One of the keys to integrated supply is eliminating the non-value added functions, but what is a non-value added function and what is a value added function?
That question sounds very simple to answer but once we delve deeper into the black & white, the answers get a little gray. On the surface a non-value added function would be a function your customer is not willing to pay you to do, or activity is redundant within your organization. The first place to look for the non-value-added is redundant mistakes. Next is to eliminate the “experts” and streamline the processes. Experts should become trainers, not the one that everybody hopes never gets hit by a bus because” we don’t know what we would do without them”.
Well I could go on with others but what I am really concerned about is the non-value-added in the supply chain. So where do we begin in the supply chain? Lets start with the obvious non-value added function in the supply chain, expediting. Nobody in today’s business climate, purchasing a durable good, wants to pay for an expediter whose sole function is to follow up on suppliers parts that did not meet the delivery schedule.
I want to buy products from manufacturers whose supply chains are so lean that their suppliers know what to deliver and when better then they do. When the manufacturer of the part is so in tune with the whole process that the raw material producers are a part of the supply chain of knowledge and they know what, when and how much to deliver. When the supply chain of knowledge is shared from beginning to end, then not only can you eliminate such non-value-added functions as expediting, but every point along the supply chain gets touched at every level from purchasing and accounting to inventory and warehouse space.
Ok so expediting is easy to spot but difficult to eliminate. Actually it is very easy to eliminate, ask for help within your supply chain. Everybody should be on board because cutting the waste out of the supply chain helps everyone involved.
