Lean Sourcing Is The Only Environmental

Lean Sourcing Is The Only Environmental

How I can reduce the risk and reduce inventory by using a single supplier? This is the circular argument between production and finance in virtually all manufacturing companies. The short answer is that you can not.
Reducing inventory levels, while only is much riskier than the use of multiple sources or suppliers from a single source. The definition of a single provider should emphasize the need for additional inventory throughout the value chain.

Only one - the sellers who offer a product or service for which you are contractually obliged to use or there is no other source of supply.

The risk of supply disruptions to the economy, natural disasters, lack of material, or for any other reason could paralyze production lines for long periods of time. Let us examine the two main drivers for the single purchase, contractually obligated to, and a source of supply.

Contractual obligation - There are times when a client requires the use of certain suppliers. The best way to reduce risk in this case, the T & C with your customer. If the amount of the additional inventory is excessive, customers should share the expense. You can also hear and preparation of a backup source of supply in advance. Include language that will allow your organization to rent escalation clauses, if the source term supply increases.

A source of supply - the provider has ownership of the patent or process to the subject or service you are contracting. Needs to be done to avoid these products in your bill of materials (BOM) in the design phase of your product. However there are times when the need or the benefit outweighs the risk. In this case, be sure to get a mitigation plan provider. Do they have more plants? If the supplier be prepared to license and outsource their product or service in an emergency?

The total inventory level in the value chain from a single source element must be greater than their counterparts. If you are a fairly large organization, you may need the seller to keep the surplus. Regardless of the venue of excess inventory will be needed to reduce risk.

This risk must be identified and quantified in the sales and operations planning (S & OP) phase, not the control input. Not to be confused with one exclusive supply. Simple supply is by choice and no other sources available on the market.

The role of lean is to eliminate waste and inefficiency from the value stream. Remember to rely on instruments to control because it would not be. We human beings are still the final task using the tools and the common sense of risk and return.

With over 30 years of manufacturing experience in the agriculture industry, aerospace, David Bueford has a wealth of knowledge as a true practitioner. The main objective is in the areas of production and inventory control and purchasing. Please feel free to read a more professional and continue the conversation http://www.leanplanet.org/.

Posted in: Risk Management