The Importance of Supply Chain Management
Most of the companies in the recent world are seeking opportunities through which they can integrate the business procedures and can be available in different geographic locations, which is crucial for the survival of the organizations. The proper control and planning of the organizations is necessary so that it can manage the raw materials in a proper manner. There are different dimensions through which the organization can maintain its supply chain in an effective manner (Christopher 2016). The first dimension deals with the important decisions with respect to purchasing, manufacturing and distributing the products among the company as well as between the customers and the suppliers. The second dimension deals with the integration of the geographical areas so that the goods can be available in different areas as well, which will help global customers in accessing the products (Jacobs, Chase and Lummus 2014).
The main aim of Supply Chain Management (SCM) is that it helps in integrating the flow of information as well as the materials so that the chain of supply can be effective within the organization. The name however misleads people, as supply chain is not a chain of businesses but rather a channel of building relationships within the business network (Cohen and Roussel 2013). The forum of supply chain that is present on a global manner consists of many top executives who are experts in different industries such as fashion apparel, communication and technology, oil and petrochemicals, commodity goods, electronic goods along with others. The forum also consists of suppliers, manufacturers of goods that are consumable in nature along with retailers and distributors (Johnson 2014). This helps the businesses to combine the experiences and the knowledge of the leading business that are present in the particular industries. This will help the new businesses to gain more knowledge regarding the method of businesses that needs to be implemented by them in the organization.
The forum has also provided a definition regarding supply chain that it is the management and integration of the major processes of business from the end-user with the help of suppliers so that the products and services along with proper information can be provided to the customers and other necessary stakeholders (Hugos 2018).
(Source: Rushton, Croucher and Baker 2014)
Network Structure of Supply Chain Processes
The picture depicts the network structure of supply chain in a simple manner, which helps in the proper flowing of information regarding the products along with the integrated functions of the different processes of SCM so that the companies can function in a proper manner. There are eight major supply chain processes that helps in the smooth flow of the information regarding the products to the customers (Monczka et al. 2015).
The first segment consists of managing the relationship with the customers, which helps the organization in facing the customers by the organization so that the flow of information can be properly done by the company to the customers. The second segment consists of managing the relationship with the suppliers so that the suppliers that are necessary within the organization can be maintained in an appropriate manner. As a result, the company is able to procure the materials at a competitive price from the suppliers so that the price of the finished goods can be low as well (Fernie and Sparks 2014).
The third segment of the picture depicts the part where the service that is being provided to the customers need to be managed properly. This can be done by providing the necessary information to the customers regarding the product so that they can be at a better place of purchasing the goods or the services (Mangan, Lalwani and Lalwani 2016). This will help the organization in gaining proper information regarding the products that they want to buy from the market. The fourth segment states the management of the demands, which helps the organizations in balancing the requirements of the customers through the supply chain. This helps in maintaining the demand and supply that is present in the market so that the customers can get the goods in a proper manner (Laudon and Laudon 2015).
The fifth segment states that the orders need to be fulfilled by meeting the requirements of the customers so that it can help them in making the process of purchase easy in nature. The feedbacks of the customers need to be taken in to account by the organization so that it can help them in making the goods according to the needs of the customers, which will help in increasing the demand of the goods in the market (Ahi and Searcy 2013). The sixth segment states that it is inclusive of all the activities that are necessary to transport the products from the manufacturing plants so that the products can be implemented and managed through a better rate of flexibility (Lin 2014).
The Operational and Strategic Processes of SCM
The seventh segment is that it deals with the development and commercialization of the products. This helps in providing a better structure so that new opportunities can be developed in the market regarding the products between the suppliers and the customers. This will help in maximizing the competitive edge of the business in the market as well. The last segment of the picture depicts that the returns need to be managed properly (Zhu, Sarkis and Lai 2013). This is due to the fact that the reverse logistics and gatekeeping are an important aspect of the business, which cannot be neglected. This will help the company in gathering better insights regarding the feedbacks that are being issued by the customers so that the products can be developed in according to their preferences. As a result, the maximization of the efficiency of the businesses occurs in the competitive market due to the increase in the level of sales (Ross 2016).
The processes of SCM are both operational and strategical in nature. The strategical process helps in providing the framework through which the structure can be implemented and the operational framework helps in providing better knowledge regarding the steps that needs to be followed so that it can be implemented in the business process. The use of the strategic process is necessary, as it will help in the integration of the firm with that of the operational and supply chain process helps in taking in to account the daily activities so that the business can be efficient in nature (Wang et al. 2016).
The main objectives of using supply chain management in the business is that it helps in reducing the cycle time from the suppliers to the companies so that the units that are being produced can be done in an efficient manner and the centers of distribution can help in distributing the goods in the market for the customers. It will also help in increasing the flexibility of the suppliers with respect to the production that is being done in the organization (Wu, Chang and Hsu 2014). It also helps in increasing the level of reliability between the partners so that trust can be developed properly, which will help in increasing the level of efficiency in the business. It also enables in integrating the process of planning is that the efforts of the supply chain can be coordinated properly and the organization can achieve better level of production (Chae and Olson 2013). The use of lean supply chain system helps in reducing most of the wastes that are produced within the company so that the process can be smooth in nature. This will help in manufacturing the products at a faster rate and delivering it to the customers as well. The use of lean management is long-term in nature and the changes will help in affecting the level of efficiency as well as the quality of the goods that are being manufactured in the company (Wu, Chang and Hsu 2014).
Objectives and Benefits of SCM with Lean Management
The research will aim in highlighting the necessary platforms that will help the companies in increasing its level of efficiency by using the supply chain. This will lead to increase in the level of production at a minimum level of cost, which will be beneficial for the company in increasing its level of profits.
The major problem that is being faced by the organization is that they are not being able to use the supply chain in an effective manner. This has resulted in the loss of goods during the process of manufacturing and the final output of the product. The companies need to understand the importance of the use of supply chain so that it can manage the internal processes in a proper manner. This has result in the loss of finance in the business as well, as the products and the services are not being maintained properly. The research will help in highlighting the importance of SCM in the companies so that it can be used in an effective manner. The company will be taking up the lean management system, as they are facing issues in their supply chain management strategies. This will help them in efficiently delivering the products to the customers so that it be given to them within the particular time.
