1

Lean Logistics

Chapter Two
2
What is Lean Logistics?
▪ Lean logistics
▪ a way to recognize and
eliminate wasteful
activities from the
supply chain in order
to increase product
flow and speed and
maximize customer
value
 3 What is lean thinking?
▪ Lean Thinking is a business methodology that originated
in the Japanese automotive industry during the late 1980s.
▪ The core idea is to maximize customer value while
eliminating waste from all processes.
▪ Simply put, Lean means creating more value for your
customers with fewer resources.
▪ Lean has also made its way into logistics. The concept is
known as Lean Logistics and has become a popular term
in supply chain management
4
What is Value?
➢the importance, worth,
or usefulness of
something.
➢principles or standards
of behaviour;
➢one's judgement of
what is important in
life
5 Value Parameters…Diverse
6 What is Customer Value?
7 Customer Value in Mobile
8 Lean Thinking –Business Model
9 Lean thinking

[1]Specify value:
▪Customer value
is identified and
added along the
supply chain
network.
10 Lean thinking
[2] Map out value stream:
▪ Identifying all processes along the supply chain
network in order to eliminate the processes that do
not create value to the overall product.
▪ This mapping helps us understand how the value is
created into the product from the customer’s
perspective.
11 Lean thinking

[3] Create a product flow:

▪ Applying the factors
outlined in order to make
valuable processes to
occur in a smooth
system;
▪ minimizing interruptions,
inventories, downtime.
12 Lean thinking

[4] Establish customer

pull:
▪ Manufacturing only in
response from the
customer that more is
needed;
▪ implying that demand
information is made
available across the
supply chain.
13 Lean thinking in a nutshell
▪ Specify value:
▪ Customer value is identified and added along the supply chain network.
▪ Map out value stream:
▪ Identifying all processes along the supply chain network in order to eliminate the processes that do
not create value to the overall product.
▪ This mapping helps us understand how the value is created into the product from the customer’s
perspective.
▪ Create a product flow:
▪ Applying the factors outlined in order to make valuable processes to occur in a smooth system;
minimizing interruptions, inventories, downtime.
▪ Establish customer pull:
▪ Manufacturing only in response from the customer that more is needed;
▪ implying that demand information is made available across the supply chain.
14 Lean Logistics Process: Overview
 Seven Types of Waste
15
 Seven Types of Waste
16
 Seven Types of Waste
17
 Seven Types of Waste
18
19
20
 Goal of logistics management

▪ To satisfy customer expectations for

delivery of products (or services)
while minimizing the total cost
▪ Managers must support the
requirements for procurement,
manufacturing and customer
accommodation supply chain
operations
22
End of today’s lecture
 Goal of logistics management

▪ To satisfy customer expectations for

delivery of products (or services)
while minimizing the total cost
▪ Managers must support the
requirements for procurement,
manufacturing and customer
accommodation supply chain
operations
24 Contribution of Lean Logistics to Integrated SCM

▪ Logistics value proposition: Cost and service

▪ Logistical process
▪ Logistical synchronization
▪ In terms of performance cycle structure and dynamics
25 Logistical value proposition
▪ Logistical value proposition consists of a
commitment to key customer expectations and
requirements at a minimum cost
▪ The two elements of this value proposition are
Service and Cost Minimization
▪ Firms must make appropriate tradeoffs between
service and cost for each of their key customers
26 Logistical Value Proposition…
▪ Service Benefits
▪ importance of service to the customer
▪ Creation and basic logistical performance is measured in
terms of
▪ Service Availability,
▪ Service Operational Performance, and
▪ Service Reliability.
▪ Cost Minimization
▪ Logistics Value Generation
 Logistical Value Proposition
27
▪ Service benefits are created in 3 areas:
▪ Availability: involves having inventory to consistently meet customer material
or product requirements or service requirements
▪ Operational performance: deals with the time required to deliver a
customer’s order
▪ Key performance indicators:
▪ service consistency
▪ delivery speed
▪ flexibility
▪ frequency of malfunction and Recovery time from malfunction
▪ Service reliability: involves the quality attributes of logistics
▪ Key to quality is accurate measurement of availability and operational performance
over time
▪ should be realistic in terms of customer expectations and requirements
28 Logistical Value Proposition…
▪ Diversity in Logistical Service requirements
▪ Basic logistical service (the level of service a firm provides
for all established customers) may not fit all customers due
to diverse service requirements (i.e., diversity)
▪ There are customers that opt for unique or special
value-added services
▪ Managers must realize the diversity and work hard to
match the services with the unique requirements
and purchasing power of the customers
29 Logistical Value Proposition…

