Building a Lean Fulfillment Stream
Building a Lean Fulfillment Stream
Building a Lean Fulfillment Stream will change the way you think about your supply chain and logistics networks – giving you a way to act using lean principles to transform and continuously improve.
In this pioneering workbook, lean logistics veterans Robert Martichenko and Kevin von Grabe explain step-by-step a comprehensive, real-life implementation process for optimizing your entire fulfillment stream from raw materials to customers, including two critical concepts: calculating the total cost of fulfillment and collaborating with across all functions and firms along the stream.
Your company, like most, probably calculates costs at different points within departments, such as the piece price paid by the purchasing department. Few companies figure the total cost associated with each major function across the fulfillment stream. Calculating total cost, which to most executives is surprisingly large, lets you measure the impact of your improvement efforts on operational performance and
List Price: $ 50.00
Price: $ 50.00
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Advancing System Thinking and Lean Principles to the Fulfillment Stream,
This book truly expands the body of knowledge lean practitioners refer to as lean thinking. Building a Lean Fulfillment Stream extrapolates lean thinking out beyond the manufacturer’s four walls to include the flow of materials from suppliers to the producer and on forward to the delivery of goods to customers. As such, it is an eye-opening read for producers who are intent on providing greater responsiveness, service, and overall value to their customers at minimum costs. This book is written to managers and practitioners who already have a solid understanding of basic lean concepts and methodologies.
The book concentrates on applying lean principles to the total “fulfillment stream”. The authors define the fulfillment stream as the flow of parts from suppliers to the producer, through the producer, and finished products on downstream to the customers. Traditionally the progression of materials from suppliers to end customers has been called a “supply chain.” The authors refer to this movement of materials as a “fulfillment stream” to emphasize the lean concept of smooth, continuous flow with minimum waste. As such, the book moves such disciplines as supply chain management, logistics, and inventory management to a much higher plane of perspective and analysis.
The premise of the book is that what a company should want to do is to identify, calculate, and minimize the total cost of fulfillment for each of its fulfillment streams. The total cost of fulfillment is all of the cost involved in moving material from one end of the fulfillment stream to the other. Such costs incurred by the company as transportation costs, carrying and storage cost of inventory, the cost of material handling equipment and labor, and the management time devoted to gathering all of the information needed to constantly monitor performance are included. Likewise, the costs of all of the transport, inventory, handling, and management costs incurred by customers and suppliers along the fulfillment stream are included.
The authors are very much attuned to the fact that in the real world close, willing collaboration and committed participation are needed by all functions, firms, and facilities touching the fulfillment stream if the total cost of fulfillment is to be truly minimized. To be successful costs must be managed jointly over the long-term, with a clear view of how decisions at different points in the fulfillment stream affect the entire stream. To address this need, the authors propose the formation and convening of a fulfillment stream council. It is to be comprised of a senior leader from each function of the driving company plus representatives from its suppliers and customers. The council will oversee the building and execution of the lean fulfillment stream. It is to provide vision and leadership for the transformation, not day-to-day decision-making.
The authors prudently utilize extended value stream mapping to develop and depict the overall fulfillment stream and to identify its individual elements. From the collection of fulfillment-stream elements the total cost of fulfillment is developed and costed out. Since extended fulfillment streams typically cut across several functions and firms horizontally, it is recommended that the fulfillment-stream council designate a mapping team to do the detailed work of mapping the current state, envisioning the future state, and developing an implementation plan for putting the future state in place. The mapping team should be composed of knowledgeable representatives from every company and facility contributing to the stream.
To support the daily operations and execution of the stream it is proposed that a fulfillment-stream leader (implementation leader) be appointed by the council. The fulfillment-stream leader would be charged with facilitating disciplined processes, daily monitoring of operations, and root cause problem analysis. This person would be responsible for overseeing all the different elements of improvement across the entire fulfillment stream.
The basic idea of a lean fulfillment system is that the lean producer should work with its customers to have them order goods so as to receive them at precisely the pace they are being consumed. In turn, the lean producer picks up required materials and parts from its suppliers at exactly the rate in which they are being consumed by its own production processes. The book presents and builds on this skeleton and gives it life by offering the reader the principles, ideas, techniques, and explanations needed to make it a powerful, living lean system in the real world. The details of building the lean fulfillment stream (from which came the title of the book) is presented and illustrated in the latter half of the book.
Such key concepts as setting the cadence of the entire fulfillment stream to the rate of true…
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|Building a Lean Fulfillment Stream Covers Missing Links in the Supply Chain,
Book description: what’s the key message?
Building a Lean Fulfillment Stream is about introducing lean into your supply chain and logistics networks. A fulfillment stream is defined as all of the activities that move materials and information from suppliers to end customers: planning, sourcing, transporting, manufacturing, inspecting, sorting, packing, and consuming, as well as managing the entire process. The book introduces two concepts for optimizing your fulfillment stream: total cost of fulfillment and collaborations across all functions and firms within the fulfillment stream.
The first half of the book focuses on defining a lean fulfillment stream and measuring the total cost of fulfillment through the process of value stream mapping your supply chain.
The authors list eight guiding principles for designing lean fulfillment streams:
1. Eliminate all the waste in the fulfillment stream so that only value remains.
2. Make customer consumption visible to all members of the fulfillment stream.
3. Reduce lead time.
4. Create level flow.
5. Use pull systems.
6. Increase velocity and reduce variation.
7. Collaborate and use process discipline.
8. Focus on total cost of fulfillment.
Performance of the fulfillment stream can be characterized by perfect-order execution. The execution of a perfect order is characterized by “8 Rights”:
Right quantity
Right product
Right place
Right time
Right quality
Right source
Right price
Right service
The second half of the book elaborates on improving your fulfillment stream through collaboration. The fulfillment stream is broken down into six main areas:
Customer collaboration
Outbound logistics
Shipping, receiving, and trailer-year management
Material ordering
Inbound logistics
Supplier collaboration
A disciplined process of daily monitoring is essential to sustain improvements and reduce waste within the fulfillment stream.
How does it contribute to the lean knowledge base?
This book is important because it is a thorough compilation of lean supply chain strategies to minimize the cost of fulfillment. This book describes the critical principles of a lean fulfillment stream and shows how to total cost of fulfillment can be visualized, mapped, and calculated. While the techniques in this book are not new the authors present them in a new way challenging the reader to consider the total fulfillment stream/
What are the highlights? What works?
There are two major strengths of this book. First, the workbook format makes Building a Lean Fulfillment Stream an action guide for companies. The book details an improvement process following the flow from the customer back through the manufacturer to the supplier. Second, the book is supported with over 40 charts and illustrations, including current and future state value stream maps. The authors explain why the data is important and how it differs from traditional measures.
What are the weaknesses? What’s missing?
This book is not written for the lean beginner. In order to apply many if not all of the tools and systems recommended to redesign the fulfillment stream one must be familiar with VSM, takt time, flow, pull, kanban, leveling, and PDCA for instance. The authors place a stronger emphasis to reducing the cost of the fulfillment stream instead of maximizing value for the customer.
How should I read this to get the most out of it?
After reading this book to familiarize yourself with the content the power behind it is in trying it. Assemble a team to map your fulfillment stream and calculate the total cost of fulfillment. Then use the steps in this workbook to remove waste in your supply chain. Combining this workbook with other LEI workbooks like Learning to See, Creating Continuous Flow, and Making Materials Flow can be beneficial.
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