Impact of Lean Supply Chain Management On Operational Performance - A Study of Small Manufacturing Companies PDF

International Journal of Business Analytics, 2(3), 1-19, July-September 2015 1
Impact of Lean Supply

Chain Management on
Operational Performance:
A Study of Small Manufacturing Companies

Steve Bin Zhou, College of Business, University of Houston Downtown, Houston, TX, USA
Fiona Xiaoying Ji, College of Business, James Madison University, Harrisonburg, VA, USA
ABSTRACT
Lean is a systematic approach to identify and eliminate non-value-added activities or waste through continuous improvement process. While traditional lean manufacturing focuses on the activities within a single
organization, lean supply chain consists of the same processes, but it views these processes over multiple
organizations. This research addresses an important yet under-studied area lean supply chain management
in small organizations, especially small manufacturing firms. The study examines driving factors of lean supply
chain management, focus of lean supply chain practices, and major supply chain and information technology
solutions applied in these companies. Through a research survey, the study has provided important insights
into the current status of lean supply chain practices and related implementation issues in small businesses.
Keywords:
Just-in-Time, Lean, Lean Manufacturing, Six Sigma, SME, Supply Chain Management
1. INTRODUCTION
Lean is a systematic approach to identify and
eliminate non-value-added activities or waste
through continuous improvement process.
Waste is anything other than the minimum
amount of equipments, materials, components,
and working time that are essential to the
manufacturing process. The practice of lean
manufacturing originated from Toyota that
used names such as Just-in-Time manufac-
turing or Toyota Production System (TPS) in

the 1950s.The main goal of TPS was to reduce
costs and improve productivity by eliminating
wastes or non-value activities (Womack et al.,
1991).Lean is regarded as continuous flow to
the assembly line process with a focus on cost
reduction, quality improvement, and throughput, which is recognized as the most advanced
manufacturing process by both practitioners
and academicians.
DOI: 10.4018/IJBAN.2015070101
Copyright 2015, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
2 International Journal of Business Analytics, 2(3), 1-19, July-September 2015
1.1. Lean Manufacturing
1.2. Lean Supply Chain
Initial lean efforts were made to reduce wastes

within organizations. From the production and
inventory perspective, waste can be classified
into several types, such as production waste,
waste of waiting time, transportation waste,
inventory waste, processing waste, and waste
from product defects. Various lean tools and
techniques were invented, applied, and refined
in different areas to help companies operate
more effectively and efficiently. In the early
manufacturing stage, lean initiatives were focused on specific areas and functions within
the firm, such as engineering, production, and
quality control. While implementing lean programs and tools in these areas, firms found that
close intra-organizational and cross-functional
collaborations were necessary and important to
the success of lean. As a result, lean efforts were
gradually expanded to full organizations in the
process of waste reduction and value creation,
aiming to become lean enterprises.
The desire for cheaper materials and labor
sources motivates many companies to engage in
more international procurement and outsourcing activities to reduce costs. Large companies
have either established production facilities, or
completely outsourced manufacturing to low
cost countries and regions. Inevitably, such
practices involve more international suppliers
in the extended supply chain, with both benefits
and potential risks. Firms are not only required
to monitor their internal operations, but their
partners as well so as to achieve lean in the
entire process. In fact, as lean evolves from lean
manufacturing to lean enterprise, and eventually
to lean supply chain, many organizations have
become to realize that optimizing a part of the
process is different from optimizing the whole.
If real changes were to take place, they had to
include their business partners in the existing
firm-based lean efforts. Companies must extend
their boundaries to their suppliers and customers
to reach the global optimum.
A supply chain is a complex system consists

