Supply chain management and Lean Resources Management
Supply Chain Management:
Supply chain activities cover product development, sourcing, production, logistics, and more information
systems needed to coordinate these activities.
Supply chain management is the active management is the active management of supply chain activities by
the members of supply chain with the goals of maximizing customer’s value and achieving a sustainable
competitive advantage.
Links within Supply Chain
The organizations that make up the supply chain are linked together through physical flows of product
through flows of products and through flows of information.
Goal of Supply Chain
The result of effective SCM is fewer stock outs at the retail level, reduction of excess manufacturing by the
manufacturer and reduction of excess finished goods inventories, fewer rush/expedited orders.
Lean Resource Management
The emphasis in lean thinking is on adding value to the customer while cutting out waste, or muda in
Japanese.
“Waste” is anything that does not add value to the customer or anything the customer is not willing to pay
for.
Seven wasteful activities
1. Overproduction
2. Delay
3. Transporting
4. Over-processing
5. Inventory
6. Motion
7. Making defective parts
Five Lean Principles
1. Specify value from the standpoint of the customer.
2. Identify the value stream.
3. Create continuous flow.
4. Pull.
5. Perfection or continuous improvement.
1|CMA US – Level I Cost Management
, Machine Downtime and Batches
Having minimal machine downtime when changing from manufacturing one item to manufacturing a different
item is an important item is an important component of lean manufacturing.
Often large batches are assumed to be more economical than small bathes due to excessively long or difficult
changeover procedures.
But production of large bathes result in large on-hand inventories.
Manufacturing Cells
Under lean manufacturing, the plant layout is re-arranged by manufacturing cells or work cells. Each work cell
produces a specific product or product type.
Kaizen - Continuous Improvement
Kaizen is part of lean manufacturing philosophy. A Japanese word that means “improvement.”
Error and Mistake Proofing
Creating improvements on many different levels to make the product correctly the first time.
Beyond Manufacturing
The concept of lean resource management can be and is being extended beyond manufacturing to every
enterprise.
Lean principles create greater value for the customer while using fewer resources, that is increasing value
while reducing waste.
Health Care
Lean thinking can be used to
• Reduce waiting time for patients,
• Reduce waste in hospitals, inventories, and
• Lead to better quality care.
Warehousing
Individual’s items can be organized by size and by frequency of demand.
Appropriately-sized containers can be used to hold the items and pick them.
Ordering can be done daily instead of weekly or monthly and include just what was shipped that day.
2|CMA US – Level I Cost Management
Supply Chain Management:
Supply chain activities cover product development, sourcing, production, logistics, and more information
systems needed to coordinate these activities.
Supply chain management is the active management is the active management of supply chain activities by
the members of supply chain with the goals of maximizing customer’s value and achieving a sustainable
competitive advantage.
Links within Supply Chain
The organizations that make up the supply chain are linked together through physical flows of product
through flows of products and through flows of information.
Goal of Supply Chain
The result of effective SCM is fewer stock outs at the retail level, reduction of excess manufacturing by the
manufacturer and reduction of excess finished goods inventories, fewer rush/expedited orders.
Lean Resource Management
The emphasis in lean thinking is on adding value to the customer while cutting out waste, or muda in
Japanese.
“Waste” is anything that does not add value to the customer or anything the customer is not willing to pay
for.
Seven wasteful activities
1. Overproduction
2. Delay
3. Transporting
4. Over-processing
5. Inventory
6. Motion
7. Making defective parts
Five Lean Principles
1. Specify value from the standpoint of the customer.
2. Identify the value stream.
3. Create continuous flow.
4. Pull.
5. Perfection or continuous improvement.
1|CMA US – Level I Cost Management
, Machine Downtime and Batches
Having minimal machine downtime when changing from manufacturing one item to manufacturing a different
item is an important item is an important component of lean manufacturing.
Often large batches are assumed to be more economical than small bathes due to excessively long or difficult
changeover procedures.
But production of large bathes result in large on-hand inventories.
Manufacturing Cells
Under lean manufacturing, the plant layout is re-arranged by manufacturing cells or work cells. Each work cell
produces a specific product or product type.
Kaizen - Continuous Improvement
Kaizen is part of lean manufacturing philosophy. A Japanese word that means “improvement.”
Error and Mistake Proofing
Creating improvements on many different levels to make the product correctly the first time.
Beyond Manufacturing
The concept of lean resource management can be and is being extended beyond manufacturing to every
enterprise.
Lean principles create greater value for the customer while using fewer resources, that is increasing value
while reducing waste.
Health Care
Lean thinking can be used to
• Reduce waiting time for patients,
• Reduce waste in hospitals, inventories, and
• Lead to better quality care.
Warehousing
Individual’s items can be organized by size and by frequency of demand.
Appropriately-sized containers can be used to hold the items and pick them.
Ordering can be done daily instead of weekly or monthly and include just what was shipped that day.
2|CMA US – Level I Cost Management
