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Supply Chain Assessment
Part 5 of 6

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Lean Manufacturing, Basics, Principles, Techniques

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IV.  Proficient

An enterprise achieves full supply chain proficiency in Stage IV. This stage is characterized by a new paradigm. An enterprise cannot progress to this stage alone. An integrated supply chain (ISC) network allows multiple enterprises to operate as a single entity. The virtual company— where the boundaries of businesses become blurred—becomes a reality.

Criteria for the characteristics of this stage are still evolving. However, they include alliances, collaboration and interactive information shar­ing.


Business Environment: Stage IV fully implements the supply chain management paradigm. The ISC provides collaboration capabilities where sophisticated sensitivity analysis models determine the effects of changes in products, supply sources, delivery options and manufac­turing alternatives. Customer requirements and demand drive the sup­ply chain. Key business environment indicators for this stage are

•    alignment:

-      matrix of teams

-      participative

-      integrated supply chain

-      integrated and segmented core competencies

•    business processes:

-      problem solving and innovation

-      processes support integrated supply chain management

-      best supply chain practices

-      "pull demand" drives ISC

-      customers and suppliers participate in collaboration processes

•    effectiveness measure:

-      measures across integrated supply chain

-      mutual goal-setting

-      measures relating to effectiveness of delivering products from
conception to retirement.

Customer and Supplier Relations: At Stage IV, the enterprise suc­ceeds in breaking all the barriers of the traditional model. Suppliers and customers work in total harmony. A single enterprise cannot bring on this breakthrough alone. Instead, it requires an industry wide alli­ance of supply chain management participants. Criteria include


     value chain extends out to final consumer

     ISC becomes extremely sophisticated

     full conversion from push to pull demand management

     "going to market" as a supply chain.


     supply chain extends back to raw material provider

     supply chain heavily influenced by customer requirements

     working with suppliers, as a single entity, on R&D

     collaboration on marketing strategy.

Supply Chain Communications: Communications are instanta­neous and extend to the lowest practical levels of the supply chain. For example, when a customer places an order, alert notifications, aggre­gated at some kanban level, are transmitted to all ISC members. Major supply chain communications criteria are

     Internet introduced for customer communications

     supplier EDI fully implemented

     instantaneous communications to all ISC members.

Information Systems: Sophisticated information systems are in place that extend ERP to include collaborative planning software. Ex­tensive use of the Internet for electronic commerce. Costs to the ISC are evaluated and shared proportionately by all members. Criteria in­clude

     full ISC technology implemented

     knowledge-based systems

     collaborative software supporting instantaneous transfer of infor­
mation across ISC.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and go to Series 10


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