supply chain is not completely unlike that in automotive or retail,
Johnson says. A successful supply chain starts with a planning
process that involves the maintenance manager, sourcing and procurement, transportation, inventory management, and information
technology.
What can one expect? “At a high level,” Johnson says, “we’ve
seen a 20-percent cost improvement come in a variety of areas.
Inventories can come down because the performance of the supply
chain itself improves.”
Does Lean Make a Good
Company Great?
Simply stated, Lean alone won’t make a company successful,
but even a successful company could improve immensely if it
adopted a number of Lean practices, says Kenneth McGuire,
a management consultant with Management Excellence
Action Coalition.
and then fail because they don’t have adequate leadership stature.
What’s the relevance of Lean programs in supply chain and
logistics? McGuire says Lean “looks” at the value stream from the
point of view of the customer. “It says that during the period
between the decision to buy and the delivery of any goods, every
activity either adds value to that value proposition or it doesn’t, and
if not, it’s waste by definition and should probably be eliminated.
Customers for the most part will look at the high cost of their trans-
portation or logistics bill and will say that no longer is labor the dif-
ference between competitive and noncompetitive companies, it’s
the approach to logistics. They favor those who can do it with few
stops and delays, the best quality, and the best communications.”
McGuire says over the past 10 years or so, the manufacturing
companies that seem to be the best have three times the quality that
the average ones possess, they are two to three times faster, they
have communications skills that are double those of average com-
petitors, and their people are more engaged.
“So do they deserve the title of greatness?” McGuire asks. “Per-
haps not, but they certainly are better.”
For the last 30 years, MEAC has helped companies in manufacturing
improve so they can boost productivity. Lean is one of the ways to
do that because it is among the competitive norms against which
companies will be measured. After all, there’s an immediacy in
delivery that’s required by most customers now, a perfection in
product quality that most consumers expect now, and there’s a very
high service level demanded now. These are goals that Lean prac-
tices enable if not necessarily guarantee.
Jacobson Companies and Fonterra
North America: A Working Relationship
When you turn to an outside provider to reorganize your
supply chain, it helps to have a partner that is not only knowledgeable about your business but flexible enough to keep
changing the model until it gets it right, says Thomas Friend,
vice president of supply chain for Fonterra
North America, and
John Kelly, vice president of business development at Jacobson
Companies.
So what’s the first step? Start with the people. You must have a
“deep and honorable respect for your people,” says McGuire. If not,
they will drive the whole process—just not where you want it to go.
Leadership is important. McGuire says the process can be so dif-
ficult that many companies may get a year or two into their project
Fonterra is a New
Zealand dairy coop
comprising 11,000 dairy
farmers. When its North
American subsidiary
needed to revamp its
supply chain, it turned
to its transportation
management provider,
Jacobson Companies.
