Introduction
The lean concept has gained popularity in the recent past especially in the globalization of various business operations due to the introduction of multinational organizations. Different lean principles as explained in the paper enable organizations to overcome waste in various trade actions carried out. The concept makes business organizations achieve their objectives more flexibility and profitability, making businesses able to control their operations in the most optimal way possible. Waste, as used in the paper, implies the various activities that limit the smooth flow of business process with no value addition to the commerce. Some of the main activities identified as wastes in lean supply include aspects like waiting time, overproduction, defects, and transportation. Although the concept emerged from the manufacturing industry, with Toyota being renowned for its use, it is important to recognize the fact that it can be applied to a broad range of areas, such as in the supply chain management (Liu et al., 2013).
The management of supply chain is faced with numerous challenges especially with the introduction of globalization, a scenario that is experienced in the current business world. It is only through structuring appropriate strategies in the global market that firms can remain competitive (Vinodh et al., 2013). Therefore, the lean concept enables a firm to experience reduced waste and eliminate the various non-valuable activities to achieve efficiency so as to survive in the global business.
Literature review
The idea of lean supply has evolved from different practices of supply chain used over the years by individual companies to go beyond the national boundary to tap the various opportunities in the international market. The concept of lean supply means that consumers of the respective products can obtain right products at the right price and the right time without any form of waste whatsoever. The concept is relevant to business organizations as it gives them a competitive advantage and is vital to their survival in the international market where competition is high (Packowski & Francas, 2013).
Meeting the demand of the consumers in the market is the primary goal of any supply chain is, a concept that helps minimize any uncertainty directed towards the supply objective. However, various researchers have indicated their concern that at times, it is always impossible to eradicate risk in the supply chain, a feature that contributed to the evolution of lean and agile strategies of supply. The lean paradigm was introduced to help harmonize the different goals of supply chain management in organizations which were later reinforced by the agile concept of manufacturing (Urbaniak, 2015).
The concept of lean as outlined by Toyota implies developing value for the various products in the supply chain while eliminating any form of waste whatsoever. The concept help ensures that the supply process is conducted in the most efficient way possible while taking consideration of time, optimal resource use and creating value to the final consumers (Lyons & Ma'aram, 2014). However, the concept of agility as put across by different scholars implies efforts to utilize the market knowledge by various suppliers to exploit the various market opportunities.
However, in light of the notion, Cabral et al., (2012) asserts that the market can further be distinct to encompass order winners and qualifiers to gauge accomplishment in the market. The intention of the statement was to indicate that market competitiveness in supply chain entailed that for efficiency in manufacturing to be achieved for example in Toyota, there was a need to have an integrated supply chain in place. Apparently, the study further indicates that leanly is more efficient in ensuring that cost reduction is achieved at all costs while on the other hand, the agile paradigm shows that service and consumer value is enhanced.
Furthermore, other researchers such as Minagawa & Monden, (2016) indicate their concern that the relevance of agility depends on a broad range of issues such as the environment of the supply chain for the respective organizations. However, two forms of operating environment are identified which include the functional products with a predictable demand and supply. On the other hand, innovative products that attract response to market demand are often characterized by speed and flexibility other than costs aspects. Therefore, in the study of supply management, it is worth appreciating the fact that while other environmental factors support the lean concept of supply, others favor agile concept. The issues have led to a common understanding that combining the two issues of supply will realize an efficient supply chain in the market. Integration of the two concepts will thus help eradicate any form of restrictions or boundaries that limit the efficient flow of material, money and resources to their respective destination (Hashmi et al., 2015).
As mentioned earlier, the lean concept was historically applied in the various manufacturing techniques as for the case of Toyota, but the notion has recently gained popularity in supply chain management. The rationale behind the concept of lean supply is to produce the optimal quantity of merchandise that is demanded by the consumers, at the right time and location without incurring any form of loss whatsoever. The motive that drives the concept of lean supply is to experience the optimal use of resources and adequate satisfaction of the consumers. The lean supply concept, therefore, creates value for the various products in the stream by eliminating the diverse activities that add no value to users (Chen et al., 2015). The bottom line that makes the concept be embraced in the international supply chain is that it adds more value to consumers while at the same time minimizing wastes. The concepts help identify the various activities that do not add value to consumers such as defective products or overproduction which should be kept to a minimum or eliminated if possible.
