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Phạm Hoàng Phúc 20213165

Vũ Nguyễn Thành Vinh 20213191

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Nguyễn Khánh Huyền 20213143

Đinh Đức Mạnh 20213156

Table of content

Chapter 17 Discipline: Chapter 18: Discipline: Chapter 19: Discipline:

collaboration Systems optimization Waste Elimination
LEAN CANVAS

Chapter 17:
Discipline
collaboration The three strategic focus areas for logistics
Collaboration are:
+ teamwork

+ strategic sourcing

+ Project Management
1. Teamwork Back to Lean Canvas Overview

Discipline→Collaboration→Teamwork

Teamwork is a powerful force that involves individuals with unique talents

working towards a common goal. It can elevate a company above its
competition and is often replaced by turf building and power brokering.
Building teams is not about personal preferences or departmental roles but
about a shared goal and the skills and talents of the team members.
1.1 Processes and knowing the customer

Departmental dysfunction in organizations often arises from friction between

sales and operations and back-office processes, including sales, marketing,
human resources, and finance.
Core processes, which generate revenue directly, are managed by sales and
front-line operations, while enabling processes, such as finance, human
resources, and procurement, support these processes.
A healthy balance between customer requirements and internal necessities
is necessary for effective service.
1.2 Building the teams:

This require awareness of the following two key aspects of teamwork:

l. Effective teams have members with complementary skills and opposing
views.
2. Teams go through natural phases of development before becoming
effective.
1.3 Complementary skills and opposing views

A successful team requires a diverse group of members with diverse skills and talents. A high-
functioning team should have at least one member who can fulfill roles such as:
1. Content specialise This is the team member who can help with science, mathematics, or
specialized topic content.
2. Driver: This is the person who follows through on the steps needed for
the completion of the project, who breaks down barriers, and strives for
accountability from all team members.
3. Visionary: This is the person who thinks and dreams possibilities and
ideas and is crucial in the brainstorming stage of teamwork where ideas
and alternatives are necessary to generate a go-forward plan for the team,
4. Analyst: This is the person who can get the detailed work done, the
grinder who can develop a work plan and manage the fine points.
1.3 Complementary skills and opposing views

A successful team requires a diverse group of members with diverse skills and talents. A high-
functioning team should have at least one member who can fulfill roles such as:
1. Content specialise This is the team member who can help with science, mathematics, or
specialized topic content.
2. Driver: This is the person who follows through on the steps needed for
the completion of the project, who breaks down barriers, and strives for
accountability from all team members.
3. Visionary: This is the person who thinks and dreams possibilities and
ideas and is crucial in the brainstorming stage of teamwork where ideas
and alternatives are necessary to generate a go-forward plan for the team,
4. Analyst: This is the person who can get the detailed work done, the
grinder who can develop a work plan and manage the fine points.
1.4 Natural Stages of team
Development

Effective teamwork is essential

for collaboration, and
organizations should ensure
employee training on team
principles and discipline in
managing teams and projects.

Back to Lean Canvas Overview

2.Strategic sourcing Back to Lean Canvas Overview

Discipline→Collaboration→Strategic Sourcing

Lean theory emphasizes supplier partnerships based on long-term

commitments to quality and cost reduction. Six Sigma theories minimize
supplier numbers to reduce complexity and costs. Strategic sourcing
strategies significantly impact logistics functions, and decisions regarding
suppliers and sourcing should be prioritized.
The types or sourcing mat logislicians are interested in are:
+ Raw material suppliers
+ Logistics providers
2.1 Raw material Suppliers

The logistics manager plays a crucial role in the selection process of

suppliers for manufacturing, particularly when organizations are moving
their domestic supply base to offshore locations. Key elements include:
1. supplier location,
2. supplier order-to-ship lead time and reliability,
3. supplier to plant transportation lead time and reliability,
4. supplier quality of service compliance,
5. supplier quality of product compliance.
2.2 Standardization, Complexity, and DUal Sourcing

Standardization and complexity are crucial in managing supply bases. The

law of complexity suggests that more suppliers increase complexity and
cost. To minimize this, organizations should challenge their best suppliers
to take on new business.
Dual sourcing strategies, which involve having at least two different
suppliers for the same part or raw material, can provide cost
competitiveness and risk aversion. However, this strategy also has
administrative costs and may reduce economies of scale. Typically used for
high-volume, high-value, and complex parts.
2.3 Beware the Term “ Partnership”

To maintain professional relationships and provide consistent quality,

logistics managers must collaborate with logistics providers.
2.4 Collaboration and Logistics Services:

Collaboration with service providers is crucial for achieving Lean goals and
executing effective logistics strategies. The logistics business environment
is changing, and companies must adapt to these changes.

