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Questions and Answers
What is the primary goal of lean production?
What is the primary goal of lean production?
A push system in inventory control anticipates consumer demand and pushes products accordingly.
A push system in inventory control anticipates consumer demand and pushes products accordingly.
True
Name one of the seven wastes in lean production.
Name one of the seven wastes in lean production.
Overproduction
Lean production aims to eliminate _______ in the production process.
Lean production aims to eliminate _______ in the production process.
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Match the following concepts with their definitions:
Match the following concepts with their definitions:
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Which of the following is not considered one of the original seven wastes?
Which of the following is not considered one of the original seven wastes?
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Agile strategy is primarily focused on waste reduction.
Agile strategy is primarily focused on waste reduction.
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What is the term used to describe the system where businesses respond to actual consumer demand?
What is the term used to describe the system where businesses respond to actual consumer demand?
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The Toyota production system (TPS) was developed to eliminate waste in ________ areas.
The Toyota production system (TPS) was developed to eliminate waste in ________ areas.
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Match the following types of inventory control systems with their descriptions:
Match the following types of inventory control systems with their descriptions:
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What is one of the main causes of work-in-progress inventory waiting?
What is one of the main causes of work-in-progress inventory waiting?
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Unnecessary inventory is beneficial for a production process.
Unnecessary inventory is beneficial for a production process.
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Name one of the Seven Wastes mentioned.
Name one of the Seven Wastes mentioned.
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The principle of producing in response to customer demand is known as _____ production.
The principle of producing in response to customer demand is known as _____ production.
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Match the following terms with their correct definitions:
Match the following terms with their correct definitions:
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Which of the following is NOT a type of waste identified?
Which of the following is NOT a type of waste identified?
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The agile supply chain model emerged in the 2000s to address stable demand.
The agile supply chain model emerged in the 2000s to address stable demand.
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What is one of the key principles of lean consumption?
What is one of the key principles of lean consumption?
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Inappropriate processing means using standardized procedures for products that _____ require it.
Inappropriate processing means using standardized procedures for products that _____ require it.
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What is the purpose of mapping the value stream?
What is the purpose of mapping the value stream?
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What process allows for the customization of products and delays packaging until orders are received?
What process allows for the customization of products and delays packaging until orders are received?
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Lean supply strategies are best applied in situations of unpredictable demand.
Lean supply strategies are best applied in situations of unpredictable demand.
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What is the term for the point at which a product transitions from a base product to a customized product?
What is the term for the point at which a product transitions from a base product to a customized product?
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An example of an agile, quick response supply chain situation is _____.
An example of an agile, quick response supply chain situation is _____.
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Match the following supply chain strategies with their characteristics:
Match the following supply chain strategies with their characteristics:
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Which method involves keeping main components ready but finalizing orders upon request?
Which method involves keeping main components ready but finalizing orders upon request?
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Mass customization can be applied both to manufacturing and services.
Mass customization can be applied both to manufacturing and services.
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In supply chain planning, what should managers focus on integrating?
In supply chain planning, what should managers focus on integrating?
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The strategy of having regular deliveries based on predictable demand is known as _____.
The strategy of having regular deliveries based on predictable demand is known as _____.
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In which situation is 'lean, plan, and execute' most appropriate?
In which situation is 'lean, plan, and execute' most appropriate?
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Study Notes
Supply Chain Strategy: Lean and Agile
- Supply chain strategy defines material procurement, transportation, manufacturing, service creation, distribution, and follow-up service processes, determining if they are in-house or outsourced.
- Logistics and supply chain management (SCM) are cross-functional activities impacting all business divisions and functions.
- Two key logistics and SCM strategies are Lean and Agile.
Top-Down Perspective on Strategy
- Corporate strategy influences business unit strategies, which, in turn, drive functional strategies. This is a hierarchical approach.
A Holistic View of Logistics and SCM Strategy Formulation
- Supply chain strategy is foundational to overall strategic action.
- Logistics and SCM activities transcend individual functional divisions.
- Lean and Agile are key logistics/SCM strategies.