The aim of the research is to investigate an existing design for an improved supply chain management system (SCMS) in business and formulate a framework or model for use in the SCMS of business organization using a lean manufacturing technique for an improved operational system.
The objectives of the research are:
- To identify the issues with supply chain management system (SCMS) in business or small medium enterprise system (SMEs)
- To review an existing literature in support of the issues identified in SCMS.
- To design a methodology for collecting data for an informed knowledge of SCMS
- To formulate a model using lean manufacturing techniques for an improved SCMS in SMEs using a case study of a company
- To discuss finding based and propose an implementation procedure for adoption and management
- To evaluate findings and present results
- To make conclusions, summary and recommendation
The motivation of this research is that it will help in providing better insights regarding the use of proper supply chain in the organization, thereby, resulting in maximization of the flow of the goods in the market from the manufacturing unit of the organization. It will also help in storing the goods in a proper manner so that it does not get destroyed and cause a financial loss to the company. The complexity of managing the supply chain needs to be understood by the company so that it can help in increasing the level of trust among the stakeholders and the company can grow in the market in a commercial manner.
The aim of this research is that it will help in providing proper suggestions to the regarding managing supply chain in an effective manner so that the company can achieve its goals in an efficient way. It will also help the company in taking effective decisions regarding the types of goods that needs to be given in production so that the company can cover its losses with respect to the perishable items that are present in their production unit. It will also help in increasing the financial stability of the company and increase the distribution of the goods in the market in an equal manner as well.
Research Aim and Objectives
The major ambition of Breezemount is that they want to become the best 2 Man Home Delivery Service in the UK and Ireland sector. The company has been growing on a continuous manner and the key strength of the company is its level of flexibility and the approach that is centered towards the customers. The company has experienced managers both in the logistic and retail sector so that necessary knowledge can help the business to grow its operations. The use of the resources has helped the company to be cost-effective in nature so that the processes can be done in a smoother manner. In the recent scenario, it has been seen that the company has been facing issues with supply chain and the management has taken up the decision to follow lean practices so that the business can prosper in the country (Breezemount – Express 2 Man Home Delivery UK & Ireland, 2018).
The research will be based on the following hypothesis:
H0- The use of effective supply chain management will result in increasing the performance of the organization and gain competitive advantage irrespective of gender, age and work experience of the employees.
H1– The use of effective supply chain management will not result in increasing the performance of the organization and gain competitive advantage irrespective of gender, age and work experience of the employees.
The major limitation in the research will be the factor of time and cost. If the researcher would have had more time, it will help in increasing the authenticity of the thesis, as more employees from different companies can be interviewed. The researcher has limited budget, which may hamper in visiting the official data of the companies to collect authentic results.
The research needs to be done maintaining professional ethics so that proper consent can be taken from the interviewees before the survey is being done. They need to be ensured that the information will be kept confidential so that it does not harm their reputation. The researcher will ethically destroy the evidences once the thesis is completed so that no records can be kept.
The main risk in carrying out the thesis is that it may damage the reputation of the company, as the flaws of the company with respect to supply chain might be discovered. This may also result in loyal customers to switch their brands as well.
The researcher will collect the responses of the survey in a confidential manner and analyze it for the thesis to be beneficial in nature. The researcher will not be leaking the information of the company as well as the customers, which might hamper the reputation of the brand in the market.
The Data Protection Act, 1998 that is present in the United Kingdom will be abided by the researcher so that the data is not leaked by him. If it has been found that the researcher has been indulging in these practices he/she will be prosecuted according to the Act that has been laid down in the country.
The introduction has provided a detailed description of the different dimensions of supply chain so that it can be managed in an effective manner by the organization. This will help the companies in increasing their competitive edge in the market so that their level of profits can be increased as well. The attraction of the products among the customers is crucial so that they can be loyal towards the organization. The efficient use of supply chain will also help in transporting the raw materials and the finished products in a better manner, which will reduce the risk of financial loss within the organization.
This chapter deals with the current literature that is present with respect to Supply Chain Management. The definition and history of supply chain has been discussed along with supply chain management and its importance to the organization. Moreover, the overview of supply chain in UK along with the advantages and disadvantages has also been discussed. This has helped in narrowing down the study specific to the UK sector with respect to supply chain. The issues that are present in SCM has also been mentioned and critically evaluated as well so that it can help in providing a better level of knowledge. The implementation of SCM within the company has also been discussed so that it can help in identifying the issues and challenges that are present in it.
Supply chain is a systematic organization through which the information, resources and other activities are involved in a process through which the products or the services can be transferred from the supplier to the customers. This type of activity is inclusive of the transformation of the resources that are natural along with the raw materials that needs to be converted in to finished products and supplied to the customers (Williams et al. 2013). To put it simply, it is the process through which the finished products enter the market for the customers to use the products. Moreover, used products can also enter the supply chain, which are recyclable in nature so that it can help in creating values for the organization (Waters and Rinsler 2014).
Liu et al. (2013) stated that supply chain is an effective network between the suppliers and that of the company, which helps in producing and distributing the products in the market through certain steps so that it can reach the hands of the customers. The logistics of business refers to the distribution and production that takes place within the company so that it can be supplied in an effective manner to the customers that are present in the market. This helps the company in gaining a higher level of profit as well.
Another author Gold, Hahn and Seuring (2013) were of the view that it is a network of resources, activities, individuals and technology, which helps in creating the sale from the product that is being made in the organization by distributing it effectively in the market with the help of proper suppliers. The use of supply chain helps the organization in supplying the finished services and goods to the consumers from the manufacturer.