Lean Six Sigma Logistics recognizes these environmental challenges and

works closely with carriers to address driver retention efforts.
2.5 Third party logistics
Outsourcing to a third-party logistics
company (3PL) is a strategic sourcing
decision, as it has direct
communications with suppliers and
customers, acting as an agent for the
logistics organization. However, many
third-party logistics relationships fail
due to poor planning and lack of
effective strategies. The main reasons
for these relationships include :
1.inaccurate information,
2.underpricing, overpromising,
3.leaving all logistics functions to
the 3PL,
4. lack of resources,
5.failure to set expectations,
6. not listening to customer voices,
7. lack of continuous improvement
infrastructure, and
8. a focus on cost-reduction goals.
2.6 Developing a Lean
Third-Party Logistics
Relationship

When choosing a 3PL to support a Lean

initiative, the following should be taken
into consideration:

1. What is the 3PL's knowledge level of

Lean and Six Sigma?

2. Does the 3PL have a formal

continuous improvement
infrastructure?

3. What 3PL employees will work on

your account, and what are their skills
and talents?
3.Project Management Back to Lean Canvas Overview

Discipline→Collaboration→Project management

Effective project management skills

are crucial for successful
completion of projects, as not all
team members have the same
commitment level. Lean Six Sigma
programs emphasize team building,
project management, and
leadership, recognizing that these
are the "hard stuff."
3.1 Project Management: The Basics

To accomplish the successful completion of projects, we need the following

basic project management tcxyls:
1. Meeting agenda (compass)
2. Storyboard (also known as A3 or tabloid)
3. Gantt chart with clear tollgate meetings
4. Failure Mode and Effects Analysis
3.2 Meeting Agenda(Compass)

Meetings often lack structured agendas, leading to dysfunction and

ineffectiveness. A well-structured agenda serves as a compass, guiding the
meeting and capturing action items. It should prescribe the "who, when,
where, why, and how" of events and be questioned seriously if no action
items result.
3.3 Storyboard

The A3 storyboard,
a Lean tool, is a
paper-sized plan
that outlines a
project's entire
scope on one piece
of paper.The
storyboard is
regularly updated
and serves as a
compass throughout
the project's cycle.
3.4 Gantt Chart

The Gantt chart is a crucial tool

in project management,
ensuring clear communication,
delegation of responsibility,
accountability, and driving the
project forward. It is an XY
matrix detailing the
chronologically ordered tasks
of a project, with clear starting
and ending dates.
3.5 Failure Mode and Effects Analysis

The Failure Mode and Effects Analysis (FMEA) is an implementation

tool that helps project managers brainstorm potential failures in
new initiatives. It identifies all possible failure modes and their
likelihood and severity.
LEAN CANVAS

Chapter 18:
Discipline
Systems TOTAL COST
Horizontal and Vertical Integration

Optimization Some others aspect of difficulty, incentive program

and teamwork.
1 TOTAL COST

Least total cost is what results when we optimize the processes relative
to the overall system inside the firm
At its roots, inventory strategy is about balancing the cost of carrying
inventory relative to customer service targets. In itself, this is a total cost
concept. In other words, we need to determine how to spend carrying
inventory to meet a targeted customer service performance level.
2: Explixit and Implicit Costs

Explicit costs are defined as historical costs or actual costs that are
tangible and visible on a firm’s financial statements. With respect to
logistics, these costs can be seen in items such as storage, transportation,
and material handling costs including personnel, warehouse, and explicit
freight costs.
Implicit costs are those costs that do not involve actual payment by a
company, but do represent lost opportunity that results from allocating
money in one area, thus abandoning other potential investments and
projects.
2: Explixit and Implicit
Costs

To manage total cost will require

excellent coordination and
horizontal integration inside the
firm.
For successful completion,
someone must take responsibility
for the total logistics system.
This person will be a vice president
of logistics or supply chain
management or someone higher in
the organization and, in fact, may
be the CEO in many companies
3 Horizontal Integration

Driving horizontal integration will

improve logistics operations for a
firm dramatically. This is based on
the premise that in logistics,
volume drives opportunity; the
more volume, the more
opportunity
4: Perceived Difficulty and System Constrains

