National Research University

Higher School of Economics

Faculty of Management

Department of Production Management and Logistics

Research Proposal for Bachelor’s Thesis

“ _ Lean Management, Supply Chain Management and Sustainability_”

(On the example of Limited Liability Company “Mechta”)

Student: Ekaterina R. Ogarkova

Group: 11 M2

Argument consultant: Prof. Petr A. Terentev

Language consultant: Prof. Elena A. Voronina

Submitted 6 March 2015

Nizhny Novgorod

Contents

Abstract 2

Introduction 3

Literature review 5

Methodology 7

Results anticipated 8

Conclusion 8

References 9

Abstract

The aim of the present study is to evaluate the relationship between Lean Management, Supply Chain Management and Sustainability by the example of manufacturing enterprise. The presented literature review will contain both an internal focus and an entire supply chain focus, and considering, at the same time, the key aspects of sustainability. Also, this study describes various approaches to understanding Lean production, that closely associated with material flow analyzes for supporting material flow management. However, despite the fact that the number of organizations introducing Lean Management approaches has been steadily increasing, it is worth noting that only through the use of complex system of interrelated socio-technical methods the company can significantly improve its performance and eliminate its waste.

Introduction

Significant competition compel businesses to guarantee customers’ demands can be satisfied as much as possible at the lowest expenses. Therefore, companies try to develop new solutions to refine the quality of their supply chains and at the same time reduce their operational costs (Sarac, Absi, & Dauzère-Pérès, 2008).

For companies operating to minimize costs while increasing performance, the Lean approach is a natural fit. Looking at the world through the prism of continuous enhancement, and armed with waste-fighting tools such as value stream mapping (VSM) and 5S, organizations are slenderizing, strengthening, and working out efficient materials flow throughout the supply chain.

Lean initiatives can concentrate on certain logistics processes, or they can cover entire supply chains.

Lean production was introduced by Toyota under the names ‘‘Toyota production system (TPS)’’ or ‘‘just-in-time (JIT)’’ manufacturing in the 1960s (Bruun & Mefford, 2004; Reichhart & Holweg, 2007; Taj, 2008; Wu, 2003). JIT manufacturing aims to eliminate losses and to improve their productions by applying a continuous improvement approach, including endorsing the only demanded inventory and reducing changeover times to decrease lead times, queue lengths, and batch sizes to achieve minimum cost. Lean production allows to integrate different instruments in the production system and supply chain as well as focuses on waste riddance to reduce costs, improve quality, and lessen lead time, implements, and equipment downtime. Many enterprises have applied Lean production to improve their performance and competitiveness during the last decades.

Lean Management is a potent managerial treatment widely accepted as improving the general operational capacity of a company (Shah and Ward, 2003; Liker, 2004). Guided by the success reached by Toyota and some other Lean organizations all over the world, an increasing number of firms have adopted Lean Management practices to meet market needs, reduce costs, and gain an advantage over competitors. Nevertheless, in contempt of the Lean Management projects, several companies failed to achieve high performance via Lean Management. Operations Management scientists discussed a number of reasons for this lack of success, namely, the complicacy of Lean Management implementation (Lander and Liker, 2007), the existence of contingency factors limiting its positive effect (Bortolotti et al., 2013), the focus on Just-In-Time (JIT) practices without appropriate consideration of other important OM aspects (Matsui, 2007; Agarwal et al., 2013), and insufficient attention paid to human resource management (HRM) (Bateman, 2005; Agarwal et al., 2013).

Lean supply chain management acquired vogue in the production sphere, as this is where considerable enhancement can be achieved. Production processes can be improved by reducing waste and resources at the same time as maintaining operational performance. Quality is an essential part of Lean manufacturing. With zero obstacles in the manufacturing process reduces waste and increases efficiency within the organization entirely. With greater quality customers will no longer return goods, which means less resources will be required for returns and quality issues. Organizations that have adopted Lean supply chain practices have investigated each of their routings, list of materials and equipment to recognize where improvements can be made (Sarac, Absi, & Dauzère-Pérès, 2008).

At the same time, it is worth remembering Mr. Drucker, who pointed out, enhancing efficiency in the face of effectiveness can be worthless. Heart of the problem lies not just in the continuous analysis of efficiency thoughts, but also in effectiveness measures and service-related result evaluation. Why should a company care if it is processing applications with increased speed if the applications could be processed elsewhere and components are complaining about the quality of the process? It is not enough to think about costs — the true way to value is through a combination of cost, quality, and customer service.

The object of my research is an enterprise, which I'm going to go practice in.

Thus , practical value of the study study lies in the fact that the obtained data on performance and sustainability of the enterprise, as well as its supply chain analysis, helps to sort out where the bottleneck of the enterprise and which processes need to be optimized by eliminating waste and non-value added activities.

This paper is structured as follows. First, the basic concepts of Lean production are examined. Second, the impact of Lean Management tools on company performance is considered theoretically. Third, supply chain operations with Lean are analyzed. This is followed by drawing conclusions and proposes future research directions.