The concept of supply chain started during the period of 1940-50, as the focus shifted from manual to mechanic labor due to the advancement in the technology. This helped in improving the processes that were labor intensive so that the materials can be handled in a better manner and the warehouse can be designed in an effective way as well (Estampe et al. 2013). During the mid-50s period, a new concept started known as transportation management that helped in developing the ships and trucks so that it can handle the containers in a better way. The use of terns like material handling and warehousing were taken up so that these efforts could be explained in a better manner but it acted as a fundamental application within the domain of industrial engineering (Laosirihongthong, Adebanjo and Choon Tan 2013).
During the 1960s, there was trend that most of the products were being transported through trucks than through rail, which led to the joint consideration of handling the materials and transportation through freight under the name of ‘Physical Distribution.’ In the year 1963, the National Council of Physical Distribution Management was started, which helped in gaining attention in this particular area and became predominant within the organization (Waller and Fawcett 2013). This helped in gaining more amount of recognition so that the needs can be identified and modification can be done based on that. Before the advent of the computers, most of the transactions were being done manually, which was consuming more amount of time. The introduction of computer helped in providing greater opportunity so that the process of innovation can be developed in planning the logistics. This also resulted in optimizing the inventory and fixing the route of the trucks as well (Hammer 2015).
The 1980s helped in bringing drastic changes in the logistic management, as the companies were using personal computers that allowed them in storing the data and plan within a graphical environment. The use of the latest technologies such as spreadsheets and interfaces based on maps helped in improving the logistics as well as executing the technology in a proper manner (Ptak and Schragenheim 2016).
The technological changes in the supply chain gathered importance during the 1990s through the use of Enterprise Resource Planning (ERP). By the end of 2000, it was seen that most of the large companies have utilized the ERP system, which helped in improving the availability and accuracy of the data. This also led to increasing the recognition and planning in a better manner so that the components of logistics can be used effectively (McCormack and Johnson 2016).
Supply Chain Management (SCM) are the activities that help in maximizing the value of the customers so that the company can gain a competitive advantage. This helps in producing a sensible effort by the firms that are indulging in supply chain management to develop their strategies so that it can provide an efficient and effective method for the organization (Qrunfleh and Tarafdar 2014). The use of the activities related to supply chain ranges from developing the products, sourcing it to the company, manufacturing the products in the organization and use of logistics to distribute the products in the market. The use of SCM also allows the organization in using the information systems so that these activities can be coordinated in a proper manner (Roh, Hong and Min 2014).
According to Hudnurkar, Jakhar and Rathod (2014). the SCM concept is based on two major ideas where the first one deals with all products that is provided to the customers. This also represents the effort that has been taken up by the organization to manufacture the product. Most of these organizations are jointly known as supply chain. The second insight is that the organizations mostly pay attention to the ideas that are being developed within their system. The entire chain of supply makes it a point that they take up the activities that will help in delivering the products in an effective manner to the customers. This also results in the supply chain to be effective in nature.
The pattern of supply chain management depends on many things, which helps in setting up unique set of demands in the market and addresses the issues as well. It is basically placed in five major areas such as production, which helps the company in determining the major products that are demand in the market (Luthra et al. 2014). This helps the company in increasing its level of profits, as they will be distributing the services and the products according to the needs and preferences of the customers. It also helps in balancing the work load and control the quality of the products as well. The use of this concept also helps in calculating the level of inventory that is present in the organization so that it can help in keeping a track of the products that are present within and supplied in the market as well. The main purpose of this is that it will help in reducing the uncertainty that is present in the organization with respect to inventory (Turker and Atluntas 2014).
The European Union (EU) has set forth a regulatory structure that has helped in providing a legal framework to oversee the process of planning and control the prices within the industries. The competitive structure that is present in the industries in EU has made it mandatory for the businesses to maintain an effective supply chain. An example of this is that the purchase that is being done by the business are covered under the EU Procurement Directives so that the public sector follows the contracts that are being made to the suppliers (Ghadge et al. 2013). It is of the fact that the use of supply chain in an effective manner helps in reducing the cost of the companies to a great extent. The areas of operation helps in benchmarking the operations so that the supplies can be maintained in a proper manner. Additionally, the issues have to be examined with respect to the planning s that the prices can be set accordingly (Luthra et al. 2014).
The supply chain that is present in the United Kingdom has been privatized so that proper attention can be given regarding the issues that are being faced by the organizations. The UK industry makes it a point that the purchasing of the supply chain techniques so that improvements can be made in a professional manner (Coyle et al. 2016). The organizations manufacture the products and outsource the distribution and transportation of the goods and products to the private companies so that it can be available to the customers in an effective manner. This will help the organization in increasing its level of profits as well. It has also helped the organizations in UK to manage their inventories and transport the goods to the warehouse so that the reverse logistics can also be maintained (Golicic and Smith 2013).
Supply chain management is one of the essential aspects of the logistics because it helps in managing the flow of the goods by considering the demand and supply in the market. However, the the fast changing market, the supply chain management is facing challenges that is affecting the overall process. It has been said that the business organizations must practice effective supply chains in order to compete in the networked economy and global market. However, recently, globalization has become one of the major issues that hamper the effective supply chain management. As commented by Christopher (2016), for competing in the global market, the business organizations need to reduce cost of the overall supply chain that often becomes challenging. In order to reduce cost of the overall supply chain management, the business organizations are moving manufacturing operations to countries that offers lower labor cost. However, as criticized by Dekker et al. (2013), though outsourcing the production process globally increases the procurement network of the company, having suppliers at different geographical locations makes the overall supply chain management complicated. The business organizations have to deal with the different suppliers at different locations thereby, making coordination one of the biggest issues in maintaining an effective supply chain management.
In addition to, the fast-changing market is also considered as a current issue for maintaining an effective supply chain management. In order to stay in the competition, the business organizations has to continuously modify and change their existing supply chain thereby, making it difficult. This is because smaller departments comprises to form the overall supply chain and changing in all the departments to cope up with the fast-changing market is a current issue and highly challenging (Fernie and Sparks 2014). On the other hand, quality and compliance is another current issue with the supply chain management. Quality of the product and compliance works simultaneously due to which it is necessary for the business organization to meet both local and international regulatory standards in manufacturing and supplying (Ahi and Searcy 2013). Thus, globalization, fast-changing markets, quality and compliance are the current issues with supply chain management.
