OPA/MANL/0114/00/0002

Faculty of Business Administration

AMERICAN INTERNATIONAL UNIVERSITY–BANGLADESH (AIUB)

INTERNSHIP RESEARCH REPORT ON

Adopting lean manufacturing to reduce the lead time of procurement pr

An Internship Report Presented to the Faculty of Business Administration in

Partial Fulfillment of the Requirements for the Degree of
Bachelor of Business Administration (BBA)

Supervised By
MD HASIBUL ISLAM
Lecturer
Faculty of Business Administration

Submitted By
MD Miratul Islam
20-44116-2
Operations and Supply Chain Management
Date of Submission January 18, 2024
 INTERNSHIP RESEARCH REPORT ON

Adopting lean manufacturing to reduce lead time of procurement process: A

 Letter of Endorsement

The Internship Research Report entitled

Adopting lean manufacturing to reduce lead time of procureme
has been submitted to the Office of
Placement & Alumni, in partial fulfillment of the requirements for the degree of
Bachelor of Business Administration (BBA)
, Major in Operations and Supply Chain Management ,
Faculty of Business Administration on January 18, 2024 By Mr. Md Miratul Islam, ID#
20-44116-2
. The report has been accepted and may be presented to the Internship Defense
Committee for evaluation.

(Any opinions, suggestions made in this report are entirely that of the author of the report.
The University does not condone nor reject any of these opinions or suggestions).

Md. Hasibul Islam

Internship Supervisor
 Letter of Transmittal

Date: 18/01/2024

Mr. R. Tareque Moudud, FCMA

Director, Office of Placement & Alumni (OPA)
American International University-Bangladesh
Kuratoli, Dhaka.
Subject: Submission of Internship Report on “
Adopting lean manufacturing to reduce lead time of pr
”

Dear Sir,

It is a great pleasure to present the internship report titled “

Adopting lean manufacturing to reduce lead tim
” which was assigned
to me as a partial requirement for the competition of Bachelor of Business Administration
degree.

It is my honor to work for a leading organization of Bangladesh and gain an in-depth

knowledge on lending process and monitoring techniques. Throughout the study, I have tried
with the best of my capacity to accommodate as much information and relevant issues as
possible and tried to follow the instructions as you have suggested. I tried my best to make
this report as much informative as possible.

I am grateful to you for your guidance and kind cooperation at every step of my endeavor on
this report. I shall remain deeply grateful if you kindly take some pen to go through the report
and evaluate my performance.

Sincerely yours

Md Miratul Islam

20-44116-2
Faculty of Business Administration
American International University-Bangladesh (AIUB)
 Acknowledgement

To Md. Hasibul Islam (Lecturer, faculty of business administration, American International

University of Bangladesh) who helped with the creation of this research study on
“Adopting lean manufac
”
I would like to extend my heartfelt appreciation.

I would like to thank Ms. Fahmida Rahman the Teacher Assistant for her constant guidance,
support, and encouragement throughout the research process. Their valuable feedback and
insightful suggestions helped me refine my ideas and improve the quality of my work.

I would also like to thank the participants of this study, who generously shared their time and
knowledge with me. Their willingness to participate and provide honest feedback has been
instrumental in shaping the findings and conclusions of this research. I would like to extend
my sincere gratitude to my manager, Mr. Md. Hafizul Islam (Manager, Admin &
development at Palmal group of companies). Whose advice, feedback, and mentorship have
been important to my development both personally and professionally. I sincerely appreciate
his cooperation and the time he took to help me by responding to all of my questions and
giving me the resources, I needed to finish my report.

I also want to thank my parents for their encouragement and empowerment during the course
of my job. Last but not least, I give thanks to the Almighty for preserving my health and
allowing me to submit my report on schedule.
 Abstract
This study aims to find the major contributions of high lead time in the RMG procurement
process. This is a both quantitative and qualitative study and takes data from 10 procurement
experts through discussion. The findings are Unavailability of software-based work, lack of
deadline maintenance, and lack of medium to communicate with suppliers, and late delivery.
Besides, management manages their decision-making process and they are not able to
provide clear instructions to manage the work properly. Consequently, suppliers and workers
need so much to realize the process or demand of management. This study adopts lean
manufacturing to identify causes that are responsible for higher lead time. Through these
findings, some possible solutions include implementing a software-based procurement
process, creating a strong communication system with suppliers, increasing manpower, etc.

