Due to the bad storage facilities, products sold are normally defective due to wear and tear. The traditional way of reducing cost is through mass production. Supply Chain Management is therefore, the integration of key business processes across the supply chain for the purpose of adding value for customers and stakeholders (Lambert, 2008). One of the central disadvantages of lean production is that you have little margin for error. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. If a program is not working, then companies have to discontinue it. Outsourcing comes at a cost because the third party is a business entity and will have to make profit on its operation. This enables “flowing” the product through the chain in response to the pull of the customer in pursuit of perfection. The advantages of Lean Supply Chain Management cut across every kind of company. Some of which are redundancy costs and the costs in selling equipment. The company gets more revenue and loyalty will increase as customers tend to purchase their needs from companies they can trust. Definition and Importance of Lean Management, Create automated scheduled questionnaires with questions like “, No one forgets to fill in status updates because it sends, Use status updates for future reference and. Labor shifts are also scheduled to ensure workers don't stand around without work to do. — Lean management is all about maximizing profits. Lean Supply Chain Management relies heavily on outsourcing. As global competition continues to intensify across industries, companies are actively pursuing strategies that will enable them to compete more effectively and profitably. If you consistently fail to provide timely shipments, buyers look for suppliers that can. People:- Apart from the operational changes, adoption of the Lean methodology requires a significant organizational transformation. Alternatively, you can allow each participant to view his/her own records only and stakeholders to view all entries. Documentation and streamlining of processing steps enables the out-sourcing of non-critical functions, allowing the company to focus their efforts core competencies and on customers’ needs. Whether it is fixing faulty equipment or reducing work hours to ensure workers are not too exhausted it is crucial that leaders realize the importance of lean management practices with regard to safety. The customer’s needs are met rapidly. Observably, the modems may have been going through multiple defects due to excess motion as well. After this was done, it was then retailed to telecommunication providers to further apply their logos onto the modems and engage in secondary configuration steps to streamline the modem capabilities to the individual service provider. Business — Lean management began with the customer’s viewpoint in mind. The biggest advantage is the reduction in cost to the company. Shin Lo electronics, a Chinese based supplier of data modems to countries in Africa has recently faced a downward turn in profits and customer patronage. 6th Jun 2017 Lean Supply Chain Management is one that makes the company produce just what is needed, when it is needed and where it is needed. Unnecessary stocks or inventory occur especially when an organisation holds a large quantity of inventory in a “just in case” scenario without accurate market demand analysis. To adequately grow, the customer’s viewpoint has to be a significant part of the lean management philosophy. It is, “… a battle not only for minds, but for hearts as well.” Lean principle application requires that managers convince employees (and other supply chain stakeholders) that lean is not just a short-term campaign, but a long-term strategic proposition aimed at achieving a competitive advantage. The kinds of waste and how they affect organisations will be treated in detail in the following pages of this paper. This is not largely friendly toward the needs of the customer as new innovations based on customer needs are not implemented. Customers who face the task of returning goods through their unpleasant experience may not return and further causes loss of market for the products and the telecommunication provider as a whole. If equipment breaks down or you need more-than-projected labor for certain processes, you may fall behind and lose your optimized efficiency advantages. Lean Supply is greatly attributed to the success of many organisations. Over production, Non Value adding Processes, Transportation, Delays, Excess motion, Unnecessary stocks, and Product& Service quality defects. Supply Chain Management is expensive to operate and Companies are determined to cut costs to maximize their profits. The hospital noted increased profits, decreased deaths, an 85 percent decrease in the wait for lab results, and a 93 percent increase in productivity. This isn’t possible currently due to the multiple steps the modem goes through at the various locations and production processes. This provides no value but forms the bulk of costs incurred to the manufacturer and the end customer. How and where do we get the raw materials. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Vendors and suppliers are going to be one of the most critical groups in the implementation of lean management. Most organizations implement Lean principles based on the operational improvements, primarily because of the perception that Lean only applies to the operations side however benefits cut across the main decision making processes or departments of every organisation. Another major contributor of the downhill spiral of Shin Lo electronics is the number of modems returned with defects. It also means that the organisation will have to stomach some initial costs. Flow production is a way of doing things in small quantities in sequential steps, rather than in large batches, lots or mass processing. It is also easier to customize products or flex production processes when you cater to select buyers. Introduction The concept of a supply chain system is the movement of a product from the supplier to the customer. Convert these raw materials into finished products. In a lean production facility, there aren't a lot of extra equipment and tools around. Worker safety and well-being should be the primary priority for all business leaders. As is the success of any business platform, constant improvements to all aspects and new innovations and lines of thinking are spearheading the success of businesses worldwide. Excess motion caused by poor housekeeping, work flow design, layout and inconsistent or poor documentation of work processes are frequently overlooked. Secondly, the manpower is wasted during the initial production process of the part or provision of the service) the first time cannot be recovered. Waste of transportation was the first to be identified. This means that supply chain is now faster and more efficient. If a new product has a component that is decreasing sales, then it should be removed. Whether companies call it “lean” or not, waste management has to be a key component in creating successful growth. In a lean production facility, there aren't a lot of extra equipment … It is not necessary to have space or people to manage the extra inventory until it is purchased. Waste:- Waste in this context refers to all non-valued-adding activities that ultimately increase cost throughout the chain. 1665 Words 7 Pages. Customization demands in current markets by the consumers have been the main downfall of strict lean thinking. Your wholesale or retail buyers need goods by deadlines to meet the demand from their customers. Configure who will add records by choosing the “Participants” tab. A second advantage is reduced volume of transaction. — A strategy that can help manage this is having a “pull” over a “push” mentality. Company Registration No: 4964706. — Leaders can push the processes beyond what they may be able to yield, so understanding the impact of incremental changes is key here. Keeping good metrics are key to knowing how much waste is being eradicated due to lean management implementation. Show More. — Company expenses can become inflated if leaders are not paying attention to how inventory is piling up. Lean supply chain management makes the company action biased. Our academic experts are ready and waiting to assist with any writing project you may have. A National Institutes of Health study revealed results of the Virginia Mason Medical Center’s usage of comprehensive lean policies. Fig.2 The Value of Lean Principles, an Oracle white paper, Nov.2003. Examples of improvements include: • Decreased component and finished goods defects. Kokemuller has additional professional experience in marketing, retail and small business. Supply Chain Management is used by every kind of business. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Their practices that embrace efficient technology usage, carrying cost reduction with “Just in Time” inventory strategies and a relentless commitment to innovation have inspired companies across many industries. According to Martin (1992) it is “the network of organisations that are involved through the upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hand of the ultimate customer”. — Introducing teams to lean management can create a culture that values daily improvement. This is achieved when the same number of staff is equipped with multi skills to handle larger numbers of orders that would have previously needed more staff. Outsourcing is the contracting of certain essential components of the business to another organisation.1 The role of outsourcing in lean supply chain management reduces risk to the company as it hands over certain ill-performed tasks previously performed by the organisation to third party experts. 5. This requires daily efforts to continually remind, educate, and enforce lean policies. Untapped creativity can lead to more revenue lost than ever imaginable.

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