As discussed above, the current issues with the supply chain management are globalization, fast changing market, quality and compliance. Most of the business organizations aim towards globalization in order to ensure business and customer growth. As commented by Jacobs, Chase and Lummus (2014), globalization is an issue because it becomes difficult having suppliers at different geographical locations. Considering the intense global market, the business organizations are expanding globally in countries that offer lower labor cost and transport. Though this is beneficial for competing in the global market, communicating with the different suppliers is making globalization an issue. However, as argued by Seuring (2013), globalization in supply chain management is an issue because this imposes an inherent risk of of losing proper management, control and visibility over inventory. This is because after globalization, the business organizations aim towards localization of the existing products that requires significant change in the existing supply chain management that often becomes an issue.
As discussed above, the fast changing market is another issue with the supply chain management. As opined by Monczka et al. (2015), the fast changing market is an issue with the supply chain management because products have shorter life cycles. The business organizations are under tremendous pressure to cope up with the latest trends for which they have to ensure innovation by introducing new products. The entire supply chain management needs to be modified accordingly for introducing the new product in the market. Thus, modifying and changing the overall supply chain management by considering the fast changing market is the cause of the issue. However, as argued by Wisner, Tan and Leong (2014), the business organizations need to constantly upgrade the features of the product considering the fast changing market. This is because the consumer behaviors are highly affected by the cultural, social, personal ad psychological factors that changes quickly due to technology and globalization. The fast changing market is also an issue and the cause of this issue is because innovation imposes a challenge in forecasting demand of the new products. The continuous innovation demanded by the fast changing market also signifies anticipating demand for new products constantly. As a result, the business organizations have to establish and maintain agile supply chain management so that they are able to respond quickly to the dips and spikes in the production and demand need (Govindan et al. 2014).
As mentioned above, quality and compliance is an issue with supply chain management because quality goes hand-in-hand with compliance. According to Dabbene, Gay and Tortia (2014), the business organizations have intense pressure because they have to create high-quality products consistently by addressing the quality at every level of the supply chain such as procurement of the raw materials, packaging, manufacturing, logistics and product handling. However, as argued by Pagell and Shevchenko (2014), this is an issue because the business organizations have to prepare compliance documents that can overwhelm them as well as the supply chain management systems.
Currently, the UK market is facing challenges in the supply chain sector that is hampering the majority of the business organizations, as they are unable to cope up with the demand and supply. According to Beske and Seuring (2014), one third of the manufacturers of all sectors of UK believe that the raw materials are the biggest barrier in achieving the quality of the product according to the reports. Raw materials are one of the essential factors in the supply chain management as this forms the base of the system. Having adequate and quality raw materials is an issue that UK is currently facing that is affecting the overall UK supply chain sector. Having quality raw materials is hampered because of price, globalization and local markets.
Another issue the UK supply chain sector is currently facing is delivering on time. As mentioned by Hugos (2018), the business sectors are failing to deliver the end products to the end customers on time due to late delivery of the raw materials during manufacturing. This is due to suppliers at different geographical locations thereby, making communication difficult.
(Source: Golicic and Smith 2013)
From the aforementioned figure it can be seen that UK ranks 14 in world innovation that is considered to be considerably low. This is due to the current issues the UK is facing in terms of barriers of raw materials and failure to deliver on time. Due to the current issues in the UK, all the manufacturing sectors in the UK are encountering loss in their business (Hohenstein, Feisel and Hartmann 2014). Product quality in the UK is by 44% as more important than price but the barriers in the raw materials is putting the overall supply chain sector under risk thereby, resulting in no business growth. However, it has been forecasted that eradicating the current issues in the UK supply chain sector can lead to a 30% increase in both revenue and profitability.
It is significant for the organization to maintain the supply chain, as this strategy will help in maintaining the operations of the company appropriately. This will help in recognizing the strategies that are present in the business and that of the supply chain. The supply chain strategies will also help in increasing the performance of the company as well as increase the level of profit from the market (Chang 2016). The use of SCM is also important, as it helps in networking the designs for the outbound distribution from the warehouses of the company, which is important for the company to be successful in the market. The use of these networks will help in addressing the issues that are related to the changes and development. This will help the business to be successful in nature as well (Wisner, Tan and Leong 2014).
Another importance is that the performance of the company also improves, which helps in increasing the level of profit and drives the customers towards satisfaction by using the products. The satisfaction level of the customers are highly dependent on the supply chain that is being used by the organization so that their level of performance can be increased to a great extent (Roh, Hong and Min 2014). The issues regarding performance that are present in the organization can be addressed by taking up effective supply chain, which will help in increasing the time for marketing the new products so that the requests of the customers do not get delayed. It will also help in fulfilling the orders so that the delivery by the company in the market can be done on time. It will also result in keeping a track on the shortages of the inventories that are present in the company (Turket and Atluntas 2014).
The use of supply chain also helps in reducing the cost of the companies, as the flow of inventory for production process can be maintained in a proper manner. This will not result in holding up the amount that the company pays for the inventories used in the manufacturing of the products (Coyle et al. 2016). It will help in reducing the cost of transportation services along with the procurement costs so that the cost of storage can be reduced as well. The reduction in the cost will also help the company in optimizing and streamlining the supply chain so that it can be oriented towards the process within the company (Chang 2016).
It is important for the business organizations to have an effective supply chain management for surviving in the competitive market. As commented by Cohen and Roussel (2013), one of the major advantage of an effective supply chain management is an organization is higher efficiency rate. The business organizations are able to achieve a great place when they are able to incorporate supply chains, integrated logistics and product innovations by considering the current market scenario. As a result, the business organizations are able to increase the level of profit, as effective supply chain management is able to consider the demand of the market and supply the customers accordingly. However, as argued by Hsu et al. (2013), apart from higher efficiency rate, effective supply chain management provides an opportunity for the business organizations to ensure inventory buffers. In order to do so, the business organizations have to take charge of the managing the inventories in a way that helps in decreasing the holding cost while providing sufficient flexibility to meet the demand of the customers.