▪ Cost Minimization- Which

cost?
▪ Concept of total cost
▪ all expenditures necessary to
perform logistical requirements
▪ achieving the lowest possible
cost for each individual function
of logistics vs integrated total
cost
▪ understanding of logistical
cost components
30 Cost components…
 Cost minimization using the total cost logistics
31 model
Traditional Cost Logistics Model Total Cost Logistics Model
(Functional Approach) (Integrated Approach)
▪ Focused on achieving the lowest ▪ Focused on achieving the lowest total
possible cost for each individual cost across each function of logistics
function of logistics ▪ A cost decision in one function should
▪ For example, Transport the material consider impact to costs of all other
the cheapest way possible logistics functions
▪ Expected lowest cost based on ▪ For example, Transporting material the
decisions that were cheapest for cheapest way is slower than other
individual functions choices. This requires an increase in
storage cost to hold the material longer
▪ Ignored the impact of cost decisions
▪ Would it still be a lower cost to use the
across logistics functions
cheapest mode of transport?
32 Different perspectives on cost minimization
Traditional Cost Logistics Model Total Cost Logistics Model
Minimize order processing cost Minimize (order processing +
+ inventory + transportation +
Minimize inventory cost warehousing, materials handling
+ and packaging + facility) cost
Minimize transportation cost _________________________
+
Lowest total logistics cost
Minimize warehousing, materials handling
and packaging cost
+
Minimize facility cost
__________________________
Lowest logistics cost
 Example of evaluating alternatives to find lowest total
33 cost

▪ Compare two alternative shipping carriers to move a

shipment of electronic chips
▪ Value of shipment = Birr 25,000.00
▪ Faster shipping is generally more expensive than slower
shipping
▪ Carrier 1 costs Birr 250 to ship
▪ Carrier 2 costs Birr 20 more but delivers 1 day faster
▪ Product in transit is a form of inventory
▪ Holding costs for shipment is 40% of value per year
▪ No other cost differences across remaining logistics functions
Example of evaluating alternatives to find lowest
total cost
Traditional Cost Method
▪ Minimize transportation cost
▪ Compare 1st carrier at Birr 250 vs. 2nd carrier at Birr 270
▪ Decision is to use 1st Carrier to save Birr 20

Total Cost Method

▪ Minimize total of transportation and inventory cost
Annual
Daily cost of holding = holding cost x Product /365
product value

= (.40 x Birr 25,000)/ 365 = Birr 27.40

▪ Compare 1st carrier at Birr 250 + Birr 27.40 = Birr 277.40 vs. 2nd carrier at Birr 270
▪ Decision is to use 2nd Carrier since it is a lower total cost
 Integrative management requires simultaneous
35 achievement of 8 processes

Table 1.2 Eight Supply Chain Processes

 Logistics Value Generation
36

▪ the art of matching operating competency and commitment to key

customer requirements
▪ It is a unique commitment of a firm to an individual or selected
groups of its customers
▪ high customer response and capability while controlling operational
variance and minimizing inventory commitment
▪ cost/service trade-offs
▪ well-designed and well-operated logistical system through logistics
value generation can help achieve competitive advantage
 37 The Work/Functions of Logistics
▪ The main purpose of logistics is to move and position inventory to achieve
desired time, place, and possession benefits at the lowest total cost.
▪ Inventory has limited value until it is positioned at the right time and at the
right location to support ownership transfer or value-added creation
▪ the maximum strategic benefit of logistics is to integrate the full range of
functional work of logistics i.e.
▪ Order Processing
▪ Inventory
▪ Transportation
▪ Warehousing, Materials Handling, and Packaging
▪ Facility Network
 38 Major Functional Areas of Logistics
▪ Order Processing
▪ Inventory
▪ Transportation
▪ Warehousing, Materials
Handling, and Packaging
▪ Integrated through a
network of facilities
▪ E.g. warehouses and
distribution centers
39 Integrated Logistics Framework (ILF)
▪ The goal is to achieve customer satisfaction at the lowest Total
Cost
▪ ILF is necessary because the logistics decisions made in one
functional area will impact cost of all others
▪ Hence, integrating the logistical functions into a coherent
framework starting with the customer (Order processing) and
ending with the customer (Transportation and Delivery)
40 Five Interrelated Functions of Logistical Work