The concept was evolved in Japanese industries but has currently spread across the globe, becoming one of the essential tools used in supply management. The concept is endowed to help reduce operational costs incurred in business while at the same time, enhance the overall performance of an organization. Use of the notion varies significantly in various groups. While some firms focus on specific activities in the supply chain, other organizations concentrate on changing the entire process of the supply chain to adhere to the lean principles. Moreover, the concept is highly appreciated in various organizations across the globe due to its significant impact on cost reduction which saves the company a lot of cash. Some of the attributes involved in the process are engaging everyone in the struggle to minimize costs, enhance quality and achieve timely delivery.
Lean suppliers
Supply chain managers require having lean suppliers who can adequately respond to changes in the market and offer low prices as compared to competitors due to their efficiency in production. Moreover, they are characterized by quality services and products, timely delivery and culture of continuous improvement to enhance the consumer experience. To establish lean international supply in the organization, it is important to consider the fact that the various suppliers involved should be included in the value stream. The providers in such cases are involved in the various activities that promote transformation and lean activities that act towards minimizing wastes as it helps solve the different challenges while at the same time-saving costs.
Lean Procurement
Lean manufacturing
As a concept of lean supply, the concept helps the manufacturers to experience optimal production in that they supply the market with the right quantity of goods demanded in time and meets the consumer expectation. The concept helps an organization to optimally use its resources in meeting the market demand more efficiently, an aspect that helps the firm to save it resources (Singh & Pandey, 2015). The concept not only protects businesses from experiencing cost reduction but also help in enhancing the quality of the products.
Warehousing
The idea of lean warehousing is critical in the process as it helps managers to eliminate any form of non-valuable activities in the storage process. The warehouses perform various functions, and there are different types of wastes found in the process which include the defective products, overproduction, excess motion and information processes. The concept requires that each step of warehousing process is adequately monitored and evaluated to see if there is any form of repletion or non-valuable activities that can be eliminated (Hajdul & Mindur, 2015).
Lean consumers
For the case of lean users, they are aware of the necessary activities that should be handled in the supply chain management to ensure that efficiency is achieved. Some of the aspects that are embraced with such kind of people include speed and flexibility as the consumers expect high-quality services and products. Moreover, such groups expect high satisfaction from the various products that they consume while at the same time offer more value to the different consumers that they engage (Hemmings, 2015).
Furthermore, different scholars have asserted that strong leadership can only enforce the various lean principles discussed in the paper. Moreover, the concept requires the respective managers to engage their employees in efforts to adhere to the lean system as it has a positive long-term impact on business organizations. The concept maximizes the consumer experience in the market while at the same time eliminates any form of waste whatsoever.
Advantages
The attribute develops a culture of rapid response so as to meet timely and efficient response to consumer needs to win their loyalty in the market. Another benefit realized by embracing the concept includes reduced inventories, as inventories in the optimal supply chain are considered as waste (Govindan et al., 2014). The idea has forced different organizations to experience optimal production and develop a culture of an immediate supply of finished goods without keeping any inventory whatsoever. The culture does not allow for overproduction as excess production is considered waste, therefore not tolerated at all costs. For the case of raw materials, the concept is lenient and can allow storage of raw materials although to a limited extent for future production purposes. However, for same organizations which consistently adhere to the lean supply principles, the groups consider organizing for timely delivery of the raw materials to support production (Reichhart & Holweg, 2007).
Reduced costs are another significant benefit achieved through the use of lean supply as such suppliers focus on achieving efficiency through optimal resource utilization. Furthermore, the concept tries to reduce the time taken for an organization to develop a new product released into the market to meet the changing consumer wants. However, the decision to use less capital-intensive machines enables organizations to experience flexibility in production, a feature that enhances consumer satisfaction significantly (Baladhandayutham & Venkatesh, 2012). This implies that new products supplied at affordable costs are released into the market more is a business strategy that is often considered sufficient to meet the consumer demand. Such suppliers are considered as innovators, and this issue makes customers develop consumer loyalty towards their products in the market. As aforementioned, an efficient supply chain that embraces the different lean principles develops a competitive advantage in the market to survive in the global business. Therefore, it is imperative also to recognize the fact that lean supply chain offers an organization an advantage to competent more efficiently, especially in the global business (Thun et al., 2011).