Keywords: RMG, Procurement, Lean Manufacturing, Lead time, Lean tools

Table of content

Introduction……………………………………………………………………………………2

1.1 Background……………………………………………………………………………..2

1.2 Problem
formulation…………………………………………………………………….2

1.3 Objectives………………………………………………………………………….……3

1.4 Scope and limitation…………………………………………………………………….3

2. Theoretical background……………………………………………………………………..5

3.1 Methodology ………………………………..……...……………………………………..8

3.2 Overview of case company………………………………………………………………..9

4. Result……………………………………………………………………………….…..….12

4.1 Process Mapping of Procurement Process……………………………………….……12

4.2 Analyzing Lead Times of procurement process…………………………………….…14

4.3 Value stream mapping (current state)………………………………………………....16

4.4 Fishbone diagram drawn for high lead time……………………………………..…….17

4.5 Ranking the causes for high lead time…………………………………………………18

4.6 Proposed Idea and Benefits……………………………………………………………20

4.7 The future state of value stream mapping……………………………………………..23

5. Discussion and Conclusion………………………………………………………………..26

 Chapter 1
Introduction

1
1.1 Background

In Bangladesh, the RMG sector has a direct influence on this country's economy, which
makes a large contribution to GDP (Rahman, 2023). In RMG sectors, purchasing and
procurement is an important part of the company's business. This process begins with
analyzing the company's purchase needs. Once the requirement is identified, the company
searches for suppliers and contacts them for required goods or services. The company
evaluates suppliers through reliability, cost-effectiveness, and quality. Maintaining strong
relationships with the supplier, the company negotiates with them to secure favorable pricing
which plays a huge role in the procurement process. The focus of this paper is to identify the
causes that are responsible for high lead time of procurement process and propose solutions
to reduce it. The remainder of this paper is as follows. Section 2 provides a theoretical
background on lean manufacturing. The methodology to identify the causes of higher lead is
described in Section 3. Section 4 provides the results and Section 5 discusses and concludes
the implementation of lean manufacturing tools to reduce lead time.
1.2 Problem formulation
Though all companies try to maintain a perfect purchase and procurement process, there are
always some challenges to doing that. In this case, one notable challenge is lead time. Lead
time refers to the total time duration of task completion (Singh, 2009).In this sector, at every
step of the procurement process, some issues are responsible for increased lead time. The lead
time of the purchase and procurement process is very high in some cases. Which creates
several problems in the procurement process. Evidence suggests that the professionalism of
procurement staff, features of required products and suppliers, and the masterfulness of
procurement are the main incentives for lead time and majorly affect operational performance
(Iqbal, 2018). Higher lead time creates several problems that a company has to deal with. For
example, cost increase, supplier-purchaser relations, heavy workload, company reputation,
etc. Lower lead times make a Smooth procurement process, cost efficiency, and ultimately,
Increase profitability. Implementing lean manufacturing tools like process mapping, VSM,
and fishbone diagrams, it possible to identify the key problems and bottlenecks. By proposing
solutions, it can analyze how much lead time can reduced. This can increase the company's
strength, potential, and profitability.

2
1.3 Objectives
The objective of this paper is adopting lean manufacturing to reduce the lead time of the
purchase and procurement process in RMG sector.
1.4 Scope and limitation
This study is conducted by only one RMG company. That can be useful for this specific
company but this restricts the research's usefulness to the larger RMG industry.

3
 Chapter 2

Theoretical background

4
2. Theoretical background

In this research, we will implement lean manufacturing tools to identify lead time problems.
Lean Manufacturing philosophy originated from Toyota automotive company (Dekier, 2012).
Toyota's production system is called House of Lean because it built two main pillars, JIT and
Jidoka, Which refers Just-in-Time and automation (Liker and Morgan). Figure 1 illustrates
the concept of Toyota production system.

Figure 1: Toyota production system

Lean manufacturing is a continuous improvement management process that aims to

maximize efficiency and minimize waste throughout the entire value stream. The initial goal
of using this method is to eliminate all kinds of activities that do not put any value (Wahab et
al., 2013). Some Lean tools are 5s, TPM, Kanban, VSM, JIT, Kaizen, Poka-Yoke and Jidoka.

