2014

LEAN SUPPLY CHAIN INDIVIDUAL ASSIGNMENT

DHRUV MISRA
GSEP13GLSCM045 | S.P. Jain School of Global Management
Contents

1. Introduction .......................................................................................................................................... 2
2. Lean Supply Chain ................................................................................................................................ 2
3. Green Supply Chain .............................................................................................................................. 4
3.1 Supply Chain Pollution Avoidance (SCPA) ........................................................................................... 4
4. Tooling Lean for a Green Supply Chain ................................................................................................ 5
5. Conclusion ............................................................................................................................................ 6
Bibliography .................................................................................................................................................. 7





















Problem
Solving
People
Process
Philosophy
Figure 1: 4Ps of Lean (Liker, 2004).
1. Introduction
The report presents a comprehensive understanding of Lean & Green principles. It portrays a linkage of
both the principles. Lean has been adopted by organizations to optimize performance. Today as
environmental laws are becoming stringent the organizations are moving towards a Green Supply Chain.
Lean principles are evident enabler of Green.
2. Lean Supply Chain
Today organizations compete on the basis of the value which they deliver to their customers. The
competitive edge is achieved when this value is delivered in the least cost possible. In order to create a
sustainable & profitable competitive advantage working on ones Supply Chain is the solution. The
answer to sustainable and cost effective Supply Chain is Lean.
Lean Supply Chain basically deals with the idea of removal of waste from a system and continuous
improvement.
Lean is based on four main principles (Liker, 2004) :










These 4 Principles can be drilled down further to 14 principles of The Toyota Way (Liker, 2004).
Inventory
Overproduction
Waiting
Motion
Transportation
Rework
Over Processing
Figure 2: Classification of 7 Wastes
The waste can be classified in 7 ways:


An eighth parameter which organizations are now taking into consideration as waste is Under
Utilization of resources.
Lean uses various methods and techniques to reduce these wastes such as
Kaizen- Change for Best is a philosophy of continuous improvement.
GEMBA This states that the original problem can only be detected at the place of Crime.
5S- It is a methodology to organize a workplace so as to get most efficient results.
And-On Cord Coming from Japanese work Jidoka, The main idea is to give authority to individuals to
stop the manufacturing line if they find any error.
Value Stream
Mapping This helps in
mapping each and
every process with the flow of information and material with time. This allows the users to identify the
area where there is a waste and an opportunity to optimize.
All the above methods are useful if and only if they are implemented in an organized way. To do so the
PDCA Cycle (Plan, Do, Check and Act) can be used. Apart from these four key rules the most important
rule is Sustain. We should ensure sustainability of the improvements made by all the efforts of
application of Lean Principles and using the PDCA cycle.

Source
Reduction
, including
reuse
Recycling,
including
composting
Waste
combustion
with energy
recovery
Landfilling
Figure 3:4Rs for Green Supply Chain (Burt, Dobler, & Starling, 2012)
Generation
of waste
should be
Reduced
Material
should
reuse to a
max
Material should
be reallocate as
much as
possible
Recycling should be
done to a max and
efficiently
Figure 4: Four basic methods for implementation of Green Supply Chain (Burt, Dobler, & Starling, 2012)
3. Green Supply Chain
Today the world is facing environmental issues. Some of the major issues are Global Warming, Depletion
of Ozone Layers, various types of pollution. As there is increase in awareness the consumer accounts
himself for his own carbon footprint and is active in choosing a product or service that help reduction in
this. This changing consumer behavior has made it mandatory for the firms to go green. The main idea
of green is to reduce and minimize the negative environmental impact of our organization and usage of
all the available resources efficiently. This is done by continuously seeking waste in the system and
finding ways to eliminate them.

The Green Supply Chain management has 2 components (Burt, Dobler, & Starling, 2012).
1. The purchase of materials and items which are recyclable
2. The environmental and liability issues associated with the use and discharge of hazardous
material anywhere in the chain.
The US Environmental Protection Agency has defined a process which is the 4Rs.







