Why Companies adopted Lean Thinking and JIT model?

Expansion of global market brought about several changes among companies as they tried to
improve quality while holding production costs low. Even today, the companies are making it to
global markets with enhanced efficiency and minimizing costs to ensure they compete fair with
others. Therefore, that brought about the adoption of Just In Time and Lean Thinking. First, the
Just In time was introduced by Toyota when they realized that they were having a lot of products
tied up in inventories which increased the costs of production and the lead time ( Pinto et al.,
2018). After the successful use of the strategy, other companies adopted it to improve their global
competitiveness. Later, lean thinking was also developed and widely used.
The main reasons for adopting Just In time by companies is to help they reduce holding too
many inventories. Before the introduction of the JIT, companies used to kept large amounts of
stock just in case customers needed products. Under the use of the concept, it allows the firms to
order raw material in small quantities basing on short term production cycles ( Pinto et al., 2018).
That means that parts arrive just in time that they are needed and eliminate inventory costs.
Companies use this concept to reduce the lead time as well as the production cost. Through the
reduction of costs and lead time, it improves the efficiency within the supply chain.
Further lean thinking is different from JIT, but it uses this concept to reexamine ways to create
value for customers. In the global market place, the quality of products matters a lot. Through
Lean thinking, companies think the real value that the product gives to customers ( Pinto et al.,
2018). Then they focus on each activity in the supply chain and how the efficiency can create
value or add value to the product. The main reason for using the lean concept is to ensure that
customer get value for their money after buying the product.
Discuss significant waste types, and companies have to keep in mind during production
The ability of the firm to minimize supply chain wastes is vital in improving efficiency and also
reducing costs. During the production, the process firm needs to put in mind several wastes that
occur and ensure that they can minimize them. Focusing on the agility supply chain, it aims at
the flexibility of business practices. The whole system of distribution is flexible such that it can
quickly respond to market demands, change of buyers' preferences and ensuring that productivity
is high. The agility supply chain since it ensures that they focus on the current factors affecting
consumption and are likely to have high profits. But there are several wastes related to this kind
of supply management which include overproduction, inventory, defects, waiting and transport.
Through agility, there may be overproduction, particularly where goods need to be produced
before order placement. Production leads to waste of resources such as costs incurred and
materials used, which is wasteful (Elsharydah et al., 2020). Further, there is a waste of time due to
delays in shifting from one production activity to another. Also, there are unnecessary
transportations that happen as the firm tries to supply the products such as out route stops and
excess backhaul. Due to the speculation of the demand, through the agility supply chain, it may
lead to inventory mismanagement where goods are sent to the wrong distribution centre
(Elsharydah et al., 2020). There is a waste of space since the new products need to be stored while
the previous products are still in the store. The space waste also arises through the poor package,
storage and stack product and can cause defects as they try to conduct quick deliveries in limited
production time.
Assess the reasons for using lean thinking (suitable examples), what are the benefits from
Suppliers to end-users?
As mentioned earlier, lean thinking is highly used, particularly for manufacturers who have a
global presence. This is to ensure they produce quality, and also it helps in gaining competitive
advantage in the market. Therefore, lean thinking creates value in the manufacturing process.
First, lean thinking is used to streamline the company's processes front the front office up to
distribution (Elsharydah et al., 2020). That helps in reducing costs and the speed to make
customers aware. For Instance, the firm makes an order for raw materials, and the process is
long, leading to delays. That entirely affect the whole supply chain. Therefore, lean management
identifies all the weaknesses in the process and streamline by ensuring that they have a reliable
and fast way of acquiring materials.
Further companies use lean thinking to eliminate the wastes described above ( Elsharydah et al.,
2020). For instance, a firm incurring warehouse and other inventory that have not been sold leads
to waste. There are increased costs that need to be cut down through matching demand with
supply or the use of Just In Time. This reduction of waste in the production and distribution
process helping manufacturers to work at full potential. Lean thinking is used to build team
commitment that can implement change. A company having a skilled and competent marketing
team who can be able to identify customer needs is essential in determining how to achieve
value. Lastly, the work of lean thinking is a continuous improvement. Lean thinking is a constant
process to ensure that customer demands are met.
Lean thinking has several benefits in the entire supply chain. Since lean management of a supply
chain help the firm to operate under full potential, it increases the value of suppliers who are
required to supply the raw materials. Besides, the firm can improve customer relations, minimize
costs, and avoid holding excess inventory and increase quality ( Caldera et al., 2017). With the
combination of these benefits, a company can be able to improve its competitiveness in the
global marketplace. More importantly, the employees can communicate with the management,
which makes them be at the centre of decision making. Lastly, all goods are tailored to meet the
needs of the customers. The whole work of lean thinking is meant to provide the firm with value
and meet their needs. Customer satisfaction is the overall goals of creating value and improving
efficiency.
Due to COVID 19 emergency, do you think agile supply chain is the right concept in this
kind of situation? Give reason with example.
Covid 19 as a world pandemic have exposed some companies to risk. Though not all firms may
be affected by this, the global as well as local markets for the manufacturing industry at a higher
risk. Therefore, the use of agile supply chain is right for this kind of situation. Agility in the
supply chain is not a choice but a necessity. The concept has four frameworks which include
virtual integration, process alignment, market sensitivity and network of efforts (Christopher et al.,
2016). Virtual integration requires that information is distributed to all department about real
demand. Business can no longer assume that things are normal since consumer behaviour is
changing due to pandemic. There is a need to determine the actual order to avoid overproduction.
Process alignment, which ensures the management of inventory by providing all the parties in
the supply chain, put a collaborative effort in achieving the desired outcome. Lastly, market
sensitivity is determined from the market mainly through daily points of sales.
So, the four frameworks in Agile supply chain is the best to use for the case of Covid 19
situation. Many problems are being experienced in supply chain management networks due to
the pandemic. For instance, there is restricted movement of people and goods across several
countries. That means some companies can no longer access their international markets.
Therefore, there is a need to determine such challenges within the supply chain to ensure no
overproduction. More importantly, the concept can help in deciding demand fluctuations during
this period, and suppliers can self-service their functions.
References
Caldera, H. T. S., Desha, C., & Dawes, L. (2017). Exploring the role of lean thinking in sustainable
business practice: A systematic literature review. Journal of Cleaner Production, 167, 1546-1565.
Christopher, M., Harrison, A., & van Hoek, R. (2016). Creating the agile supply chain: issues and
challenges. In Developments in logistics and supply chain management (pp. 61-68). Palgrave Macmillan,
London.
Elsharydah, A., Michaelis, M. A., & Rajan, N. (2020). Lean Management: Inventory, Waste Management.
In Manual of Practice Management for Ambulatory Surgery Centers (pp. 113-118). Springer, Cham.
Pinto, J. L. Q., Matias, J. C. O., Pimentel, C., Azevedo, S. G., & Govindan, K. (2018). Just in Time. In  Just
in Time Factory (pp. 25-38). Springer, Cham.
Pinto, J. L. Q., Matias, J. C. O., Pimentel, C., Azevedo, S. G., & Govindan, K. (2018). Introduction to Lean
and Just-in-Time Manufacturing. In Just in Time Factory (pp. 1-4). Springer, Cham.