The world is getting more and more conscious about wastage. The Government, communities and individuals are constantly promoting elimination of waste and adoption of mindful disbursement. Optimization has been the core concern of the manufacturing businesses. Better management at all levels of production help the companies achieve high productivity and customer satisfaction. Lean manufacturing and its tools have transformed the manufacturing sector over decades and are now acting as catalysts in the speedy service of ecommerce. Lean Thinking focuses on streamlining the manufacturing process as a whole. This concept is not only applicable to the physical resources that the company uses to produce goods but also to the natural and technological resources like Men, Materials, Money and Methods. Reduction of resources used in manufacturing, handling and delivery of products can help e- commerce swiftly run its processes without causing a loss of ‘value’ to its customers.
One of the key tools in Lean Thinking is the Runners, Repeaters, Strangers (RRS) approach. RRS —‘runners’, ‘repeaters’ and ‘strangers’ form an excellent strategy for production scheduling and supply-chain management. It uses the philosophy of constraint management to reduce the loss in the manufacturing throughput and identify the critical drivers of sales. For instance, if we take products; organizations usually find that its just 20 or 30 percent of their portfolio of products that account for bulk of the sales. These are classified as Runners or the hero products. The market demands Runners on a regular basis, and hence the organization has to produce them consistently over the year. These products are cost – efficient and enjoy maximum supplier support.
Simply put, I would call runners, the heartbeat of an organization, as they account for a steady and predictable flow of work and resources. Repeaters are products that are in demand during a specific time of the year. There is usually a set pattern in the demand of these products, so the organization can plan which quarter of the year it will need to manufacture these variants. Repeaters are less rigid and may have different variants to suit the needs of the customers. Apart from the product design; delivery time and cost of these products stay constant throughout the year. The last category; Strangers, are highly customized and produced to meet specific demands of their customers. Identifying which products are runners, repeaters and strangers can help manufacturers understand how to better leverage budgets and resources. RRS helps establish a framework that empowers organizations on multiple fronts, i.e. improve efficiencies in production, inventory management, supply chain management, distributions well as in customer facing processes, such as delivery management, after sales service, etc. The RRS approach holds a tremendous potential to make E-commerce more efficient. E-commerce organizations can adopt Lean Thinking to embed customer centric processes and thus increase the customer’s perception of delivered value.
One of the biggest advantages that accrue from RRS is competitive pricing and speedy service. E-commerce customers are typically price conscious, thus adding pressure on e-tailer margins. Consumers expect faster delivery, which calls for a superior distribution network. This is where Lean Thinking can help, since Process improvement in Lean system focuses on the needs of the customer, and the wastes are defined by activities that don’t support the generation of value to customers. Lean is not just about removing Cost; but it is about reduction of waste by focusing on what adds value and not just trying to identify the wasteful steps in an isolated process. In e-commerce, lean practices such as RRS can play a crucial role in warehouse management and logistics. For instance, fast moving Runner items can be prioritized for vendor manufacturing and supply chain, as well as optimizing warehouse storage. Repeater items, special items that are ordered during festivals, or seasonal items — can be produced as per the anticipated demand in the market. Lean Thinking plays a gigantic role in boosting brand reputation. Customers are increasingly moving towards waste reduction and prefer purchasing from sustainable companies. According to National Geographic’s Green Index 2014 (a comprehensive measure of consumer behaviour), 61 per cent of global customers said they are concerned about environmental problems. Lean thinking ensures that the company scrutinizes all processes regardless of how seemingly minor or substantial they may be to the operations. It not only makes the company more productive and cost efficient but also creates a culture of sustainable consumption in the society.
The author is Executive Vice-President and Business Head, Godrej Locks & Architectural Fittings and Systems.