We live in interesting times. Powerful forces are re-shaping the global business scene : financial and economic upheaval in the Far East, Latin America and Russia is creating a tidal-wave of change in the competitive environment. Organisations that once felt insulated from overseas low-priced competitors now find that they too must not only continue to constantly create new value for customers, but must do so at a lower price. To meet the challenge of simultaneously reducing cost and enhancing customer value, requires a radically different approach to the way the business responds to marketplace demand. One of the keys to success is the creation of an agile supply chain on a worldwide scale. The agile supply chain There is now …show more content…
These severe challenges mean that a new operating paradigm is needed. The key factor is agility - rapid strategic and operational adaptation to large scale, unpredictable changes in the business environment. Agility implies responsiveness from one end of the supply chain to the other. It focuses upon eliminating the barriers to quick response, be they organisational or technical. Agility should not be confused with ‘leanness’. Lean is about doing more with less and is often used in connection with lean manufacturing to imply a ‘just-intime’ approach to the business. Many companies that have adopted lean manufacturing as a business practice are anything but agile in their supply chain. It is paradoxical that many Japanese companies have exceptionally long delivery lead-times to their customers and insist that those customers provide them with firm orders often several months ahead of manufacture. Yesterday’s world was one characterised by standard products, mass produced for generally predictable market demand. Today’s world is almost the opposite with customers demanding tailored solutions (high variety) in small quantities (low volume) with a higher degree of uncertainty. Figure 1 suggests that whilst there will still be conditions where lean concepts are appropriate, in particular where the product is standard and volume demand is high and predictable. Increasingly however these situations are tending to become fewer as the global forces we have
Lean manufacturing is the production of goods using less of everything than in mass production: less human effort, less manufacturing space, less investment tools and less engineering time to develop a new product. A company becomes lean by continuously increasing its capacity to produce high-quality goods while simultaneously decreasing
Production practices have had an important role in satisfying the dynamic market. Many approaches have being developed in order to respond effectively to specific business requirements. In fact, some areas of management have focused its study on the overseeing, designing, and controlling the process of production in an effort to find the best methodology that ensures the business success and performance. However, complexities arise in this field because many variables such as costs, inventory, scheduling, suppliers, etc have to be considered in any business. Lean approach and the traditional approach are two points of view that aim to address this complexities, and those will be examined in this essay.
It is becoming apparent that the ever changing environment in the global marketplace requires a swifter response time from businesses and their supply chains. The era when production was moved overseas, so businesses can take advantage of low-cost labor is coming to an end, because businesses are not only competing on price but also on time. The owner of Zara, a Spanish clothing store knows this first hand, and has turned supply chain management on its ear, making his company the “envy of the industry” (Ferdows, Lewis, & Machuca, 2004).
“Lean is a systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the **product at the pull of the customer in pursuit of perfection.” Lockwood [24].
How might Wings and Legs combine a lean and agile approach in its supply chain?
Implementing an agile supply chain process would be beneficial for Riordan’s China plant. Agile supply chain strategy is to be responsible and flexible to customer needs. They are considered agile because they are responsive to change and irregularity in demands of customers while reducing risk supply disorder on back-end. The agile supply chain combines the strengths of hedged and responsive supply
Lean manufacturing is the production of goods using less of everything than in mass production: less human effort, less manufacturing space, less investment tools and less engineering time to develop a new product. A company becomes lean by continuously increasing its capacity to produce high-quality goods while
At last, lean production has been adopted by widely in various industries and economic sectors to implement the production system that focus on eliminating
Question #2-Define the supply chains for the following products from the first source of raw materials to the first customer. A) Big Mac, B) Gasoline, C) Automobile repair, D) A Text book.
“Lean Thinking” can help reduce total cost of ownership (TCO), this means the supply team in the entire “chain” must work to:
Lean manufacturing plays a major role in our economy and yet it is almost unheard of outside manufacturing. It is important to know lean manufacturing relates to our individual lives and how we can all benefit from this concept. With current slow economic recovery, it is imperative that we find avenues that consumers can get through these difficult times, but also to implement the lessons-learned values into future thinking. The rising cost of goods and the unemployment rate high, lean manufacturing is helping to keep cost low and jobs in America where they belong.
Kanban techniques for effective production scheduling and Just in Time (JIT) systems, which ensure materials are delivered only as required, are already up and running. And a lot of Japanese firms that have popularized lean manufacturing, which pare out wasteful processes, are facilitating the shift to a connected factory environment. The major goal of a connected enterprise, as you might know, is to make the value chain tighter, leaner, and invest it with the intelligence it needs to dial into the demand for raw materials and respond to inventory requirements almost immediately. However, on the ground, manufacturing supply chains include smaller vendors who tend to be a bit hesitant about putting money on newer technologies. Their rationale for postponing such investments includes non-extension of the technology footprint or the lack of reliable connectivity at the vendor
With every industry facing greater turbulence and uncertainty there is a corresponding urgent need for concepts, frameworks, models and methodologies that provide enterprises with greater intelligence and agility in responding to threats and opportunities. The unique or special series of issues that complicate the change process are detailed in this analysis. Of the many industries faced with the need to be vigilant to change processes and seek out their contributions continually is the global auto manufacturing industry. Toyota has been able to capitalize on the most valuable aspects of internal change management in the concepts and methodologies of their Toyota Production System (TPS) (Dyer, Nobeoka, 2000). Many of the best practices Toyota has created for onboarding new suppliers reflect the foundational elements of the Parallel Incremental Transformation Strategy (PITS) methodology (Taylor, 1999). Foremost among these is the need to provide a high level of agility in organizational change management strategies and frameworks to ensure core areas of a company stay responsive and focused on supply chain dynamics (Dyer, Nobeoka, 2000). The special issues that complicate the change process relating to supply chain performance are abundant in the auto industry, as this analysis illustrates.
A second related issue is the extent to which synergy can be released by global
Many complex and more diverse decisions confront supply chain managers on a regular basis: what would be more efficient to manufacture in-house or to outsource; what new channels to implement that it would benefit their customers and suppliers, or how all new technologies, platforms, and practices have to be aligned to enable real-time supply chains. Current information technology reduced outsourcing transaction costs drastically, enabled companies to an increased supervision and control over offsite work, and outsourcing services can deliver faster and more convenient, but technology alone is not the solution. If a company decides to embrace changes in business processes and business culture, those changes can support a long way toward delivering a better product for less money. Complex sphere of activities in many countries is not relevant anymore because a massive number of activities outsourced became commonplace, a new normal.