Role of Lean and Green Supply Chain Business Essay

Abstract: Lean and Green supply chain plays a key role in small scale industries. This paper tries to gather the information as to how much this concept is known in these industries. This is done by conducting a brief study and then formulating a short survey. This survey was conducted through telephonic chat and the questions were asked to the employers of the industries. Later the responses of the participants were analyzed and compiled. Through this survey the awareness of the concept of Lean and Green supply chain is expected to widen within these industries. Keywords: small scale industries, Lean supply chain, Green supply chain.

Introduction

The small scale industries in India play a vital role in the Indian economy. The growth of small scale industries (SSI) in India is huge in recent years. The small scale industries in India creates a largest employment opportunities for the Indian populace, next only to agriculture. It has been estimated that a hundred thousand rupees of investment in fixed assets in small scale sector generates employment for four persons. The small scale industries contribute 40% of gross manufacture to the Indian economy. In spite of this small scale industries play a major role in India's present export performance. 45%-50% of the Indian export is being contributed by small scale industries sector. There are three major types of small scale industries which have more revenues; they are food product industries, garment manufacturing industries and metal industries. The focus of this paper is how these industries uses or ignores the Lean and Green supply chain concept.

Research methodology and purpose

The purpose of this paper was to get a better understanding of the term "Lean and Green supply chain" and its role in the small scale industries in India. A literature review was written on the basis of valid approach to the concept by studying several journals and articles. The overview was written on summarizing the concepts of Lean with sating the fourteen principles from Toyota way; similarly the concept of Green supply chain is abstracted from several works of others and concluded. After which a survey questions were generated and sent to the entrepreneurs of three different types of small scale industries. The survey was conducted through a telephonic chat. After the discussions, an overall collective response was generated for each of the individual question in the survey. The survey was initially conducted on three different dimensions of small scale industries. They are the food product industry, garment manufacturing industry and car accessories manufacturing industry. All of them took part in the survey and described their companies view on the concept of Lean and Green supply chain. There were different reasons for choosing India for conducting this survey. India is considered as the country of more small scale industries. India has different types of small scale industries. I have more contact persons in these industries in India. These companies are running with less capital, manpower is used as main resource. Due to the growth of small scale industries in India the unemployment rate is considerably reduced. The range of employees working in these industries will be 5-75 employees.

Lean and Green supply chain: An overview

Lean manufacturing:

Toyota production system is the origin for Lean manufacturing concept that was introduced in early 1990's (Womack and Jones, 1996). According to Johansson and Winroth (2009) a strong focus is set on value creation and waste reduction in the manufacturing processes. Lean manufacturing relies on certain principles like standardized processes, leveled production, JIT practices, visual inspection and continuous improvement. Liker (2004) presented a list of fourteen management principles for Lean manufacturing. These principles can be distinguished in to four categories: philosophy (long-term thinking), process (elimination of waste), people and partners (respect, challenge and grow them), and problems solving (continuous improvement and learning) later these views were supported by Johansson and Winroth (2009). The fourteen principles are: The management decisions must be based on long-term philosophy, even at the expense of short-term financial goals. Continuous process flow must be created to bring problems to the surface. The overproduction can be avoided using "pull" system. Level out the workload (heijunka). Build a culture of stopping to fix problems, to get quality right the first time. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment. Use visual control so no problems are hidden. Use only the technology which is completely reliable and thoroughly tested and it should serve your people and processes. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Develop the exceptional people and teams who strongly follow your company's philosophy. Extend a good relationship with your partners and suppliers by challenging them and helping them to improve. To understand the situation thoroughly yourself, you should develop a active involvement in the situation. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly (nemawashi). Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen). Liker (2004) stated that it is possible to follow only few of these principles, but in that case the result will be suitable for only short-term improvements. Later Shah and Ward (2007) developed a list of ten characteristics for Lean manufacturing which is also supported by Johansson and Winroth (2009). Supplier feedback. JIT-delivery by suppliers. Supplier development. Customer involvement. Pull. Continuous flow. Setup time reduction Total productive/preventive maintenance. Statistical process control. Employee involvement. Yu cheng, Kuan yew and Anwar ali (2009) suggested that there are many excellent tools like value stream mapping, jidoka, 5S, kanban etc.. This will assist organizations to go along with Lean manufacturing transformation. They also suggested that it is better to use these Lean tools in an integrated way rather than isolation. Many of these characteristics have a relation and influence on a company for achieving Green manufacturing (Johansson and Winroth, 2009).