of organizations, people, technology, activities,
information, and resources. Supply chain activities transform natural resources, raw materials
and components into semi-finished and finished
products, which are then delivered to distributors or end customers. According to the Council
of Supply Chain Management Professionals
(CSCMP), supply chain management emphasizes the coordination and collaboration with
channel partners, which can be suppliers, intermediaries, third-party service providers, and
customers, and integrating supply and demand
management within and across organizations.
Since a supply chain contains many entities
and activities, wastes in the interaction points
of these entities and activities are created. For
example, when the suppliers of a manufacturer
are supplying only in bulks and the lead times are
longer, then the manufacturer not only needs to
carry more inventories itself but requires more
time for production planning.
Similarly, the lack of lean in downstream
distributors and retailers may lead to information distortion and demand exaggeration, which
further cause significant inventory buildup at
the manufacturer, namely the bullwhip effect
in the supply chain. These wastes are resulted
from external factors that the manufacturer has
less or even no control. On the other hand, the
end result of these wastes in the supply chain
would be eventually amplified and passed to
downstream customers who would experience
higher costs or lowered quality of the products.
Clearly, there are a limited number of things a
single firm can do to eliminate the wastes in
the entire system. To effectively remove wastes
and gain value, every entity throughout the
supply chain must contribute and accept others
as its partners.
While traditional lean manufacturing
focuses on the activities within a single organization, lean supply chain consists of similar
processes, but it views these processes over
multiple organizations. Hence, the former is
internally focused while the latter is externally
focused. There exists both differences and

overlaps between the two areas. For instance,
lean manufacturing uses a set of structured tools
and techniques to reduce wastes and non-valueadded activities with a traditional emphasis on
shop floor optimization. Lean supply chain,
on the other hand, utilizes lean tools, as well
as other programs and technologies to reduce
costs and increase value in various areas with
a focus on the optimization across supply chain
members. Lean supply chain includes multiple
organizations, activities, information, and is the
ultimate stage of lean.
Lean supply chain is defined as a set
of organizations directly linked by upstream
and downstream flows of products, services,
finances, and information that collaboratively
work to reduce cost and waste by efficiently
and effectively pulling what is needed to meet
the needs of the individual customer (Association for Operations Management (APCIS)).
With increased competition and customers
requirements, along with the growing trend of
globalization, more and more companies are
implementing lean in supply chain management.
Furthermore, as supply chain system extends,
many small companies become important
partners. Small organizations have attempted to
implement or have already implemented lean in
their practices. Some companies have adopted
a few lean tools and techniques, while others
have implemented a whole spectrum of lean
programs. Therefore, it becomes very difficult to
gauge which firm has really embraced the lean
philosophy and where it stands in comparison
with other organizations.
Further, although there is some agreement
in the field of operations-supply chain management about the underlying factors of lean supply
chain, the relationships among these factors are
not directly identifiable. Causal relationships
tend to be complex, making the assessment of
leans impact less clear. The lack of research
in the area of lean supply chain, especially
among small companies motivates us to provide
a holistic framework that help have a better
understanding of lean supply chain practice.
Therefore, the objective of this research is to
investigate the adaptation of lean supply chain

and its current state of practice in small organizations through a research questionnaire. In order
to undertake an assessment of the practicing
lean in supply chains, the research developed
three fundamental questions: a) to what extent
are the small companies implementing lean in
supply chains? b) what factors affect the implementation of lean supply chain strategies? c)
for those companies implementing lean supply
chain management, what are lean supply chains
impacts on firms operational performance?
The rest of this article is organized as follows. In the second section, we provide a review
of relevant literature on lean and supply chain
management. In the third section, we describe
research methodology employed and how it was
conducted. Section four is devoted to analyzing
lean supply chain of small organizations through
investigating some specific areas, such as lean
tools and programs, supply chain solutions, and
information technology. A thorough discussion
of valuable research findings and important
managerial implications are also presented in
this section. Finally, section five summarizes the
research study and concludes with a discussion
of its limitations and future directions.
2. LITERATURE REVIEW
Lean advocates the streamlining of business
process into a seamless operation that facilitates the reduction of cycle times, reduction of
inventories, lowered costs, and increased
quality and customer service. The well-known
Toyota Production System (Ohno, 1988) was
introduced to the U.S. as lean manufacturing
in the 1990s, during which many transformations of traditional manufacturing into the lean
approach occurred. Lean practice applies pull
production concepts, linking the shop floor to
the customer, thereby greatly reducing inventory
and lead times. It enables manufacturers to add
more value to meet customer requirements while
still largely being dependent on standardized
processes (Womack et al. 1991).
Researchers tend to agree that the concept