The Evolution of Production Strategies
- Production strategies have evolved from craft production to mass production (early 20th century), to Lean production (post-WWII), then Mass Customization (late 20th), Additive Manufacturing, and Servitization (21st century).
- Output volume and variety have changed significantly over time.
Lean Production
- Lean production emphasizes waste minimization through operational practices.
- A pull system (responding to consumer demand) is preferred over a push system (anticipating demand).
- Just-in-Time (JIT) inventory management aims to receive goods as close as possible to when needed.
The Seven Wastes (Muda)
- Lean production aims to eliminate seven types of waste: Overproduction, Waiting, Transportation, Inappropriate Processing, Unnecessary Inventory, Unnecessary Motion, and Defects.
- Recently, underutilization of resources has been added as an eighth type of waste.
The Seven Wastes (Muda) – Detailed Breakdown
- Overproduction: Producing more than is needed, leading to overstocking.
- Waiting: Inefficient process design; work-in-progress waits for resources (machines, operators).
- Transportation: Unnecessary physical movement of products; non-value adding. This is illustrated by the transportation of bananas or medicine, which merely moves them from point A to point B.
- Inappropriate Processing: Unnecessary or inefficient processing steps that do not add value to the product.
- Unnecessary Inventory: Holding excess inventory—holding inventory just in case is costly.
- Unnecessary Motion: Unnecessary movement of people or materials in the production process.
- Defects: Products with defects often lead to delays.
- Underutilization of Resources: Inefficient resource utilization, especially in service businesses.
Five Key Principles
- Identify value creation from the customer's perspective.
- Map the value stream (customer value creation process).
- Ensure efficient process flow with no waiting.
- Employ a pull system, responding to customer demand instead of anticipating it.
- Identify root causes and strive for perfection.
Lean Consumption
- Completely solving the customer's problem.
- Eliminating customer time waste.
- Providing exactly what the customer wants, where and when they want it.
- Continuously aggregating solutions to decrease customer inconvenience.
Agile Supply Chains
- Customer demand and product variety are unstable, making outsourcing, globalization, and technology improvements necessary.
- Enabled by mass customization.
- Agile supply chains are designed to manage volatility without problems through the structure, organizational processes, and supply chain relationships.
Mass Customization
- Customization postponement is central to mass customization.
- Customization is done as late as possible in the process.
- Packaging also often utilizes postponement.
- Different customers may have different packaging needs.
- Services, like fast food restaurants, often customize the final product as close to the point of purchase as possible.
- Decoupling point: The point at which a base product becomes a customized product.
- Stock-keeping units (SKUs) are different for mass customized products.
Comparison of Lean Supply with Agile Supply
- Lean supply focuses on commodities with stable demand; Agile supply focuses on volatile demand and fashion goods.
- Lean supply prioritizes price, physical costs, long-term contracts, and algorithmic forecasting; Agile prioritizes availability, marketability, immediate capacity assignment, and consultative forecasting.
Combined Logistics Strategies
- Lean, continuous replenishment is suitable for predictable demand and short lead times (e.g., retail clothing).
- Lean, plan, and execute applies to predictable demand with long lead times (e.g., Christmas trees).
- Agile, quick response is for short lead times with unpredictable demand (e.g., Zara).
- Leagile, postponement applies to situations with long lead times and unpredictable demand (e.g., computer keyboards).
The Leagile Supply Chain
- A combination of Lean and Agile strategies in a supply chain.
- Using Lean for standardized components and Agile for customized final assembly/products.
Critical Factors to Consider in Supply Chain Planning
- Focus on processes and flows of the entire supply chain.
- Develop agile and adaptive high-level objectives.
- Incorporate people, process, and technology.
- Understand that supply chain structure greatly impacts competition and success.
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Description
Explore the key elements of supply chain strategy, focusing on Lean and Agile methodologies. Understand how corporate strategy influences business unit strategies and the holistic view necessary for effective logistics and supply chain management. This quiz will delve into the evolution of production strategies and their impact on supply chain success.