Green manufacturing:

Manufacturing plays a key role in company's efforts to become more conscious about the environment (Sarkis, 2001). According to Srivastva (2007) Green supply chain has its roots from Green management and supply chain management. Srivastva (2007) defined Green supply chain management has "integrating environmental thinking into supply-chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers as well as end-of-life management of the product its useful life". Johansson and Winroth (2009) stated that Green manufacturing aims for continuous improvements of industrial processes and products to reduce or prevent pollution to air, water and land. He also suggested that by these improvements, there is possibility of minimizing risks to humans and other species. Richards (1994) stated the challenges associated with the Green manufacturing like meeting the customer demands for environmentally sound products, development of recycling schemes, minimizing the materials use, and selecting the materials causing low environment impacts. Johny, et al. (2009) has suggested that the pollution is highly prevented in the companies which practices Lean manufacturing. Johansson and Winroth (2009) indicated that employee's involvement is a key for developing or implementing the environmental performance with in the firm. The Green manufacturing relies on long term thinking because the environmental impacts created by industries have been for many years, so a sudden change will cause more investment on their capital but if a longer time frame is considered, Cost is quite negligible because of their reduced cost in their wastes (Johansson and Winroth, 2009). Long term thinking and process focus are the key aspects of both Lean and Green supply chain.

The survey:

After a brief study on the concept of Lean and Green supply chain and about the small scale industries of India the following survey was generated. The main purpose of this survey is to know how these small scale industries adopt this concept, so the questions will be more generalized on the topics. How does your company define Lean supply chain? Which of these waste parameters do you associate with Lean supply chain? Rank them in order of importance. Over production Delay/waiting(time) Transportation/conveyance Motion Inventory Space Unused knowledge/competence of staff What methods do you use to improve Lean supply chain at your firm? Can u specify these methods? Does your company have any goals when it comes to Lean supply chain? What are they? How do you work towards achieving these goals? Does your company consider ergonomic parameters and other safety parameters for improving Lean supply chain? Does your company associates Green supply chain in product manufacturing? If so, how would you define it? What are the major wastes of your company in concern with environment? How do you dispose these wastes from your company? Do you think that you have any effect on profit of your company by implementing Green supply chain? Do you see any similarities/synergies between Lean supply chain and Green supply chain?

The companies

As mentioned in an earlier section the survey was sent to the entrepreneurs of three different types of small scale industries in India they are food product industry, dying unit of garment industry and automobile accessories manufacturing industry. Below is the short presentation of the companies. Food product industry: The industry is one of the major food processing industries in Tamil Nadu. The industry produce jellies as their main product and it is located in the district of Madurai. The size of the industry is about 10000sqft and about 50 employees are working within the firm. The company export jellies to the countries like Srilanka and Malaysia. Dying unit of garment manufacturing industry: The company is one of the major dying industries in the city of Tirupur. The main process of the industry is dying i.e. adding color to the yarn and fabric materials. The company is built around 4000sqft and about 20 employees are working within the firm. The production capacity of the industry is about dying one ton of yarn per day. Automobile accessories manufacturing industry: The company produces different varieties of bumpers for different types of car. The industry is located in the district of Coimbatore. The size of the industry is about 7500sqft and about 30 employees are working within the firm. The company has different processing units for manufacturing bumpers like electroplating unit and powder coating unit.

Analysis

In this section we try give a collective overview of each of the respondents on each question of the survey one by one. How does your company define Lean supply chain? According to the three participants the Lean supply chain was generally defined as the process used for increased production of using the minimum resource and by eliminating the waste. Which of these waste parameters do you associate with Lean supply chain? Rank them in order of importance.