of lean has evolved from a shop floor waste
reduction strategy to an allover continuous
improvement strategy, affecting everyone from
suppliers to customers in the supply chain. Lean
tools and techniques were classified based
upon the area of implementation internally
and externally oriented lean practices (e.g.,
Panizzolo, 1998 and Olsen, 2004). Panizzolo
(1998) divided lean practices into six areas:
process and equipment; manufacturing; planning and control; human resources; product
design; supplier relationships; and customer
relationships. The first four areas are grouped
as internal oriented lean practices, whereas supplier relationships and customer relationships
are obviously external oriented lean practices.
The study confirmed that many firms seem to
have difficulty in adopting lean tools that related
with external suppliers and customers, even for
high performance firms.
Lean includes a variety of tools and techniques which were categorized into four bundles
associated with Just-in-Time, Total Quality
Management, Total Preventive Management,
and Human Resource (Shah and Ward, 2003).
Achanga et al. (2006) argued that the success
of lean implementation depends on four critical
factors: leadership and management; finance;
skills and expertise; and supportive organizational culture of the organization. McGill and
Slocum (1993) identified the four stages of
learning organizations as knowing, understanding, thinking, and learning. It is believed that
the key factors that lead to the distinction of an
organizations learning stage are philosophy,
management practices, employees, customers,
and overall change.
The change from traditional manufacturing
to lean manufacturing, and to lean supply chain
is not an easy task. Agus and Hajinoor (2012)
suggested that quality, cost, flexibility and delivery are considered very important issues in
the supply chain. Supply chain managers and
coordinators have been thinking of approaches
to adopt in order to achieve reduced cost, efficient delivery, high quality and flexibility
with the supply chain. While the huge benefits
gained from lean implementation are widely

recognized, in reality many manufacturing
firms have experienced various problems and
issues in lean practices (Balle, 2005; Papadopoulou and Ozbayrak, 2005). Zhou (2012)
investigated various factors associated with the
implementation of lean in SMEs in the U.S.
Its findings suggested that though most SMEs
have a relatively accurate understanding of
lean concept and philosophy, there exist quite
significant differences in terms of the degrees
of lean implementation in SMEs. Varied lean
tools and programs have been applied and they
are positively related with firms performance.
It concluded that major lean barriers are encountered by SMEs regarding management or
people related factors as well as key knowledge
and know-how. Hines et al. (2004) analyzed and
provided three main failures of lean. The first
main failure of lean was its lack of contingency.
A lack of contingency is defined as being a
failure to prepare a manufacturing system for
fluctuations in demand or supply. The second
main failure was the lack of consideration for
human aspects, and this represented the idea that
lean systems could be interpreted as potentially
being exploitive. The last failure of lean was
its narrow operational focus on the shop floor.
Narrow focus on shop floor implementation of
lean has led in the end to a lack of sustainability
of many lean transformation programs.
Womack et al. (1991) investigated the
difference between lean and non-lean firms by
the number of suppliers they had. They showed
that non-lean firms had 67% more suppliers
than their lean counterparts. Optimizing and
reducing the number of suppliers lead to more
reliable sources of materials and supplies. Fewer
suppliers also can deliver the right quantity at
the right time, which ultimately lead to lower
costs and quicker response times to customers
requirements. Ansari and Modarress (1988)
argued that involving one supplier, rather than
many, provides the opportunity for mutually
collaborative ventures that otherwise would not
be possible. Well-recognized advantages of a
small number of suppliers include, for instance,
consistent quality; saving of resources; lower

costs; and long term relationships.
Involving customers into lean practice is
another key area of lean supply chain management. Classic lean principles and tools such as
Pull system, Just-in-Time, and KanBan, are
customer/demand oriented. Companies need to
focus on customers and develop close relationships that allow the sharing of key information
such as product development and demand.
Value identification and creation are achieved
with the help of customers, whose inputs are
of significant importance to help identify processes and features. Companies applied different
supply chain management programs to achieve
lean in the system. For instance, many firms
use Vendor Managed Inventory (VMI) and
Electronic Data Interchange (EDI) to improve
supply chain performance, reducing inventories and eliminating stock-out situations. The
impact of the level of cooperation in the supply
chain on lean production adoption is examined
(Moyano-Fuentes et al., 2012). The effect of
the level of cooperation with both suppliers
and customers with regards to the intensity of
lean production adoption is investigated, as is
the joint effect of cooperation and information
integration with customers.
A growing number of firms have expressed
keen interest in jointly forecasting customer
demand and co-managing business functions.
Such interest sparked the rapid development
and implementation of Collaborative Planning,
Forecasting and Replenishment (CPFR) that
was proven to be successful in minimizing safety
stocks, improving order fill rates, increasing
sales, and reducing customer response time (Min
and Yu, 2008). Various supply chain information
systems and technologies such as Enterprise
Resource Planning (ERP), Warehouse Management System (WMS), Customer Relationship
Management (CRM), Radio Frequency Identification Technology (RFID), e-Procurement,
Geographic Information System (GIS) and
Global Positioning Systems (GPS) are also
employed to facilitate communication and collaboration among organizations. For instance,
Zhou et al. (2010) examined the implementation

