– Classify each task as adding value
or waste

24. 6. Develop solutions to eliminate
waste
7. Implement solutions
–Test
– Document
–Train
– Implement

25. 8. Repeat. Go back to step 5 and
select another area to work on
9. As success takes hold, go back to
step 1 and create new teams to look
at other processes in the business

26.  A timber trading company facilitates deals
between buyers in one country and sellers in
another country
 A total of 100,000 such transactions is processed
each year
 An analyst has prepared a value stream process
map on the following page
 The cycle time (“CT”) per order is 20 hours, 5
minutes plus shipping
 The process time (“PT”) per order is 1 hour, 18
minutes

28. Reduce the time to
enter orders
Reduce the wait time
for a back-office process
Shorten the lead time
to obtain raw materials

29. Automate production of shipping documentation
Redesign a job to reduce walking distances
Create a lean work cell for an assembly or production process
Reduce excess work-in-process inventory

30. Reduce the elapsed time to
pick, pack and ship an order
‘Fail-safe’ a
process to
eliminate errors or
defects
Eliminate double
entry of
information into
spreadsheets