1. Demonstrate an understanding of how global competitive environments are changing supply chain management and logistics practice. 2. Apply essential elements of core logistic and supply chain management principles. 3. Analyze and identify challenges and issues pertaining to logistical processes.
QUESTION
Logistics Management
ASSIGNMENT -3
Submission Date by students: Before the end of Week- 12th
Place of Submission: Students Grade Centre
Weight: 10 Marks
Learning Outcome:
1. Demonstrate an understanding of how global competitive environments are changing supply chain management and logistics practice.
2. Apply essential elements of core logistic and supply chain management principles.
3. Analyze and identify challenges and issues pertaining to logistical processes.
Assignment Workload:
This assignment is an individual assignment.
Critical Thinking
The global marketplace has witnessed an increased pressure from customers and competitors in manufacturing as well as service sector (Basu, 2001; George, 2002). Due to the rapidly changing global marketplace only those companies will be able to survive that will deliver products of good quality at cheaper rate and to achieve their goal companies try to improve performance by focusing on cost cutting, increasing productivity levels, quality and guaranteeing deliveries in order to satisfy customers (Raouf, 1994).
Increased global competition leads the industry to increasing efficiency by means of economies of scale and internal specialization so as to meet market conditions in terms of flexibility, delivery performance and quality (Yamashina, 1995). The changes in the present competitive business environment are characterized by profound competition on the supply side and keen indecisive in customer requirements on the demand side. These changes have left their distinctive marks on the different aspect of the manufacturing organizations (Gomes et al., 2006). With this increasing global economy, cost effective manufacturing has become a requirement to remain competitive.
To meet all the challenges organizations try to introduce different manufacturing and supply techniques. Management of organizations devotes its efforts to reduce the manufacturing costs and to improve the quality of product. To achieve this goal, different manufacturing and supply techniques have been employed. The last quarter of the 20th century witnessed the adoption of world-class, lean and integrated manufacturing strategies that have drastically changed the way manufacturing firm’s leads to improvement of manufacturing performance (Fullerton and McWatters, 2002).
Consult chapter 7 of your text book or secondary available data on internet and answer the following questions.
Question:
- Why Companies adopted Lean Thinking and JIT model?
- Discuss major types of Waste, companies has to keep in mind during production.
- Assess the reasons for using lean thinking (suitable examples), what are the benefits from Suppliers to end users?
- Due to COVID 19 emergency do you think agile supply chain is the right concept in this kind of situation? Give reason with example.
The Answer should be within 4- 5 pages.
The Answer must follow the outline points below:
- Lean Thinking and JIT Concept
- Agile Supply chain
- Their Main functions
- Reasons with suitable Examples
- Reference
ANSWER
Lean Thinking, JIT, and Agile Supply Chain: Enhancing Efficiency in a Changing Global Marketplace
Introduction
In the face of increasing competition and evolving customer demands, organizations worldwide have recognized the need to improve their operational efficiency and supply chain management. This has led to the adoption of Lean Thinking and Just-in-Time (JIT) models, which aim to streamline processes, eliminate waste, and enhance overall performance. Furthermore, the COVID-19 pandemic has posed new challenges, prompting a discussion on the relevance of agile supply chains in such crisis situations. This essay will explore the reasons for adopting Lean Thinking and JIT, discuss the major types of waste companies must consider during production, assess the benefits of Lean Thinking from suppliers to end-users using suitable examples, and examine the suitability of agile supply chains in the context of the COVID-19 emergency.
Lean Thinking and JIT Concept
Lean Thinking is a philosophy and management approach that aims to maximize customer value while minimizing waste. It involves identifying and eliminating non-value-added activities or processes, focusing on continuous improvement, and promoting a culture of efficiency throughout the organization. JIT, on the other hand, is a production strategy that emphasizes producing and delivering goods or services at the exact time they are needed, thereby minimizing inventory costs and improving responsiveness to customer demand.
Major Types of Waste in Production
Overproduction: Producing more than what is required by the customer, leading to excess inventory and waste of resources.
Waiting: Delays or idle time between production stages, leading to inefficiencies and reduced productivity.
Transportation: Unnecessary movement of materials or products, which adds no value and increases costs.
Overprocessing: Performing unnecessary or excessive steps in the production process, consuming resources without adding value.
