Impact of Lean Practices on Supply Chain Environmental Performance
Globalization has created the essentials for lean and green components in the supply chain management processes. The integration of the lean and green measures in the supply chain management ensures sensitivity to the environment, leading to its protection and care. Several businesses on the global platform have attempted to strike a connection between the lean and green touch with regards to the efficient energy consumption methods and the reduced scenarios of waste or pollution. Similarly, the aspects of Global warming are influencing decision-making within the corporate sector compelling company executives to rethink what they should use and how they should use it in their production sectors.
Lean concepts are facts influencing the operations of the industries of the world today. The various processes within the industries today implement responsible manufacturing, which yields cost reductions and time management. The scheduling of various process improvements, and organizations have managed to produce more using fewer resources, thereby protecting the faster depletion of the natural resources like raw materials and water among another requirement. This has enabled companies to effectively manage their supply chain process to produce products at high-efficiency levels using fewer resources and reduced hours of operations, which effectively translates to quality products at relatively low prices. Therefore, the discussion will review the impact of Lean practices on supply chain environmental performance to construct a viewpoint that operational efficiency is attained through the principles of lean and green supply chain processes.
The Lean and Green Value Chain Analysis
Under the value chains of companies in the manufacturing sector, operational systems have been created to ensure safe distribution mechanisms, sourcing systems, simplified product development phases, and the arrival of a quality environmentally friendly product. Lean supply chain systems develop a network that simulates all system expectations within the supply chain to deliver products to the end customer in a cost-effective manner. The eliminations of various process wastages in the supply chain ensure sufficient redistribution of labor and cost outside the business as it gives the opportunity to environmental protection mechanism.
According to Yazdani et al., the integration of green environmental thinking into the supply chain process from the aspects of product design, material sourcing, selections and manufacturing process leads to the process and systems of delivery of the final product to the target customers, which enahnces green supply chain (3735). Puche et al., explain that the Lean paradigm linked to supply chain management is a strategy premised on the reduction of costs and time and the elimination of systemic bottlenecks to yield the optimizations of the supply chain systems (422). The simplifications of the supply chain processes, reductions of waste, and the eliminations of activities that hold little or no value to the entire process lead to an efficiency of the entire process as it improves the quality of the final product or service.
Therefore, the process of lean thinking includes several processes leading to swift operations and environmental protections.
- Identifying value
- Sequencing value addition steps for the eliminations of the waste
- operations process without customer interruptions and
- Improving the process continually.
The management of the above process requires efficient and effective logistic to support the delivery of raw materials and finished products to the customer.
Lean Practices in Logistics
The council of logistics management from the opinion of Campos et al., explain that logistics is the process of planning, implementations or controlling the systematic flow of goods and services from a point of origin to a point of ultimate consumption (383). For the process to be complete and ensure safe delivery of products and services, efficiency and effectiveness are key operational drivers. Given that the customer is at the epicenter of the global supply chain process, conforming to his or her requirements is important. Therefore, the process of ensuring customer satisfaction within the supply chain management must involve effective sections like the inbound and outbound logistics, the internal and external movements, including the return of material for environmental objectives. The impacts of logistics in the supply chain can be envisaged through the perspective of value chain analysis in the manufacturing sector.
Source: Dubey, Angappa, and Thanos 196.
The council for the supply chain management professionals CSCMP explains that the associated activities that support product process before the intended customers plays a key role in the process of lean logistics practices. The importance of logistics cannot be understated in the processes of supply chain management. Logistic take a center and facilitative role in ensuring the process of raw material handling and warehousing for either the material balance or final products (Ponte et al. 83). Indeed, this also includes the facilitation of the distribution of the finished products.
The Outbound and Inbound Logistics
The outbound logistics play a critical role in the value chain processes. The inbound logistics refers to the movement of good through effective transport, the storage system, and the delivery of similar goods of processed products. The two primary value chain activities play an important process in the management of lean supply chain and environmental system. The primary activities have the capacity to influence cost while managing environmental situations of the company. The transportation system for the movement of raw material plays a center stage in logistics. Technology growth in the logistics sector has necessitated the optimizations of material inventory replenishments and monitoring in the supply chain sector. Outbound and inbound logistics, according to Sindi and Roe integrate material movement, the storage, and distribution. In addition, the authors confirm that it also goes through the processes of order selections, order transportations and customer deliveries (7). The inclusion of lean system within this process is a sure way to remove systemic bottlenecks leading to efficacy.