As opined by Harms, Hansen and Schaltegger (2013), having an effective supply chain management provides an opportunity for the business organizations to stay on top of the demand. One of the important credentials of an effective supply chain management is product innovation. Thus, having an effective supply chain management ensures product innovation considering the demand of the current market and being on the top of the demand.
With the benefits and importance, having an ineffective supply chain management imposes certain challenges in an organization. As commented by Mangan, Lalwani and Lalwani (2016), considering the series of work involved in a supply chain management, extensive training and planning is required. Lack of extensive training and planning results in disruption in the overall supply chain management in an organization. The entire process of raw materials procurement, manufacturing and assembling are disrupted as well as delayed. However, as criticized by Wolf (2014), ineffective supply chain management within an organization results in reduced and decreased productivity. As a result, the overall business and its position in the market is hampered.
In addition to, ineffective supply chain management results in difficulty in delivering the value. The business organizations fail to deliver the end products to the target customers on time thereby, creating a negative impact on the business (Rushton, Croucher and Baker 2014). Ineffective supply chain management delays the delivery cycle for the products and the services. Considering the disadvantages of ineffective supply chain management, the business organizations tend to lose the competitive advantage thereby, resulting in loss of business.
Successful implementation of supply chain management is necessary because this allows the business organization to ensure smooth deliver of the end products to the target customers. As commented by Gold, Hahn and Seuring (2013), it is essential for the business organizations to assemble the right group of people for the job before the project commences. Having the right people within the supply chain management system provides an opportunity for the business organization to plan and procure appropriately. After selecting the right people for the job, it is important for the business organizations to analyze the existing supply chain management system. Examining the operation of the supply chain along with identifying the goals helps in implementing the management effectively. However, as argued by Hofmann et al. (2014), successful implementation of supply chain management is possible when the key stakeholders are convinced and approve the implementation of supply chain management and agree to the change that has been identified.
Thus, in this chapter, it can be summarized that supply chain management is most important for the business organizations in order to cope up with the demand and supply. It is important for the business organizations to rely on effective supply chain management or networks in order to compete in the global market and the network economy. Over the years, the supply chain management has changed to include the recent trends, changes and globalization within the management in order to sustain in the competitive market. Having an effective supply chain management ensures that each product reaches the end user by maintaining effective flow of goods and services from the point of origin to the point of consumption. In this case, it has been seen that Breezemount has encountered challenges in supply chain management due to the present UK market and needs to be improved by incorporating lean manufacturing technique.
This chapter of the research sheds light on the history and concept of lean manufacturing technique in accordance with the current issues faced by Breezemount in terms of their supply chain management. The brief overview about lean manufacturing technique includes the concept and origin of the technique for improving the overall supply chain technique.
Lean manufacturing technique is defined as the set of principles that lean thinkers utilize for achieving enhanced services in quality, productivity and lead-time by eradicating the waste that is generated through the process (Hajmohammad et al. 2013). However, on the contrary, lean manufacturing technique is more appropriately defined as the systematic method that minimizes the production of waste within a manufacturing system without compromising the productivity. In lean manufacturing technique, wastes created through overburden as unevenness are both considered.
The origin of lean dates back from the Toyota production System or Just in Time Production. The concept of lean was developed by TAIICHI OHNO, the executive of Toyota. Mr. Ohno was the first individual who identified the seven types of waste through the overall supply chain. The lean manufacturing technique was developed with the aim of minimizing the waste that is produced as the products moved from one discrete process to the next through the logistics system (Martínez-Jurado and Moyano-Fuentes).
As discussed above, the concept of lean in supply chain is to minimize and eliminate the waste of the overall processes of the supply chain management and ensure that the products produced have reduced wastes. The concept of lean in supply chain is not only for business organizations that manufacture products but for businesses that wants to streamline the process of eliminating waste and non-value added activities (Fullerton, Kenndey and Widener 2014). Thus, lean in supply chain helps in identifying and eliminating the wastes through the overall supply chain process.
As commented by Clark, Silvester and Knowles (2013), A3 is a structured continuous problem solving and improvement technique that was first implemented by Toyota but now highly practiced globally. This is a report that documents the results from the PDSA cycle that contains eight items. However, as argued by Teich and Faddoul (2013), 5S is a simple yet powerful Japanese tool that is used with the aim of having and organizing a systematic, clean and safe working environment. As a result, this lean manufacturing tool helps in improving productivity, work standardization efforts thereby, helping in visual management.
According to Gnoni et al. (2013), lean management is a technique for conducting a business organization that supports the idea of improvement continuously. It is a long-term technique of work that emphasizes of systematic work thereby, seeking small changes as well as incremental changes in the process for enhancing both quality and efficiency. The lean management aims in improving value, value stream, flow, pull and perfection thereby, increasing productivity.
The five principles of lean management are the value stream, pull, value, perfection and flow. As mentioned by Chen et al. (2013), value is defined as the concept of understanding value placed by the customer on their services and products thereby; determining the amount the customer wants to pay willingly. However, as argued by Kreimeier et al. (2014), the value stream is defined as the the overall flow of product’s life cycle since the origin of raw materials to the end product. On the other hand, flow is most significant principle, as this determines the elimination of waste thereby, ensuring smooth occurrence of value chain. Pull signifies that everything is made on time thereby, building up work in process inventory that prohibits the synchronization. Finally, perfection highlights delivering the perfect product at the end.
Considering the concept and definition of emotional intelligence, this helps in identifying, utilizing, understanding and managing emotions in a positive way. As commented by (2013), emotional intelligence in lean is beneficial because this helps in relieving stress, ensuring effective communication, empathizing with others, defusing conflicts and overcoming challenges. However, as argued by Camacho-Miñano, Moyano-Fuentes and Sacristan-Diaz (2013), emotional intelligence can prohibit the individuals in lean think critically and can used to manipulate people thereby, restricting the positive thoughts.
