With Bonfiglioli Consulting, the principles become 6: Supplier Development for an Extended and Lean Supply Chain
We explored the five core principles of Lean ThinkingDefine value, map the value stream, make the stream flow, let the customer “pull,” and pursue perfection. However, practical experience and the increasing complexity of the market reveal the crucial importance of a Sixth principle, often defined by those working in the field as an indispensable step for true Lean transformation: the’Extension of Lean Principles to the Supply Chain, which is supplier developmentLean Supply Chain.
Today, the overall costs and delivery timeslead time) of a product or service largely depend on activities that take place outside the company's borders. It is increasingly rare for internal costs to account for more than one-third of the total required to bring a product to market. This means that without actively involving suppliers with a Lean perspective, any internal “lean” efforts within the company can never reach their full potential, being limited at most to one-third of the necessary way.
Why Supplier Development is essential for efficiency
Many companies try to control their suppliers through suffocating schedules or reduce their margins with aggressive bidding systems. However, these tactics rarely lead to significant improvements in delivery times and supplier costs, simply because suppliers may not have the internal skills or processes to do so efficiently. Over time, cornered, they may seek other opportunities, leading to the loss of valuable partners.
This is why the sixth principle becomes fundamental: to achieve true efficiency overall, it is necessary engage suppliers and help them take Lean thinking steps themselves. This involves transforming the supplier-company relationship from one of mere procurement to one of Vera Partnership.
Key Elements of Supplier Development in a Lean Perspective
Supplier development in a Lean approach is not an easy task; it requires significant commitment and the ability to interact with complex external realities where decision-making power is shared. However, it is a project that, if well managed, leads to enormous benefits:
- Establish partnership relationsThe basis of this principle is to build solid and collaborative relationships with suppliers. This means moving from a transactional logic to one of trust and mutual benefit, where the company invests in the growth and improvement of its supplier.
- Greater integration in internal processessuppliers are no longer seen as separate entities, but as extensions of one's own value chain. This can translate into:
- Information sharingtransparent flow of data on demand, production, and issues for better joint planning.
- Collaborative planning: joint work on forecasting, production planning, and inventory management.
- Joint product developmentinvolving suppliers from the early stages of new product design to leverage their know-how and optimize manufacturability.
- Shift from quality control in acceptance to quality assurance (free-pass)In a Lean system, the goal is to eliminate inspection waste. Instead of checking the quality of incoming materials, we work to ensure the supplier is capable of ensure quality upstream. This often materializes with “free-pass” agreements, where supplier materials, thanks to their reliability and certified processes, can be sent directly to production lines without further incoming inspections. This requires a high level of trust and strong collaboration to implement and monitor the supplier's quality systems.
- “Pull” production and shipping from the supplierExtending the “pull” principle to the supply chain, the goal is to ensure that suppliers produce and ship only what is actually needed by the company's assembly lines or consumption points, and only when it is needed. This minimizes excess inventory at both the supplier and the customer, reducing warehousing costs and the risk of obsolescence for both. Systems such as Kanban they can be extended and implemented in the relationship with the supplier as well.
For a practical application that leads to measurable results in the purchasing process, read the article “The strategic shift in procurement: the 7 Lean World Class® steps for end-to-end excellence.
The challenge and evolution of the Lean project
Supplier development is a “robust” (or “tough”) project because it involves intervening and interacting with business realities different from one's own. Decision-making power is more limited, and those tasked with following it must be particularly capable and resilient. It requires not only technical competence but also strong interpersonal and negotiation skills.
However, this project can and must be considered the natural evolution of an internal production restructuring process. This is the final phase of a larger corporate reorganization project based on Lean Thinking principles. This is where the’efficiency it is no longer confined within company walls but extends to the entire ecosystem of supply chain, creating an interconnected network of efficient processes.
Conclusion: The Supply Chain as an Extension of Lean Value
The principle of supplier development it is the missing link for a complete and lasting Lean transformation. Recognizing that much of the value and costs lie outside their own borders, the most forward-thinking companies understand that the success of their Lean strategy inevitably involves extending its principles to their key partners. Only in this way can true lean supply chain that it be agile, efficient, and capable of responding optimally to market needs, consolidating competitiveness and sustainability of the entire value chain.
You've understood this principle, but you want an overview? Back to the Complete Guide to Lean Thinking and learn about all the other key concepts.
