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1、 Lean Supply Strategies: Applying 5S Tools to Supply Chain Management Kimball E. Bullington, Ph.D., P.E., CSSBB Associate Professor of Supply Chain Management Middle Tennessee State University 615/904-8420; kimballb@m
2、tsu.edu 90th Annual International Supply Management Conference, May 2005 Abstract. Supply strategies in a lean environment should support the operations strategy. It is appropriate then to use lean concepts and lean ter
3、minology in the creation of supply strategy for lean operations. This paper examines supply strategy development in a lean production environment by utilizing 5S, a key lean concept. The concepts of lean supply and 5S
4、will be introduced followed by a discussion of how the 5S methodology may be used to develop and implement a supply strategy. Lean Supply. The term “l(fā)ean supply” implies that the supply chain is appropriate for lean
5、production. Lean production is a concept of waste elimination in processes, which has enjoyed popularity in manufacturing companies. The basic tenets of lean production as outlined by Womack and Jones (1996) include th
6、e following. ? Specify value ? Identify the value stream ? Organize the value stream to promote flow ? Communicate demand through pull ? Strive for perfection It is appropriate for the supply management function i
7、n a lean environment to integrate lean concepts and terminology into the development of supply strategy. One of the foundational lean concepts that serves as a basis for all of the tenets given above is 5S. What is 5S
8、? The 5S’s are lean concepts derived from the Japanese words: seiri (sort), seiton (set in order), seiso (shine or purity), seiketsu (standardize), and shitsuke (sustain) (Hirano, 1996). Companies adopting the lean pro
9、duction philosophy often implement the 5S process to bring order to the workplace and thereby support lean production. Why Use the 5S Concept as a Model for Lean Supply Strategy? 5S is a proven model for organizing an
10、d maintaining a lean production environment. The relationship between purchasing or supply and the general management of operations may be improved through the use of a common vocabulary built around concepts familiar
11、to the organizational head and the heads of other departments. For this reason, 5S is an appealing model for the development of supply strategy in a lean production environment. A model for using 5S to develop supply
12、strategy follows. Sort: Remove All But the Necessary Materials, Equipment and Supplies. Typically, the first step in a producer’s implementation of 5S will be a tour of the target area marking with red Table 1: Supplier
13、 Segmentation Value Matrix (Risk / Spend) Low Spend High Spend High Risk Risk Value Partnership Value Low Risk Transaction Value Price Value The key suppliers for lean production companies tend to be in the high risk –
14、high value potential or “partnership” category of the supplier segmentation matrix. Partnership suppliers represent a higher risk to the company in terms of design complexity, startup communication, custom tooling, ov
15、erall higher demand for buyer input, and schedule pressures (e.g., just-in- time support). Risk can also be thought of as the level of opportunity for adverse effects on value (e.g., deterioration in delivery, lead time
16、, price, or quality). The other supplier segments have different needs. The low risk – high value potential segment may include commodity items where price dominates other considerations. If the risk may be reduced fo
17、r high risk – high value potential items, significant savings may be realized by some form of competitive bidding. The high risk – low value potential suppliers affect value by the nature of the factors that make them
18、 high risk. Risk factors could include demanding delivery requirements, advanced technology, etc. Temporary situations, such as cash flow problems or capacity limitations, could be the major risk factors. Segmentation
19、helps prevent the supply manager from overlooking these potential problem suppliers. Finally, the low risk – low value potential suppliers typically have relatively high transaction costs as compared with the value of
20、 the product. The opportunity for adding value comes by consolidating these purchases and reducing transaction costs. Several different segmentations may be conducted in order to properly categorize the suppliers. The
21、 segmentation of suppliers may also include an evaluation of quality (e.g., certified, conditional, approved status). Performance measures may be helpful in segmenting the remaining supply base. Hau Lee (2002) suggests
22、 the use of an uncertainty framework as a means of segmenting the supply base for demand and supply uncertainty. The location aspect of Set in Order may be addressed by identifying the location value of each supplier
23、on a large map. This may identify further opportunities for consolidation by grouping suppliers locally or in targeted areas or along trucking routes so more than one supplier may be visited on a single trip. Other con
24、siderations for Shine: Keep Everything Swept and Clean. Cleaning implies system maintenance and inspection. As a work area is cleaned, problems such as oil leaks or other maintenance issues, become more apparent be
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