Lean logistics is a concept that outlines ways through which generation of wastes can be reduced in supply chain systems. The supply chain encompasses all the processes involved from production to consumption. Lean logistics principles aims at minimizing the cost incurred from waste generation for entrepreneurs' to maximize market profits. Many scholars believe that the concept of Lean logistics originated from Toyota Company before adoption by other business companies. The concept is also believed to have facilitated the rise of Toyota Company to from being a small firm to a giant business corporation (Dennis, 2004).
Other components of Lean logistics are perfect manufacturing system flexible to improvement, proper manufacturing lay out for the plant, reduction in production series and reduction in time take at preliminary processes. This is because Lean logistics believes that there is no perfect system in the business world. It is worth noting that for those manufacturing systems which priorities their products and services, they end up incurring losses. This is because unused equipment's and inventories in such operations are considered to be a waste. However, any business model adhering to the Lean principles eliminates chances of wastage. The main goal of a Lean model in business operations is to enable the companies attain maximum efficiency, and thus give their customers maximum value. This is achieved by empowering all workers to realize their potentials so as to contribute fully in business activities (Economist Intelligence Unit, 2009).
[...] Barac, N., Milovanović, G & Andjelković, A. (2010). Lean production and six sigma quality in lean Supply chain management. Journal of economics and organization, Vol pp 319-334.Available at http://facta.junis.ni.ac.rs/eao/eao201003/eao201003-07.pdf Dennis, H. (2004). LEAN Manufacturing Implementation: A Complete Execution Manual for Any Size Manufacturer. New York: Ross Publishing. Economist Intelligence Unit. (2009). The demand-driven supply chain: A holistic approach. Available at http://viewswire.eiu.com/report_dl.asp?mode=fi&fi=1304214915.PDF Economist Intelligence Unit. (2007). Enterprise Resource Planning. [...]
[...] Unnecessary motions due to poor storage of products or the design of packaging area distract employees' attention. Ideally, these distractions affect business activities and can hinder the realization of the set targets. It is thus essential to ensure proper working environment for workers to realize their potentials (Smith & Hawkins, 2004). Inventory is another waste seen to interfere with business goal realization. They occur as a result of high levels of unnecessary raw materials or unfinished products. Inventory increases the storage costs of unnecessary products. Some of these inventories are early deliveries and inappropriate orders. [...]
[...] In addition, new technologies are evolving in the business world and hence Lean businesses should restructure their manufacturing systems to achieve the emerging heights of operation efficiency. With constant Lean changing models, managers are able to improve their data management and measurement systems for accuracy purposes. By doing so, they are able to determine whether the new technologies are effective to their corresponding businesses or not. These findings aids in laying out improvement strategies to smoothen business operations. Seemingly, in an effort to have timely incorporation of new technologies, the Lean logistic model requires employers to train their workers. [...]
[...] Hershey: Idea Group Publishing. Kirk, Z. (2006). Applying LEAN manufacturing to logistics and supply chain. Hoboken: John Wiley and Sons. Liker, K., Jeffrey, K & Thomas, L. (2000). LEAN Manufacturing Principles Guide. Michigan: University of Michigan. Smith, R & Hawkins, B. (2004). Models Lean - Lean Maintenance - Reduce Costs; Improve Quality and Increase Market Share. Oxford: Butterworth- Heinemann. [...]
[...] Increase in demand will increase the supply while decrease in demand will reduce the supply. This balances the markets forces leadings to profits in an airline firm (Kirk, 2006). Reducing inventory is an essential principle towards profits maximization. The inventory comes as a result of working capital, interest payments, double handling, storage space, possible damage, risk of obsolescence. Proper utilization of pull system in production plants will eliminate inventories. This is because inventories in any production work will increase the overall costs of operation. [...]
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