The Supply Chain Process

How Lean Supply Chain Theory Transformed the Automotive Industry

When Mr. Taiichi Ohno of Toyota visited America in 1956, he toured a supermarket and observed how shoppers browsed and selected from a variety of products, which were then replenished by stock clerks. He went on to implement this system within his Toyota automobile factory, which soon became one of the top producers of vehicles in the world.

Mr. Ohno believed that reducing inventory through a customer-driven “pull system” was the key to a powerful and efficient supply chain. The pull system idea became a cornerstone of lean strategy and thinking. Today, companies in a wide variety of industries across the world are using the same approach to improve their supply chain operations.

How a Pull System Benefits the Supply Chain

In a pull system, since production or delivery is initiated by consumption, overproduction is prevented and the flow of goods is based on actual market conditions instead of planning and speculation. What your manufacturing team needs at the moment to produce a customer order is what your production line creates. Since replenishment becomes the priority, workers are more engaged in the process of standardizing procedures. A pull system also makes it easier for management to know what their teams are focused on and to maintain a transparent workflow that’s connected to your company’s most urgent priorities.

Incito’s experienced team helps companies to:

• Identify and eliminate waste within the supply chain.
• Focus on establishing clear customer priorities, and translating those into an action plan to guide production, procurement, and other supply chain activities.
• Use the right tools–from technology to Kanban cards–to streamline production and create transparent systems that make it easy for managers to audit progress at any time.
• Train supply chain workers to quickly and effectively follow the pull method for maximum productivity.
• Design a supply chain that minimizes risks like over-purchasing and over-production, and instead ensures that it’s a reliable and high-return part of a company’s operations.
• Ensure managers understand the value of the pull approach and work with their teams to achieve continuous improvement.

Although perfection may never be achieved, the goal of a lean supply chain is to complete one unit just in time to be delivered. This gives a company the speed and agility to keep in touch with customer needs while also minimizing the inefficiencies of excess inventory.

Are you ready to learn more about how lean thinking can help your company better manage your supply chain? Contact Incito Consulting today to arrange for a personalized consultation.