Name: Muhammad Ahmad Minhas

Enroll# 01-111182-186

Question: Explain why lean production is so important to successful supply chain management.
Briefly explain the primary pros and cons of lean supply chain. Support your argument?

Although lean thinking is typically applied to production, lean techniques and focus could be
applied anywhere where there are processes to improve, and that includes the entire supply
chain. A lean supply chain is one that produces just what and how much is required when it is
required, and where it is required. The underlying theme in lean is producing more or doing more
with fewer resources while also giving the end customer exactly what they want. This basically
means focusing on each product and its value stream. In order to do this, companies ask and
understand which activities will truly create value and which ones would be wasteful. The most
crucial thing is that lean is not just about eliminating waste, it is more about eliminating waste as
well as enhancing value. Lean is basically a cooperative process for survival and success. Supply
chains that want to grow and improve have to adopt lean. Lean concepts need an attitude of
continuous improvement along with a bias for action. The concepts of lean can be applied to all
elements of the supply chain, including the support departments like product development,
quality, marketing, finance, human resources, purchasing, and distribution. One needs to bring
all these areas out of their traditional silos and make them work together in order to reduce waste
and create flow. Duplication along with a lack of appropriate and timely communication is
rampant in traditional companies. A lean supply chain can be proactive and plan for the
unexpected by positioning all the resources for effectiveness. Any downturn in demand is
addressed without any layoffs or significant losses of productivity. Like in lean production,
where both supervisors and factory workers embrace changes that result in making their lives
less complicated and more successful, in the area of supply chain management, people need to
understand how lean can benefit them. The answer to that is simple: What would benefit the
organization as a whole would also benefit the supply chain. Because the Internet gives us huge
opportunities to share information and conduct transactions across the supply chain, the
companies need to have a sense of urgency about adopting lean concepts. All supply chain
partners need to be on the same playing field, and the lean concept would let everyone reach new
levels of efficiency as well as effectiveness. Therefore, Supply chain leaders should not delay in
implementing lean production concepts in the supply chain.

Pros of Lean Supply Chain:

 Lower inventory costs: Lean supply chain management helps in reducing quantities of
raw materials, work in progress as well as finished stock. The cost of inventory could
quickly add up thus leading to little profit or overblown expenses. Using Lean supply
chain strategies to the inventory the company holds, will enable the company to see the
hidden costs of holding more inventory than is needed.
 Elimination of Waste: By creating a Lean supply chain, the company will undertake
value stream mapping that would uncover all the waste the company can remove from it's
the supply chain. The removal of this waste will allow the company to focus on what
matters most, i.e the customer.
  Increase in productivity and flexibility: Eliminating waste inevitably leads to increased
productivity and flexibility. Giving the business flexibility, it needs to react to market
demands, which is the key to staying ahead of your competition. It also enables the
workforce to be more productive, engaged as well as motivated, thus enabling the
company to deliver on time and in full to its customers.
 Improvement in Quality: Lean supply chain does not only give better productivity and
flexibility, but it also allows the company to decrease it's errors by being able to focus
more on quality improvements for the end customers. Quality improvements in the
manufacturing processes would mean fewer errors in the upstream processes thus causing
lesser delays.
 Employee Morale: Another benefit of Lean applied to the supply chain is an increase in
employee morale. By empowering the workers with more responsibility and a
relationship that is based on mutual trust, the company would see an improved culture.
One that nurtures and fosters a workplace that strives for continuous improvement.

Cons of Lean Supply Chain:

 The issue of Inventory: Traditionally, in a lean, a low quantity of stock is kept on

hand to decrease carrying costs. This would cause the company to depend on its
suppliers and hope that they are able to make adjustments to deliver the goods quickly
and efficiently. If there is any kind of disruption of inventory processes, it could
derail the company.
 Difficulty in Changing Over:  Employees might not always be welcoming to lean
supply chain practices. The implementation would take a lot of patience as well as a
complete overhaul of work processes. This might not be something that longer-
tenured workers would be comfortable with.
 Higher Implementation Cost: Usually, when lean supply chain management is
implemented in a company that has never used it before, it is highly likely that all the
systems and production processes would have to end in their current state. This could
bring high costs for the company that is not prepared for the increase in expenses of
bringing new equipment and training programs.
 Temptation for Over-Structuring: Everything might not require an overhaul.
Therefore, the challenge for leaders is determining what should be incorporated into
lean management and what doesn't. Leaders might push the processes beyond what
they would be able to yield, therefore understanding the impact of incremental
changes is the key here.