Figure: Integrated Logistics

41 Position of Logistics in the Strategic Planning Process

External Environment Internal Factors

Economic Strengths
Regulatory Weaknesses
Technological Opportunities
Competitive Threats

Corporate
Objectives &
Strategy
PEST SWOT

Competitive
Strategy

Functional strategic plans

marketing production

finance logistics
42 Logistics Functions
▪ Order Processing
▪ Order processing is the transmission of customer requirements to the supply chain
▪ Accurate information is needed to achieve superior logistical performance
▪ information technology will facilitate it
▪ Responsive supply chains require accurate and timely information about customer purchase
behavior
▪ Fast information flow enables improved work balancing
▪ two areas of logistical work driven by information
▪ Forecasting and
▪ Communication of customer requirements
▪ The more responsive the supply chain design,
▪ the greater the importance is of accurate and timely information regarding customer purchase behavior
▪ customer requirements are transmitted in the form of orders
▪ from initial order receipt, delivery, invoicing, and collection
 Logistics Functions of Logistics….
43
▪ Inventory
▪ Inventory requirements of a firm are directly linked to the facility network and the
desired level of customer service
▪ Inventory strategy seeks to achieve the desired customer service with the minimum
inventory commitment
▪ A sound inventory strategy is based on a combination of
▪ core customer segmentation,
▪ product profitability,
▪ 80/20 rule …..Pareto principle
▪ transportation integration,
▪ time-based performance,
▪ degree of commitment to deliver products rapidly to meet a customer's vs inventory requirement
▪ If products and materials can be delivered quickly……no inventory
▪ safety stock
▪ timely inventory replenishment
▪ supply chain costs incurred
▪ competitive performance.
44 Logistics Functions…
▪ Transportation
▪ is the operational area that geographically moves and positions inventory
▪ fundamental importance and visible cost
▪ traditionally received considerable managerial attention
▪ There are three basic ways to satisfy transportation requirements
▪ Operate a private fleet of equipment
▪ Contract with dedicated transport specialists
▪ Engage carriers that provide different transportation services as needed on a per
shipment basis
45 Logistics Functions…
▪ Transportation
▪ three factors are fundamental to transportation performance
▪ Cost
▪ Speed
▪ Consistency
46
Logistics Functions…
▪ Warehousing, Materials Handling, and Packaging
▪ facilitate the speed and overall ease of product flow throughout the logistical
system
▪ These work activities are integral parts of other logistical functions
▪ Inventory typically needs to be warehoused at selected times during the logistics process
▪ Transportation vehicles require materials handling for efficient loading and unloading
▪ Individual products are most efficiently handled when packaged together into shipping
cartons
▪ Effective integration of these functions facilitates the speed and overall ease of
product flow throughout the logistical system
47 Logistics Functions…
▪ Warehousing
▪ to store inventory
▪ Material Handling
▪ + many value- adding activities
▪ sorting,
▪ sequencing,
▪ order selection,
▪ transportation consolidation,
▪ product modification and assembly
48 Logistics Functions…
▪ materials handling
▪ Products must be received, moved, stored, sorted, and assembled to
meet customer order requirements
▪ The direct labor and capital invested in materials handling equipment
▪ mechanized and automated devices exist
49 Logistics Functions…
▪ Packaging
▪ master carton
▪ pallets, slip sheets, and various types of containers
▪ To facilitate handling efficiency
▪ serves to protect the product during the logistical process
▪ facilitates ease of handling by creating one large package
50 Facility Network
▪ The number, size and geographical relationship of facilities
used to perform logistical operations directly impacts customer
service capability and cost
▪ Types of facilities in the logistics network include:
▪ manufacturing plants,
▪ warehouses,
▪ cross-dock operations, and
▪ retail stores.
51 Facility Network…
▪ integrates information and transportation capabilities
▪ processing customer orders,
▪ warehousing inventory, and
▪ materials handling
 The scope of integrated logistical operations
52