Emotional intelligence in essential because this provides the individuals in lean management to recognize, use, understands and manages emotions in a positive manner. As a result, the individuals in lean ensure self-awareness, self regulation, motivate and empathize others by showing adequate social skills (Lawal et al. 2014).
Toyota is the number one company that has successfully used lean in their supply chain that helped them to become the top car company in the world today (Charron et al. 2014). On the other hand, Intel, a computer processor company adopted lean technique has helped them in reducing time to bring a microchip to the market. After adopting the lean technique, Intel has reduced the time of bringing a microchip from 3 months to 10 days in the market (Stanton et al. 2014).
Majority of the companies in the UK is using lean manufacturing technique that has helped the business organizations secure better places in the competitive market (McCann et al. 2015). However, on the contrary, some of the business organizations in the UK is still struggling in implementing the lean management in their supply chain that is hampering their production line.
As mentioned by Handel (2014), supply chain is defined as the system that involves the business organization, people, activities, information and the resources that helps in moving a product or service from the supplier to the customer. However, as argued by Bhasin (2015), lean management aim towards reducing the waste through the entire process of the supply chain thereby, ensuring improved quality and efficiency.
Bigger supply chain industries have included lean manufacturing technique effectively that has helped them to reduce and eliminate the waste throughout the overall supply chain system. However, on the other hand, the smaller supply chain industries are failing to include the lean management effectively due to which increased waste are produced thereby, hampering their overall process (Plenert 2016).
Apart from the benefits, the potential challenges of lean include expenses, more outlay for labor and opposition. As commented by De Koeijer, Paauwe and Huijsman (2014), considerable amount are required for acquiring the right equipment for updating the production line. However, as criticized by Panneerselvam (2014), the labor cost is increased, as it requires an up-front commitment.
According to El Reifi and Emmitt (2013), lean in supply chain helps in ensuring higher efficiency by eliminating the wastes throughout the process by adding more value and removing the no-value products. On the other hand, lean in supply chain helps in ensuring better quality by identifying the root cause of the defects and then improving the entire production process.
Lean management allows the business organizations to gain competitive advantage by ensuring improved product quality and efficiency by eliminating wastes.
Conclusion
Thus, in this chapter, it can be concluded that lean in supply chain is beneficial for the business organizations, as this helps in removing the no-value activities and adding more value in the production line thereby, ensuring improved efficiency and quality.
In this chapter, the researcher highlights the eight wastes that are produced in the supply chain due to which the overall process slows down thereby, hampering the production, efficiency and quality. Lean manufacturing techniques aim towards eliminating the wastes that are produced thereby, ensuring faster production.
In any business, the greatest enemy of profit is waste that includes both time and money. As commented by Douglas, Antony and Douglas (2015), in the manufacturing industry, waste is defined as any expense or effort that is put forward that fail to transform raw materials into an item that the customer is willing to pay.
There are eight wastes that are produced within the supply chain are listed below:
Defects: This is the most easily recognizable wastes in the manufacturing industry that includes scrap parts, assemblies that are missing details and products that require reworks
Excess processing: Excess processing is a waste that is produced that is produced when the products fail to meet the customer expectations. As a result, the products have to be repaired in order to satisfy the needs of the customers. Thus, clear customer expectation is required.
Overproduction: Overproduction has the most b=negative impact on the production line. This waste can occur any time due to defects and excess processing.
Waiting: This waste occurs because continuation of overhead cost to maximize during the time when the product waits to be transformed, as no value is produced when the product waits.
Inventory: This is also a waste because it is a value that is being held at a cost because it is valuable product that waits either to be sold or to be fully transformed.
Moving: Moving of product incurs cost due to which transportation is considered as a manufacturing waste.
Motion: Motion fails to add value because it can be either people or product whose effort are being wasted.
Non-utilized talent: This is not manufacturing specific but related to the management that fails to use the talents they have appropriately (Verrier, Rose and Caillaud).
As commented by Charron et al. (2014), one of the effective methods of eliminating the waste in supply chain is by getting the customer expectation right. This helps in manufacturing and producing the right product thereby, reducing excess processing and overproduction. However, as argued by Powell et al. (2013), reducing the wasted employee motion also helps in eliminating the waste in the supply chain management by reducing the time the employees take to accomplish, pick, pack and ship the product through lean manufacturing techniques.
This chapter sheds light on the future of lean supply chain, as this is considered as one of the most significant aspect for ensuring improved product quality and efficiency. Since its origin, the lean manufacturing has undergone several changes in accordance with the demand of the market but needs developments and modifications in the future as well.
Technology has gripped the modern world and is advancing with each passing day. As mentioned by Pagell and Shevchenko (2014), as technological progress is becoming more prominent and important, lean supply chain management has to include the technological advancements. The entire supply chain consists of processes such as business organization, people, activities, information and resources in order to move a product from supplier to the customers. The use of lean in supply chain is crucial in the future because this will help in minimizing the waste that is produced in the entire supply chain process. On the other hand, it can also be said that the use of lean in supply chain will help in developing a clear idea of the expectation of the customers and then manufacture the product accordingly thereby, eliminating defects, excess processing and overproduction (Cooper 2017).
From this chapter, we have learned that lean supply chain management has huge significance and potential in the future, so that the business organizations are able to eliminate the waste to the maximum and improve product quality and efficiency.
This chapter highlights designing a framework and implementation of lean in supply chain management. Designing and implementing of lean in supply chain management will thereby, help the company to reduce and eliminate waste by ensuring just in time production.
(Source: Cooper 2017)
The above figure indicates that 80% of the supply chain activities are not visible that are accountable for the processes. The abbreviations PT stands for process time, WT stands for wait time, INV stand for inventory and FTQ stands for first-time quality. The structure highlights multiple suppliers, customers and service providers and also has increased variability in the performance of the supplier performance and the capability. In addition to, the extended enterprise lacks clear visibility. Also, lack of data is also noticed in the current supply chain process.
