Lean Strategic Sourcing
Supplier development and procurement strategies are a significant part of supply chain excellence. Together with the customer, LeanCor executes comprehensive strategic sourcing initiatives from purchasing policy deployment to the development of target pricing through to supplier performance measurement. Most importantly, LeanCor develops and implements continuous improvement programs between suppliers and manufacturers.
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Lean Strategic Sourcing
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Strategic Sourcing Vision Development
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Current Condition Supplier Analysis
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Purchasing Policy Development
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Supplier Collaboration Development
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Total Cost Management Development
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Target Pricing Development
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Contract Management
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Order Management
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Supplier Performance Assurance
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Procurement Measurement
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Continuous Improvement Development
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Embedded in the Lean lexicon is the concept of supplier partnerships. Lean theory suggests that supplier relationships should be based on long-term commitments to quality and cost reduction. Six Sigma theories suggest that the number of suppliers we have should be minimized in order to reduce complexity and the associated costs.
The supply chain executive will, with any luck, have some participation in the selection process of suppliers for the manufacturing process. At the very least, the logistics manager should be involved with analysis when looking at sourcing strategies, especially reviewing supplier and supplier location relative to transportation and inventory carrying cost. This is particularly important as many organizations are moving their domestic supply base offshore to China with far-reaching implications.
When performing this analysis, the key elements to look at are:
- Supplier location.
- Supplier order to ship lead time.
- Supplier to plant transportation lead time.
- Supplier quality of service compliance.
- Supplier quality of product compliance.
From a Lean point of view, the focus on supplier selection is how the decision impacts the manufacturer’s inventory. This is one of the main reasons why partnerships and long-term relationships are so important. This may not be instinctive, but in reality the better the relationship with our suppliers, the fewer inventories we should have in the system. The more we can trust our supply base, the fewer inventories we will need to carry. This lesson is embedded in Six Sigma theory: variation is what causes the need for inventory.
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