Supply Lean Management

Abstract

In contrast to the traditional paradigm, the objectives of so-called keiretsu supplier networks and lean production are based on a reduction of throughput times and the elimination of non-value-adding activities. These activities are waste or so-called MUDA (Japanese = 無駄). The figure shows the two concepts, the traditional and the lean one. Both concepts are directed towards customers. Nevertheless the lean concept’s foundation is based on the optimal reaction capability and not based on inventories. Inventories increase the cost of capital and have negative impacts on the shareholder value, whereas short cycle times lead to small inventories. Lean manufacturing or lean production, often simply “lean”, is a systematic method for the elimination of waste (“MUDA”) within a manufacturing system. Lean also takes into account waste created through overburden (“MURI”) and waste created through unevenness in workloads (“MURA”). Working from the perspective of the client who consumes a product or service, “value” is any action or process that a customer would be willing to pay for.