Sustainable Solutions for SCM

Lean principles in supply chain management The Toyota House [56] describes the most important lean tools and principles. However, to recognise the difference between lean and previous mass production and logistics systems, especially the reduction of the waste in production and logistics, four main transition principles can be identified: 1. One-piece flow.

2. Tact. 3. Pull. 4. Zero defects.

Its understanding in the supply chain management is important for efficient integration between suppliers, logistics service providers, producers and customers. One- piece flow interaction could be characterised by the flow of the as small as possible amount of components in containers which should create only a few hours of quantity of stock level in each chain of the supply chain. It improves work in progress, waiting times and interruptions. Tact means, in logistical terms, the precise time-tables, how the flow of resources is and how the interaction between partners in a supply chain is organised. It improves balance work content, and the continuous flow and responds flexibly to changes in the market-place. Rather than Push, Pull is understood as the direction of optimal either informative or physical flow of resources which minimises over-delivery, inventory and working capital. Zero defects describe the cause and effect distinction in problem solving which means that all mistakes and defects should be solved immediately rather than afterwards. All four principles in combination with concrete lean tools enable radical improvement in quality, lead time and costs. Critical mistakes in lean implementation Despite the enormous popularity of lean, some recent studies say that failure rates for lean programmes range between 50%and 95%. The study from 2007 declares that 70% of plants in the US were using lean as an optimisation method. Only 2% of them reach expected results, and 24% have any positive results at all [47]. Understanding principles in mass and lean production, certainly in the research of academic papers dedicated to principles of production and SCM or practical implementation of lean principles and tools in the automotive industry, enables the creation of a conceptual framework built on 4 fundamental changes connected with transition from mass to lean production [39]. Without acceptance of the changes in productivity, added value, cost accounting and management approach, it is impossible to implement lean and expect long-term positive results. Productivity in mass production is based on maximisation of output (output/ input) of each individual chain, either production or logistics and push this output through the supply chain to the final customer. Such an evaluation of productivity supports the wrong direction of the flow of all resources. In the case of the pull flow of resources, the new evaluation formula needs to be accepted. Productivity in lean production respects the importance of customer wishes so the productivity formula

14