Lean manufacturing or lean production, more-often “lean”, is often discussed as the underlying principal explaining the growth of Toyota, from a small company to the world’s largest car manufacturer. Lean is a systematic method for waste minimisation within a manufacturing system without sacrificing productivity.
Similarly, Lean Procurement analyses the steps within the procurement process to define what adds value, by reducing everything else (which is not adding value). Considering procurement’s obsession with value, it is understandable that there is a strong synergy with the principals of Lean. Hence, Arvo have begun applying Lean in procurement to streamline procurement processes and procedures so as to improve efficiencies and performance, eliminate process waste, reduce total cost and deliver maximum value to internal and external customers.
Arvo classify waste as time, costs or inventory, and the elimination of such waste, will lead to increased efficiencies and margins for all organisations. Therefore, the benefits of applying Lean Principles to procurement functions and purchasing activities can dramatically affect a company’s cash flow, while a Lean procurement function is paramount to Procurement delivering long-term value and impact
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