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Title Lean Supply Chain Management - A Toyota Case
Author Jørgensen, Birgitte Sten
Knage-Rasmussen, Elsemarie
Institution Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark
Thesis level Master's thesis
Year 2005
Abstract Toyota has shown superior results in terms of cost, quality, and lead-time compared to its competitors. This success has led to an extensive interest in the Toyota Production System and Toyota's way of doing business. Consequently, various studies of "The Toyota Way" have been carried out. This has led to the definition of lean production, which can be seen as a generic description of the Toyota Production System. While there are many different perceptions of what exactly has caused Toyota's success, Toyota itself suggests that the basis of its system is to consider the time from receiv-ing the customer's orders to cash collection and shorten this lead-time by continu-ously eliminating waste. Also in Denmark there has been an increased focus on lean production the recent years. According to a survey carried out by the Confederation of Danish Industries in 2004, more than 80% of the Danish manufacturing companies have already or are considering implementing lean production. In a pre-project for the master thesis we concluded that the Danish breakthrough of lean production did not happen until in the early 2000s, why Danish companies are mainly focusing on internal optimisation. However, in order to gain the full benefits of lean production, it should be extended beyond the internal barriers of the focal company. Consequently, the next step for Danish companies is to pursue a lean sup-ply chain. The aim of this master thesis, therefore, has been to examine how to create a lean supply chain. In order to clarify this, we have examined Toyota's approach toward supply chain management, through both primary and secondary sources. Based on the case study of Toyota, we have examined how Danish companies can benefit from Toyota's approach and how to adapt to Danish environment. Basically to achieve a lean supply chain requires that every member of the chain is lean, i.e. the lean principles should be spread throughout the supply chain. However, learning from Toyota, we find four issues important for creating a lean supply chain: Production Planning Method, Outsourcing, Partnerships, and Supplier Association. Consequently, we recommend Danish companies to learn from Toyota's experience in these areas. We have not identified any larger constrain in terms of adaptability of Toyota's ap-proach to Danish environment, except from one: Danish companies' fear of close re-lationship. This we find is the one major challenge for Danish companies to over-come, why we argue that a change of mind-set is needed toward perceiving the parties in the supply chain as partners not competitors. This change of mind-set is critical; as we find that, in particular, Toyota's effective inter-firm relationships are the underly-ing reason for a successful implementation of TPS, i.e. lean production, in the supply chain.
Imprint Institut for Produktion og Ledelse, DTU
Pages 130
Keywords Supply Chain Management; LEAN Manufacturing; Toyota
Admin Creation date: 2006-06-22    Update date: 2008-01-11    Source: dtu    ID: 187342    Original MXD