Improvements in Supply Chain Performance Through Value Stream Workflows and Managing Supply Chains With Cycle Time Compression: A Comparative Analysis

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).

A supply chain is a net work of firms. Thus, each firm in the chain should build its own supply chains to support the competitive priorities of its services or products. Two distinct designs used to competitive advantage are efficient supply chains and responsive supply chains. Efficient supply chains work best in environments where demand is highly predictable. The focus of the supply chain is on efficient flows of services and materials keeping inventories to a minimum. The firm’s competitive priorities are low-cost operations, consistent quality, and on-time delivery. Responsive supply chains designed to react quickly in order to hedge against uncertainties in demand. Work best when firms offer a great variety of services or products and demand predictability is low. Typical competitive priorities are development speed, fast delivery times, customization, variety, volume flexibility, and top quality. Tables below show the environments and design features that best suit each design.

The many challenges in order to improve the supply chains usually come with the unidentified. Many companies produce products they think their consumer will want. After that, they ship their products to retail stores. Then, these stores try to sell the products to the customers. Here, the supply chains slows down as they are figuring out what to build next. Then, these companies deal with their suppliers to get the materials for the products. Here, the supply chain slow down more and even slower as they wait for the product to get sold and get paid.

4) Exploring the possibility of implementing JIT (Just in Time) system that can reduce the finished goods inventory at

The catalyst of any effective logistics system is the ability to collaborate accurately and completely with key suppliers while also staying synchronized to the needs of the broader network it is part of. For Huffman Trucking, the challenge is to quickly ascertain which shipments need to be sequenced by delivery location, distribution and supply chain partner, and the costs versus profits of expediting or delaying one delivery relative to another. Just-In-Time (JIT) systems are a critical aspect of logistics and supply chain systems for a service providers' and manufacturing standpoint in that they can drastically reduce operating costs and increase inventory efficiency (Legner, 2005). JIT systems are indispensable for managing highly complex supply chains critical for ensuring manufacturing stays aligned to demand management requirements of their distribution channels and direct customers (Huin, Luong, Abhary, 2002). JIT functionality is a core component of many Enterprise Resource Planning (ERP) systems, which serve as the central coordination system of accounting, finance, logistics, supply chain, service in addition to many other functional areas of a company (Shi-Ming, Kwan, Yu-Chung, 2001).

Just-in-Time (JIT) is a manufacturing process that can be implemented into an existing Business to Business (B2B) infrastructure to provide a business with an efficient outflow of products to its consumer base. JIT correlates itself into many different areas and aspects of B2B processes such as coordinating with co-suppliers, establishing relationships and becoming a customer-centric value chain. Finding and collaborating with co-suppliers is a very important part in just in time because having co-suppliers takes a crucial part in how products and services will be produced and delivered on time.

In the 1980’s, intense global competition began and manufacturers utilized JIT and TQM strategies to improve quality, manufacturing efficiency and delivery times. JIT is a lean-production system and it results in faster delivery times, lower inventory levels and better product quality. The supply chains had to be developed because an important aspect of a lean system is the quality of incoming purchased items and the quality of the various assemblies as they move through the production processes. This is due to the characteristically low levels of inventory purchased and work in process in lean-oriented facilities. Thus, firms employing concepts of lean usually have a TQM strategy in place to ensure continued quality compliance among suppliers with internal production facilities. So there was a real need of a good internal control system and chain management processes to be developed and that is how supply chain management got designed. And every supply chain design

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

Just-in-time (JIT) is a management philosophy which was first developed by Toyota manufacturing plants to meet consumer demands with minimum delays (IfM, n.d.). It is based on the elimination of all kinds of waste and the continuity in the improvement of productivity. The implementation of JIT enables the production of goods to exactly meet the customers’ demand in terms of timing, quality and quantity (Bo, Chan &Wang, 2013). In other words, with a successful JIT implementation, the manufacturing plants are able to reduce the raw materials held and achieve an improvement in their production cycle and product quality. However, in order for the JIT system to be successful, a reliable corporation between suppliers and companies plays an important role

