Course Objectives: · Critique a peer’s e-portfolio and pitch by providing feedback using the assigned rubric. Prompt Examine the work of one of the peers with which you linked to in Week 5. You will
Running head: LEAN SUPPLY CHAIN 1
Lean Supply Chain
Steven C. Higgs
TLMT 611 Global Logistics Management
American Public University
Dr. Ernest Hughes
27 December 2019
Abstract
The goal of a lean system is to achieve a state of processing where every input is directly associated with an output with zero interaction that does not contribute to the end state. This means the system is working to achieve the output with the absolute minimum resources necessary. Although this is the prime goal of any organization in order to ensure no resources are wasted, the methodology to implement these systems and processes can be troublesome. There are some instances where lean systems are over-implemented and actually work counter to the end state. Additionally, some processes are such that a “lean” system would actually hurt the process. These problems and more are why it is necessary, in a lot of circumstances, to invest the time, energy, and resources to obtain outside consultants to conduct a process map and analysis. Alternatively, third party logistics or sub-contracting is necessary in order to ensure an arrangement can be made to meet the goals of the organization. Using third-party logistics is a good practice in order to outsource a requirement and also specify explicitly the requirements in order to ensure the goals and objectives of an organization are met, only without having to perform the service themselves. There is a significant drawback to this, especially if the company is not experienced in outsourcing requirements. Contract management officials are needed to ensure the goals and objectives of the company, as well as the ethical and feasible requirements of the company are adhered to. From this, a successful outsourcing option can be achieved in the performance of the service.
Table of Contents
Introduction………………………………………………………………………………………..4
Literature Review..………………………………………………………………………………...4
Discussion….……………..……………………………………………………………………….7
Conclusion…………………………………………………………….…………………………..8
References…...……………………………………………………………….……………..…....10
Introduction
Implementing lean manufacturing (LM) systems and processes aim to ensure an organization is operating in such a way to ensure there is maximum value added to the end user (customers). In this way, there are ways in which LM systems can sometimes contradict each other, and potentially work in niche systems. There is no one size fits all solution to any organization or process, and that is why lean systems must be tailor-made to fit the organization. With the continuous growth toward more technology, there comes more interconnectedness, access, and other ways in which companies and consumers interact and communicate demand and deliver on supply. From this, companies have to be more able to compete in order to survive. Lean systems is how companies keep costs down and answer the demand.
Defining “Lean Supply Chain” (LSC)
The first step in ensuring an organization is functioning as a lean supply chain system is to define what we mean by “lean supply chain” (LSC). Reese states that lean can be defined as “driving waste from all aspects of the business… a Japanese philosophy, is simply the elimination of waste through continuous improvement.” (Reese, 2014) Some key points to highlight here are the most common forms of waste that typically intrude into systems. Defects, production process flaws, overproduction, wait time, transportation time/cost, inventory and raw material issues, safety issues, and underutilized humans are the most common reasons why systems are not optimized. (Reece, 2014) Typically an insider is not able to identify these types of concerns and will be less likely to correct deficiencies of wastefulness. An outsider, typically one trained in lean and/or six-sigma is more likely to analyze process flows and make recommendations to benefit the systems. All lean analysists are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash ... And we are reducing that time line by removing the non-value-added wastes. (Wilson, 2010)
Implementing Lean Systems
The most difficult part of any initiative to improve process flow is the identification of the problem and the implementation of the fix. In a number of scenarios, the identification process is long and tedious. If the analysists are from the outside, then they need a large amount of time to analyze and learn the system and define what is value-added and what is non-value added but required. Additionally, there are many “models” of what a lean system looks like but they’re likely not to fit every system. From this, we can deduce that time and resources must be spent in implementation. The needs of the customer also must be considered, as it is likely that these are value added requirements. Tortorella et al note that the most common traits that define a system as lean are pull systems, close relationship between customer, supplier, and relevant parties, and leveled scheduling systems. (Tortorella, 2018) Tortorella also notes that there are many varied descriptions of what a true lean system looks like, but in some cases the literature is not mature enough to define a particular trait as being specifically lean. Research conducted did indicate that there was a statistically significant correlation between the age of companies (greater than three years) and the degree of “lean” practices implemented. Their research also confirmed that implementation of multiple lean practices can be contradictory and/or nullify the beneficial effects in some instances.
As stated by Kazmane, we must take into account the operational excellence that can support the business through the costs of the initiatives, as well as aiming to sell to the customer a product and service with satisfaction. Here, a balance must be struck between the costs and the benefits of the system. The lean supply chain must aim to reduce cost, enable flexibility through freeing up resources, and reduce or eliminate all waste. Kazmane also identifies the fundamental priorities in process mapping lean supply chain management which are listed as the cost, flexibility, rapidity, reliability, quality, and the innovation in the process. (Kazmane, 2018) These are the guideposts in ensuring a system or process is truly lean, and depending on the system or process being mapped, some may be more high priority than others. For example, most systems that are developing some tangible output probably rely heavily on rapidity and reliability, whereas a system outputting a software may rely heavily on innovation and flexibility in order to ensure the software is meeting the goals of an ever-changing market.