(Source: Cooper 2017)
Considering the above challenges in the previous supply chain, the newly designed lean in supply chain aim towards eliminating the non-value creating processes by identifying the wastes in each step of the supply chain. The abbreviations PT stands for process time, WT stands for wait time, INV stand for inventory and FTQ stands for first-time quality. The newly designed supply chain also aim towards leas-time reduction, supply chain visibility, applying flow and pull, leveling of flow and material both inbound and outbound and total cost of ownership.
Conclusion
Thus, in this chapter it can be concluded that the newly designed framework of lean in supply chain will help in reducing waste for the company by ensuring just in time production and manufacturing the best for the customers thereby, fulfilling their needs and expectations.
In this chapter, the researcher mentions the different methodological tools that can be used while carrying out a research along with justifying the use of particular research methodology. This chapter also mentions the ethical considerations that need to be followed in order to complete the research work successfully.
The researcher has used positivism philosophy, as this allowed the researcher use scientific approach in analyzing the data thereby, ensuring data accuracy and validity. In addition to, the researcher has used survey and interview research strategy for gathering the data (Neuman 2013).
The purpose of the research is to investigate the existing supply chain design for an improved supply chain management system in business and formulating a framework or model for using in supply chain management of business organization using lean manufacturing technique for an improved operational system. As a result, Breezemount will be able to ensuring improved product efficiency and quality.
Out of the two research approaches, deductive and inductive, the researcher has used deductive research approach. This has provided an opportunity for the researcher to refer to already existing pieces of literature in terms of supply chain and lean manufacturing technique and support own findings and arguments (Taylor, Bogdan and DeVault 2015).
The researcher has used a set of written questions with suitable choice of answers in order to fulfill the research aim.
The researcher has designed a close-ended survey questionnaire for the structured questionnaire for gathering data from 50 employees of Breezemount.
Participant is a qualitative research method in which the researcher observes the research participants along with engaging the research participants actively in the activities. The researcher has used interview and survey both for engaging the participants actively while doing the research.
The researcher has also used interview as the data collection method as this allowed the researcher gather in-depth idea about the issues of supply chain management and the benefits of including lean manufacturing technique (Brinkmann 2014).
The researcher has used open-ended survey questionnaire for 2 managers of Breezemount.
Out of qualitative and quantitative data analysis technique, the researcher in this case has used both qualitative and quantitative data analysis techniques. This has allowed the researcher to use numbers, averages and percentages for analyzing the data as well as interpreting the response or verbatim recorded during the interview process (Silverman 2016).
One of the most important ethical considerations in research is maintaining data confidentiality. The researcher is strictly prohibited from sharing the data and the identity of the participants without the consent. In addition to, the researcher cannot force the respondents to be a part of the data collection process. Thus, signing the consent form by the respondents ensures willing participation.
Conclusion
Thus, in this chapter, it can be concluded that the researcher has used suitable and justified research methodologies that allowed the researcher to collect appropriate data and fulfill research aim and objectives.
|
Value |
df |
Asymp. Sig. (2-sided) |
Exact Sig. (2-sided) |
Exact Sig. (1-sided) |
|
|
Pearson Chi-Square |
.255a |
1 |
.614 |
||
|
Continuity Correctionb |
.000 |
1 |
1.000 |
||
|
Likelihood Ratio |
.451 |
1 |
.502 |
||
|
Fisher’s Exact Test |
1.000 |
.800 |
|||
|
Linear-by-Linear Association |
.250 |
1 |
.617 |
||
|
N of Valid Cases |
50 |
||||
|
a. 2 cells (50.0%) have expected count less than 5. The minimum expected count is .20. |
|||||
|
b. Computed only for a 2×2 table |
The Chi Square test helps in determining the statistical significance that is present between two variables. The result of this test has come to be .614 whereas the minimum value that was expected from the test had to be .20. This shows that there is a statistical significance between the gender of the employees and the strategies taken up in supply chain management that helps in creating value within the customers. Thus it can be stated that most of the male employees are of the view that the strategies that are taken up in the company with respect to supply chain management has helped the company in creating value for the customers.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
.669a |
3 |
.881 |
|
Likelihood Ratio |
.634 |
3 |
.889 |
|
Linear-by-Linear Association |
.225 |
1 |
.636 |
|
N of Valid Cases |
50 |
||
|
a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .60. |
The result of the test has come to be .881 whereas the minimum value of the test had to be .60. This shows that there is a statistical significance between the gender of the employees and the issues that the country is facing with respect to the supply chain management strategies. Thus it can be stated that most of the male employees are of the view that overproduction and defects in the manufacturing process of the companies have led to many issues in the supply chain management that the present in the country.
