An ideal SCM integrates all aspects of logistics in a rapid manner attempting to achieve the objectives by using who, what, when, where, and why (the 5Ws) for accuracy and success. The focus of this literature will cover the history, functions, modifications and future of SCM, while also considering the literature and preceding research that was conducted in each area. This paper will enhance the readers’ understanding of the SCM in general along with the process and concepts of the subject. It will also enable readers to apply aspects of SCM in their respective line of business. The literature for this review is relative, ranging from one to three years old. Organizations must understand that Supply Chain Management can increase the company’s EBITA (Earnings Before Interest Taxes Amortization) or decrease it if used properly. An additional benefit of an optimal SCM is optimizing time from production to customer, which can increase customer base when the industry notice speed of delivery to customers.
In the 1950s Toyota came up with the idea of lean thinking which is a set of functioning ideas and techniques that helps generate the greatest importance for individuals by decreasing waste and delays” (Feeney, 2015). The purpose of this systematic approach was to change the establishments thought process and value, which would eventually lead to the conversion of the
Lean Thinking is an integrated system of standards, procedures, tools, and techniques that focus on harmonizing work flows, managing differences in production flows, and lessening waste. The process provides several standard solutions to common organizational problems like complexity reduction and visual management. The
One obstacle is the perception that the use of lean manufacturing solutions is, at best, nothing more than a trend. In addition, at worst, a brief craze. It is often observed as nothing more than a repackaging of fundamental industrial engineering principles dressed up in new clothes, and flaunted in new terms to appeal to a new industry. Lean manufacturing is sometimes seen in many industries as a collection of techniques, known to be effective in the auto industry, which some people are now trying to impose on a completely different industry. This means that perceptions have to be changed.
It aims to identify areas of inefficiency and generate ways of cost saving. Post World War II in the 1950’s in Japan, Toyota was able to use Lean as an improvement approach to improve flow and eliminate waste. It occurred that a series of simple innovations might make it more possible to provide both continuity in process flow and a wide variety in product offerings.
Supply Chain encompasses three things universally; supply, manufacturing, and distribution. It is a practice that has many layers and is very intrinsic but if a company can master an efficient supply chain they will have a huge one up on any competitors in their path. This is arguable one of the most important parts of a company it can be measured in many ways, from operational efficiency, profit (improving bottom line), customer satisfaction and many other ways. “In light of the many opportunities and risks, shareholders and leadership understand the utmost importance of supply chain excellence. In today’s world, the supply chain is central to business models and represents the ultimate source of competitive advantage” (Lehmacer). Supply chain doesn’t always just focus on internal problems of a business but it is so wide reaching that it also; “touches major issues, including the rapid growth of multinational corporations and strategic partnerships; global expansion and sourcing; fluctuating gas prices and environmental concerns, each of these issues dramatically affects corporate strategy and bottom line. Because of these emerging trends, supply chain management is the most critical business discipline in the world today.” (Bisk) Available positions in this field include: supply chain manager, director of product marketing, SR product manager, global sourcing manager, VP supply chain software products, senior buyer, planner, materials manager… etc. With this industry
The basic concepts involved in lean and lean manufacturing was originated from The Toyota, one of the Japanese automaker in the global competition since decades. In 1988, Taiichi Ohno brought the lean concept into operation for the first time at Toyota and called it as Toyota Production System (TPS), to overcome economic crisis due to World War II. TPS was mainly developed to flourish with minimum resources. Owing to the immense shortages of material, human and financial resources, TPS had no other option but to choose the waste reduction policy to cut down the costs at the shop floor. Even in the hard economic crisis, Toyota sustained and was successful because of its higher efficiency in operation and improved production system. In the meantime, inadequacy of the resources which was at first an obstacle to the company transformed into an opportunity to establish Toyota as a world class car manufacturer. ‘Lean’ approach was slowly applied in many manufacturing and management floors over the last few decades.
$1.6 billion, it is an estimation of manufacturers’ and trade inventories in the United States in august 2012 (according to the US Department of Commerce). Inventory represents a significant part of company budgets. They are costly and can be risky, but the company spend a lot of money in inventories because they also provide some security for businesses.
Toyota 's Production System (TPS) is based upon “lean” principles that includes focusing on the customer, constant and recurrent improvement, and superiority through waste reduction, and combined upward and downward developments as part of a lean. “TPS is the foundation for what has become a global movement to “think lean”. Most manufacturing companies in the world have adopted some type of “lean initiative,” and this concept is now spreading to a diverse range of organizations, including the defense department, hospitals, financial institutions, and construction companies” (Liker & Morgan, 2006). Unlike like TPS, Lean is a business improvement idea that focuses on the true needs of the customer to help the business prevent waste from being built into the system. This paper will compare and contrast the concept of Lean and TPS used by Toyota.
The actual market competition requires companies increasing quality and reducing cost by reducing any type of waste. The Toyota System production is based on two pillars: increase efficiency and reduce waste since the beginning of the process by developing details plan and activities focusing on long term results. Despite the fact of the simplicity definition of lead thinking, in practice developing lean thinking techniques is a challenging activity for companies especially in these competitive markets that requires quality, speed and customize products (Marutschke, 2012).
Sourcing, procurement and logistics management. The recurring needs of business is fulfilled by Sourcing to make sure that there is sufficient access to resources necessary to run a business, which can either be goods, services or both by proper finding, evaluating and engaging. Procurement is obtaining or buying goods and services which includes preparation and processing of a demand till the end receipt and approval of payment. Logistic Management complies with process of planning, implementing and controlling the proficient, operative flow of goods, services and related information from point of origin to point of consumption for customer’s requirement. Logistic management includes elements of order processing, inventory, transportation, warehousing, channel partners, third party logistic providers.