issues of information technology in a mediumsized third party logistics service company
and revealed important facts regarding the
hurdles in their lean operations and process
management. Chen et al. (2013) studied lean
production and radio frequency identification
(RFID) technologies to improve the efficiency
and effectiveness of supply chain management.
Their study showed that utilizing technology,
the cost of labors can be significantly reduced
while maintaining current service capacity at
the members in the studied supply chain. Some
other actual applications and discussion of lean
and supply chain management can be found in
Liker (1998), Abdulmalek and Rajgopal (2007),
and Fauske, et al. (2008), and the references
cited therein.
A company must keep its efforts for an
effective communication process at all levels
in order to be successful in lean implementation (Puvanasvaran et al., 2009). However, a
focus on simply improving all internal operational processes does not make a firm lean; a
focus on those outside the bounds of the direct
manufacturing operation needs to be factored
in. A lean supply chain identifies all types of
wastes in the systems and seeks to eliminate
them (Wee and Wu, 2009).Thus, Shah and
Ward (2007) re-defined lean as a socio-technical
system that is integrated to achieve a reduction
in or elimination of operational inefficiency by
simultaneously minimizing variability from
customers, suppliers and internal operations.
3. RESEARCH METHODOLOGY
The objective of this research is to find out
if small companies are implementing lean in
their supply chains, why they implement, and
how they implement. To this end, a research
questionnaire was developed and distributed to
collect related data. In what follows, we discuss
research method employed in the study along
with its procedure.
3.1. Population and

Sample Selection
Our research population is small businesses
in a variety of different industries, such as
manufacturing, logistics and distribution, and
service. In particular, these companies practice in assembly, metal and chemical goods,
electronic components, machinery, logistics
and distribution, and pharmaceuticals fields.
We selected the samples of organizations from
various regional chapters of Association for Operations Management (APICS). This selection
is both convenient and relevant to our research
problems, since APICS is the leader and premier
source of the body of knowledge in supply
chain and operations management, including
production, inventory, materials management,
purchasing, and logistics. The association has
more than 43,000 individual and corporate
members in more than 10,000 companies and
its members include managers and owners of
many small firms across the nation. A total of
200 small companies are randomly chosen from
different APICS chapters in the northeast region
of the U.S. The major reason for choosing the
companies in the northeast region is that these
companies have experienced fast development and faced significant opportunities and
challenges.
The survey questions were stored in a
commercial survey website for a period of 6
weeks. Emails that contained a web link to the
survey were sent to the respondents to request
their participation of the study. The emails
and survey were sent to senior management
of these companies such as managers, managing directors, vice president of operations, and
companies owners, who should be regarded as
the best people that are likely to be the leaders
in charge of lean implementation in their supply chains, if any.
3.2. Questionnaire Development

The research questionnaire included two major
parts that cover different interested aspects.
The first part of the questionnaire collects the
primary information related to the organization