Lean Six Sigma processes are used by many businesses without it being realized. Many companies today are adopting the Lean Six Sigma processes to aid in cost reduction and waste management. The Six Sigma program aids in eliminating the negative effects caused by variations within the supply chain. The Lean process is all about the speed, flow and elimination of waste concerning inventory. Although Lean and Six Sigma are separate programs, they complement each other. Together these two programs provide supply chains with a tool that eliminates, “unnecessary inventories through disciplined efforts to understand and reduce variation, while increasing speed and flow in the supply chain.”(Lean Logistics Understanding) Lean and Six Sigma

Various definitions of the term ‘Supply Chain’ exist and with differing Interpretations and understanding. As stated in Horch (2009), many regard the supply chain as combination of inbound materials, manufacturing finished products, inventories and distribution. Pioneering work which led to the creation of Lean originated In the 1970s when Toyota Motor Company completed a productive system with a distinct competitive advantage known as the ‘Toyota Production System’ (Leseure, 2010). Lean Production involves a disciplined approach to manufacturing (Waller, 2003). A core concept of lean philosophy is waste elimination. ReVelle (2001) defines waste as “…any activity that absorbs resources such as cost and time but adds no value”. Waste can be classified in numerous ways. Organisations reduce and eliminate waste in their operations through waste management. Companies incur wastes in a supply chain through internal or external processes. Causes of waste in a supply chain context include: forecasting errors, inefficient processes, communication breakdowns and lack of responsiveness. Money and time wasted through production and supply chain processes can be reduced by the optimisation of supply chain activities. In order to successfully eliminate waste, organisations must develop lean supply chain management methods and apply them in supply operations (Albu and

Lean operations and supply chain originated from the Toyota Production System in Japan and have influenced manufacturing over the past two to three decades. Lean is described as the product of applying the Toyota Production System to all areas of an industrial process. Toyota’s strategies are based on Just in Time manufacturing, continuous flow, reducing lead times, eliminating non-value added waste, and excess inventory, a pull system centred on customer demand and continuous improvement (Liker, 2004). These integrated processes became the basis of Lean manufacturing and have recently extended to include all aspects of the supply chain process. Raw materials arrive Just in Time for production based on the demand of the

Leanness means developing a value stream to eliminate all waste, including time, and to ensure a level schedule. Agility means using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile marketplace. Leagile is the combination of the lean and agile paradigms within a total supply chain strategy by positioning the decoupling point so as to best suit the need for responding to a volatile demand downstream yet providing level scheduling upstream from the marketplace. The decoupling point separates the part of the organisation (supply chain) oriented towards customer orders from the part of the organisation (supply chain) based on planning. In this report, I attempt to prepare the literature review of

Production managers are faced with many challenges within their facilities such as managing inventories, controlling waste, and managing an ever changing production schedule. Managing product flows can be difficult when balancing supply chain inventories with demand changes or scheduling problems due to throughput variations. Several methods for managing these challenges have been developed through the years and each have their own advantages and disadvantages for different applications. The methods discussed in this paper will be limited to the Theory of Constraints, Just in Time, and Material Requirements Planning. All three methods are designed to manage different aspects of a manufacturing facility’s product flow but all three were ultimately developed as an optimization strategy for the manufacturing process. The roots of Lean Manufacturing is one of the earliest management strategies to be developed to address the challenges for production control and may well have been the birth of strategic production control as we know it today.

Every company, firm, or organization has a need to know and understand how to plan for production and the inventory needed to sustain it. During the reconstruction following World War Two an atmosphere was present that enabled pioneering minds just as Deming to institute several industrial theories into practice. Having embraced the concepts whole heartedly, these theories enabled post war Japan to become a world leader in development and production. According to Evans & Lindsay (2010), these concepts began to take root and have great effect on how business was conducted globally. One of these concept that still to this day are displaying complete relevance is that of Just-In-Time (JIT). It must be understood that JIT in time is only a supporting process of larger concepts such Lean production and inventory control, and how they interact with push or pull of materials within the production plan; How the concept of Kanban can be instituted to farther support the JIT process.