CSCMP's Supply Chain Quarterly
October 19, 2018

Spreading the word about lean

Robert Martichenko has helped companies and practitioners worldwide to recognize and apply lean as an end-to-end supply chain strategy.

Robert Martichenko Early in his career, Robert Martichenko recognized that although lean principles had long been utilized to improve manufacturing processes, companies would greatly benefit by extending those practices to partners within the supply chain. This idea led him to launch LeanCor Supply Chain Group, a company that provides lean supply chain and logistics training and education, consulting, and third-party logistics (3PL) services.

Martichenko's mission is to help organizations apply lean thinking to eliminate waste, improve supply chain performance, and build a culture of operational excellence. But this is not just a commercial objective for him. He also devotes a considerable amount of his time to promoting education in this field. In addition to running his company, he is a senior instructor for the Lean Enterprise Institute and the Georgia Tech Supply Chain and Logistics Institute, and is a frequent speaker for industry groups around the world. A Six Sigma Black Belt, Martichenko has written or co-authored six books. Two of them—People: A leader's day-to-day guide to building, managing, and sustaining lean organizations, and Building a Lean Fulfillment Stream—have won the Shingo Research and Professional Publication Award for research and writing that conveys new knowledge and understanding of lean and operational excellence. (He's also just written his first novel, Drift and Hum: The Great Canadian-American Novel, about friendship, growing up in the north, and dealing with life's challenges.)

Martichenko's influence has been widespread. He has expanded the boundaries of supply chain management to include lean practices, a development that is helping businesses to better manage globalization, market and product complexity, and changing customer preferences and demand patterns.

For his thought leadership and devotion to improving professional standards and educational opportunities in supply chain management, Martichenko received the 2015 Distinguished Service Award (DSA) from the Council of Supply Chain Management Professionals. The prestigious award, the organization's highest honor, is given to an individual for significant achievements in the logistics and supply chain management professions.

The Timmins, Ontario, Canada, native recently spoke about lean, innovation, and education with Supply Chain Quarterly Editor Toby Gooley.

Name: Robert Martichenko
Title: Chief Executive Officer
Organization: LeanCor Supply Chain Group
Education: Bachelor's degree in mathematics from the University of Windsor (Ontario); Master of Business Administration in finance from Baker College
Business Experience: Worked in the transportation and warehousing industry in Canada and the United States; founded LeanCor in 2005
CSCMP Member: Since 1998

Your education was in mathematics and finance. Has that helped you in your career?
There is no question that mathematics has been and continues to be helpful in my work. A lot of problem solving in logistics and supply chain has an analytical element, and mathematics is extremely helpful. There's very little you can do in supply chain management without that.

My MBA in finance came later; I did that after 10 years in industry. I specifically chose to focus on finance, as opposed to operations, because I was getting operations experience at work. I had recognized that one reason why we were not moving the ball down the field in supply chain as quickly as we needed to is that we were not connecting with the language of finance: revenue, operating costs, margin, and working capital. I thought that was important, and that I needed a more solid education around the language of the [chief executive officer].

Why is the lean philosophy—originally developed for manufacturing—important in supply chain management?
Because lean originally was used for manufacturing, the term "lean manufacturing" took hold, which is unfortunate because it perpetuates the idea that it's only about manufacturing. What lean says to us is to make customer consumption visible, then manufacture and distribute to the pace of customer consumption. So lean in its essence is a supply chain strategy.

If you look at the companies that pioneered this concept and at those that have successfully implemented lean from end to end, they're actually lean supply chain organizations. If you look at the ones with underwhelming or unsuccessful initiatives, it's because they believed lean is only for manufacturing, and they never connected lean to their customers. So what they have is factories that are building inventory faster and stockpiling inventory that's going to sit in a warehouse for six months. That business sees marginal or no actual benefits.

A lot of organizations believe that simply using lean tools to identify and eliminate waste is a lean system. For example, some organizations are using lean tools, such as 5S, quality at the source, and one-piece flow, to improve a particular function. But I would say that's a tactical definition of lean thinking. Then there's a true strategic definition, where you're using it as a business methodology to create a learning culture that is focused on flow. You want to create a business environment where problems are made visible and you can see and fix the root cause by focusing on flow. It's about the end-to-end flow, not just about using tools at the functional level.

You're known as an advocate for supply chain innovation. What role can innovation play in supply chain management?
When people see the word innovation, we most often think of technology. But I think the real breakthrough is not one of technological innovation but one of thought innovation. We have to think about things differently. We need to move away from a focus on achieving economies of scale and toward economies of time. [For example,] reducing lead times is the most important thing we should be doing.

The idea of total cost and understanding the end-to-end system costs of these business decisions—that to me is innovation and the next frontier in supply chain. We're now working on a concept called supply chain advancement, or SCA. At essence, it involves the recognition that people at all levels of an organization make business decisions, but the value or waste created by those decisions will be manifested inside the supply chain. For example, people could make a business decision in marketing, but that decision is not going to create value or waste in marketing, it will do that in the supply chain. The same thing happens in product development, and similarly for all other functions.

What that means is recognizing that every single decision being made in a business is going to have an impact on the supply chain. Whether you have 10 people or 10,000 people in a company, every one of them should have some fundamental knowledge of supply chain management so they will understand the impact their decisions will have on the supply chain.

You're involved in education as a volunteer, not just through CSCMP, but also at the high school and university levels. Why is that a personal priority?
Some of the work I've enjoyed the most is speaking at universities. I'm also participating in a mentoring program at the College of Charleston (South Carolina, USA). I do this for a few reasons: I am passionate about the industry, and even today, with all the great work that CSCMP has done and the universities are doing, there is still a lack of understanding about the jobs and roles that are available to young people in our field. We're a long way from kids in high school understanding the amazing world of supply chain, and I want to help young people understand the great career opportunities it offers.

Focusing on training and teaching, and getting in front of young people, senior executives, and other professionals also makes me clarify my own thoughts. I've written several books, and writing is my way of synthesizing my own thoughts. When I teach, it's similar.

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