Application of Lean Thinking in Supply Chain Management by the Small and Medium Sized Manufacturers in China: A Status Survey

Introduction

Efficiency and responsiveness can be regarded as the primary goals in supply chain management (SCM) (Chopra & Meindl, 2010). To achieve these two objectives, waste elimination and flexibility enhancement are the keys. They help reduce operating cost and enforce continuous improvement thereby increase overall efficiency and responsiveness. With growing recognition of the significance of SCM (Houlinhan, 1987), the notion of “lean supply chain” – a derivative of “lean thinking” (Womack & Jones 2003) – has been proposed. As a philosophy developed from “lean production”, lean thinking was put forward by Womack, Jones, and Roos (1990). Lean production, or lean manufacturing, itself is originated from “just-in-time manufacturing” or “Toyota Production System” introduced by the Japanese automobile manufacturing company Toyota (Browning & Heath, 2009; Cox & Chicksand, 2005). Nowadays, lean production usually refers to a collection of principles governing waste elimination and value creation (see for example Womack & Jones, 2003) that have been applied in different industries, organizations, and countries (Calloway, 2004; Holweg, 2007).

The success of the Japanese automobile manufacturing companies such as Toyota and Honda in the last few decades has provided strong evidence of the benefits derived from lean production (Calloway, 2004). Similar successful examples of lean thinking application can also be found in other businesses or industries such as passenger airplane manufacturing (Horng, 2007). In SCM, some of the key elements of success include “flow”, “integration”, “sustainability”, “cost”, and “service” (Handfield & Nichols, 1999; Simchi-Levi, Kaminsky, & Simchi-Levi, 2008). In many ways, lean thinking can be regarded as an enabler of recognition of these essentials. Application of lean thinking in SCM has been witnessed all over the world. In the UK, many food and farming supply chains have applied lean thinking (Cox & Chicksand, 2005). In the US, companies such as Buck Knives, New Balance Athletic Shoe, and Ariens Co. have enjoyed improvement brought by lean management (Kator, 2007). As consumer markets become increasingly competitive, unpredictable, and volatile in recent years, cost minimization, flexibility, and resource optimization are the strong incentives for supply chain members to adopt a lean approach (Weber, 2009).