Topic: Supply chain management improvement using lean manufacturing technique
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Supply chain management can be defined as managing the flow of products and services within the organizations. It comprises the movement of the raw materials, works in progress and finished goods from their origin to consumption (Lee and Nelson, 2010). So, it comprises of planning, designing, monitoring the supply chain activities with the intention to create net value, executing, controlling ,building a competitive infrastructure, coordinating the demand and supply activities and measuring the performance of the company according to the global standards.
One of the techniques of production is the lean manufacturing techniques. Lean is the method for minimizing the waste within the manufacturing system without surrendering the productivity of the organization. It considers the wastage arising from the overburden and through ununiformed workloads. It is a technique of manufacturing which adds value to the processes by decreasing everything which is not doing the value additions.
Value-added activities comprise of the techniques to verify the wants of the consumers in the entire supply chain since comprehending the requirements of the consumers is essential for minimizing the wastages in the supply chain systems (Rose, Deros, Rahman and Nordin, 2011).
As per Manzouri et al., (2014) the businesses have been attempting to minimize the total cost and waste throughout their supply chains in order to be competitive and expand themselves in the international market. The influence of lean management principles on the supply chain of the businesses cannot be ignored. The lean procedures and techni
ques assist the businesses to be flexible and lucrative. The lean management comprises of quality development processes, pull production techniques, focus on the processes, continuous improvement, worker empowerment and value stream management.
The aim of the lean management principles is to fulfill the demands of the consumers with the help of reducing the waste. Reduction of wastages can be considered in the supply chain processes of human resources, design and production and activities associated with inventory and distribution. As per the concept of lean management principles application of its tools and techniques can assist in the minimization of such wasted efforts (Anvari, Ismail and Hojjati, 2011). The personnel involved in the supply chain should comprehend the concepts of lean management and apply its practices through cooperation and coordination.
The various processes of Lean management principles are Total Quality Management (TQM), Just –In –Time (JIT), value stream mapping, human resource management, total preventive maintenance programs and vendor development. Lean is a concept which applies a series of activities for removal of wastages and retaining the worth with less of work. In this context, the lean concept has been used in the production systems (Bicheno and Holweg, 2016). Lean enterprise or lean production arises when the business integrates the elements of a supply chain with the lean production, procurement, manufacturing, and distribution together.
However, if the organization overlooks the strategy of lean production, it would not be able to confront the worldwide competition in terms of fast delivery, high quality, and fewer costs. The lean management principles can be categorized into six areas viz. planning and control, manufacturing, product design, process and equipment, supplier and consumer relationships and human resources (Poppendieck, 2011). The lean principles can further be dividing into three classes viz. identification of problems, assessment of their causes and resolve the issues. When waste and problems are recognized in the supply chain, the personnel try to resolve the problems and implement them to develop the system.
In this context, the lean supply chain (LSC) recognizes and removes all kinds of waste in the supply chain. While handling the supply chain, they target on the undertakings which deliver the raw materials, manufacture the final product and transport them to the end consumers in an efficient manner. The function of LSC is to focus on each activity which generates wastages and attempting to minimize them. The supply chain management is a total system which requires assimilation and optimization which are achieved through procedures and techniques of lean manufacturing (Taleghani, 2010). The combination of LSC and supply chain management strategy creates the successful and dynamic strategy.
The various aspects of LSC can be classified into the following areas viz. role of suppliers, nature of competition, source decision, supply structure, supplier development, interchange and interaction of data and production techniques (Rajenthirakumar and Thyla, 2011). The competition is amongst the various supply chains. Furthermore, the quantity of sources shall be kept low as probable. Adapting the principles of lean management is more complicated.
To overcome this, the members of the supply chain must apply the principles of lean management and recognize new methods to improve their internal techniques such as improvement of inventory, quality, costs, and transportation and then apply those improvements at all the levels of the supply chain. So, all the techniques shall be implemented on the whole of the supply chain. The activities adding value should be described on the basis of advantages derived by the partners of the supply chain.
For implementing the LSC, the organizations have to pass seven steps viz. development of the system thinking, understanding the value of the consumers, benchmarking best practices, value stream mapping, creating flow, designs which manage demands and measuring the performance metrics (Gothelf, 2013). The companies also follow the steps regarding network process and design: integrating the internal and external activities with the supply partners, assimilation of the supply chain within the enterprise and creating an internet connection amongst the partners of the supply chain to make a single virtual enterprise.
However, some of the companies are able to successfully implement the LSC in spite of their benefits. Some of the failures include misinterpretation the idea and the aim of the LSC and accessibility of resources such as time, cost and skilled workers. Another reason might be the cultural differences arising in the translation and transitions of the techniques and principles of lean management (Modi and Thakkar, 2014). For its adoption, the lack of availability of resources proves to be serious hindrances. Lack of support of top management is another issue in this regard.