Using this process 4 basic methods which we need to consider are






3.1 Supply Chain Pollution Avoidance (SCPA)
SCPA is an approach which is the most used to protect the environment. In this approach we go back to
the starting of supply chain and the attempt to reduce the generation of waste at the initiation of the
chain. The generic approach of end of line has more cost implications than that of SCPA. If we can avoid
the generation of waste at start of supply chain it is always less costly (Burt, Dobler, & Starling, 2012).
4. Tooling Lean for a Green Supply Chain
To use lean practices for getting to a green supply chain we should look at the similarities between both
the philosophies.
The lean value stream mapping sees deep inside a system and a chain of process and tries to reduce
waste from all the possible points. This is quiet similar to the Life cycle analysis of a product where we
try to find the environmental impact of the product. Integration of lean and green helps companies to
do processes more effectively and with a reduced cost (Bashkite & Karaulova, 2012).
Both Lean as well as green have strong principles around waste reduction.
Lean philosophy ensures that the resources in the supply chain are running on peak efficiency, this is
one of the enablers of sustainability. (Friedman, 2008)
Leading companies have already realized that Green not only improves brand perception but also saves
money by reducing wastes and implementing efficient processes. The supply chains are being modified
by managing five key inputs & outputs as shown (Deloitte, 2012).

Green Supply Chain can be achieved by implementing the Lean Principles. Some of the examples are
EDI Implementation: enables data exchange between the supplier and the organization
through a common network. Processes such as ASN helps reduce waiting time & increase labor
productivity. It is a paperless process which also reduces obsolesce of inventory & helps save
environment (Palevich, 2012).
JIT & VMI: enables the reduction in the total inventory being shipped & stored. In case of JIT
the inventory is not stored and hence save electricity costs in warehouses. Since the number of
transportations is reduced by this system due to increased accuracy, the cost of fuel hence the
fuel usage is reduced (Palevich, 2012).
Reverse Logistics: Elimination of cardboard boxes and implementation of reverse
logistics using pallets and plastic bins. Australian supermarket Target started cardboard
recycling program. In the year 2004 they collected 362 million kgs of corrugated boxes for
recycling and saved 4.8 MM trees.
Transportation Planning: Choosing the cheapest mode of transportation i.e. seaways is a part
of lean principles as it reduces the cost incurred. The same sea way is the least polluting method
of transport.
Warehousing: Proper warehousing with minimal wastage of space in warehouse, cardboard
boxes and pallets is a Lean method. This in turn saves energy usage.
Use of optimal order lots: Reevaluation of lot sizes since small order lots reduce obsolete
wastes and electricity usage at distribution centers and manufacturing plants.
Eliminate of excess packaging: Not stuffing papers in packaging of footwear is an example. It
cannot be applicable in every industry since breakable items do require certain safe packaging,
but can be eliminated wherever unnecessary.

5. Conclusion
A Green Supply Chain is not just beneficial for the society & the planet but also for the bottom line of
the organizations. The firms adapting these should highlight to the customers to increase brand image.
Lean is the starting point of thinking in a Greener way. Every concept of Green can be implemented
using Lean principles as a tool.












Bibliography
Bashkite, V., & Karaulova, T. (2012). INTEGRATION OF GREEN THINKING INTO LEAN FUNDAMENTALS BY
THEORY. INTEGRATION OF GREEN THINKING INTO LEAN FUNDAMENTALS BY THEORY, 1-6.
Burt, D. N., Dobler, D. W., & Starling, S. L. (2012). World Class Supply Management. New Delhi: Tata
McGraw Hill.
Deloitte. (2012). The evolving supply chain: Lean & Green. Deloitte Development LLC.
Friedman, P. (2008, November 3). Leaning Toward Green: Green your supply chain with lean practices.
Outsourced Logistics, pp. 16-17.
Liker, J. (2004). The Toyota Way. Michigan: McGraw-Hill.
Palevich, R. (2012). The Lean Sustainable Supply Chain. Pearson Education.