5
Figure 2 Show a diagram of lean tool.

Figure 2: Lean tools

The lean tools we will use are Value stream mapping and the Fishbone diagram. Research
says that the outcome of a value stream mapping refers to the chart that presents the value
flow around the whole company besides it finds out the total lead time of manufacture or
realizes the amount of time in percentage which adds value to an organization. (Rohac &
Januska, 2015). Through this, we can understand the current state of value-adding time and
the future state of value-adding time after solving the problems we found out before. A
fishbone diagram is a systematic way to identify the cause and effect of a problem. From
Ardianto's view, this tool is used for analyzing and exploring the relation between the cause
and effect, where the problem is placed at the head of the diagram. After that, the cause of the
effect has been analyzed and investigated (Ardianto et al., 2020).

Also, this diagram is imagined as the bone of a fish which has several branches. Each branch
of the bone becomes each aspect to be analyzed, which probably has caused a problem
(Ardianto et al., 2020). In Yamamoto's view, Lean is a broad concept that includes the use of
a holistic and sustainable approach which influences organizations to practice Lean
philosophy more (Yamamoto et al., 2019) The lean manufacturing process will be effective
in reducing lead time in the purchase and procurement process. Analyzing the problem and
applying a solution systematically, can eliminate unwanted or useless activities to reduce the
lead time which can fasten the purchase and procurement process (Nugroho et al., 2020).

6
 Chapter 3

Methodology

7
3.1 Methodology

A case study was conducted in the case company to reduce the lead time of the purchase and
procurement process by the lean manufacturing method. Lean manufacturing (LM) consists
of a set of tools and practices of the tools, if the tools are implemented properly and fully then
it helps to improve the overall performance of the system (Omogbai & Salonitis, 2017). 5S is
one of the lean tools of them. It is an acronym for sort, set in order, shine, standardize and
sustain (Omogbai & Salonitis, 2017). Increasing production efficiency is the main objective
of Toyota's production system which has been done by consistently and thoroughly
eliminating waste (Ohno, 1988).

This paper intends to depict the current state, identify the root causes of the high lead time of
purchases and procurement, and solve the problem. Then evaluate how much lead time can
be decreased by implementing those solutions. The process involves a purchase and
procurement Process diagram, identifying lead time, identification causes, data collection,
and processing data, ranking problems, histogram, value stream mapping (VSM) analysis,
making the fishbone diagram, proposed idea, and benefit. The process of collecting data
involves direct observation, taking procurement history from the company, and interviews or
discussions with experts. Both qualitative and quantitative techniques were used for data
collection. The data sources used are primary data obtained directly from the company
interviewing 10 experts in relevant functional areas and self-observation.

At first, purchasing and procurement process mapping. A recent study found Process
mapping is the oldest but value-adding technique that helps to streamline workflow. Process
mapping refers to the activity that defines what the business is all about and specifies the
responsibilities of a person, specifying the standard of process and how success can be
achieved in business (Bucourt et al., 2011). Value stream mapping (VSM) tool is used to
evaluate the wasted time in the procurement process. The current state of the value stream
map shows the current situation of lead time and the amount of time wasted on this process. It
has been demonstrated that planning and linking lean initiatives which happen through
systematic data acquisition is included in the value stream mapping (VSM) and it provides
additional insights (Bucourt et al., 2011, 416), VSM is usually used in lean environments
which helps to decrease the lead-times and it creates the opportunity for improvement
(Bucourt et al., 2011, 417 ). After that root cause analysis was conducted by fishbone

8
diagram. The identified root causes were prioritized using frequency analysis collecting data
on a 1 to 5 Likert scale by 10 experts. Finally, the proposed idea and possible benefit table
show possible solutions to decrease lead time and achievable outcomes. The future state of
value stream mapping shows the improvement in lead time and waste time after possible
improvements

Figure 3 simplified research steps

Figure 3: Research steps

3.2 Overview of case company

“Palmal” Group of Industries, a promising RMG manufacturing business organization,
emerged in 1984. It has multiple factories, including knitting & dying, apparel, needlecraft,
composite knit, etc. It has been experiencing phenomenal growth during the last 31 years in
the RMG sector. “Palmal” creates a strong base to ensure a smooth flow of purchase and
procurement processes. Nowadays, around two million women workers have been currently
working in the company. They try to provide the best service and product to their customers,
this is their main mission. Consequently, they are taking some actions, for example, acquiring
a scientific approach to the manufacturing process, and trying to be a market leader in the
field of value global supplier of RMG.