and respondent, such as the name of the firm,
operating locations, type of industries, type of
ownership, number of employees, sales data,
job title, etc. The background information is
important as it provided a general picture of
the respondents. The second part focuses on
collecting information about lean practices in
the respondent companies supply chains.
Research questions were classified into six
areas with a total of 50elements.The first area is
Motivation of lean supply chain management,
which consists of questions aiming to reveal the
triggering factors for implementing lean in the
supply chains. The second area, Coordination
within the organization, investigates the level
of communication and collaboration among
different functional areas within the firm, such
as manufacturing and engineering, purchasing
and logistics, and marketing and manufacturing,
etc. The third area, Supply chain management
programs applied, intends to discover SCM
programs and methods employed by the firms
in their lean practices. The fourth area, IT
solutions applied, is designed to find out what
types of information technology and information systems have been used in the organizations.
The last area, Successfulness of lean SCM,
measures the extent of successfulness of lean
SCM in the respondents companies.
These various areas were evaluated on a
Likert type scale. Potential answers were measured with a five-point scale, anchored at, for
instance, 5 = strongly agree, 4 = agree, 3
= neutral, 2 = disagree, and 1 = strongly
disagree. The application of these scales is an
effort to force respondents to make an exclusive
and decisive choice. In addition, this design of
the survey instrument can also keep it short and
help the respondents to answer them in less time.
A pilot study was conducted during the survey
development process. Lean and supply chain
management experts from both industries (3
practitioners) and academics (3 academicians)
were consulted. Comments and feedbacks from
these experts were generally favorable and some
modifications were made to alter and eliminate
some variables and improve readability.
Table 1. Reliability and validity tests

Areas
No. of
Items
Cronbachs
Alpha
Item
Deleted
KMO
Value
Bartletts
Test Sig.
Motivation of lean SCM
0.92
0.82
0.00
Coordination within the organization
0.92
None
0.73
0.00
SCM programs applied
11
0.92
None
0.87
0.00
SCM IT solutions applied
10
0.93
None
0.84
0.00
Successfulness of lean SCM
14
0.98
None
0.90
0.00
3.3. Tests of Reliability and Validity
4. FINDINGS AND ANALYSIS
We developed reliability and validity tests to

ensure that the questionnaire is both reliable and
valid. Reliability measurement is an indication
of the stability and consistency of the instrument
applied. Cronbachs alpha is used to gauge the
reliability of the six major areas of the study.
Cronbachs alpha with a minimum value of
0.60 is acceptable, as it is generally agreed that
a value of 0.60 is satisfying for exploratory
research. Validity test is achieved through principal components analysis. Kaiser-Meyer-Olkin
(KMO) and Bartletts test of sphericity are
employed to measure the sampling adequacy.
A summary of the reliability and validity test
results is provided in Table 1.
It is observed that the results of the six
areas all have very high internal consistency
with Cronbachs alpha values varying from
0.92 to 0.98, which are significantly greater
than the threshold value and hence they are
reliable. Also, it is noted that there is one item
deleted in the Motivation of lean SCM area
so as to achieve a satisfying Cronbachs alpha.
In the validity test results, KMO values of the
six areas are all exceeding the minimum score
of 0.5, demonstrating that all areas and factors
are valid. In addition, Bartletts test results
show that they are all significant with p = 0.00.
In summary, it is safe to conclude that all areas
of interests in the study are reliable and valid,
hence they are suitable for further analysis.
The respondent companies were contacted via

email, in which a general description of the
research project, its purpose, and a link to a
questionnaire URL were provided. After the
initial contact, follow-up emails were sent to
these respondents after 2-3 weeks to remind
them to complete the questionnaire. In the end,
45 responses were obtained and 34of them were
valid for analysis. This screening process led
to a response rate of 17%. As this research is
conducted as a preliminary study to obtain initial
results and insights on the lean supply chain
project, the rate was considered to be acceptable.
4.1. Company Profiles

The first area of research interest was the general background information of the companies
involved in this study. The key descriptive
statistics with respect to company profiles are
provided in Table 2.
Among the survey respondents, private
firms account for 82.4%, while public companies account for 17.6%. This result demonstrated
that majority of the small companies are privately owned. In terms of the types of industries
of the respondents, 85.3% of the respondent
companies are in manufacturing industry (e.g.
assembly, metal and chemical goods, electronic
components, machinery, and pharmaceuticals).
The rest of the respondents are in the service or
distribution sector. In terms of operating locations, 91.2% of the respondent firms operate
in less than 3 locations, and 8.8%of them have
Table 2. Background of the respondent companies

Area of Interest
Results
Ownership
Private
82.4%
Public
17.6%
Industry
Manufacturing
85.3%
Service, Logistics, Distribution
14.7%
Operating Locations
1 to 3
91.2%
4 to 6
0.0%
More than 6
8.8%
Years of Lean Practice

Less than 3 years
52.9%
3 to 6 years
35.3%
More than 6 years
11.8%
Title in the Company

