Sustainable Solutions for SCM

difference between mass and lean is the understanding how to increase the productivity. Meanwhile, mass production focuses on the “producing more” principle to reach minimum unit costs (production value added) through the economies of scale. Lean production focuses on the “consuming less” principle observing the reduction of the total costs (production, logistics value added and production, logistics waste). Standard cost accounting leads to minimisation of unit costs of particular chains in the supply chain. Concrete goals of the chains in the supply chain are then set based on the sum of costs and goals of the related cost centres rather than as a reflection of customer requirements. Today, cost accounting is in this matter more anti-lean as it is incapable of identifying positive effects of lean such as productivity growth and cost reduction (see Figure 1.7).

Figure 1.7 Differences in cost allocation in mass and lean [31] The inaccurate perception of productivity, explained in the previous paragraph, considers as productive whatever is produced rather than only what is demanded, which causes a highly inaccurate allocation of costs. Lean SCM involves a system view so its aim is to reduce the cost of the complex. Therefore, activities causing waste have the same importance as those adding value. The benefits of lean could only be made visible when the cost of wasting is identified and calculated (see Figure 1.7, lean SCM – batch production). Unit cost of wasting has to be considered in today’s cost accounting so that the waste could be made visible [31]. The previous three changes require the new attitude to management of supply chains. Functional management is focused on insular optimisation of single departments or chains. On the other hand, process management enables optimisation of total affects which are also dependent not only on cost accounting of performances of related departments but also on evaluation of productivity and the capacity of optimisation itself. Management of the particular parts built on planning, organising and control

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