9
Moreover, they are trying to ensure the best quality at an affordable price and speedy delivery
is also the main term of their mission. Besides, their short-term goal also includes creating
more opportunities for the growth of their employee. Their long-term goal includes being
leading the main supplier to our consumers by delivering socially, ethically, and Eco-
friendly. Their strategy involves selecting suppliers carefully, contacting suppliers, evaluating
quotes, negotiating terms, and finalizing orders. But some issues increase the lead time. To
make a strong base in purchasing and procurement, it is necessary to identify and solve the
problems.

10
Chapter 4

Results

11
4. Result

The results below show the lead time of the company, the causes of higher lead time, and
some possible solutions to reduce that.

4.1 Process Mapping of Procurement Process

Figure 4 represent the steps of procurement process

Figure 4: Flow chart of purchase and procurement process

Requisition: At the beginning of the purchase and procurement process, requisitions come
from factories for required goods. After getting the requisition, we know the required demand
for materials or labor work. There are Electric, civil, and mechanical departments to Check
the requisition and make a BOQ. The First Step is to Find Vendors Who Can Provide Those

12
Materials or labor. The second step is to Negotiate with vendors and collect quotations for
Materials or labor work.

Competitive statement (CS): After getting quotations from multiple vendors, we make a
competitive sourcing table where we can Find all the information and costs about the material
or labor work. Then we submit it to audit with the authorization of the department head of
purchase and procurement.

Audit: Audit all quotations to ensure the appropriate quantity of demand and price for the
goods or Services and the specifications we need. Also, compare with previous purchases if
there are any.

FDA: After audit approval, FDA Collects all data from there to make records of all costs
made for a specific project or a Factory.

Management: Management decides how much Advance payment we should give on this
purchase or work order. Sometimes we need to give full advance payment as per the vendor's
terms & conditions.

Purchase Order or Work Order: After Management Approval we send a work order or
purchase order to vendors with the amount of payment we will make as advance. We also add
our terms and conditions to their.

Account: We send an allocation to the accounts department to make pay orders of advance
payments to the vendors.

Final Balance: After delivery of materials or Work is done we receive Bills and challans
from them and if it is labor work we receive a call report. After receiving all required
documents, we make a final balance from where we can know how much payment is due and
send it to audit.

Audit: The audit checks all the documents to check how much work is done or how much
materials we get. If they find out any problem they ask for clarification.

Management: Management checks all documents again and approves due payment if there
are any.

FDA: After management approval, again FDA Collects all data from there to make records
of all costs made for a specific project or a Factory.

13
Account: Then we send the final balance to the accounts department for due payment and
make pay orders for the vendors.

4.2 Analyzing Lead Times of Procurement Process

Table 1 shows the lead time of all steps of the procurement process and the Average lead
time of the whole procurement process.
Table 1: Lead Times of Procurement Process

Steps Lead time(Days)

Requisition 1

CS 3

Audit 7-21

Management 7-21

FDA 1

PO/WO 1

Account 5-10

Final Balance 5-7

Audit 7-21

Management 7-21

FDA 1

Account 5-10

Average lead time to Process a file 81 Days

Requisition (LT: 1): It takes one day to make. After that, we start processing the CS

CS (LT: 3): To make CS we need approval of EEE, Civil or mechanical team approval, and
BOQ after we take quotations from vendors. In this part, vendors do not always respond fast
and Take time to send the quotation. Also, there is a negotiation part which takes some time.

Audit (LT: 7-21): The audit takes too much time to check and approve the file. And they do
not maintain any serial to process files. Also, there is no deadline to finish the approval of the
file.

14
Management (LT: 7-21): Management also takes too much time to check and approve the
file. And they do not maintain any serial to process files. Also, there is no deadline to finish
the approval of the file.

FDA (LT: 1): The FDA takes only one day to record all the data.

PO or WO (LT: 1): It takes only one day to send PO/WO.

