Often, Lean has been viewed as the domain of the manufacturing floor but this is not the case at Silcotec Europe. Lean principles and practices go beyond the firms centres’ of manufacturing excellence to all of a its processes, as well as being extended to Procurement and supply chain management.
At Silcotec Europe Lean is more than just a toolset, but a methodology that extends across the enterprise and represents a way of thinking that when appropriately applied and led by senior management can provide benefits to Procurement, Supply Management and the entire enterprise.
Ann Flaherty, who has been with Silcotec in a purchasing role for over 20 years and currently coordinates the various purchasing activities between the sites has been involved in many lean improvements over the years. From her perspective the concept and practice of lean are commonly misunderstood in relation to procurement, sourcing and supply management.
Ann commented: “At SIlcotec Europe we are committed to adding value, and reducing waste at every touchpoint of of our processes but when I talk to people about lean in the procurement process I seem to come across some common misconceptions.
Sometimes people think its just about being “lean and mean”, by running the company as lean as possible in order to reduce costs, thereby starving their operations of the necessary materials to produce product effectively. When we are dealing with the kind of customer partners we do this is simply impossible.
When I talk with other procurement professionals. some seem to think that “lean” is just for the manufacturing floor and not for purchasing and even if it does extend to purchasing that it is a set of tools used to focus on cost reduction and that having the tools will make the company lean.
The last of the common misconceptions is that computerisation on its own, by default, will lead to a lean procurements and supply chain function.
Talking with Ann it is clear that 20 years of working with Silcotec Europe suppliers has given her some interesting insights into the procurement discipline. It is as if their supply chain is its own dynamic ecosystem that is made up of processes, products and companies working together extremely smoothly, adding value to the entire network as they meet their goal of exactly meeting customer requirements in the most cost effective manner.
From Ann’s perspective, lean in procurement can be approached from many angles: “ The most important perspective is, of course, that we specify value from the standpoint of the end customer. This includes: quality, speed, cost, flexibility and service. So with this in mind we look at four key areas in order to gain perspective.
From a logistics and transportation perspective: how do we keep goods and services flowing in a smooth, uninterrupted and cost-effective fashion from suppliers to customer firms to end customers?
Inventory optimisation: how do we keep minimal, but sufficient inventory in the supply chain pipeline in order to provide appropriate service levels without disruptions?
Lean Procurement: how can Procurement scale and streamline its processes to minimise transactions, reduce total cost, and work with the best possible suppliers who meet its requirements?
Lean supply chain (adopting Lean within and between both customer and supplier firms): how can each business work to eliminate waste while adding value to its customers?”
It is clear that finding new perspectives produces clarity for Ann and her procurement team and understanding that it is not just about ‘cost down’ purchasing. There is a specific focus on the long term, not the short term which makes sense as Lean works best when continuous improvement is ingrained in the culture and becomes a way of life and it is totally ingrained in the culture at Silcotec Europe.
Does Ann see the culture as being the only reason for success within a lean environment ?
“ No, the culture is naturally an imperative, but as far as I see the leaders of the enterprise must support Lean by actions, not just words. The Silcotec Europe leadership fully understand Lean and then expect and require success. Our Lean Procurement gains additional traction as part of an overall Lean initiative as other functions better understand and support the effort.”