Managers or Executives
52.90%
QA or QC Personnel
20.60%
Other
26.50%
more than 6 business locations. Apparently,

smaller firms tend to have a limited number
of operating locations.
We are also interested in finding out the lean
experiences and involvements of the respondents companies. To this end, we introduced a
short question and asked the respondents about
the number of years of lean practice, which is
regarded as an indicator of their maturity in the
field. It appears that more than half (52.9%) of
the respondents have less than 3 years of lean
practice, more than one third (35.3%) of the
firms admitted that they have adopted lean for
3 to 6 years, and about one tenth (11.8%) of
the respondents indicated that they have applied lean for more than 6 years. These results
showed that the majority of the small firms have
begun to adopt lean and have some extent of
engagements in their operations.
Lastly, we obtained the information with
respect to the personnel involved in the survey.
As can be seen in the table, 52.9% of the personnel are managers and executives (such as vice
president of operations, chief executive officer,
etc.). Quality assurance or control personnel
account for approximately 21%. Together, these
two categories account for more than 70% of the
personnel responded the survey. We believe that
these respondents have the necessary experience
and knowledge of their companies, especially
on the implementation of lean and supply chain
management, and their answers should be reliable and helpful to the study.
4.2. Drivers and Focus of

Lean Supply Chain
Understanding the driving forces of lean supply
chain management is very important and they
could directly affect lean decision, application,
and results. To identify primary reasons for
small companies to apply lean in supply chains,
Figure 1. Drivers for lean supply chains
respondents were asked to rate the relative importance of seven elements that are believed to
be the driving factors. A five-point scale with 5
= very important to 1 = not important was
used to indicate the level of importance for each
of the factors. The average mean values were
computed and presented in Figure 1.
The top three reasons for implementing
lean in the respondents supply chains are:
Shorten cycle time, Improve operational
performance, and Improve customer service,
with mean values of 4.29, 4.26, and 4.06, respectively. Clearly, these factors are all closely
related with lean. Especially, we found that
these companies tend to place high priority on
both internal operations and external customers
requirements, which are keys elements for establishing effective and efficient supply chains.
Further, with a mean score of 4.0,Reduce
inventory traditional area on which lean has
focused, is another major reason for adopting
lean supply chain. Among the questions, we also
listed two explicit supply chain management
elements and both of them received aboveaverage mean scores. In particular, Improve
supply chain flexibility received a mean score
of 3.94 and Improve supply chain visibility

had a score of 3.62. The results show that small
firms have a relatively high intention to apply
lean in supply chain management.
Since lean initiatives normally start within
the firms, we next gauged the internal collaboration among different functional areas. Five
key areas were included in the survey, including purchasing, engineering, manufacturing,
marketing, and logistics. Respondents were
requested to identify the level of collaboration
among these areas based on a five-point scale
with 5 = very high level of collaboration, to
1 = very low level of collaboration. Average
mean values were computed for the results,
which are provided in Table 3.
Results show that the respondent firms
have relatively high level of cross-functional
collaborations within the organizations, as
mean values between any two functional areas
vary between 3.36 and 4.21, and all values are
above-the-average score of 2.5. Specifically,
purchasing and manufacturing were identified
as the areas that have the highest degree of
collaboration, which has a mean score of 4.21.
This is followed by engineering and manufactur-
Table 3. Level of collaboration among firms internal functional areas

Functional Areas
Purchasing and manufacturing
Average Mean
Rank
4.21
Engineering and manufacturing
4.06
Purchasing and engineering
3.76
Purchasing and logistics
3.74
Engineering and marketing
3.47
Manufacturing and logistics
3.50
Manufacturing and marketing
3.36
ing (mean score of 4.06) and purchasing and

engineering (mean score of 3.76). On the other
hand, the areas that have a relatively low degree
of collaboration are engineering and marketing, which had a score of 3.36. It is believed
that this lower score is quite normal since the
interactions between these functional areas are
considered not significant in general.
In an attempt to identify where small
firms have applied lean in their supply chains,
respondents were asked to indicate the areas that
lean efforts have been concentrated. Altogether,
seven areas were provided in the survey. Table
4 presents a summary of the findings.
Inventory management and control and
Manufacturing and supply chain flexibility
were the highest ranked areas of lean focuses,
where 59.82% and 52.94% of the respondents
indicated that they have applied lean. This
implies that in general, effective and efficient
inventory management and flexible manufac-
turing and supply chain systems are primary