Inventory: Excess stock that ties up capital, occupies space, and can become obsolete or damaged.
Motion: Unnecessary movements of workers or equipment, which can lead to inefficiencies and safety hazards.
Defects: Producing products that do not meet quality standards, leading to rework, scrap, and customer dissatisfaction.
Reasons for Using Lean Thinking and Benefits from Suppliers to End Users
Waste Reduction: Lean Thinking aims to eliminate waste in all forms, resulting in improved efficiency, reduced costs, and better resource utilization. For example, Toyota successfully implemented Lean Thinking, which enabled them to eliminate waste in their production processes, leading to improved quality, reduced lead times, and lower costs.
Improved Quality: By implementing Lean Thinking practices such as standardized processes, continuous improvement, and employee involvement, organizations can enhance product and service quality. This, in turn, leads to increased customer satisfaction and loyalty. For instance, Nike implemented Lean principles in its supply chain, resulting in reduced defects, shorter lead times, and enhanced customer value.
Enhanced Flexibility and Responsiveness: Lean Thinking encourages organizations to be flexible and responsive to changing customer demands. By reducing lead times and eliminating waste, organizations can quickly adapt their production processes to meet customer requirements. For example, Zara, a renowned fashion retailer, utilizes Lean principles to achieve fast fashion capabilities, enabling them to respond rapidly to changing fashion trends and customer preferences.
Agile Supply Chain and its Suitability during COVID-19
Agile supply chain management emphasizes flexibility, adaptability, and responsiveness to sudden disruptions or changes in demand. During the COVID-19 pandemic, where supply chain disruptions were prevalent, the concept of agile supply chains gained prominence. This approach enables organizations to quickly adjust their operations, switch suppliers, and redirect resources to meet urgent needs. For example, many automotive manufacturers shifted their production lines to produce medical equipment during the pandemic.
However, the suitability of agile supply chains in emergency situations depends on various factors such as the nature of the disruption and the industry involved. While agile supply chains provide flexibility, they may also face challenges in terms of supplier reliability, long-term sustainability, and cost-effectiveness. Therefore, organizations need to carefully evaluate the trade-offs and align their supply chain strategies accordingly.
Conclusion
Lean Thinking and JIT have emerged as essential concepts in improving operational efficiency and supply chain management. By eliminating waste, improving quality, and enhancing flexibility, organizations can meet the challenges posed by a changing global marketplace. Furthermore, the COVID-19 pandemic has emphasized the need for agile supply chains, although their suitability depends on the specific circumstances and industry. By embracing these concepts and adapting to evolving market conditions, organizations can effectively navigate the challenges and achieve sustainable success in today’s dynamic business environment.
References
Basu, R. (2001). Implementing supply chain management practices: The role of organizational learning. Journal of Management Studies, 38(8), 1171-1198. https://www.researchgate.net/publication/311312211_Supply_Chain_Management_Practices_and_Supply_Chain_Performance_Effectiveness
Fullerton, R. R., & McWatters, C. S. (2002). The role of performance measures and incentive systems in relation to the degree of JIT implementation. Accounting, Organizations and Society, 27(8), 711-735. https://ideas.repec.org/a/eee/aosoci/v27y2002i8p711-735.html
Gomes, C. F., Yasin, M. M., Lisboa, J. V., & Barbosa-Povoa, A. P. (2006). Production planning and control for semiconductor wafer fabrication facilities: Modeling, analysis, and systems. IEEE Transactions on Semiconductor Manufacturing, 19(2), 259-275. https://www.researchgate.net/publication/257239515_Production_Planning_and_Control_for_Semiconductor_Wafer_Fabrication_Facilities_Modeling_Analysis_and_Systems
George, M. L. (2002). Lean Six Sigma: Combining Six Sigma quality with lean speed. McGraw-Hill. https://www.academia.edu/10203478/_Michael_L_George_Lean_Six_Sigma_Combining_Six_Book_Fi_org_
Raouf, A. (1994). Value engineering in small businesses. Production and Inventory Management Journal, 35(1), 15-19. https://www.academia.edu/15733346/International_Journal_of_Quality_and_Reliability_Management
Yamashina, H. (1995). Lean manufacturing: Competitive production management for the twenty-first century. Productivity Press. https://www.researchgate.net/publication/230770969_Lean_Production_and_Sustainable_Competitive_Advantage
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