As evidenced by the study, the concept of lean supply for the long-term success of the various global trades. Through adhering to the set principles, firms can evade the additional activities which add no value to the business in the supply chain, an aspect that enhances consumer experience as more value will be achieved in the long-run. Apparently, lean supply improves the efficiency of diverse internal and external aspects of supply in a corporate for sustainability purpose. However, while the internal factors base their focus on the relationship linkage, the external factors focus theirs on the various operations that are involved in the supply chain (Gopalakrishnan, 2015). Five key areas considered include the manner in which product flow is experienced in the market, the flow of information to different stakeholders, varying consumer needs, and finally the upstream and downstream linkages. Moreover, efficiency is enhanced when firms eliminate waste in their various supply process, an aspect that improves the consumer experience.
The lean supply strategy of ‘pull’ scheme is considered resourceful as business organizations tend to re-design their operations to meet the response of various core drivers in the market. The issue enhances the liquidity flow of official merchandise and an efficient response to market demand as suppliers get accurate information about the exact level of products demanded. Moreover, the concept limits the number of vendors in the market, leaving only the best, an aspect that improves the process of supply chain management (Hartono et al., 2015). Furthermore, the element will contribute to more profitability for the business which is beneficial to the organization to survive in the global market.
Disadvantages
The implication of lean supply in business as aforementioned is to cut down the number of vendors so as to remain with the best. However, the action is faced with a lot of challenges as few vendors in the market may contribute to severe crises, especially when faced with challenges, hence impair the production capacity of the business (Sillanpää & Sillanpää, 2014). An example in place to explain the above situation is the case of Ericsson, which is a crucial vendor in mobile phones in the international scale, with its principal supplier Philips. In early 2000, one of the Philips’ plants located in Mexico experienced a fire outbreak, an issue that significantly influenced its supply to Ericsson, impairing the overall business. However, Ericsson, on the other hand, did not have an alternative supplier in the market and had to experience massive losses in the company as it had to wait for Philips to recover from the shock.
Furthermore, the concept of lean supply is not active in the unpredictable markets, especially with the introduction of globalization aspects. The lean principles of supply tend to focus on gaining more from the market while involving them in less activity to minimize waste, which is not efficient in meeting the rapid change in demand. Moreover, the notion is effective in maintaining consumers as it leads to the development of more loyalty other than acquiring more clientele in the marketplace. The issue, therefore, limits chances of expanding the market share of business in the global commerce operation, an issue that adversely affects the growth of a company (Martínez-Jurado & Moyano-Fuentes, 2014).
Conclusion
Lean is a guaranteed strategy not only for success in the international trade but also for survival as well, for various organizations involved in the supply chain that wishes to experience rapid growth ought to adopt the concept. The concept develops efficiency in an organization and enables managers to experience more profitability for their respective organizations without much struggle. To survive in the market, it is imperative to recognize the fact that businesses should consider changing the way that they operate since intense competition characterizes globalization. Moreover, the supply chain management in the global industry is faced with a lot of challenges which limits organization's chances to experience growth. However, from the study, it is important to assert that lean supply chain management brings more collaboration and enhances the ability of an individual to manage business operations effectively. Therefore, organization managers can utilize the concept of a lean system to develop a competitive advantage for their respective business organizations so as to realize more profits in the end.
As evidenced by the study, organizations that wish to experience more benefits have to adhere to the various principles of lean supply to experience more collaboration in the global world. Moreover, the non-valuable activities need to be eliminated so as to enhance efficiency with a motive to retain the best supplier in the market as they have more benefits to an organization in the long-term. Moreover, it is important to note that firms that wish to become lean must develop efforts to monitor their progress with consistent improvement in their supply chain management. In conclusion, there are numerous benefits of adhering to the lean concept than the disadvantages; hence, it is worth concluding that it is an ideal concept for organizations to use in managing their supply chain management.
References
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