TOPICS INLEAN SUPPLYCHAINMANAGEMENT

Marc J. SchniederjansUniversity of Nebraska-Lincoln, USA

Dara G. SchniederjansTexas Tech University, USA

Ashlyn M. SchniederjansHarvard University, USA

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World ScientificNEW JERSEY • LONDON • SINGAPORE • BEIJ ING • S H A N G H A I • HONG KONG • TAIPEI • C H E N N A I

XI

CONTENTS

Preface

List of Tables and Figures

PART I. Introduction to Lean and Supply Chain Management

Chapter 1. LeanIntroductionWhat Is Lean?Origins of Lean PrinciplesLean Principles

Seek the Elimination of WasteSeek Improved QualitySeek Increased Product FlowSeek Reduced Cost

Lean Approaches and MethodologyProcess Mapping and Value Stream MappingThe 5 Ss '.Single Minute Exchange of Dies (SMED)Stable Production SchedulingQuality at the SourceContinuous ImprovementSix SigmaTotal Productive MaintenanceGreen Manufacturing and ServiceAutomationVisual ManagementSupplier Relationship Management

Final Comments on LeanSummaryReview TermsDiscussion QuestionsProblems

Vll

xix

33347

11121213141415161718182023252526272731323333

xii Topics in Lean Supply Chain Management

Supplement 1 for Chapter 1: Toyota Plan-Do-Check-ActCycle Approach to Operational Problem Solving 34

Supplement 2 for Chapter 1: Process Mappingand Value Stream Mapping 37

References 40

Chapter 2. Supply Chains 43Introduction 43

Supply Chain Facility Flow 46Supply Chain Problems 47

Bullwhip Effect 47Snowball Effect 49Supply Chain Disruptions 51

What Is Supply Chain Management? 51History and Trends 52SCM Tasks 53SCM Performance 53

Decision Making in Supply Chain Management 60Supply Chain Decision Making Tools 63

Supply Chain Information System and Technology . 65Global Supply Chains 67Summary 72Review Terms 72Discussion Questions 73Problems 74Supplement 1 for Chapter 2: A Simple Scorecard

Methodology for Assessing Supply ChainPartner Risk 77

References 79

Chapter 3. The Nexus of Lean and Supply Chain Management 81Introduction 81Lean Supply Chain Management Principles 82

Seek Leadership and Growth Strategy 82Seek a Strategic Customer Value Focus 83Seek Single Source and Reliable Suppliers 84Seek to Build Trust Based Alliances with Ethical

Supply Chain Partners 84Seek a Demand Pull, Synchronized Supply Chain 85

Contents xiii

Seek to Maximize Flow and Eliminate Supply ChainFlow Constraints 86

Seek Supply Chain Agility 89Seek Continuous Improvement 89Seek Waste Elimination 91

Lean and Supply Chain Nexus Conflicts 92Summary 92Review Terms 95Discussion Questions 95Problems 95Supplement 1 for Chapter 3: Gap Analysis for

Continuous Improvement 98References 100

PART II. Topics in Lean Supply Chain Management

Chapter 4. Topics in Lean Supply Chain Leadership 105Introduction 105

Leadership Defined 105Traits of Successful Leaders 107Leadership Styles and Skills 108

Coaching Leadership 111Teams 111

Obstacles to Leadership 113Lean Supply Chain Leadership Topics 115

Importance of Leadership 116Strong Leadership 116Leading with Lean Certification 117Leadership Training 117Leadership Advice from a Lean Consultant 118

Summary 118Review Terms 119Discussion Questions 119References . 120

Chapter 5. Strategic Customer Value Focus in Lean SupplyChain Management 123Introduction 123

Customer Value Defined 123Customer Value Components 124Customer Satisfaction 126

xiv Topics in Lean Supply Chain Management

Implementing a Customer Value Focus 129Lean Supply Chain Strategic Customer Value Focus Topics 133

Question Strategic Plan 133Customer and Culture Focus 134From Forecasting to Customer Orientation 134Operational Excellence 135Customer Focus in a Service Supply Chain Environment 136Modularization of Distribution Systems 137Integrating Marketing and Supply Chain Management

for Improved Customer Value 138Creating Customer Value by Resource Alignment 139Creating Customer Focused Value during Recessions 142

Summary 143Review Terms 143Discussion Questions 144References 144

Chapter 6. Topics in Aligning Lean Supply Chain Strategy,Tactics, and Operational Plans 147Introduction 147Strategy, Tactics, and Operational Planning Basics 147

Strategic Planning Stage 148Tactical Planning Stage 151Operational Planning Stage 155

Aligning Supply Chain Strategic Goals for Strategic Fit 156Lean Supply Chain Alignment of Strategies, Tactics,

and Operational Plans Topics 157Supply Chain Capabilities and Strategies 157Combining Lean Supply Chain Strategies for

