ASSIGNMENT - 02

Course Title: Globalization and Strategy

Prepared for:
Dr. Syed Golam Maola
Professor
Department of Management
University of Dhaka

Prepared by:
Md. Tanver Ahmed
Roll: 308
MBA (SIM)
Department of Management
University of Dhaka

Date of Submission: July 19, 2016

1. (a) Features of Lean Production:

The core idea of lean production is to maximize customer value while minimizing waste.
Simply, lean means creating more value for customers with fewer resources. Taiichi Ohno is
the pioneer of lean production system. Lean production basic features are1.
2.
3.
4.
5.
6.
7.
8.
9.

Produce only what is needed

Fielding a team of multi-skilled players
Believing the motto of Our competitive advantage is us.
Implement Just in Time (JIT).
Beginning the journey of world class
Reduction of waste that we can see and also the waste hard to see.
The beauty of doing things is simplicity.
Compliance is not commitment
Right balance between people and technology as people are the new frontier.

1. (b) Barriers to Lean Production:

A recent article on the iSixSigma site says "recent studies say that failure rates for Lean
programs range between 50 percent and 95 percent." Of course, whatever those numbers are
there are variety of factors.

Misunderstanding of Lean is one of the major reason to lean failure. Some companies have
looked at Lean as merely a cost reduction process, not a method of creating more value to
customers and removing waste. Which can reduce internal costs in the short term but do
nothing for total supply chain costs in the longer term.
Finance related issues are among the most common barriers to lean practice across different
organizations. These barriers to include corruption, inadequate projects funding, inflation,
implementation cost, poor professional wages, lack of incentives and motivation, and risk
aversion.
Supply chain complexity has many costs, and one of them is making Lean techniques more
difficult to adopt cleanly.
In some companies, other improvement methodologies, such as Six Sigma, Total Quality
Management, etc., can create internal conflicts with Lean initiatives.
Lean initiatives are taken by some specialist, sometimes it creates understanding
complexity to shop floor worker and top management that is a barrier of proper
implementation.
A huge consulting industry has developed around but everyone might not have a proper
technique or skill for implementation of Lean. That may have a debacle to Lean production.
Lack of staying power is another barrier for Lean production. If a Lean initiative actually
go in the wrong direction at the start, companies frequently cancel the program rather than
fixing what went wrong.

The bottom line message is that strong Lean intentions and launching a program are clearly
not guarantees of success. Being away of the key barrier to program outcomes, from top
management on down, is one way to at least improve the chances of a successful initiative.

2.(a) Elements of Six Sigma:

There are three key elements of Six Sigma. These are shortly described below:
1. Processes: Defining processes as well as defining their metrics and measures is the central
aspect of Six Sigma. By understanding the transaction lifecycle from the customer's needs and
processes, we can discover what they are seeing and feeling. This gives a chance to identify
weak areas with in a process and then we can improve them.
2. Employees: A company must involve all its employees in the Six Sigma program. Company
must provide opportunities and incentives for employees to focus their talents and ability to
satisfy customers.
3. Customers: Customers define quality. They expect performance, reliability, competitive
prices, on-time delivery, service, clear and correct transaction processing and more. This means
it is important to provide what the customers need to gain customer delight.
2.(b) Relationship between Six sigma and Total Quality Management (TQM):
Total Quality Management (TQM) is a method by which management and employees can
become involved in the continuous improvement of the production of goods and services. It is
a combination of quality and management tools aimed at increasing business and reducing
losses due to wasteful practices. On the other hand Six Sigma is a disciplined, data-driven
approach and methodology for eliminating defects in any process from manufacturing to
transactional and from product to service.
In japan TQM and six sigma is same thing but in USA, six sigma is treated as a tool to
implement TQM. Generally six sigma is treated as a part of implementing and ensuring total
quality in an organization. There are many others tolls are used to ensure total quality such as
Kaizen approach, Fishbone diagram, Gant chart, PDCA cycle and many more. There are two
tools are used to implement six sigma. DMAIC is used for existing product or process on the
other hand DMADV is used for new product or process.
The basic difference between Six Sigma and TQM is the approach. While TQM views quality
as conformance to internal requirements, Six Sigma focuses on improving quality by reducing
the number of defects. The end result may be the same in both the concepts (producing better
quality products). Six Sigma helps organizations in reducing operational costs by focusing on
defect reduction, cycle time reduction, and cost savings.
TQM initiatives focus on improving individual operations within unrelated business processes
whereas Six Sigma program focus on improving all the operations within a single business
process. Six Sigma projects require the skills of professionals that are certified as Belt
whereas TQM initiatives are usually a part-time activity that can be managed by non-dedicated
managers.
In conclusion it can be stated that, Total quality management emphasizes on improving the
existing or new policies and making necessary changes in the systems to ensure superior quality
products and services. Organizations practicing Six Sigma are focused on removing errors and
defects to ensure high quality products.