Inventory Flow

Information
Flow

Logistical Integration
 Inventory flow

▪ Managers must be concerned with

the movement and storage of
inventory in three major forms
▪ Materials
▪ Work-in-process
▪ Finished products
▪ Logistical operations should add value
by moving inventory when and where
needed
▪ Materials and components gain value at
each step of their transformation into
finished inventory
54 Three areas of value-added logistic process
▪ Customer accommodation (Market Distribution) is the movement of
finished product to customers
▪ Manufacturing support concentrates on managing work-in-process
inventory as it flows between stages of manufacturing
▪ Procurement is concerned with purchasing and arranging inbound
movement of materials, parts, and/or finished inventory from
suppliers into manufacturing or assembly plants, warehouses or retail
stores
 Information flow
▪ Information flow identifies specific locations
within a logistical system that have
requirements
▪ Information also integrates the three operating
areas
▪ Information facilitates coordination of
planning and control of day-to-day operations
▪ Logistical information has two major
components
▪ Planning / coordination information
▪ Operational information needed to complete work
 Logistical integration requires achieving six objectives
56 simultaneously

Responsiveness
Variance reduction
Inventory reduction
Shipment consolidation
Quality
Life cycle support
57 Logistical Operations

▪ Market distribution
▪ Manufacturing support, and
▪ Procurement
 58 Logistical Operations …
▪ Market distribution [1]
▪ Movement of finished product to customers
▪ Timing and geographical placement of inventory become an
integral part of marketing distribution
▪ Link manufacturers, wholesalers, and retailers into supply chains to
provide product availability
▪ Helps to assist in revenue generation by providing strategically
desired customer service levels at the lowest total cost.
 59 Logistical Operations …
▪ Market distribution[1]…
▪ The activity requires performing the following:
▪ order receipt
▪ processing deployment of inventories,
▪ storage and handling, and
▪ outbound transportation within a supply chain
▪ It shares the responsibility to coordinate in the areas of marketing
planning including:
▪ pricing, promotional support, customer service levels, delivery standards,
handling return merchandise, and life cycle support.
 60 Logistical Operations …
▪ Manufacturing support[2]
▪ This involves planning, scheduling, and supporting
manufacturing operations such as:
▪ master schedule planning
▪ performing work-in-process storage,
▪ handling, transportation, and sortation, sequencing and time
phasing of components.
 61
Logistical Operations …
▪ Procurement[3]
▪ This activity involves obtaining or sourcing products and materials from outside
suppliers.
▪ Key activities include:
▪ resource planning,
▪ supply sourcing,
▪ negotiation,
▪ order placement,
▪ inbound transportation,
▪ receiving and inspection,
▪ storage and handling, and
▪ quality assurance.
 62 Logistical Operations …
▪ Procurement[3]
▪ It also shares the responsibility to coordinate with suppliers in the areas of
▪ scheduling,
▪ supply continuity,
▪ hedging, and
▪ speculation, as well as research leading to new sources or programs.
▪ The primary procurement objective is to support manufacturing or resale
organizations by providing timely purchasing at the lowest total cost.
 Logistical Operations …
63
▪ Information Flow[4]
▪ It integrates the three operating areas:
▪ Market
▪ Manufacturing
▪ Purchasing
▪ Within individual logistics areas, different movement requirements exist with
respect to
▪ size of order,
▪ availability of inventory, and
▪ urgency of movement.
▪ It has two major components:
▪ planning/coordination and
▪ operations
64 Logistical Operations…
▪ Information Flow[4]
▪ Planning/Coordination: This involves identifying the required operational
information to facilitate Supply Chain integration via
▪ Setting strategic objectives,
▪ Identifying capacity constraints,
▪ Specifying logistical requirements,
▪ Managing inventory deployment,
▪ Specifying manufacturing requirements,
▪ Providing procurement requirements, and
▪ Forecasting demand.
65 Logistical Operations…
▪ Information Flow
▪ Operations information involves:
▪ order processing,
▪ order assignment,
▪ distribution operations,
▪ inventory management,
▪ transportation and shipping, and
▪ procurement.
66 Logistical Operating Arrangements/Structure

▪ Why logistical operating arrangements

or structure?
▪ to balance performance, cost, and
flexibility
67 Typical logistical arrangements
68
Logistical operating arrangements…
▪ All logistical arrangements share two common characteristics
▪ They are designed to manage inventory
▪ The choice of logistical arrangement is limited by available technology
▪ There are three widely utilized structures:
▪ Echelon (traditional) is a linear flow from origin to destination through
buffers or warehouses/distribution centers
▪ Direct is designed to ship products directly to customer’s destination from
one or a limited number of centrally located inventories
▪ Flexible/Pragmatic/Hybrid/Combined- this is a combination of Echelon and
Direct, depending on the nature of the product, market, or customer
requirements
69 Logistical arrangements…
(A) Echelon Structured Logistics
• The flow of products typically proceeds through a common arrangement of firms
and facilities as it moves from origin to final destination.