Account (LT: 5-10): The account also takes too much time to process payment and does not
maintain any serial and deadline

Final Balance (LT: 5-7): It takes too much time to collect all necessary documents Like Bill
Challan Call report pictures of the finished work and make the final balance.

Audit, management, and account departments have the highest lead time to process files.
FDA department, requisition, and CS making take the lowest lead time to process files. Most
of the departments do not maintain any serial for checking files and do not follow any
deadline for a specific file. So that any file did not have any time limit to process and finish
the whole process of purchase and procurement, it increases a lot of pressure and
mismanagement in a workspace which causes a huge delay in work or material supply.
Sometimes files are lost because of the taking it from one place to another multiple times.
Supplier or labor worker payment is also delayed for that.

15
4.3 Value stream mapping (current state)

Here is the current state of value stream mapping in Figure 5 which provides data of value
added time

Figure 5: VSM (current state)

Total Lead time = 81 Days

Total Value Added Time= 17 hours 30 minutes or 18 hours

Daily working Hour= 10 hours

So, 81 days = (81*10) or 810 Days

Value added ratio = (18 / 810)* 100% = 2.22 %

16
4.4 Fishbone diagram is drawn for high lead time

Figure 6 illustrate causes of higher lead time

Figure 6: Fishbone diagram

This fishbone diagram illustrates the four main reasons for the lead time increase.
1. Communication
2. Man
3. Method
4. Material
There are 11 secondary causes and those are:
1. Suppliers take too much time to send a quotation
2. Wrong quotation from supplier
3. The same work was done several times for the wrong decision of management
4. File missing
5. Shortage of manpower in audit and management
6. Not Maintaining serial for processing file
7. Not Maintaining deadline for processing file
8. All work done manually increases the chance of mistake
9. Supplier lost interest in the business for a delay in supplier payment
10. Unreliable delivery schedules of supplier

17
 11. Not using any software-based process

The majority of the causes are in the method which is increasing the lead time. However, the
cause of not using the software-based working system on the main cause of material is a
major cause of increasing lead time. One of the main causes of communication is created by
the suppliers and purchase managers. There is a communication gap between suppliers and
purchasers which is creating problems like sending wrong quotations and not prioritizing
requests for quotations. There is another cause which is created by man and the reason behind
it is mismanagement. First of all, there is a shortage of manpower, which increases the
pressure of workload on the management team. So that they can not make any decision
properly, which causes decision-making mistakes and they need to do the same work again.
This table illustrates the current state of value stream mapping, we can identify the lead times
of all steps and the total lead time of the procurement process. Also, we can identify value-
added time and total value-added time of the procurement process. By those data, we can
calculate the Value added ratio of the process. From the above data we have found average
lead time of the purchase and procurement process is 81 days, if there are 10 hours, then 81
days equals 810 hours. The total value-added time is 17 hours and 30 minutes. We consider it
as 18 hours. We found Value added ratio is 2.2222%.

4.5 Ranking the causes for high lead time

A survey was conducted to identify and rank the importance of various problems by using the
Likert scale. Table 2 shows the average score of the problems and the histogram in Figure 7
is a visual representation of the score.

Table 2: Ranking the causes of high lead time

Problem Average
score

1 Supplier takes too much time to send a quotation 1.2

2 Not Maintaining serial for processing file 2.9

3 Not Maintaining deadline for processing file 2.9

4 File missing 3.7

5 All work done manually increases the chance of mistake 2.9

18
6 Not use of software base process 4.7

7 Unreliable delivery schedules of supplier 2.2

8 Supplier lost interest in the business for a delay in supplier payment 1.8

9 The same work done several times for the wrong decision of 2.9
management

10 Shortage of manpower in audit and management 2.7

11 Wrong quotations from the supplier 1.2

We found 11 problems that are responsible for creating higher lead time. All problems are
identified through interviews with procurement experts. Also, problem rankings are given
based on the interviews. Rank 4 to 5 are considered as major problems, rank 3 moderate and
rank 1 to 2 as minor.

Histogram of cause Ranking

Figure 7: Problem ranking by their importance.

This Histogram Illustrates the ranking of 11 problems of lead time increase on the Likert
scale of (1-5). This data is collected from the previous table where causes are listed and
ranked. In this diagram, we can identify not using a software-based working system is
the main reason for the lead time increase. The second major problem is the file missing.
It can create a huge problem if any file is lost forever. There is no way to recover those
data because all files are created manually and used as a hard copy only. Problem
numbers 2,3,5,9 and 10 are in rank 1 to 2 which we can consider as moderate problems.

