“Lean” describes manufacturing processes and methodologies focused on reducing waste, streamlining production, and improving quality. But lean supply chain processes can also benefit the foodservice industry. How can you apply lean management practices and achieve goals of improved efficiency, lower cost, and decreased levels of waste?
What is Lean Supply Chain Management?
Simply put, lean restaurant supply chain management describes the relationships you develop with your suppliers and distributors to provide everything you needs to produce your menu items and satisfy customers’ orders. Disruptions or inefficiencies in the chain could result in higher costs, increased waste, and the inability to effectively service its clientele. A lean approach defines the operation of a well-planned supply chain, one which delivers product to the customer efficiently and effectively.
What are the 5 Principles of Lean Supply Chain Management?
1. Deliver Value
Striving to deliver value in your supply chain means eliminating costly waste and overblown inventory from your chain. By decreasing costs in these areas, you can deliver value to your customers.
2. Monitor Value Stream
The most efficient supply chain operates with little to no interruptions. A well-managed supply chain should provide product where its needed when its needed at each step of the production process. Breaks or pauses along the chain, particularly in the delivery of perishable items, can prove quite expensive, and tempt you to overstock items to compensate.
3. Create Uninterrupted Flow
When creating a lean supply chain, you must develop relationships with vendors, set schedules, and implement processes to ensure a continuous flow of delivery along the supply chain. In the foodservice industry, uninterrupted flow means the right amount of food, beverage, and serving items are available daily without ballooning inventories or requiring emergency calls to the distributor to meet customer demand.
4. Pull, Don’t Push
Lean Manufacturing takes a “just in time” approach rather than using forecasts to dictate the production of products. “Pulling” means not building product until an order is placed, thereby limiting costly work-in-process (WIP) inventory. While pulling in the traditional sense may not seem realistic in the foodservice industry, establishments can closely monitor the popularity of individual menu items as well as the daily ebb and flow of business to dictate supply needs rather than using broad forecasts or allowing volume discounts to “push” product from farm to table.
5. Improve Continuously
Lean principles do not simply strive to eliminate waste and lower costs; a lean approach looks continuously for improvements in processes to deliver quality products.
How Do You Build a Lean Supply Chain?
Think Holistically
View your supply chain as a continuous flow of product from the vendor or distributor to the final destination of the customer’s experience. Optimizing each link in the chain in isolation can undermine the lean process. For example, taking advantage of a distributor’s volume discount for a particular ingredient may fail to recognize waning customer demand and the inability to repurpose that particular ingredient, resulting in costly unused inventory or waste.
Identify the Supply Chain
To think holistically, you need to map your supply chain to identify weak links. Specifically, lean processes look for weaknesses in three areas:
· Unnecessary items - what items in your chain add little or no value to the end product for the customer?
· Uneven quality - what segments of your supply chain offer uneven quality or delivery performance?
· Unanticipated burden - what segments of your chain could suddenly become overburdened, causing a weakness in either delivery or quality?
Consider Demand Volatility
In the foodservice industry, demand volatility is often defined in terms of customer volume ebb and flow. Failing to recognize the reasons for the volatility and planning only for worst (or best) case scenario takes “lean” out of supply chain management.
Originally developed for the manufacturing industry, lean supply chain management principles can also prove valuable in the foodservice industry. Striving to lower cost, reduce waste, and improve quality, a foodservice supply chain can deliver greater value to its customers, recognize its value stream, ensure uninterrupted flow, “pull” the chain by heeding customer demand, and continuously monitor all processes with an eye for quality improvements.
For a professional assessment of your supply chain, contact the experts at Purchasing Partners, Inc.