Global Barriers to Lean Understanding

We all know that lean and six sigma cuts waste and boosts productivity but an essential “tool” which is often overlooked in these projects is effective communication. And no where is it required more if project teams don’t speak English as a first language.

Generally, if we want a successful outcome when you’re crossing international boundaries:

good quality means that the target audience received the message its provider intended it to receive.

This communication issue manifests itself in global sourcing. However, even though: you should obtain parts locally, as close to your plant as possible, to eliminate the waste of transportation firms are increasingly:

• exploiting global efficiencies in production
• identifying alternate supplier sources
• utilizing buffer capacities and
• taking advantage of specific geographical talent pools.

China dominates the global sourcing directions of most firms, particularly for those based in the United States and Europe. However, near-shore sourcing destinations such as South America and Eastern Europe form significant second-tier markets.

Indeed, research has shown that a low-cost country sourcing can have a positive impact on company performance in terms of cost and quality although the time dimension remains to be a challenge.

So, whether or not a local or global supply base makes sense is really up to the company, customer and market sector involved. I believe there should be as a minimum three supply base goals:

1. quality improvement to Six Sigma levels
2. delivery performance measured zero days late, to one day early
3. total cost of ownership improvement.

Also you don’t want improvements to come at the expense of supplier margins. The supply base needs to make reasonable margins in order to remain healthy, commercially viable suppliers. Supply chain management is meant to reduce excess inventory in the supply chain. A supply chain should be demand driven. It is built on the pull approach of customers pulling inventory, not with suppliers pushing inventory. Excess inventory reflects the additional time with the supply chain operation. So the perfect supply chain would be lean with removing wasteful time and inventory regardless of where it is in the world.

What do you think? Can a global supply chain be lean?

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