Lean Practices in Procurement

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The role of procurement is evolving rapidly, and the traditional “business as usual” mindset is no longer enough. In today’s competitive landscape, it's not just about doing things better, it's about doing them differently. This webinar challenges procurement professionals to think beyond incremental improvements and embrace transformational change. By shifting from outdated practices to collaborative strategies that benefit both buyer and supplier, procurement can become a powerful driver of innovation and competitive advantage.

Led by industry expert Mike Gozzo, this session will focus on how to apply lean principles directly to your procurement operations. You’ll learn actionable techniques to streamline supplier interactions, reduce inefficiencies, and build stronger, trust-based relationships that foster mutual success. Whether you're looking to shorten lead times or strengthen strategic partnerships, this session will provide the tools you need to make meaningful changes to your procurement approach.

Your Benefits for Attending:
  • Understand the principles of lean practices and how to apply them to your procurement process.
  • Learn how to have your suppliers reduce lead time and setup—and understand why this is so significant.
  • Gain insight into developing trust with suppliers and why that is so critical.
  • Understand 5S / Kaizen and how to use them effectively.
Why this webinar is a benefit to attend:

You’ll walk away with practical strategies to enhance procurement efficiency and build high-value supplier relationships, essential tools for any professional looking to lead rather than follow in a transforming industry.

Level: Intermediate
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Management Services (2 hours)
Program Prerequisites: None
Advance Preparation: None

  1. Introduction 
  2. Outline 00:01:41
  3. What are Lean Practices? 00:02:20
  4. Lean Principles 00:02:36
  5. Waste Elimination 00:04:22
  6. The Transparent Workplace - Values Versus Nonvalue Added 00:06:04
  7. Transparent Workplace - Flow Analysis 00:07:43
  8. What is Value Stream Mapping? 00:09:32
  9. Why is it Called a Value Stream? 00:10:50
  10. Difference From Process Mapping 00:11:35
  11. Transparent Workplace - Value Stream Mapping (VSM) 00:12:58
  12. Process Timeline 00:14:19
  13. How do Lean Practices Relate to Purchasing? 00:19:07
  14. Role of Purchasing 00:19:31
  15. What are Cost Drivers? 00:21:32
  16. Lean Flow Collaboration 00:24:19
  17. What Is It? 00:25:57
  18. Collaborations 00:27:41
  19. Collaboration Implementation Five Steps 00:30:09
  20. Collaboration Benefits 00:31:59
  21. Who Needs Lean Flow? 00:32:57
  22. Performance Potential 00:33:39
  23. Improvement Potential 00:34:38
  24. Case in Point - Wiremold 00:35:28
  25. Understanding and Application of Tools 00:37:06
  26. Paper and Transaction Reduction 00:Exercise 00:37:22
  27. Exercise - Horse Scenario 00:38:12
  28. A Simple Example 00:38:19
  29. One Potential Solution 00:39:37
  30. Lead Time 00:42:32
  31. Definition of Lead Time 00:42:48
  32. How is it Determined? 00:43:24
  33. Elements of Manufacturing Lead Time 00:44:14
  34. Purchasing Lead Time 00:46:32
  35. Characteristic of Lead Time 00:47:14
  36. Action 00:47:29
  37. Kanban 00:48:16
  38. Cost of Placing Orders 00:50:18
  39. Costs Associated with Order Quantity Decisions 00:51:49
  40. Order Quantity Constraints 00:53:20
  41. Cost of Quality a TQM Measure 00:54:49
  42. What Must Be Done? 00:57:47
  43. Our Direction 00:58:01
  44. Direction Guidance Questions 00:59:01
  45. Further Guidelines for a Lean Purchasing Practice 00:59:32
  46. Performance Assessment 01:00:31
  47. Assessment Continued 01:00:55
  48. Scoring the Assessment 01:01:02
  49. Strategic Sourcing 01:02:10
  50. Strategic Sourcing Process 01:03:19
  51. Sourcing Strategy Continued 01:05:12
  52. Transformation to Lean 01:07:18
  53. What & Where Continued 01:09:14
  54. Components For Improvement 01:11:32
  55. Components For Improvement Continued 01:13:31
  56. Things To Do For Sourcing 01:18:20
  57. Components for Improvement Continued 01:19:53
  58. Transparent Workplace - Visual Order - The 5 Ss 01:20:54
  59. Before Storage Room 01:22:39
  60. Red Tag Items 01:22:56
  61. After Storage Room 01:23:30
  62. Measurements of Performance 01:24:18
  63. Lean Practices Employment 01:29:06
  64. Steps To Take 01:24:17
  65. Expectations and When 01:31:58
  66. Recap 01:34:14
  67. Q & A 01:37:19
  68. Closing Comments 01:38:01
  69. Presentation Closing 01:41:40
  • Michael W. Gozzo