concerns of these respondent companies. Needless to say, lean practices help improve decision
making process and business performance in
such areas. In addition, the respondents seem to
emphasize on using lean to enhance customer
value-adding activities in the supply chains,
as44.12% of the respondents indicated that
it is the third most important area where lean
practices has been applied. Interestingly however, only 26.47% stated that they have been
using lean to establish customer demand-driven
supply chain processes.
4.3. Supply Chain and IT Solutions

An important objective of this study is to reveal the status of lean supply chain practices
of small firms. Two areas were investigated to
achieve this goal: a) supply chain management
programs; and b) information technology (IT)
Table 4. Focus of lean in the supply chain

% of Respondents
Rank
Inventory management and control
Focused Areas
58.82%
Manufacturing and SC flexibility
52.94%
Customer value-adding activities in the SC
44.12%
Reduce non-value adding SC costs
41.18%
SC continuous improvement
29.41%
SC administrative and overhead costs
26.47%
Customer demand-driven SC processes
26.47%
Table 5. Supply chain programs applied

SCM Programs
Sharing forecasts with suppliers
Average Mean
Rank
2.76
Certification of major suppliers
2.71
Collaborative design with customers and/or suppliers
2.71
Sales and Operations Planning (S&OP)
2.68
Access to customers forecasts
2.65
Customer satisfaction surveys
2.41
Cross-organizational teams and process
2.41
Kitting/pre-assembly for customers
2.26
Vendor Managed Inventory (VMI)
2.12
10
Collaborative Planning, Forecasting and Replenishment(CPFR)
2.12
11
solutions. The first area includes eleven supply chain management programs and methods,
ranging from Vender managed inventory,
Customer satisfaction surveys, to Crossorganizational teams. The extent of implementation was determined by computing the
average mean values for each of the programs
or methods. The results are illustrated in Table 5.
The top ranked supply chain programs are
Sharing forecasts with suppliers, Certification of major suppliers, and Collaborative
design with customers and/or suppliers.
These results demonstrated that small firms
have moderately applied various supply chain
management programs in their operations, with
a focus on information sharing and collaboration with suppliers. It is noted that, however, all
average mean scores of supply chain programs
have relatively low values, ranging from 2.12
to 2.76. To further analyze the results and find
out if there exists any differences among the
respondent companies, we examined the level
of implementation of the supply chain programs
based on the number of years of lean practices
(lean maturity) of the firms.
In Table 6, the top three programs adopted
by the beginners of lean (less than 3 years of
lean practice) were Access to customers forecasts, Collaborative design with customers
and/or suppliers, and Sharing forecasts with
suppliers. In the second group of companies
that have 3-6 years of lean practice, or the

in-transition group, the most applied supply
chain programs were Certification of major
suppliers, Sales and operations planning
(S&OP), and Sharing forecasts with suppliers. In particular, Certification of major
suppliers often requires a relatively high level
of participation and cooperation between a firm
and its suppliers, as well as well-established
policies and procedures. These require more
lean knowledge and experience from the firm.
In the third group of respondents, the lean
companies with more than 6 years of lean
practice, Sharing forecasts with suppliers,
Collaborative design with customers and/or
suppliers, and Customer satisfaction surveys
were the three most implemented supply chain
programs.
From Table 6, it is easy to observe that
the lean companies mean scores (i.e. Table
6, column 6) are all larger than those (Table 6,
column 2 and 4) of companies that are either
beginners or in-transition to lean. And
there is a clear pattern that the average mean
values are increasing as the number of years
of lean practice increases. These results reveal
that as the companies become more advanced
and experienced in the field, it is expected that
they have a higher degree of lean supply chain
management implementation.
Table 6. Supply chain management program applied based on the number of years of lean practice
< 3 years of lean practice
Avg.
Mean
3 - 6 years of lean practice
Avg.
Mean
> 6 year of lean practice
Access to customers
forecasts
2.67
Certification of major
suppliers
3.08
Sharing forecasts with

suppliers
4.00
Collaborative design with

customers
and/or suppliers
2.61
Sales and Operations

Planning (S&OP)
3.00

customers
and/or suppliers
3.50

suppliers
2.39

suppliers
2.92
Customer satisfaction
surveys
3.25
surveys
2.33

customers
and/or suppliers
2.58
suppliers
3.25
suppliers
2.33
Access to customers
forecasts
2.50

