The biggest challenge I encounter in achieving supply chain excellence is that many organizations believe they are powerless when it comes to working with their suppliers. The typical beliefs I encounter are: “we aren’t big enough to have any leverage”, “we can’t control what our suppliers do”, and “implementing a Lean supply chain will increase our costs”. Interestingly, most organizations feel the same way toward managing their customers as well. It is this victim mentality that prevents many companies from achieving operational excellence.
The root cause of these limiting beliefs usually comes down to two critical factors: 1) not fully understanding what a Lean supply chain actually is, and 2) not understanding how to “sell it”, in other words, how to demonstrate how it will help the supplier to be more competitive and then use that as part of the negotiating process.
To overcome these limiting beliefs, I focus on building a solid understanding of what a Lean supply chain is, from both the perspective of the customer, as well as the supplier. A key ingredient of the truly Lean supply chain is the concept that the entire supply chain is “in this together”, to be mutually successful and profitable. All too often what I see is the implementation of a “Mean supply chain” rather than a Lean supply chain. A “Mean supply chain” is one where each party is out to lower their own cost and risk exposure at the expense of the others in the supply chain. It is an atmosphere of competition rather than collaboration, which inevitably leads to a less than optimal supply chain as each party seeks to leave the other holding the bag.
Once the Lean supply chain concepts are fully understood, mastered and a process for supply chain development is created, only then can an organization create a Lean supply chain where all parties work together to achieve mutual success.