New research shows smaller companies adopting proven ultra-lean supply chain management principles

Smaller automotive component suppliers worldwide are increasingly benefiting from ultra-lean supply chain management principles proven by their larger customers. A review of 2010 bookings by emergency logistics specialist Evolution Time Critical shows that second and third tier businesses are now applying the same principles that have allowed the automotive industry to operate the world’s leanest and most efficient supply chains.

“A first tier customer of ours recently told me ‚If I don’t use emergency logistics, my supply chain isn’t lean enough,‘ reflecting the growing strategic use of emergency logistics to facilitate very high levels of supply chain savings," explains Evolution Time Critical managing director, Brad Brennan. "The partnerships we are establishing with smaller companies worldwide now suggests that this principle is being adopted deeper into the supply chain. Since 2008 we have recorded a steady year-on-year increase in this kind of consultancy work with Tier Two suppliers. Before that time, work was mainly confined to Tier Ones and OEMs.”  

The pressure on automotive suppliers to reduce inventory costs has increased in recent years, driving lean working practices further and further down into supply chains. Evolution Time Critical has recorded consistent double-digit growth in its work with Tier Two suppliers in the past three years. Founded in 2001, the company launched as a bespoke emergency logistics provider to OEMs and Tier Ones. Now in its tenth year of business, it is involved at the planning stage of supply chains, advising manufacturers on ways to ensure their lines keep running and avoid costly delays without the burden of excessive stock.

“Evolution Time Critical’s core business is still delivering emergency logistics,” says Brennan “but manufacturers and suppliers are increasingly using our services in a pre-emptive way. Emergency logistics is now seen as a key part of the manufacturing process rather than as a last resort. We have become an enabler; our existence allows our customers to run incredibly lean supply chains with confidence.”

"The automotive industry is exceptionally good at managing very robust supply chains that do not rely on contingency stock. Instead they rely on rigorous analysis and planning, allowing substantial savings," concludes Brennan. "When I look at many other sectors, I realise that there are proven lean techniques that could be usefully applied to help other industries work more efficiently."

Quelle: Evolution Time Critical