    Michael W. Gozzo

    Michael W. Gozzo provides consulting and training services to all levels of management and is a Supply Chain Specialist including Purchasing (Supplier Collaboration), Inventory Control and Production/Operations Management.  With many years of practical international experience, he offers a supe [...]

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ISM Credit

Institute of Supply Management

This program may be used for Continuing Education Hours (CEH) toward recertification for programs offered by the Institute for Supply Management®, including the Certified Professional in Supply Management® and Certified Professional in Supplier Diversity®.

QPANJ Credit

Qualified Purchasing Agent - New Jersey

ATAPU Credit

Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in purchasing.
  • 80-20 Pareto Rule 01:14:58
  • ASCM - Association for Supply Chain Management 00:43:00
  • Cost 00:21:12, 00:42:40, 00:52:29, 01:09:05
  • Cost Of Goods Sold (COGS) 01:02:32
  • Inventory 00:21:52, 00:32:16, 00:49:03, 00:53:43
  • Inventory Supplier Management (ISM) 00:21:05, 00:28:38
  • Lead Time 00:22:30, 00:42:32, 00:47:18
  • Pareto Analysis 01:14:45, 01:18:20
  • Process Mapping 00:11:46, 00:19:00
  • Procurement 00:20:42, 00:35:11, 00:34:39, 00:37:27
  • Product Family 00:13:37
  • Pull System 00:26:08
  • Purchase Orders 00:15:06, 00:20:44, 00:50:53
  • Push System 00:24:19
  • Revenue 01:07:31
  • Strategic Sourcing 01:02:10
  • Supplier 00:02:12, 00:03:19, 00:08:23, 00:15:10, 00:19:49, 00:22:01, 00:30:29, 00:36:38, 00:46:22, 00:52:00, 01:00:07, 01:06:36, 01:13:19, 01:24:36, 01:29:05
  • Supplier Resource Management (SRM) 00:28:10
  • Supply Chain 00:32:13
  • Supply Chain Management 00:43:07
  • Total Quality Management (TQM) 00:54:49
  • Value Stream 00:09:43, 00:02:20, 00:45:47
  • Value Stream Mapping (VSM) 00:09:42, 00:12:58
  • Vendor 01:04:40
  • Vendor Management Inventory (VMI) 01:04:
  • Voluntary Inter-industry Commerce Standards (VICS) 00:49:05

80-20 Pareto Rule: The Pareto principle states that, for many events, roughly 80% of the effects come from 20% of the causes.

ASCM - Association for Supply Chain Management: The Association for Supply Chain Management (ASCM) is the global leader in supply chain organizational transformation, innovation and leadership. As the largest non-profit association for supply chain, ASCM is an unbiased partner, connecting companies around the world to the newest thought leadership on all aspects of supply chain.

Cost: The sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location

Cost Of Goods Sold (COGS): The direct expenses related to producing the goods sold by a business. The formula for calculating this will depend on what is being produced, but as an example this may include the cost of the raw materials (parts) and the amount of employee labor used in production.

Inventory: A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilization.

Inventory Supplier Management (ISM) : Inventory Supplier Management refers to the systems and strategies businesses use to source, evaluate, and collaborate with vendors. It bridges procurement and inventory control, ensuring the right materials are in stock while minimizing carrying costs and mitigating supply chain risks.