19
 But they also have a huge impact to increase lead time. The rest of the problems are
related to suppliers, which are created by suppliers or miscommunication with them.
Although it gets the lowest rating those communication gaps create a large delay in
workflow.

4.6 Proposed Idea and Benefits

Table 3 shows the Proposed solutions and potential benefits which are divided into 3
categories.
Table 3: Proposed solution and potential benefit

Category Proposed Solution Potential benefits

New technology Using software-based working  can maintain file serial easily
implementation processes which will give equal priority
to all files
 can maintain a deadline to
approve files while increasing
workflow
 there will be no chance of
missing any file
 Mistakes will reduce for
automation of software
 The supplier payment process
will be faster so that suppliers
will not lose interest in
business with the company

Supplier Develop communication with Suppliers will give proper attention to

relationship suppliers And create multiple our demands.
supplier base

 A contract or agreement Can get delivery on time or before the

for Timely Delivery and required time
a penalty for late

20
 delivery.
 Setting the delivery
deadline to two or three
days before the required
delivery time.

Provide clear instructions and all can get the required quotation easily
necessary information about our which will reduce lead time
requirements.

Management  Identifies the causes of more manpower and better decision-

style the same work done making will solve previous decision-
several times and making problems and will enable to
proposes improvement. do any work in a single attempt
 external advisor for
management and
Additional training
 Increasing manpower

New technology implementation

Software-based working systems are the key solution for minimizing lead time. It will help to
maintain the serial and deadline for a file. So that every single file will get equal priority and
will be approved on time. Using hard copies of files and sending them from one department
to another, increases file missing problems. By using a software-based working process, there
is no need to deliver hard copies. Doing all work through software, sending files to other
departments and storing them will be faster and more secure. Furthermore, so many suppliers
lose interest in the business because of making payments due for a long time. This whole
software-based procurement and supplier payment process will be faster so that suppliers will
not lose interest in the business.
Supplier relationship
It has been demonstrated that the proper management of suppliers is a sequence-based
process, which includes supplier selection and evaluation, supplier monitoring, supplier

21
development, and supplier integration. (Singh et al., 2017). Encouraging suppliers to respond
to quotations, good working relations, and regular communication will be great options to
encourage them to prioritize our requests and respond quickly. Having a limited number of
suppliers can create problems, for example, not responding on time or availability issues.
Creating a large base of suppliers can help solve this problem. If a supplier is unable to
respond timely or unable to provide required goods there will be more supplier options to us.
There is a delivery issue with the supplier. It has been demonstrated that transportation refers
to material handling which includes the movement of materials from suppliers to customers.
Overall waste in the manufacturing process has happened through the movement of various
parts between process lines.

As a result, the extra cost has been seen which may affect the organization's external
customers directly, and it may be the reason for delayed delivery. (Soliman, 2017).
Sometimes suppliers are unable to deliver materials on time. A contract or agreement for
Timely Delivery will be beneficial for that. If any supplier is unable to do their job on time
there will be some penalty for that. Also, we can set the delivery deadline two or three days
before the required delivery time. So that we can get our delivery on hand before or on time
when needed. Sometimes suppliers send different product quotations because of
unavailability or needing to understand the requirements. To avoid mistakes like these, we
have to provide clear instructions and all the necessary information about our requirements.
And be more specific about the required materials.
Management style
The same work done several times increases the lead time and also increases the cost of a
project. Also, there is an issue in manpower shortage. To solve this problem we need to focus
on decision making. Identifying the root cause of why same work is done several times and
discussing with management about the lacking and proposing improvement. According to the
research, organizations make the effort by making effective managerial decisions, where they
try to avoid the decision trap besides they ensure the effort which includes various innovative
ideas, consequently, the organization obtains excellence (Asikhia et al., 2021). Seeking an
external advisor can give a new perspective for a solution. Also, Additional training and
development can increase skills for decision-making.