Since all the processes in the company starting from preparation to application are executed under the direction of the top management, lack of their support will cause the failure of application of lean tools and techniques (Womack and Jones, 2010). The concept of lean management initiated in the locomotive industries, their advantages have been perceived and recorded in these industries. The benefits of the lean management have been recorded in other industries too. With the implementation of the LP, the reduction in the time of material flow in the construction companies has been observed. Additionally, improvements are recorded in the transportation and storage of animal food industry has been observed.
The demand variations and fluctuations of the orders can be accomplished through supply chain collaborations. Through the management of the demand volatility, the organizational performance is improved and the consequence of the whole supply chain is recovered (Aziz and Hafez, 2013). So, demand collaboration and signal are considered to be crucial LSC application tools to comprehend demands throughout the whole supply chain.
As per Junior and Mendes (2017) the utilization of lean management principles can contribute to the processes of waste reduction. The organizations using the lean principles in its supply chain are expected to minimize the waste from the production activities with the help of environmental management practices and minimization of costs. A company using the lean management practices utilizes some alternative approaches which help in managing and organizing the relationships of the company with its consumers, supply chain, production and product development operations.
Here the utilization of resources means minimization of wastages in all the aspects including the natural resources. Thus lean manufacturing processes help in improving the environmental management practices. With the help of reduction of internal wastages through lean management techniques, the management of environmental wastage can be done. The lean management principles also target the financial improvements along with aiming at productivity and quality through the operational procedures.
Lean management targets at processes, technology, operations, physical arrangement, quality, supply chains, inventory and resource planning procedure. Lean management principles can be described as a framework of practices which aim at minimization of wastages and non-value adding actions from the industrial activities of the company. A lean company aims at the sustainability advantages through the operational practices. Thus the lean approach aims at all the organizational activities at all the levels which are related to environmental and economic sustainability.
According to the opinion of Saleh et al.,(2016) supply chain operational reference (SCOR) is a methodology has been considered as a measuring tool that can be utilized in the supply chain system for serving the performance indicators, business process framework and distinct mechanisms and technologies for supporting the communication and collaboration among the supply chain management process within the business organization. The further review is focused on measuring the supply chain management performances by making use of SCOR version for production typology for MTS and MTO in the Indonesian Banking sector.
Modi and Thakkar, (2014) has observed and noted that the idea of lean manufacturing is concerned about the end or decrease of the wastage done amid the assembling and other related procedures, subsequently if the standards of lean generation if actualized to the administration capacities can bring a diminishment and cut the blunder rates and which will convey improvement to responsiveness and shoppers fulfillment. In any case, at that point likewise, the business enterprises are discovered moderate in the execution of the lean standards and the purpose behind the same is that the waste and wastefulness that can meddle with administrations are once in a while self-evident (Goetsch and Davis, 2014). If there should be an occurrence of the production lines where the sit still laborers and the heaps of merchandise and stock are the prime reason of the broken procedures and waste is considered as covered up in the event of the administrations. It creates prowl between the functionalities, offices or the locales and because of which the business associations can look only a section or segment of the issue. Another issue is with the cushy representatives which are each much hesitant towards the idea that their work could be managed. What's more, this absence of institutionalization of consistency in the administration procedures can be demonstrated exorbitant. The procedures which are perplexing and wasteful are slower and furthermore have a higher rate of mistakes, which will likewise acquire lessening the general responsiveness and fulfillment level of shoppers, this will likewise bring about an expansion in hazard and risk consistency (Lee and Nelson, 2010). The standards of lean assembling and industrialization can be actualized to the administration and also creation functionalities yet with one major contrast .i.e. the costs are to be handled come from the workforce, overheads, and declining fulfillment level of purchasers however not the physical stock. The procedure of Lean execution includes the choice of a suitable set apparatus and hardware's from the lean storehouse for accomplishing the greatness in the procedures (Taleghani, 2010). Anyway, there are odds of hazard from over concentrating on the advantage picked up from the apparatuses and are likewise striving for the procedure flawlessness, however, the supportability of the lean instruments has additionally been ignored inside that particular work culture. A probability of a presentation of hazard for the business association is there with the execution of new techniques each time and furthermore, there are odds of the two openings and risk for Nike Inc.
After summing up and analyzing the above executed review it has been concluded that supply chain management is one of the crucial operation within an organization so as to make smooth in-flow and out-flow of the goods. The review is focused on the lean manufacturing techniques that aids in bringing improvements in the supply chain system
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