An Alternative
Outsourcing is a viable option to ensure a business is able to execute business practices without incurring cost and quality objectives are met. With proper utilization, these outsourcing options will ensure continued success. There are multiple implementation guidelines that can be followed. As stated by Reece (2014), there are certain “benchmarks” to ensuring effective outsourcing. A company must spend a considerable amount of time analyzing the contractor’s scope of work, business practices, and defining responsibilities to manage sourcing, and those sourcing decisions are in line with the defined requirements. Additionally, as an organization wanting to ensure lean business practices are valued, the company must define and assess the requirements for lean manufacturing in the scope of work. (Reece, 2014)
The most significant takeaway from any contracting/outsourcing situation is the importance of the scope of work definitions, the performance work statement or statement of work documents to include the Performance Work Statement and Quality Assurance Plan. Contractors will often try as hard as possible to cut corners, save costs, and use vague terminology or definitions to their advantage.
Discussion
With the uncertainty that can be faced in implementing lean supply chain management initiatives, organizations should conduct a significant amount of research and analysis before implementing changes. In most cases, the recommendation can be made that an outsider should do the process mapping and lean analysis for a supply chain. A great example of this is in the reading about the Excalibur Machine Shop where analysis decreased the batch size for the production of a piece of electrical hardware. This could seem counter-intuitive due to the fundamental concept that large batch sizes typically are more efficient. However, in the grand scheme it made the entire process flow more smoothly and reduced bottlenecks at other stations. The team looked at the assembly cell and discovered they could get away with two fewer people. After retraining, the process went from 36 to 10 minutes. (Wilson, 2010) This team also improved the quality by decreasing the batch sizes. This is a perfect example of how sometimes a implement that works in some systems does not work in all, and also how an outside observer can identify issues better than internal analysis.
One additional takeaway is the research by Kazmane where it is highlighted the types of lean principles that are contradictory. It is impossible to implement every lean principle, and there are some choices to be made when choosing how the business should operate in order to choose the lean principles that suit the needs of the supply chain in use. Another key note is the number of lean principles that are exercised by companies greater than 3 years old versus those less than 3 years old. This suggests that “leanness” is inherent in older companies, or potentially just that companies that are not lean do not last long.
Another alternative highlighted is that companies can utilize third party logistics to minimize the amount of internal risk in conducting their business. From utilizing third party logistics, companies can specify the parameters that outline how a job is done, and therefore the soliciting company’s values are still utilized in the performance of the work. Contract specialists will likely be required in order to lay out the requirements for how the service is to be conducted so that is conducted in a way that is ethical, feasible, and acceptable to the requiring company. By conducting a thorough analysis of the requirements and drafting performance of work requirements,
Utilizing third party logistics does have a significant drawback. The work to be done is no longer is in the sole control of the parent company. If the company chooses to perform the work themselves, it is imperative that they conduct a thorough analysis of how to do the work with the highest degree of efficiency and systems analysis as possible. For this, the company should consider hiring an analyst to map the process to ensure the outputs are produced with as few or zero extraneous inputs.
Conclusion
Although the prime goal of any organization in order to ensure no resources are wasted, the methodology to implement these systems and processes can be troublesome. Some processes are such that a “lean” system would actually hurt efficiency. Alternatively, third party logistics or sub-contracting could become necessary in order to ensure an arrangement can be made to meet the goals of the organization. The key takeaway is to ensure a company with a requirement or defined goal can define what those requirements or goals are. From this, the organization can define the process inputs that are required in order to meet those goals. For service providers, those can also include what sort of level of quality is required in order to ensure the company’s priorities are met. The company has to internally assess if customer satisfaction is the priority, or is cost saving the priority. From this analysis, the “balancing act” can be made in order to ensure the appropriate levels are adjusted to ensure the quality is there in accordance with the cost.
References
Gao, R., Chan, A. P., Lyu, S., Zahoor, H., & Utama, W. P. (2018). Investigating the difficulties of implementing safety practices in international construction projects. Safety Science, 108, 39–47. doi: 10.1016/j.ssci.2018.04.018
Kazmane, J. (2018). Proposal and analysis of a model for design and development of lean supply chain strategy. International Journal of Engineering Research in Africa, 37, 158–171. doi: 10.4028/www.scientific.net/jera.37.158
Reece, P. M., & Antosiak, L. B. (2014). Outsourcing & lean manufacturing: product quality & waste elimination. Neutraceuticals World, 17(2), 18–21. Retrieved from http://web.b.ebscohost.com.ezproxy2.apus.edu/ehost/detail/detail?vid=0&sid=65985fc8-9347-4ee6-be58-04b9257499da@sessionmgr103&bdata=JkF1dGhUeXBlPWlwJnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=94707994&db=bth
Singh, S. C., & Pandey, S. K. (2015). Lean Supply-Chain:A State-of-the-art Literature Review. Journal of Supply Chain Management Systems, 4(3), 33–46. doi: 10.21863/jscms/2015.4.3.013
Tortorella, G., Giglio, R., Fettermmann, D., & Tlapa, D. (2018). Lean supply chain practices: an exploratory study on their relationship. The International Journal of Logistics Management, 29(3), 1049–1076. doi: 10.1108/IJLM-06-2017-1041
Wilson, L. (2010). How to Implement Lean Manufacturing. New York: McGraw-Hill Professional. Retrieved from http://search.ebscohost.com.ezproxy2.apus.edu/login.aspx?direct=true&AuthType=ip&db=nlebk&AN=286873&site=ehost-live&scope=site