Lead Time: The number of days from when a company places an order for supplies, to when those items arrive.

Pareto Analysis: Pareto analysis is a formal technique useful where many possible courses of action are competing for attention. In essence, the problem-solver estimates the benefit delivered by each action, then selects a number of the most effective actions that deliver a total benefit reasonably close to the maximal possible one.

Process Mapping: Process mapping is the graphical representation with illustrative descriptions. Process maps provide insight into a process, help teams brainstorm ideas for process improvement, increase communication and provide process documentation. Process mapping will identify bottlenecks, repetition, and delays. Business process mapping refers to activities involved in defining what a business entity does, who is responsible, to what standard a business process should be completed, and how the success of a business process can be determined.

Procurement: Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement is used to ensure the buyer receives goods, services, or works at the best possible price when aspects such as quality, quantity, time, and location are compared.

Product Family: A group of variants passing through similar processing steps that use common equipment.

Pull System: A lean manufacturing strategy used to reduce waste in the production process.

Purchase Order: A legal contract between a buyer and a vendor. It lists the materials or services to be purchased on specified terms and conditions (quantity, price / pricing conditions, delivery date).

Push System: Production happens based on demand forecast.

Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

Strategic Sourcing: Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so an organization can use its consolidated purchasing power to find the best possible values in the marketplace and align its purchasing strategy to business goals.

Supplier: A supplier is an entity that supplies goods and services to another organization. A supplier is usually a manufacturer or a distributor. A distributor buys goods from multiple manufacturers and sells them to its customers. Similar Terms. A supplier is also known as a vendor.

Supplier Relationship Management (SRM) : Supplier relationship management is the discipline of strategically planning for, and managing, all interactions with third-party organizations that supply goods and/or services to an organization The objective of SRM is to maximize the value of those interactions.

Supply Chain: A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. The supply chain also represents the steps it takes to get the product or service from its original state to the customer.

Supply Chain Management: In commerce, supply chain management, the management of the flow of goods and services, involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods as well as end to end order fulfillment from point of origin to point of consumption.

Total Quality Management (TQM): Total quality management consists of organization-wide efforts to "install and make permanent climate where employees continuously improve their ability to provide on-demand products and services that customers will find of particular value."

Value Stream: a series of steps that occur to provide the product or service that their customers want or need

Value Stream Mapping (VSM): Value stream mapping (VSM) is defined as a lean tool that employs a flowchart documenting every step in the process. Many lean practitioners see VSM as a fundamental tool to identify waste, reduce process cycle times, and implement process improvement.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

Vendor Management Inventory (VMI): A supply chain agreement where the manufacturer or supplier takes control of the inventory management decisions for the seller or retailer.

Voluntary Inter-industry Commerce Standards (VICS): The VICS (Voluntary Interindustry Commerce Standards) Bill Of Lading (BOL) provides inventory-processing information through the supply chain to a shipper, carrier, and customer.

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This webinar received a total of 1 survey responses. Attendees have given an average rating of 4.6 stars out of a possible 5, reflecting the quality and value of the content presented.

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Nancy S.
May 12, 2026
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Good presentation. I would have liked to have seen the Wiremold case example walked through the entire process if time allowed to see exactly how they were able to increase sales 200% and how lead time was reduced from 4-6 weeks to 1-2 days.

