World-Class, Lean Performance in the SMEs - Small and Medium Enterprises - by Carlo Scodanibbio, Industrial & Business Consultant - Lean Management Consultant
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Carlo Scodanibbio
Industrial & Business Consultant
Lean Management Consultant
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main ingredients of the world-class, lean performance formula

World-Class Industrial Culture (Lean Culture)     (more »)
World-Class approach to Market and Clients     (more »)
World-Class Products and Services     (more »)
World-Class Operations (Lean Operations)     (more »)
Lean Value Chain
Lean Human Resources Management     (more »)

Lean Value Chain

The secret of success for any new-world enterprise is to be "...at the right moment in time in the right Value Chain..." and to exploit in full its potential.

Lean Value Chain Entrepreneurs, Enterprise People: did you know that the very secret of existing and operating as an enterprise lies in the fact that your enterprise belongs to a Value Chain? (more »)
 

It's called Value Chain because Value must be associated to each link in the Chain.
 

In every relationship or transaction between supplier and client there must be a transmission of Value, flowing from supplier to client.
 

Every link in the value-chain is an enterprise (until the end-user is reached on the demand side).
 

Every enterprise in the link is supplier of one or more clients, and client of one or more suppliers.
 

The ideal condition is achieved when maximum or optimal value is transmitted at each step (in each link of the chain): this is called the "lean condition".

 

The question that needs to be answered is:


"How can things be structured so that the enterprise and its suppliers do nothing but add value, and do that as rapidly as possible?"

Under the "lean" approach, all the intermediate steps, all the intermediate time and all the intermediate people are eliminated.
All thatís left are the time, the people and the activities that add value for the customer.

The achievement of the "lean condition" in both the Supply Side and Demand Side of the Value Chain is always a medium-term program.

Firstly, it requires a new culture, the Lean Culture - that is to be set, diffused and shared internally and upstream/downstream.
It requires abandoning obsolete principles of "Contractual Power" based on offensive policies or defensive policies in both sides of the Value Chain.
It demands that enteprise, suppliers (supply side) and clients (demand side) gradually position themselves onto the same level of cultural maturity, thus talking the same language.
It dictates that the old motto "shop around for the best price" is gradually converted into new-world mottos "the productive process starts at supplier's premises", "clients are not our enemies, they can become our friends" and "we are in business together".
 

In practice there are a number of lean initiatives to be undertaken:

  • SUPPLY SIDE CHAIN: involvement and integration of Suppliers.
    In steps, through adequate strategies and policies (falling under the Vendor Classification, Evaluation, Grading and Up-grading discipline), suppliers are "up-graded" in their status.
    From Normal Suppliers (motto: "...shop around for the best price...."), well selected suppliers are brought to the status of Performing Suppliers (motto: "....let's improve together...").
    The next step is to upgrade selected suppliers to the status of Integrated Suppliers (motto: "...the operational process starts at supplier's premises...."). We are in a situation of Operational Comakership.
    In the most successful situations, suppliers are further up-graded to the status of Partner Supplier (motto: "....let's make business together...."). We are in a situation of strategic integration, the so called Business Comakership.
    Several tools, including sophisticated web-based software, allow today the complete, operational integration on the supply side.
    In all up-graded situations the target is joint and shared: let's deliver the utmost value to our clients.

  • DEMAND SIDE CHAIN: full understanding, involvement and integration of Clients.
    In steps, through adequate strategies and policies (falling under the Lean Customer Care discipline), well selected clients (classified through a Pareto Diagram - ABC Analysis) are "up-graded" in their status.
    From Generic Clients (motto: "...they are just looking for the cheapest price...") most Class A clients are gradually brought to the status of Sensitised Clients (motto: "...they understand what value for money means....").
    The next step is to upgrade selected clients to the status of Integrated Clients (motto: "...we plan and monitor value generation together...."). This is achieved by launching joint initiatives such as Concurrent Product/Service Development using QFD - Quality Function Deployment-based approaches, or Joint Strategic Planning and the like.
    In the most successful situations, clients are further up-graded to the status of Partner Clients (motto: "....let's make business together...."). We are in a situation of strategic integration, the so called (again) Business Comakership.
    Several tools, including sophisticated web-based software, allow today the complete, operational integration on the demand side.
    In all up-graded situations the target is joint and shared: let's assure we are in a position to produce utmost/optimal value.

  • SUPPLY CHAIN AND DEMAND CHAIN: deployment of Lean Techniques in strict collaboration with Integrated Suppliers/Clients and Partner Suppliers/Clients aiming at waste elimination all along the Supply/Demand Chain.
    The core discipline is always Value Stream Mapping (more »), applied - respectively - to the Supply or Demand side of the Value Chain.
    Many other Lean Thinking (more ») tools, including Flow Charts, Communication Circles, Spaghetti Diagrams and others are also very helpful in establishing the "lean condition".

 

 

 
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