• Echelon systems utilize warehouses to create inventory assortments and achieve

consolidation economies associated with large volume transportation shipments.
Inventories positioned in warehouses are available for rapid deployment to meet
customer requirements.

• Typical echelon systems utilize either break-bulk or consolidation warehouses.

• A break-bulk facility typically receives large-volume shipments from a variety of suppliers.
Inventory is sorted and stored in anticipation of future customer requirements. Food
distribution centers operated by major grocery chains and wholesalers are examples of break-
bulk warehouses. A consolidation warehouse operates in a reserve profile.
70 Echelon Structured Logistics System
 71 Logistical Arrangements…
(B) Direct Structured Logistics (Zero Level Distribution)
▪ A logistical systems designed to ship products direct to customer’s destination
from one or a limited number of centrally located inventories.
▪ Direct distribution typically uses the expedited services of premium transport
combined with information technology to rapidly process customer orders
and achieve delivery performance.
▪ Examples of direct shipments are plant-to-consumer truckload shipments,
direct store delivery, and various forms of direct-to-consumer fulfillment
required to support e-commerce shopping.
72
Direct Structured Logistics System
73 Combined Structured Logistics System
• More risky or costly items are stocked in a central location
for direct delivery to customer

• Fast-moving products are stored in forward warehouse

• Dependent on competitiveness of industry

• Satisfy customer expectations at a lowest attainable total

cost
74 Combined Echelon and Direct Delivery
75 Flexible Structure
• Flexible operations are preplanned contingency strategies to
prevent logistical failures
• For example, a warehouse is out of an item so a contingency policy assigns
the total order to another warehouse

• The structure appears the same as a combined arrangement, but

with the ability to change the logistical structure to suit the service
need

• Different approaches for different situations

• Very common with “factory-less” companies like Nike and Best Buy
76 Flexible Structure…
➢ The customer-specified delivery facility might be near a point of equal logistics
cost or equal delivery time from two different logistics facilities
➢ The first is when a customer is at an equal spot between two logistic facilities.
➢ It is important to have a system than utilizes system capacity by balancing
workloads while protecting customer service levels.

➢ The size of a customer’s order creates improved logistical efficiency if serviced

through an alternative channel arrangement
➢ The next is the size of a particular customers order. A particular order is too
large or too small, compared to most orders to go through traditional
transportation channels. i.e. instead of using FEDEX which you do for small
order, actually contract with a 3rd party to ship a truckload to the customer.
77 Flexible Structure…
• Decision to use a selective inventory stocking strategy
• The next flexible logistics structure is the ability to stock certain types of
inventory at particular locations. The master facility may stock everything,
but the satellite facilities may only stock the things that move the most.
They would have to direct ship from the master facility and local facility.
The company would have to decide if they want to split the shipments, or
consolidate customer orders for same time delivery.

• Agreements between firms to move selected shipments outside

the established echeloned or direct arrangements
• The last example is movement of shipments outside established echelon
or direct arrangements.
78 Flexible Echeloned and Direct Delivery
Supply Chain Synchronization
▪ Supply chain synchronization is
the operational integration of
multiple firms across a supply
chain
▪ Seeks to coordinate the flow of
materials, products and information
between supply chain partners to
reduce duplication of effort
▪ Seeks to reengineer internal
operations of individual firms to
leverage overall supply chain
capability
80 Supply Chain Synchronization
▪ Supply Chain Synchronization
▪ Multi-firm operational integration across a supply chain
▪ logistics is not only an integrated management process within an individual firm
▪ integrate operations across multiple firms that are jointly committed to the same value
proposition.
▪ seeks to coordinate the flow of materials, products, and information between supply
chain partners
▪ to reduce duplication and unwanted redundancy to an absolute minimum
▪ seeks to reengineer internal operations of individual firms
▪ to create leveraged overall supply chain capability
▪ synchronizing the timing of supply with demand requirements…1st
▪ speed of performing a specific service or product movement …2nd
81 Lean Logistics
▪ Supply Chain Synchronization
▪ Performance Cycle Structure
▪ Performance Cycle Uncertainty
82 The Logistics Performance Cycle
▪ The performance cycle represents elements of work necessary to
complete the logistics related to customer accommodation,
manufacturing or procurement
▪ A performance cycle consists of the following elements
▪ Nodes
▪ Links
▪ Inventory
▪ Base stock
▪ Safety stock
▪ Input and output requirements
83 Logistical Performance Cycles

