Srinivasan' s 14 Lean Principles

Lean is not a quick fix. When 771 managers and executives were asked by the Lean Enterprise Institute to identify the biggest obstacle to implementing lean at their companies, nearly half (48 percent) said it was, "backsliding to the old ways of working." It's also revealing to note that when asked how far along they were with their lean implementations, more than half (53 percent) characterized their companies as being in the early stages. So while a lot of lip service is being paid to the idea of lean manufacturing, there remains a sizable gap on the execution end.

Lean manufacturing is a management philosophy focused on eliminating waste, reducing inventory, and increasing profitability.

As a result, companies continue to seek guidance in how exactly a lean operation should be set up, and just as importantly, how to maintain it. Mandyam Srinivasan, a professor with the University of Tennessee, has identified 14 principles that companies should follow to build and manage lean supply chains:

1. Measure any improvements in subsystem performance by weighing their impact on the whole system.

2. Focus on improving the performance of the lean supply chain, but do not ignore the supply chain's business ecosystem.

3. Focus on customer needs and process considerations when designing a product.

4. Maintain inventories in an undifferentiated (unfinished) form for as long as it is economically feasible to do so.

5. Buffer variation in demand with capacity, not inventory.

6. Use forecasts to plan and pull to execute.

7. Build strategic partnerships and alliances with members of the supply chain, with the goal of reducing the total cost of providing goods and services.

8. Design products and processes to promote strategic flexibility.

9. Develop performance measures that allow the enterprise to better align functions and move from a functional to a process orientation.

10. Reduce time lost at a bottleneck resource, which results in a loss of productivity for the entire supply chain. Time saved at a non-bottleneck resource is a mirage.

11. Make decisions that promote a growth strategy and focus on improving throughput.

12. Synchronize flow by first scheduling the bottleneck resources on the most productive products, then schedule non-bottleneck resources to support the bottleneck resources.

13. Don't focus on balancing capacities—focus on synchronizing the flow.

14. Reduce variation in the system, which will allow the supply chain to generate higher throughput with lower inventory and lower operating expense.