Lean logistics is about managing inventory throughout your entire business network to best meet customer needs and cost requirements. In this video, Steven explains a process to lower total inventory holding costs within your supply chain.
- When I say lean logistics,…what's the first thing that comes to your mind?…I immediately think of inventory, how to manage it better…so that I can reduce my cost of holding inventory.…Let's talk about inventory cost.…The most expensive type of inventory is finished goods,…the final product you sell to your customers.…It follows that products that are less than finished…would cost less.…Raw materials cost less than components,…which cost less than subassemblies,…which cost less than the final product…shipped from the factory, which costs less…than the final product sold to the customer.…
I think you get the picture.…As your product moves through the system, it gains value.…Looking at a simple supply chain of supplier,…manufacturer, wholesaler, retailer, and customer,…it makes sense that the further away…inventory is from the customer, the less value it has,…again, because it's not the completed product.…Therefore, the further away inventory is from my customer,…the less it costs to hold that inventory.…Unfortunately, in a traditional supply chain,…
Lean concepts have been successfully applied to every aspect of doing business. In this course, learn the principles of lean and how they are used in processes, production, and services. Instructor Steven Brown also explains how lean thinking impacts the organization, from the overall business culture to day-to-day work activities.
LinkedIn Learning (Lynda.com) is a PMI Registered Education Provider. This course qualifies for professional development units (PDUs). To view the activity and PDU details for this course, click here.
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- Cite the focus of a lean strategy.
- Explain what a “rule of complexity” is.
- Name the three key measures of inventory.
- List the 5S tools.
- Define a lean transportation system.
- Describe the characteristics of a lean purchasing organization.
- Identify the characteristics of a lean company.