Many organizations face challenges in cooperating and collaborating

for horizontal integration, primarily due to a lack of commitment and
practical constraints such as system limitations and the perception
that they are insurmountable.
These constraints are often used as excuses to dismiss the idea of
horizontal integration, despite its benefits for the survival and
efficiency of the corporation.
5: Compensation and Incentive Programs

Poorly designed incentive programs can be a major cause of logistics

operations failure. In many cases, these programs lack incentives for
people to make changes based on horizontal integration, and
individuals may be financially motivated to act against the best
interests of the organization.
6: Teamwork, Imperfection and Defensive behavior

Teamwork has become a popular concept in the last decade, with many
companies recognizing its benefits. However, true teamwork is often
hard to find in mainstream industry. The main challenge lies in human
imperfection and defensive behavior.
No one is perfect, including CEOs and managers, so there are always
areas that need improvement. Colleagues from different areas of the
organization may recognize these weaknesses, but communicating
them in a team environment can be difficult due to defensive behaviors.
Defensive behaviors exist because we are not willing to accept feedback
from colleagues who may have their own issues.
7 Vertical integration

Lean theory emphasizes the importance of supplier and customer

relationships and aims to synchronize production with demand. The
heartbeat of demand is known as takt time, which sets the rhythm for
building products.
The goal is to only produce what the market demands, thereby
avoiding the costs associated with building and carrying excess
inventory. Overproduction is considered a waste that leads to other
inefficiencies.
8 Vertical integration and
Information

This relationship is reciprocal in nature:

the less the information is shared, the
more inventories are created in the
system. The information that needs to
flow includes forecasting, demand
planning information, and actual sales.
Starting with the customer, we could
work backward to calculate the
requirements for the supply chain.
Indeed, this is the heart of Lean and pull
replenishment theories. This is the Lean
model: Build only what is sold and
replenish only what is consumed
9: Variability, Leveled flow, and Vertical Integration

The passage discusses the interconnectedness of Six Sigma and

Lean methodologies in operations management, particularly in the
context of vertical integration and supply chain management.
It emphasizes the importance of understanding and managing
variation (Six Sigma) and achieving flow and leveling of processes
(Lean) to address operational challenges.
The integration of supply chain partners, feedback systems, data
gathering and sharing, and logistics strategy development are
highlighted as key elements in achieving true supply chain
management.
LEAN CANVAS

Chap 19:
Discipline:
Waste Quality at the source
Continuous Improvement (Kaizen in Lean)

elimination Execution
1. Quality at the source

Error is different from a defect

- Errors happen because people and machines are involved (errors do not have to turn into a
customer defect).
- This is the foundation of the quality at the source concept.
- Error proofing (or mistake proofing) allows us to catch errors before they turn into defects.
Quality is about manufacturing and the quality of products built.
- Most manufacturing companies use inspections and rework to fix quality issues before they reach
the customer. What we want to emphasize is that quality is more than shipping a defect-free
product.
Quality is about having superior products, superior services, and superior processes.
- Quality begins at the source.
- Before we design a product or service, we first need to define what “quality” means to that
product or service, and then we need to ensure that quality is built in from the beginning.
- In the event of quality issues, we must make certain that poor quality is not passed on to the next
step in the process. This is vital because quality issues compound in severity as they travel through
an organization on their way to the customer.
1. Quality at the source

- The challenge is to focus on quality and to integrate quality into all procedures from the very
beginning. We need to do the following:
1. Understand that quality needs to begin at the source.
2. Look for processes that need quality improvement at the source.
3. Define what “quality” means and build it in at the beginning of any process.
The Benefits of Quality at the Source

Quality must be built into the product by giving processes and

employees the means to correct problems as they occur. Mistake-
proofing designs and processes to prevent defects from occurring
in the first place need to be implemented.
If we can accomplish this, we will:
1. Reduce rework
2. Reduce scrap
3. Reduce risk
4. Reduce variation
5. Reduce complexity
Logistics and Quality at the source

Initiating a Quality at the Source (QATS) program can be daunting, and the
first step is to develop an implementation map, drawing inspiration from the
"perfect order" concept in logistics management.
The perfect order is defined by the five rights: the right part, in the right
quantity, at the right time, with the right quality, and at the right cost.
To ensure quality at the source, or mistake-proofing, methods must be in
place.
In a Lean manufacturing environment, achieving a perfect supplier order
involves ensuring that suppliers deliver the correct parts, in the right
quantity and condition, at the right time, to the right place, and at the right
cost.
CONTINUOUS IMPROVEMENT (Kaizen in Lean)

Continuous improvement is about improving organizational performance.