Input and output requirements

are not illustrated
84 Lean Logistics
▪ Logistical Synchronization
▪ Performance Cycle
▪ represents the elements of work necessary to complete the logistics related to
▪ market distribution,
▪ manufacturing, or
▪ support procurement
▪ consists of specific work ranging from identification of requirements to product
delivery
85 Lean Logistics
▪ Logistical Synchronization
▪ Performance Cycle
▪ Simple or complex
▪ Under control of a single enterprise or may involve multiple firms
▪ one-time / long-standing structural arrangements
▪ The logistics performance cycle is the basic unit of supply chain design and
operational control
 86

An echeloned supply chain

structure for basic logistics
performance cycles
87 Lean Logistics
▪ Market Distribution Performance Cycles
▪ concerned with processing and delivering customer orders
▪ provides timely and economical product availability
▪ transaction-creating and physical-fulfillment activities
▪ transaction-creating activities
▪ advertising and
▪ selling.
▪ physical- fulfillment
▪ order transmission,
▪ order processing,
▪ order selection,
▪ order transportation, and
▪ customer delivery.
88
89 Lean Logistics
▪ Manufacturing Support Performance Cycles
▪ Manufacturing is the node in a supply chain that creates form value
▪ manufacturing efficiency depends on logistical support
▪ captive within individual firms
▪ JIT…Just-in-Time
▪ inter-plant movement of materials or semi-finished products
90 Lean Logistics
▪ Manufacture Support Performance Cycle
▪ It provides production logistics being positioned between the physical
distribution and procurement operations of a firm.
▪ Movement and storage of product, materials, and semi-finished parts
and components between enterprise facilities represent the
responsibility of manufacturing support logistics.
▪ In context of wholesale & retail trade, it implies selection of
assortment of inventory to be moved to the next level of value chain.
▪ Basically, supports what, where and when of the production and not
how.
91 Lean Logistics
▪ Features of manufacturing support performance cycle.
▪ Initiates provision of materials and externally manufactured
components at a place and time needed.
▪ Operations are restricted to dock-to-dock movement within the firm
and where intermediate storage is required.
▪ After completion of manufacturing cycle the finished goods inventory
is allocated and deployed either directly to the customers or to
distribution warehouses for further customer shipment.
92 Lean Logistics
▪ Procurement Performance Cycles
▪ sourcing,
▪ order placement and expediting,
▪ transportation, and
▪ receiving.
93
94 Lean Logistics
▪ Procurement Performance Cycles
▪ Includes
▪ sourcing,
▪ order placement and expediting,
▪ transportation, and
▪ receiving.

▪ also callled inbound logistics

95 Lean Logistics
▪ Performance Cycle Uncertainty
▪ A major objective of logistics in all operating areas is to reduce
performance cycle uncertainty
96 Performance Cycle Uncertainty
▪ Major objective of logistics in all areas is to reduce
performance cycle uncertainty
▪ Operational variance is randomly introduced during the cycle
through
▪ The structure of the performance cycle itself
▪ Operating conditions
▪ The quality of logistical operations
 Total time is based on each task within the cycle
97

Performance Cycle Uncertainty

98 Ways To Improve Performance Cycle Times
▪ EDI (Electronic Data Interchange) or Internet order
management and tracking
▪ RFID or Bar code material tracking
▪ Automated inventory management
▪ Automated order selection and picking
▪ Communication with customers to determine their needs
▪ Communication with suppliers to determine their capabilities

Lean
Concepts
99 Performance cycle synchronization
▪ Delayed or faster performance at any point along the supply
chain results in potential disruption of operations
▪ Once consistent operations are achieved, managers can focus
on reducing the time to complete the performance cycle to a
minimum
100

▪The end of chapter 3