Lean supply

René Grann

Student thesis: Diploma thesis


The concept of Lean Manufacturing was original created to improve a company’s internal value chain and subsequently has become one of the most "hyped" concepts involved with company optimization Those companies who have mastered their own internal value chain are focusing resources on their supply chain, for the purpose of seeking new and improved ways to interact. Companies have in the last ten to fifteen years divided their operations into core and non-core competences. Non-core competences have generally been outsourced to allow the company to focus its resource on its core competences. Because added value tends to be generated inhouse, companies are now considering extending their core competences to strategic suppliers, previously considered non-core. Lean Manufacturing will, as a concept, continue as Lean Supply, focusing on optimizing value streams across corporate value chains. This is the key! The purpose of this project is to answer the question “what are the assumptions for Lean Supply that can create sustainable comparative advantages for a company's supply chain” In the process of answering this question, a qualitative multiple case study of four companies, all with global presence, has been made The four companies have their own unique approach and they all faced individual challenges and problems, in establishing Lean Supply. The gathered empirical data has been complemented by secondary data, in the form of literature and theory in order to combine the different qualitative research methods. An analysis, of the collected empirical data, identifies that the four case companies looked to reduce their transaction costs for their Lean Supply relationships, and they also tried to provide a basis for common growth. This common growth is reflected to a greater or lesser extent between the four companies. In the process of working with this project, I found, that a number of different factors are effecting the establishment of partnerships between businesses in relation to Lean Supply. These factors and their characteristics are all to do with cooperative relations. The foundation of a partnership is trust. Trust is required to maximise the potential of a relationship. Trust is built over time and can contribute to relationship-specific investments and help companies to interact in new ways, which can lead to reduced costs and create new and innovative capabilities. It requires long-term relationships to create sustainable comparative advantages, however this can cause problems for companies with arm's length principles, based on their traditional supplier relationships. The project in regards to Lean Supply identifies change in the organizational and individual mindset, a transformation from achievement of organizational & individual goals set, are made into targets. The project did not identify if Lean Supply leads directly to a sustained comparative advantage. However when implemented wholeheartedly Lean Supply can ultimately benefit the interaction between a company and its suppliers to mutual advantage.

EducationsGraduate Diploma in Supply Chain Management, (Diploma Programme) Final Thesis
Publication date2011
Number of pages78