|
Value |
df |
Asymp. Sig. (2-sided) |
Exact Sig. (2-sided) |
Exact Sig. (1-sided) |
|
|
Pearson Chi-Square |
4.344a |
1 |
.037 |
||
|
Continuity Correctionb |
1.795 |
1 |
.180 |
||
|
Likelihood Ratio |
3.336 |
1 |
.068 |
||
|
Fisher’s Exact Test |
.098 |
.098 |
|||
|
Linear-by-Linear Association |
4.257 |
1 |
.039 |
||
|
N of Valid Cases |
50 |
||||
|
a. 2 cells (50.0%) have expected count less than 5. The minimum expected count is .60. |
|||||
|
b. Computed only for a 2×2 table |
The result of the test has come to be .037 whereas the minimum value had to be .60. This shows that there is no statistical significance between the gender of the employees and the use of lean manufacturing will help in mitigating the issues that are present in the current supply chain of the company. Thus it can be stated that both the gender that is males and females are of the view that the use if lean manufacturing techniques will be beneficial for the company in reducing the risks of the current supply chain that is present in the company.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
7.483a |
3 |
.058 |
|
Likelihood Ratio |
4.397 |
3 |
.222 |
|
Linear-by-Linear Association |
.969 |
1 |
.325 |
|
N of Valid Cases |
50 |
||
|
a. 4 cells (50.0%) have expected count less than 5. The minimum expected count is .12. |
The result of the Chi Square test has come to be .058 whereas the minimum value of the test had to be .12. This shows that there is no statistical significance between the age of the employees and the management strategies of supply chain that helps in creating value between the customers. Thus it can be stated that employees belonging to different age groups are of the view that supply chain management strategies help in creating value among the customers.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
7.359a |
9 |
.600 |
|
Likelihood Ratio |
8.293 |
9 |
.505 |
|
Linear-by-Linear Association |
.354 |
1 |
.552 |
|
N of Valid Cases |
50 |
||
|
a. 12 cells (75.0%) have expected count less than 5. The minimum expected count is .36. |
The result of the test has come to be .600 whereas the minimum value of the test had to be .36. This shows that there is a statistical significance between the age of the employees and the issues that the country is facing on a current basis with respect to its supply chain management. Thus it can be stated that employees belonging to the age group of 26-28 years have stated in particular that overproduction is one of the major cause for which the companies are facing issues in the supply chain management strategies.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
3.457a |
3 |
.326 |
|
Likelihood Ratio |
4.612 |
3 |
.203 |
|
Linear-by-Linear Association |
.023 |
1 |
.880 |
|
N of Valid Cases |
50 |
||
|
a. 4 cells (50.0%) have expected count less than 5. The minimum expected count is .36. |
The result of the test has come to be .326 whereas the minimum value of the test has to be .36. This shows that there is no statistical association between the age of the employees and the lean manufacturing techniques that will help the company in reducing the risks that are present in the current supply chain management. Thus it can be stated that employees of all age groups feel that the lean manufacturing strategies that will be taken up by the company will help them in mitigating the current issues that are being faced by them.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
6.268a |
3 |
.099 |
|
Likelihood Ratio |
4.062 |
3 |
.255 |
|
Linear-by-Linear Association |
1.316 |
1 |
.251 |
|
N of Valid Cases |
50 |
||
|
a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .08. |
The result of the test has come to be .099 whereas the minimum value of the test had to be .08. This shows that there is a statistical significance between the work experience of the employees and the value that can be created to the customers by using the strategy of supply chain management. Thus it can be stated that the employees who are working in the company for 6-9 years are of the view that the use of supply chain management strategy within the company will help in creating values for the customers.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
6.300a |
9 |
.710 |
|
Likelihood Ratio |
7.962 |
9 |
.538 |
|
Linear-by-Linear Association |
.131 |
1 |
.717 |
|
N of Valid Cases |
50 |
||
|
a. 12 cells (75.0%) have expected count less than 5. The minimum expected count is .24. |
The result of the test has come to be .710 whereas the minimum value of the test has to be .24. This shows that there is a statistical significance between the work experience of the employees and the current issues that are being faced by the country with respect to the supply chain management. Thus is can be stated that the employees who have been working for a period of 6-9 years are of the view that they have agreed to the fact that overproduction is one of the major factors that the country is facing with respect to supply chain management.
|
Value |
df |
Asymp. Sig. (2-sided) |
|
|
Pearson Chi-Square |
3.457a |
3 |
.326 |
|
Likelihood Ratio |
4.612 |
3 |
.203 |
|
Linear-by-Linear Association |
.000 |
1 |
1.000 |
|
N of Valid Cases |
50 |
||
|
a. 5 cells (62.5%) have expected count less than 5. The minimum expected count is .24. |
The result of the test has come to be .326 whereas the minimum value of the test has to be .24. This shows that there is no statistical association between the work experience of the employees and the use of lean manufacturing techniques that will help in reducing the issues that are present in the current supply chain management strategy. Thus it can be stated that employees who are new or have an experience in the company are of the view that lean manufacturing techniques will help in solving the issues that are present in the supply chain management strategy on a current basis.
- Do you have a supply chain strategy for the Company? If yes, to what extent do you see supply chain strategy contributing to the overall achievement of corporate and marketing goal?
Manager 1: “Yes, there is a supply chain strategy in our company. Over the years, I have seen that the supply chain strategy has been contributing for the overall achievement of our organization’s corporate and marketing goals. When I joined the company, the supply chain strategy had several loopholes that we overcame with time. Now, the existing supply chain strategy has helped in curbing with different issues of supply chain and delivering the best to the customers at the right time.”
Manager 2: “Even I agree with my fellow colleague. The existing supply chain strategy has helped our company achieve organizational goals and objectives. We have been able to identify the faults within the system and mitigate them thereby, delivering the best in terms of efficiency and quality to the customers. However, the overall supply chain strategy of our company is time-consuming that leads to excess use of financial resources that needs to be mitigated for better achievement of organizational goals and objectives.”
- What are the main issues in the existing supply chain management of the company?
Manager 1: “I second the concern raised by my colleague in the previous question. The main issues in our supply chain management are overproduction and manufacturing defects. Due to these issues the company currently is wasting time, labor and financial resources. In addition to, both overproduction and manufacturing defects are creating lots of wastes for the company that is eventually piling up and engaging the company’s useful resources. Also, I feel that manufacturing defect is resulting in overproduction and overproduction can be reduced by minimizing the manufacturing defects.”
Manager 2: “Even I agree with the fact that manufacturing defect is actually leading to overproduction. As the company is manufacturing products with defects, the products are going unused. Even if the products are making it to the market, they are being returned by the customers thereby, creating a bad impression. As a result, the customers are having second thoughts in purchasing our product for the second time that is resulting in overproduction.”
- How would lean manufacturing technique help in improving the current supply chain management in Breezemount?
Manager 1: “Considering the present issues in our supply chain management, I as a manager support the incorporation of lean manufacturing technique within the existing supply chain management system. The use of lean manufacturing technique will help in reducing the wastes produced by the company in terms of manufacturing defect and overproduction thereby, mitigating the loss the company is encountering currently.”
Manager 2: “Even I agree with my fellow colleague. I think lean manufacturing technique will help the company in reducing the wastes produced in terms of manufacturing defect and overproduction. As a result, the company will be able to minimize the both financial loss and time loss and delivering the best to the customers in terms of product quality and efficiency at the right time. Additionally, this will also help the company to gain competitive advantage and stay on the top of the demand in the market sector or the industry.”
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