It is surprising that many companies do not have a formal process for
improvement. In the absence of a formal process, continuous improvement
is nonexistent.
The first thing to understand about continuous improvement is that it is not
an event. The term “kaizen event” has damaged the principles and values of
true kaizen.
CONTINUOUS IMPROVEMENT (Kaizen in Lean)

The paradox of true continuous improvement is that, at times, the improvements

can be so small that they appear inconsequential. A tiny improvement may not be
quantifiable; it may not have a return on investment or an operational dynamic
that is obvious or even visible. However, these small incremental improvements
will, over time, create processes and operations that are highly efficient and
effective.
Over time, incremental improvements create best practices, and continuous
improvement eliminates the challenges that come with change management
around larger re-engineering initiatives.
Organizations neglecting continuous improvement may resort to destructive
practices like reorganization, layoffs, and reactionary management. Executives,
lacking a holistic understanding of their business, often interfere unnecessarily
with the natural system.
 The Challenges of Continuous Improvement
Implementation

Leaders believe in continuous improvement, but do very little to achieve it.

Leadership theory would suggest this happens for one of two reasons.
The first is that we are capable (we have the skills and knowledge) of
continuous improvement, but consciously choose not to improve.
The second possible reason is that we truly want to improve, but do not
possess the skills and knowledge to develop, implement, and sustain an
effective continuous improvement strategy.
 The Challenges of Continuous Improvement
Implementation
Although the former may be true in environments with poor labor
relationships and impoverished employees, the latter is by far the reason
why continuous improvement does not flourish inside our organizations. We
want to improve. We do not know how.
Consequently, we need to uncover and address the key drivers that prevent
us from reaching our organizational and personal potential.
Among the many reasons for the lack of continuous improvement are the
following problems:
1. Lack of a problem-solving and continuous improvement model.
2. Lack of time and trained resources to commit to continuous improvement.
3. Lack of discipline and corporate infrastructure to sustain improvements.
Bridging the Gap

This approach is to look at a situation where we intuitively know

improvement is required and answer the following questions:
1. What is the current condition of this process?
2. What is the desired condition of this process?
3. What is the actual-desired gap?
4. What can be done to close the gap?
5. How can we sustain the improvement over time?
The ultimate goal is to be able to communicate where we are today, where
we want to go, and how we will get there. This takes time and resources.
Getting People Trained

Training people for continuous improvement can be a daunting task. In what should we
train them? What skills do they need? Do we need engineers and statisticians on staff?
Although these are good questions, the reality is that the skills required for successful
continuous improvement are often overprescribed
So, what is required? The training needed to sustain a continuous improvement program
includes the development of people skills along with project management, teamwork,
change management, and leadership.
Sustaining improvement initiatives is the most difficult part of any continuous
improvement program. The unfortunate truth is that people and processes are inclined
to a natural resiliency that physically draws processes back to the old ways.
Consequently, all employees, from the CEO down, need to be educated in leadership
and change management issues. Significant improvement will happen when all the
stakeholders recognize, understand, and believe that continuous improvement has an
important place in bringing success to the organization.
EXECUTION

Sustained improvement is accomplished only when we execute successfully and then

sustain the improvements over the long term. This is not easy; the natural force of
resiliency makes it difficult to change and maintain the new ways of doing work. The
logistics profession faces these challenges.
At this time, our vision and dreams of world-class logistics and supply chain
management have outpaced the operational realities inside most organizations. Let’s
call it an ingenuity gap, where our ability to execute is lagging behind our ideas,
innovations, and recognition of what needs to be.
Acting as Lean Six Sigma Logistics Leaders

As leaders, we need to focus and then act on three key areas. That is, we
need to ask the tough questions, seek the facts, develop strategies, and
pursue the three principles of:
+ Logistics Capability: Is our logistics system capable?
+ Logistics Flow: Have we designed a logistics system that flows?
+ Logistics Discipline: Are the logistics processes grounded in
disciplined principles?
Acting as Lean Six Sigma Logistics Leaders

1. Capability means that the logistics leader is focused on ensuring that the
logistics system is predictable, stable, and visible.
2. Flow relates to the logistics professional’s ability to describe and articulate how
the system performs relative to asset flow, information flow, and cash flow.
3. Discipline is crucial to sustaining stability and flow, with major disciplines
including collaboration, systems optimization, and a steadfast commitment to
waste elimination.
When logistics and supply chain executives focus on capability, flow, and
discipline, it will become clear that supply chain activities are indeed the corporate
actions that bridge the organization successfully to the customer, rising above the
wastes in which our competitors are quagmired.