Organizational Change 159Complexity and Lean Strategies 160Strategic Sourcing 161Interest in Lean and Supply Chain Management as

a Combined Strategy 162Summary 163Review Terms 164Discussion Questions 164References 165

Contents xv

Chapter 7. Ethics, Trust, and Collaboration Topicsin Lean Supply Chains 167Introduction 167Trust in Lean Supply Chains 169

Trust Defined 169Trust: The Toyota Way 169

Collaboration in Lean Supply Chains 175Collaboration Denned 176Competitive Collaboration 176Benefits of Collaboration in Lean Supply Chains 178

Environmental Issues in Lean Supply Chains 179Lean Supply Chain Ethics, Trust, and Collaboration Topics 180

The Impact of Culturally-Based Ethics and Trustin Global Supply Chains 180

Ethics Expectations in Supply Chains 182Suggestions for Improving Supply Chain Corporate

Social Responsibility 182Environmental Benefits and Problems 183Lean Environmental Benefits in ISO 9000 and 14000

Programs 184Summary 185Review Terms 185Discussion Questions 186References . 186

Chapter 8. Topics in Globalization and Cultural Impactson Lean Supply Chains 189Introduction 189

Globalization and Global Operations 189The Importance of Global Operations 192Understanding Culture 195

Global Supply Chain Management 196Critical Success Factors in Managing Global

Supply Chains 197Managing the Global Supply Chains 205

Lean Supply Chain Globalization and CulturalImpact Topics 207Global Integration with Information System Software 207Cultural Distance and Global Start-up Enterprises . 208

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Learning from Lean Project Failure 209International Culture in Supply Chains and Ethics 210

Summary 211Review Terms 211Discussion Questions 212References . 212

Chapter 9. Topics in Lean Supply Chain Information Systems 215Introduction 215An Enterprise Resourcing Planning Information System 216

ERP Modules 217Additional ERP Modules 219ERP Implementation ' 221

Global Information Systems 223Lean Supply Chain Information Systems Topics 226

Information, Automation, and Lean 226Integrating Global Information Systems 226Lean and IT Integration 227Information: A Key Supply Chain Practice 228

Summary 230Review Terms 230Discussion Questions 231References 231

Chapter 10. Topics in Lean Supply Chain New Product Development 233Introduction 233New Product Development Process 233

Steps in the New Product Development Process 234Metrics for the Evaluation of NPD 244

Integrating NPD with Supply Chain Managementfor Mutual Benefit 244

Lean Supply Chain New Product Development Topics 247Lean Product Design 247Six Sigma for Product Development, But Not

New Product Development 248Lean as an Aid in NPD 248Combining NPD and Lean in Software 249Maximizing Productivity with NPD and Lean 251Toyota Product Development 252

Contents xvii

Summary 253Review Terms 254Discussion Questions 254References 255

Chapter 11. Topics in Lean Supply Chain E-Commerce 257Introduction 257E-Commerce 257E-Commerce and Supply Chain Management 260

Critical Success Factors in Implementing an E-CommerceSystem 264

Supply Chain Benefits of Using E-Commerce 269E-Commerce Interaction with Supply Chain Management 269Internet-based EDI (IEDI) and Supply Chains 270E-Trust and Supply Chains 272

Lean Supply Chain E-Commerce Topics 272Using E-Commerce as a Means to Enhance Supply

Chain Responsiveness 274E-Business Software Supports Lean Supply Chain

Principles 275Integrating Supply Chain Management in E-Commerce

Environments 275Maximizing B2C Supply Chains 276

Summary . 277Review Terms 278Discussion Questions 279References 279

Chapter 12. Topics in Lean Supply Chain Outsourcing 283Introduction 283

Introduction to Outsourcing 283Types of Outsourcing 285Benefits of Outsourcing for Lean Supply Chain

Management 287Outsourcing Planning Process 289Strategic Outsource Planning 290Tactical Outsource Planning 292Operational Outsource Planning 293

Outsourcing and Supply Chain Management 295

xviii Topics in Lean Supply Chain Management

Lean Supply Chain Outsourcing Topics 296Moving Suppliers to be Lean with an Outsourcing

Strategy 296Balancing In-house and Outsourcing Production 297Trends in Outsourcing Distribution Management

(Downstream) 298Trends in Outsourcing Sourcing and Procurement

(Upstream) 299Supply Chain Outsourcing Focus 300Outsourcing, Supply Chain, and Lean Paradoxes 301

Summary 302Review Terms 302Discussion Questions 303References 303

Epilog: What's the Wisest Thing You Know? 307

Opportunities in Changing Supply Chain Trends 307

Author Index 309

Subject Index 315