Lean is also ‘respect for suppliers’
Implementing the lean system efficiently and sustainably in a company is not a simple process, for a number of reasons. One of them is that it requires going beyond the boundaries of the company itself: it must also involve the organization’s suppliers.
This leads us to think that the lean concept and practice of respect for people needs to be something even broader, not only related to the employees of the company pursuing lean management, but also extending across the entire organizational ecosystem, including “respect for suppliers”.
And what does that mean?
In short, in lean management, respect for suppliers should be an extension of the concept and practice of respect for people that takes place inside a company pursuing the practice of lean thinking.
Respecting people, in lean management, does not merely mean the common sense of being kind; rather, it means respecting the development and autonomy of every person. In other words, respecting is supporting and encouraging everyone in the organization to look critically at their work and at the processes they are involved in, in order to reveal and solve problems, find and eliminate waste, increase value creation in everything they do and, consequently, generate learning.
In this sense, respecting suppliers means structuring and pursuing this same practice summarized above, but also in the context of each supplier and partner. That is, working so that all the people directly or indirectly connected to the company understand and practice lean every day.
Lean practice, therefore, involves collaboration, integration and trust, whether inside or outside the organization. We need to expand the idea that lean is something to be implemented solely and exclusively within a company. More broadly, we need to think that the lean journey must take place inside and outside the organization, as in a network of applications and connections. This requires a series of changes in mindsets and practices.
For example, in companies that are starting their lean implementation, it is important to understand that it is sometimes necessary to introduce and/or deepen lean with suppliers as well, encouraging this transformation not only among the company’s people but also among its partners. This increases the challenge, since it requires teaching, spreading and encouraging lean practices across an even wider range of individuals and processes.
To do so, the traditional practices of the typical supplier relationship must change. For example, those that see suppliers basically as costs to be reduced, a phenomenon that sometimes creates toxic, unproductive and unsustainable environments.
In contrast, lean management assumes that suppliers need to be seen as value adders to be constantly improved, developed, integrated… in order to add more and more value to processes and, consequently, to customers.
As a result, cost reduction will become something natural, in the sense of being a consequence and not an “end in itself”: a phenomenon resulting from the elimination of waste and the improvement of processes, management and the ability to solve problems, optimizing the extended value chain as a whole.
In other words, what is called for is the pursuit of practices that perpetuate and sustain the delivery of value. It is a long-term view, which involves partnership and consequently more respect. And showing this respect to suppliers is also, in equal measure, strengthening the relationship.
The great purpose of lean thinking is to produce and deliver more value to the customer. On this journey, continuous improvement must cover the entire flow of the supply chain. And the results must be shared according to “win-win” logic. Therefore, practices such as delaying payments, which benefit only one side in the short term, are not in line with lean thinking.
The good news is that the lean system has a number of concepts and practices that can accelerate this process. For example, Daily Management (DM) can be implemented not only within the company, but also involving suppliers. As the company becomes a disseminator of lean management practices, it develops in its partners the idea and the most meaningful and efficient practices of DM and the ways to apply them in specific contexts.
Similarly, the organization can amplify lean practice by supporting suppliers in applying jishuken, a term meaning “self-study” in Japanese, which in lean management means enabling people to learn lean by implementing it in the practice of the processes involved.
Complementing this, there is also the concept and practice of yokoten, which means spreading among everyone involved – including suppliers – the best standards or processes for surfacing and solving problems, so that they serve as examples and sources of inspiration for other individuals, teams and, in this case, other organizations.
If all this is done in a structured and planned way, the journey becomes truly sustainable and will tend to generate a management model not restricted to a single company, but extended to an entire ecosystem involving several links: the end-to-end value chain.
From another perspective, it is also possible to create a broader governance structure, encompassing the environmental, social and corporate dimensions, as advocated, for example, in ESG, creating and strengthening mature, sustainable and socially responsible relationships and practices for all the organizations that make up the ecosystem represented by the extended value chain.
However, for this to really happen, we need to deepen the lean concept and practice of “showing respect”. It is a central element of lean culture, but it cannot be confined to the specific, internal universe of a single company. It must also apply to all relationships, both inside and outside the organization, continuously creating and strengthening a true “lean ecosystem”.