3.(a) Difference between supply chain and value chain:

Supply chain means the sequence of processes involved in the production and distribution of a
commodity. On the other hand value chain is the process by which a company adds value to a
product or service including production, marketing, after-sales service etc.
Supply chain encompass the following three functions i. supply of materials to a manufacturer;
ii. the manufacturing process; and, iii. the distribution of finished goods through a network of
distributors and retailers to a final customer. Companies involved in various stages of this
process are linked to each other through a supply chain. Value chain mainly covers two sets of
activities one is primary activities which encompass inbound logistics, operation, outbound
logistics, marketing and sales, service and the other one is secondary activities involves
infrastructure, HRM, procurement and technology.
The major difference between a supply chain and a value chain is the simple fact that within a
supply chain, there is no value added. In a supply chain, one product or material is taken from
one company or from one end and transported to the other. Of course there are procedures
involved such as proper storage and careful transportation but that is about it. In value chains,
as much as there is transportation and some storage involved, the main purpose of a value chain
is to add value to the product so as to make it presentable to the client. This is often achieved
via packaging, marketing and sales.
The reason we always find this product on the shelves at our convenience store is because
supply chains never rest. Otherwise we would have to wait months before we can get the
product at our need. Value chain add value at every stage of processing to make a final product.
Supply chain is as important to the business world as a value chain. Without one or the other,
we would simply be mired in a logistically impossible nightmare. The two are difficult to
separate in that most of their functions overlap.
3.(b) Use of supply chain in operation:
Operating an integrated supply chain in operation requires a continuous information flow.
The key supply chain processes stated are:
Procurement process:
Activities related to obtaining products and materials from outside suppliers involve resource
planning, supply sourcing, negotiation, order placement, inbound transportation, storage,
handling, and quality assurance, many more.
Product development and commercialization:
Customers and suppliers must be integrated into the product development process in order to
reduce the time to market. Integration of suppliers into the new product development process
was shown to have a major impact on product target cost, quality, delivery, and market share.
Physical distribution:
In physical distribution, the customer is the final destination of a marketing channel, and the
availability of the product or service is a vital part of each channel participant's marketing
effort.

Outsourcing:
This includes not just the outsourcing of the procurement of materials and components, but
also the outsourcing of services that traditionally have been provided in-house.
Performance measurement:
Performance measures are generally collected and analyzed by the firm, including cost,
customer service, productivity, asset measurement, and quality. External performance is
measured through customer perception measures and "best practice" benchmarking.
Supply chain also used in warehousing management, workflow management, customer service
management, demand management style, Order fulfillment, Manufacturing flow management,
Supplier relationship management, product development and commercialization, returns
management etc.
3.(c) Use of value chain in operation:
Manufacturing companies create value by acquiring raw materials and using them to produce
something useful.
To implement a value chain a firm can follow Porter Value chain activities. First of all is
primary activities that involves inbound logistics that related to receiving, storing, and
distributing inputs internally. Then operations that related to the transformation of activities
that change inputs into outputs that are sold to customers. After that deliver the product or
service to customers. Marketing and sales are important issues in value chain. These are the
processes firms use to persuade clients to purchase from you instead of your competitors.
Service is necessary retain customers. It is the activities related to maintaining the value of
your product or service to your customers, once it's been purchased.
Then comes secondary activities. These activities support the primary functions above.
Secondary activity can play a role in each primary activity. For example, procurement supports
operations with certain activities, but it also supports marketing and sales with other activities.
In procurement, organization does to get the resources it needs to operate. This includes finding
vendors and negotiating best prices. Then comes human resource management that is related
how well a company recruits, hires, trains, motivates, rewards, and retains its workers.
Technological development is the third factor of secondary activities. These activities relate to
managing and processing information, as well as protecting a company's knowledge base.
Infrastructure is the last issue of secondary activities. These are a company's support systems,
and the functions that allow it to maintain daily operations. Accounting, legal, administrative,
and general management are examples of necessary infrastructure that businesses can use to
their advantage.
Companies use these primary and support activities as building blocks to create a valuable
product or service.