In recent years, the global Supply Chain has undergone a period of extraordinary complexity. Multiple critical factors, including geopolitical tensions, difficulties in sourcing raw materials, and natural disasters, have generated significant negative impacts. These have turned into disruptions in operations, interruptions in logistics networks, rising shipping costs, and extended delivery times.
In this increasing instability, it becomes imperative to develop more resilient supply chains that can quickly adapt to crises and ensure operational continuity. Organizations are therefore faced with 3 main challenges:
- Managing and diversifying supply risk to ensure operational continuity.
- Reducing costs associated with sourcing components and raw materials.
- Shortening the distance and delivery times of supplies.
Supply Chain: Approach and Management, Key Steps
To address these challenges, the Lean World Class® (LWC®), a proprietary methodology of Bonfiglioli Consulting, emerges as the natural evolution of Lean Thinking and World Class Manufacturing (WCM). Its implementation allows the optimization of the entire value chain, from supplier to end customer, thanks to an end-to-end (E2E) approach. This ensures that every phase, from sourcing to production, is optimized according to Lean principles to reduce waste, improve quality, increase operational speed, and minimize risks.
The methodology is structured into seven key steps, each designed to enhance efficiency, reduce costs, and minimize risks within the supply chain. By implementing effective company supply chain management practices, organizations can better navigate the complexities of their operations. The steps of LWC® unfold through three main phases: reactive, preventive, and proactive, creating an integrated and comprehensive supply chain management system.
The Reactive Phase: Immediate Resolution of Critical Issues
The first phase of the LWC® method focuses on the immediate resolution of existing problems through in-depth analysis and targeted interventions. It consists of three fundamental steps:
- Step 1: Analyze the critical supply factors (KPIs: Quality, Delivery, Cost, and Inventory) related to losses in Transformation/Conversion Cost.
- Step 2: Determine the root causes of the losses and develop the necessary countermeasures (aiming to reduce losses from the sourcing process to zero).
- Step 3: Implement the countermeasures, define the new standard Vendor List, and create an initial Vendor Ranking.
The Preventive Phase: Anticipating and Managing Future Risks
After stabilizing the immediate issues, the preventive phase focuses on building a robust system to identify and mitigate potential risks before they materialize. This phase unfolds through two strategic steps:
- Step 5: Supply Risk and assessment of the Vendor Ranking from a preventive perspective.
- Step 4: Analyze all internal and external constraints and opportunities to build a long-term strategy.
The Proactive Phase: Continuous Innovation and Anticipation of Opportunities
The final phase of the LWC® process focuses on the implementation of advanced technological solutions and the extension of best practices throughout the supply chain. This phase represents the final step in the transformation process towards an intelligent and interconnected supply chain:
- Step 7: Extend the approach to the entire supply chain (cascading effect on the overall costs of the supply chain).
- Step 6: Digitize the sourcing processes (Industry 4.0 technology) to achieve maximum efficiency (minimum cost) in the sourcing process.
The Fundamental Pillars of LWC®
The LWC® method is based on three fundamental elements that form the backbone of the entire supply chain management system:
- Strategic Sourcing: Optimizes supplier selection by aligning it with business objectives.
- Business Continuity System (BCS): Ensures operational capability even in crisis situations.
- Digitalization: Integrates advanced technological tools to provide visibility and real-time responsiveness.
Strategic Sourcing
This approach goes beyond simple cost management; it focuses on optimizing the supply chain and transcends tactical purchasing by incorporating a range of important evaluation factors such as quality, sustainability, and the ability to respond promptly to the needs of a changing market. Strategic sourcing involves structured processes and the implementation of several tools
- Vendor Selection
- Country Risk Analysis
- Vendor Rating
- Kraljic Matrix
- Negotiation
- Real-Time Monitoring and Continuous Improvement
Business Continuity System (BCS)
A central element for resilience, the BCS identifies risks, defines countermeasures, and plans responses to crises. Its key aspects include:
- Process Mapping
- Diversification of Sourcing Sources
- Continuous Monitoring with Digital Tools
Digitalization of the Supply Chain
Digitalization enhances transparency, collaboration, and efficiency through:
- Control Tower: A centralized hub that provides real-time visibility and predictive analytics.
- Process Automation: The automation of processes, combined with predictive analytics tools, allows for anticipating potential disruptions in production or distribution flows, enabling a quick and targeted response.
- Machine Learning Systems: Analyzing large volumes of historical and operational data to predict trends and anomalies, thereby improving resilience.
- Optimization of Total Cost of Ownership: Accurate calculation of total procurement costs.
- Advanced Monitoring: Dashboards to track costs, quality, and delivery times.
In an increasingly unstable and competitive global context, the evolution of the supply chain is no longer a choice but a necessity to ensure operational continuity and the ability of companies to adapt to new competitive scenarios.
The adoption of strategies such as Strategic Sourcing, Business Continuity System, and process digitalization, within the framework of Lean World Class Procurement®, provides an essential competitive advantage. These approaches not only improve efficiency and reduce operational costs but also strengthen the resilience of supply chains, preparing them to face future challenges with confidence.
The application of Lean World Class Procurement® methodologies leads, based on our experience, to:
- Decreasing of operational costs: 20-30%
- Improvement of on-time delivery: up to 95%
- Greater visibility and resilience
In the context of company supply chain management, this allows Bonfiglioli Consulting to operate as a strategic partner for companies that plan to transform their supply chains from reactive to predictive ones, ensuring long-term competitiveness and resilience.
