As Vice President of Supply Chain Management System I cannot help drawing the attention of company to the lean production that was founded as an interpretation of the ideas firstly implemented by Toyota production system. The concept of "Lean" united two different approaches, while aligning the improved quality, high-speed processes and a wide range of goods and services. This concept is oriented on attainment of the lower costs ensuring high quality and high speed of processes. Modern aspects of the concept “Lean” play the vital role in company logistics and its implementation.
The transportation is the source of logistic expanses. Considering the logistic expanses manager should take into account inventory control, materials handing work, warehousing, quality, obsolescence and deficit. The system of lean logistic focuses on four major loss factors: excess production resources (labor, production capacity and stocks), overproduction, excess inventory, excessive capital investment. These factors are closely related to each other, and therefore require a comprehensive solution.
There are some processes should be implemented to decrease the transportation expanses and to achieve the efficiency of logistic management. The optimization of logistic functions may be attained due to the reducing of inventory, disposal of defects, loss and the usage of standardization, alignment of processes and minimization of costs. In this case, it is considered the whole supply chain which not only reduces costs but also improves product quality and increases customer satisfaction, ensuring profit growth.
The main issue of excess inventory, shortages of materials is caused by a long-time execution of the order. In this case the inventory of raw materials should be minimized.
The transportation costs may be decreased by acceleration of the internal supply chain. In this case there are some negative points related to the long execution of order. The first one is variation of time and additional costs caused by rework and overtime. The second issue is the threat of reducing the profitability of sales and depreciation of equipment. Each process extracts from the preceding one only the number details which were spent. For Customer Service it is necessary to have strategic reserve materials when the product is removed from the reserve, production system is informed and it produces one product to replenish the reserve.
The main indicator in this method is the cycle efficiency process. This parameter demonstrates the dependence between the creation of added value and total time for product execution. The time of added value creation isn’t to be above 25 % of the total time for product execution.
The important role of logistics is based on the Information control over the process. For example, it is used a balanced scorecard (BSC) to monitor the performance and efficiency of work.
Conclusions
The essence of the concept is to possibly get rid of the processes and operations that do not add value in product usage. Since logistics is an integral part of any enterprise, these tools make change its system. They simplify inventory management, reduce spoilage, increase speed and simplify the process of finished products creating, reduce variation, improve performance, provide accurate statistical data and solve quickly current problems of supply management system.
References
Burt, D., & Starling, S. (2003). World class supply management: The key to supply chain management (7th ed.). Boston: McGraw-Hill/Irwin.
Babson, S. (1999, July 1). After Lean Production: Evolving Practices in the World Auto Industry.(Review). Industrial and Labor Relations Review.
Kumar, S. (2005). Parts management models and applications a supply chain system integration perspective. New York: Springer.