Parameters

Respondents

Food industry

Dying industry

Automobile industry

Over production 4 7 6 Delay/waiting 1 4 1 Transportation 5 1 7 Motion 6 5 5 Inventory 2 6 3 Space 7 2 2 Unused knowledge/ competence of staff 3 3 4All the participants are not aware of all the waste parameters that we mentioned. So, I tried to explain the waste and the influence made by it, so it became very useful for them to identify and to work on it. After this, the participants were asked to rank them base on their experience. The table below shows the ranking of parameters given by the participants. What methods do you use to improve Lean supply chain at your firm? Can u specify these methods? The participants replied that they don't use any specific methods for improving Lean. Most commonly used method by all these industries is total productive maintenance and visual inspection. Does your company have any goals when it comes to Lean supply chain? What are they? How do you work towards achieving these goals? The only goal of all these industries is to increase their production and to make the industry more profitable and this goal can be achieved by making the employees more involved in their work. Does your company consider ergonomic parameters and other safety parameters for improving Lean supply chain? All the participants replied 'YES' immediately because when you look at these industries the manpower is the major resource next to the capital, so it is must for them to consider ergonomic and safety parameters. Does your company associates Green supply chain in product manufacturing? If how would you define it? While the food product and automobile accessories manufacturing industry had very little or no knowledge about the term Green supply chain. The dying industry replied that it is must for them to associate Green supply chain in their process because the effluent water which is the major waste of the industry must be treated in a reverse osmosis plant because it has more effects on environment. What are the major wastes of your company in concern with environment? The participants stated their waste but they are not conscious, that it has effects on environment or not. The major waste of the food product industry was the damaged plastic cups. These cups were used for filling jellies in it. The waste stated by the dying industry is effluent water and the waste of bumper industry is the used chemicals and powder from the electroplating and powder coating process. How do you dispose these wastes from your company? Answers given by the companies were shocking because they are totally not aware of the effects caused by their wastes to environment. The food product industry replied that they would dig the soil and dump the waste and burn it. The dying industry replied that they would make the effluent water to drain in the drainage or in the canal. The bumper industry said that they would deposit the waste powder in the dumping area and the chemicals are made to drain in the drainage. Do you think that you have any effect on profit of your company by implementing Green supply chain? All the participants replied 'YES' because the reason stated by the dying industry is that the cost for implementing a reverse osmosis plant in the industry would be more than the capital invested for the industry. Do you see any similarities/synergies between Lean supply chain and Green supply chain? Yes, the both concepts promote an increased productivity of product but Green concentrates more on producing the product eco friendly.

Discussion

All the companies participated in the survey had a little knowledge about Lean supply chain but they are not aware of Green supply chain. The companies defined Lean supply chain as the process implemented for improving production but the methods used by them were not compromising because they use only two methods as there are more competitive methods for improving Lean supply chain. All the companies replied that they were more conscious about their workers safety and ergonomics factors but when this question was asked to the low level employees of these companies, they find more danger by working in these types of industries especially in the dying industry. The two companies were not able to define what actually Green supply chain is but dying industry was more conscious about the concept but the fact is that they don't follow it. The way these industries dispose their waste clearly states how much they are concern towards the environment. The reason given by the industries for not integrating Green supply chain in their manufacturing process was it would cost more and also affects the profitability of the company

Conclusion

After evaluating the survey responses the conclusion is that Lean supply chain is implemented because it helps these companies to improve their production capacity. All these industries are not totally aware of Green supply chain because of the high capital investment made in it. For improvements, the industries should consider other competitive methods for improving Lean and also making the employees more involved in the work place. These industries should focus more on the environmental factors by using the best methods for disposing their wastes and making their product Eco friendly. This survey would have alarm all the participants about the importance of Green supply chain and their effects produced, if they don't follow it.

Acknowledgements

I extend my sincere thanks to all the entrepreneurs participated in this survey.

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