The implementation of the lean management process in the outbound and inbound logics helps the attainment of best practices and customers’ satisfaction in the industry. The lean management helps in the ascertainment that the raw materials received within the company are taken to the production departments or stores swiftly. The safeguards accrued from the process leads to an improved capture of information and efficient documentation within the departments, including goods received and returned. Wastage is a primary focus in lean management (Tyagi 74). Therefore, the process of ensuring accurate documentation with regards to accurate ordering to meet unique product specifications is important since organizations have made several errors related to wrong matching of order materials, which have become a source of energy wastes, financial losses, and wastages in the human resource.
Integration of Six Sigma Principles in Lean Manufacturing
Organizations in the supply chain are increasingly using the Six Sigma principle to integrate lean approach into their existing process improvement frameworks. To ensure the integration process conforms to the structural foundations of the sigma six, Harmon explains that organizations should develop frameworks to manage pitfalls or the obstacle that may come during integrations of the sigma six (70). The five lean tools and principle that are applicable include.
- Value stream mapping
- Talk time
- Ishikawa (cause –and –effects)
- Heijunka (Loading Balance)
- Poka-yoke (Mistake proofing)
Value Stream Mapping. Value stream mapping facilitates the process of the identification and elimination of non-value activities within the process while reducing the wait-time for the steps. Therefore, value stream mapping constructs a three principal based system, leading to value-enabling, value-addition, and non-value added. Since it may be impossible to eliminate value within a process, it becomes important that the value-enabling activities that belong to the non-value added bracket is eliminated. Benefits in process improvement are realized during such eliminations. Therefore, this implies that the removal of a value process within the operations that add no value to the products will eliminate wastages of time, energy, and process requirement that would have impacted negatively on both product costs and the environment through the different forms of emissions.
Talk Time. Talk time is taken from the German word ‘Takt’ and seeks to provide a framework on the process time that a completed product requires to be finished to the customer preference (Martin and Holweg 67). The process, therefore, works with cycle times like the manufacturing or incidentals. The management of the process time helps in the reduction of systemic failure since time allocations are done in every process unit to allow correct deliverables within the units. This process reduces waste as it distributes the service level agreements (SLA) within the units in the analysis phase.
Ishikawa (Cause – and – effect). Often, the identifications of root cause in the analyze stage suffer due to lack of sufficient statistical data. This tool has equally been significant in detection the dynamics within the process or the logistical units for easy management.
The diagram above seeks to raise questions about the production process. The “why questions” help for example, in measurement issues about accuracy, bias or sampling as indicated in the above diagram. Ishikawa model is a symbol of efficiency since it leads to the eliminations of flaws by creating certainty in the process (Lavastre, Angappa, and Alain 831).
Heijunka (Loading Balance). This principle refers to a system within the production circle providing a more systematic flow of work. The principles incorporated in the design supports a pull in the system rather than a push, leading to the alleviations of bottlenecks. The introduction of a level load balance in the system leads to a reduction of inventory. Tyagi recommends that talk time principles be used during systems designs since it helps to ensure a level load balance (78).
Poka-Yoke (Mistake proofing). The improvement and design phases call for the eliminations of the major causes of error handled through redesigning of the system to avoid error-inducing incidences. Poka-yoke can be described through an example of a large number of workflows where payroll system was abruptly terminated. When the user was provided with two sets of buttons for the steps, a challenge was noted in the yield of the button press. In this case, one button press led to workflow forward while the next directed to closed workflow. The resolutions provided led to the development of mouseover text for all the buttons labeling how the button should be used and the effects the wrong buttoning would bring.
The integration of six sigma principles in lean manufacturing helps in cost reduction and efficient management of process controls leading to improved supply chain system, reductions of cost and eliminations of wastages.
