What is Lean Supply Chain?
From the organizational perspective, the term ‘lean’ implies something that is efficient and has no waste. The concept of lean has emerged from just in time manufacturing and extended its potential to lean manufacturing, then lean organization and last lean supply chain. For instance, at the early stage of lean, firms focused on developing lean production. Now the focus has been shifted to developing lean organizations and lean supply chain.
Lean is all about identifying and removing wastes and non-value added activities from the issue in concern. So, lean supply chain may be defined as a group of organizations linked in a straight line by the flows of products, services and information that work together to lower cost and waste by effectively and efficiently procuring what is required for meeting individual customer demand. The lean aspect of supply chain requires waste and non-value added activities be eliminated from supply chain through continuous improvement.
The primary concept of lean was the brain child of Henry Ford. In 1920s, he applied the technique of ‘continuous flow’ to Ford’s assembly line process. The practice reduced Ford’s costs and throughput time and improved the quality. The approach achieved recognition of the most advanced manufacturing system until Toyota Production System was introduced by two executives from Toyota after their visits in Ford’s assembly plant in 1950s. Toyota learned a great deal from the study of Ford’s operation and based its lean approach on what it saw. However, Toyota was able to accomplish something that Ford couldn’t do: a system that could handle variety.
Soon Toyota comprehended that optimizing a segment of the process is totally different from optimizing entire process. To bring true changes, they had to incorporate customers and supplier in the process. Without synchronization among all major players, the timing and features of goods provided by the suppliers will continuously hamper manufacturer’s performance. As a result, the idea of lean supply chain comes into forth.