Before starting a project, a proper evaluation of the work and its potential outcome is
necessary. Asikhia also added that managers should continually embrace innovative ideas by

22
all means, to constantly enhance their organizational excellence against all business odds
(Asikhia et al., 2021). Furthermore, it is necessary to increase manpower to improve the
management system. Increasing manpower can reduce the workload of decision-makers
which can help them to work perfectly on a project. Through this decision-making mistakes
will be reduced.
4.7 The future state of value stream mapping
Here is the future state of value stream mapping in Figure 8 which provides data of future
value added time

Figure 8: VSM (future state)

Total Lead time = 40 Days

Total Value Added Time= 16 hours 30 minutes or 17 hours

Daily working Hour= 10 hours

So, 40 days = (40*10) or 400 Days

Value added ratio = (17 / 400)* 100% = 4.25%

23
This table illustrates the future state of value stream mapping, we identify the future lead
times of all steps and the total lead time of the procurement process. Also, we identify the
Future state of value-added time and total value-added time of the procurement process. By
those data, we can calculate the possible future state of Value added ratio of the process.
From the above data we have found average lead time of the purchase and procurement
process is 40 days, if there are 10 hours, 40 days equals 400 hours. The total value-added
time is 16 hours 30 minutes. We consider it as 17 hours. We found Value added ratio is
4.25%

24
 Chapter 5

Discussion and Conclusion

25
5. Discussion and Conclusion

To summarize, this case study is based on a higher lead time problem in the procurement
process. By using lean manufacturing tools we analyze the causes of companies' procurement
processes. Also, provide possible solutions that will help to reduce lead time to fasten the
process. In this procurement process, we find out the main problems are related to suppliers,
management, and traditional working processes. To elaborate, the supplier takes so much
time to send the quantitation; and does not maintain the logistic process properly. In terms of
management, they do not take seriously about proper maintaining the file, sometimes the files
are not able to find the file. In addition, there are lacking’s on using the new software-based
program. To solve the issues, Optimizing management practices, making strong
communication with suppliers, and most importantly implementing a software-based system
can create a remarkable impact to decrease the lead time of the purchase and procurement
process. It is possible to reduce the lead time by 50%. The use of lean tools is counted as a
simple and low-cost solution that helps to grow productivity and profitability, it gives the
main focus on the elimination of waste continuously through all organizations (Oliveira et al.,
2017).

Using the lean manufacturing tool can be the best determinant of increasing productivity and
saving resources, to elaborate, as the Human resources have been working efficiently
consequently the productivity is expected to grow and the time will decline which is counted
as the main resource for a company. The proper management has been acquired through the
use of lean tools. As a result, employees have obtained the fluency to showcase their work, so
they also obtain the working satisfaction. It is highly recommended to prioritize those
solutions to ensure less west procurement process. It not only fastens the procurement process
but also builds a strong relationship and trust with suppliers and customers.

Recommendations

 RMG companies should prioritize those solutions and implement them to speed up the
procurement process.
 Companies should practice lean tools regularly to identify new causes that are
creating high lead time and find solutions to solve them.
 Companies need to be up to date with new technologies to speed up the procurement
process.

26
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28
Appendices

29
Survey

Expert Ranking Avg.

No Causes (1-5 scale) Score
.
1 2 3 4 5 6 7 8 9 10

1 Supplier takes too much time to send a 1 2 1 1 1 2 1 1 1 1 1.2

quotation.

2 Not Maintaining serial for processing file 3 3 3 3 3 2 4 2 3 3 2.9

3 Not Maintaining deadline for processing file 3 3 3 3 3 2 4 2 3 3 2.9

4 File missing 4 5 4 4 3 3 3 4 4 3 3.7

5 All work done manually increases the chance 3 3 3 3 3 2 2 4 3 3 2.9

of mistake

6 Not use of software base process 5 5 5 5 5 5 5 4 4 4 4.7

7 Unreliable delivery schedules of supplier 2 2 2 2 2 3 2 1 3 3 2.2

8 Supplier lost interest in the business for a 2 1 2 2 2 2 2 2 1 2 1.8

delay in supplier payment

9 The same work has been done several times 3 3 3 3 3 4 2 4 2 2 2.9

for the wrong decision of management.

10 Shortage of manpower in audit and 3 3 3 3 3 2 3 4 2 1 2.7

management.

11 Wrong quotations from suppliers. 1 1 1 1 1 2 2 1 1 1 1.2

30
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