Frequently Asked Questions

Lean practices in procurement apply the principles of lean manufacturing—waste elimination, continuous improvement, value stream optimization, and flow efficiency—to the procurement function, transforming it from a transactional order-placing activity into a strategic driver of competitive advantage. Traditional procurement focused primarily on negotiating the lowest unit price, often creating adversarial buyer-supplier relationships optimized for short-term cost reduction at the expense of supply chain reliability. Lean procurement shifts focus to total value creation: reducing lead times, eliminating non-value-adding transactions and activities, building collaborative supplier relationships that enable mutual improvement, and applying value stream mapping to visualize and eliminate waste across the entire procurement process. A lean procurement mindset asks not just 'what does this cost?' but 'what is the total cost of the waste, delays, quality failures, and relationship friction embedded in how we currently buy?' By shifting from incremental to transformational improvement, organizations can unlock significant competitive advantages in supply chain responsiveness and total cost structure.
Value stream mapping (VSM) is a lean tool that creates a visual, end-to-end map of every step in a process—including both value-adding and non-value-adding activities—to identify waste, reduce cycle times, and guide improvement. Applied to procurement, VSM maps the entire flow from requirement identification through supplier selection, purchase order creation, transmission, supplier processing, delivery, receiving, and invoice payment. When procurement professionals conduct this exercise, results are typically striking: the majority of elapsed time in a procurement cycle consists of waiting (for approvals, for information, for supplier response), unnecessary transactions, and rework caused by incomplete orders—all forms of waste. Value stream mapping makes these waste elements visible in a format that creates shared understanding and builds the case for targeted improvement. A VSM exercise in procurement typically reveals opportunities to compress lead times by 30–50% or more by eliminating approval bottlenecks, standardizing ordering processes, implementing Kanban replenishment for repetitive purchases, and streamlining supplier communication.
Supplier lead time reduction is one of the highest-value outcomes of lean procurement, directly reducing inventory requirements, improving responsiveness to customer demand, and lowering the cost of safety stock held as a buffer against uncertainty. Lean approaches operate on both sides of the buyer-supplier relationship. On the procurement side, simplifying order processes—reducing approval layers, standardizing purchase order formats, implementing electronic transmission—eliminates the significant buyer-side delays that inflate apparent supplier lead times. On the supplier side, lean procurement involves collaborative engagement: working with suppliers to understand and reduce manufacturing lead time elements (queue time, setup time, run time) rather than simply demanding shorter delivery windows through contract pressure. Kanban systems—where replenishment signals are triggered by actual consumption rather than forecasted demand—reduce setup frequency and enable more responsive, smaller-batch supplier production. Suppliers who see their customer committed to collaborative improvement rather than simply squeezing price are far more willing to invest in capability changes that produce genuine lead time compression.
Lean flow collaboration is a cooperative relationship model that replaces the traditional adversarial buyer-supplier negotiation dynamic with a partnership focused on eliminating waste and creating mutual value across the supply chain. In a lean collaboration, the buyer shares demand visibility, production schedules, and inventory data with the supplier—enabling more efficient supplier planning and cost reduction. The supplier shares capacity constraints, cost structures, and quality issues with the buyer—enabling more realistic planning and joint problem-solving. Trust is the prerequisite because this model requires both parties to share information they would historically have withheld for competitive advantage. Buyers who share demand data must trust that suppliers will not use it to negotiate aggressively. Suppliers who share cost structures must trust that buyers will not demand aggressive price cuts in response. Building this trust requires demonstrated reliability, consistency of commitment, long-term relationship orientation, and willingness to share both the benefits and costs of collaborative improvement—a fundamentally different mindset from the transactional procurement approach that characterized most supply chains before lean principles were applied.
5S is a lean workplace organization methodology originating in Toyota's production system, named for five Japanese terms typically translated as Sort, Set in Order, Shine, Standardize, and Sustain. Applied to procurement and purchasing operations, 5S creates an ordered, efficient, and transparent working environment that reduces the waste of searching, retrieving, and managing both physical materials and information. Sort involves removing unnecessary items—eliminating obsolete supplier contracts, outdated specification files, and redundant forms. Set in Order means organizing remaining items for immediate retrieval—logical filing structures, labeled storage, clear document naming conventions. Shine involves keeping the workspace and information systems clean and current. Standardize creates documented procedures ensuring everyone follows the same organized approach consistently. Sustain embeds the discipline to maintain these standards through audits and accountability over time. In a procurement context, 5S applied to both physical storage areas and digital document management dramatically reduces time wasted searching for information, reduces errors from outdated documents, and creates the visual transparency that supports lean flow collaboration with suppliers.