Eliminations of Lean Waste in the Supply Chain
The theoretical foundation of lean supply chain system supports the lean production systems in the mass production sectors. Companies that handle mass production have maintained several long production process runs based on standard designs. These activities lead to lower cost with limited deviations. Lean production systems compared to the conventional methods of productions utilizes half the human resource effort, half the manufacturing or production space and half the investments, including half the engineering hours allocated for a new product (Brecher et al. 18).
The implementation of lean supply chain allows the flow of value to the customer. This equally reduces waste during the process of the entire value chain. Waste reduction is an important step in the attainment of lean supply chain systems. Systemic wastes such as inventory, over processing, motion or waiting, transport or overproduction are occurring within the value. It is, however, important to note that such waste has an impact on the product cost, which will likely affect the satisfaction levels of the customer. The implementation of the lean supply chain removes all the wastes in the operational process.
The production of excess items with no corresponding orders generates wastes such as overstaffing and logistical costs. Costs for overproduced products or services lead to excessive energy which poses danger to the environment. Overstaffing and strain in warehousing are costs related to overproduction. In fact, this also includes transportation costs due to excess inventory.
Waiting (time of hand)
Unbalanced workload and unplanned maintenance are wastages within the supply chain, especially within the logistics sector. Waiting time for workers due to limited supply, stock-outs or equipment downtime is among the challenges managed through lean approaches. Hudson, Sabry, and McNamara explain that waiting wastes in lean management are occasioned by unbalanced workload or long set up times (165). Lean supply chain systems assist an organization to manage or reduce lean waiting wastes in the process.
Transport and Conveyance Dilemmas
Transporting products between processes carries some cost incursion that adds no value to the product. It is important that material handlers should be used to transport materials than passing over the costs to other organizations since they add no value to customers. Creating inefficient transport, carrying work process in long distances, or moving materials parts or goods in or out of storage leads to several lean wastes. Transport waste in the supply chain leads to increased products prices and production costs. Some of the causes of unnecessary transport occur due to poor understanding of the process flow or wide spaced equipment (Mangan, Lalwani, and Lalwani 31).
Over-processing produces waste within the processing unit due to inappropriate parts either due to poor selection of a tool or product design, leading to unnecessary product defects and motion. The addition of unnecessary steps within the value chain affects the logistical process of the organization and hence causes strain in the process.
Excess Inventory and Defects
Excess raw material leads to surplus inventory. Work in process, obsolescence, storages costs and delay leads to several wastages. Unreliable supplier shipment of products or product complexity leads to excess inventory. Similarly, producing defective parts leads to corrections or low customer satisfaction. Upadhye, Deshmukh, and Garg explain that major causes of product defects are as a result of inadequate training for employees and improper or delayed maintenance of machines within the supply chain (362).
The 5S in the Workplace
Manufacturing facilities have coopted system within their process to reduce waste while optimizing productivity through the implementations of the 5S system. The 5S approach seeks to develop a working setup based on the principles of order while utilizing visual cues to achieve systematic results in their operations (Harish and Selvam7). The system works within the logistics networks to improve efficiency of products and services and hence lower the costs.
According to Sindi and Roe, the 5C method implements a workplace organization and standardization system that keeps the employee motivated. In addition, the procedure improves efficiency and the process units as well as the productivity levels as it establishes ownership position within employees during work situations (11).
The implementation of lean practices in the supply chain management enables swift and efficient applications of the process that yields a positive bottom line for the company. The advantages of lean in supply chain management are the waste reduction systems it brings in the management frameworks of the operations of a company. The identification of wasteful scenarios and their isolations within the processing unit leads to efficiency and increased profitability. Environmental situations occur in manufacturing and logistics units of a company due to wastages. Prolonged runs, wrong packaging leading the delivery of wrong material is among several process challenges that have diverse effects on the environments as they equally lead to institutional losses. Therefore, the implementation of lean approaches in the supply chain system brings order into the working and process systems, creates efficiency, and manages to raise the customer satisfaction level. However, the ultimate beneficiary of the lean management process is improved profitability and the replenished environment.