Planning (S&OP)
3.25

Planning (S&OP)
2.33
Cross-organizational teams
and process
2.50
Vendor Managed
Inventory (VMI)
3.25
Kitting/pre-assembly for
customers
2.17
customers
2.33
Cross-organizational
teams and process
3.25
Cross-organizational teams
and process
2.16
surveys
2.25
Access to customers
forecasts
3.00
Collaborative Planning,
Forecasting and
Replenishment (CPFR)
2.11
Forecasting
and Replenishment (CPFR)
2.08
customers
2.50
Vendor Managed
Inventory (VMI)
2.00
Vendor Managed Inventory

(VMI)
1.92
Forecasting and
Replenishment (CPFR)
2.25
Avg.
Mean
Table 7. IT solutions applied

IT Solutions
Average Mean
Rank
Enterprise Resource Planning (ERP)
2.65
Sales Forecasting System
2.62
Customer Relationship Management (CRM)
2.35
Electronic Data Interchange (EDI)
2.29
Warehouse Management System (WMS)
2.12
e-Commerce
2.03
Advanced Planning and Scheduling System (APS)
1.97
e-Procurement
1.97
Distribution Requirements Planning (DRP)
1.85
Transportation Management System (TMS)
1.76
10
Table 8. IT solutions applied based on the number of years of lean practice

< 3 years of lean
practice
Avg.
Mean
IT solutions applied
3 - 6 years of lean practice
Avg.
Mean
> 6 year of lean

practice
Avg.
Mean
Enterprise Resource
Planning (ERP)
2.28
3.00
Enterprise Resource
Planning
(ERP)
4.25
Sales Forecasting
System
2.22
Electronic Data Interchange

(EDI)
2.75
Electronic Data
Interchange
(EDI)
3.50
Customer Relationship
Management (CRM)
1.83
Management (CRM)
2.75
Management (CRM)
3.50
Warehouse
Management System
(WMS)
1.78
Enterprise Resource
Planning
(ERP)
2.67
3.25
Electronic Data
Interchange (EDI)
1.72
e-Commerce
2.67
Transportation
Management System
(TMS)
3.00
Distribution
Requirements Planning
(DRP)
1.56
e-Procurement
2.50
e-Commerce
3.00
Advanced Planning
and Scheduling System
(APS)
1.56
Warehouse Management
System (WMS)
2.42
Warehouse Management
System
(WMS)
2.75
e-Procurement
1.50
Advanced Planning and

Scheduling System (APS)
2.42
Advanced Planning and

Scheduling
System (APS)
2.50
Transportation
Management System
(TMS)
1.39
Distribution Requirements
Planning (DRP)
2.17
e-Procurement
2.50
e-Commerce
1.39
Transportation Management
System (TMS)
1.92
Distribution
Requirements Planning
(DRP)
2.25
The second area is information technology

(IT) solutions applied in the respondent firms.
The questionnaire included ten commonly
used IT solutions, such as Enterprise resource
planning (ERP), Customer relationship management (CRM), and Advanced planning
and scheduling system (APS). Average mean
values and the rank of these IT solutions are
summarized in Table 7.
Generally, the average mean scores of
IT solutions applied were varied from 1.76 to
2.65. Enterprise resource planning (ERP) was
shown to be the highest IT solution implemented
in the respondent firms with a mean score of
2.65. This was followed by Sales forecasting

system (mean score = 2.62) and Customer
relationship management (CRM) (mean score
= 2.35). The lowest ranked IT solution was
Transportation management system (TMS)
with a mean value of 1.76, indicating that it
was the least used IT solution by small firms.
Since the average mean values for these
elements are relatively low, we also applied
similar method and classified the respondents
into three groups based upon their years of lean
experience to further investigate the degree of IT
solutions implementation in these firms. Results
of the three groups are reported in Table 8.
As can be seen in the table, in the first

group of companies with less than 3 years of
lean practice, average mean values are relatively
small, varying from 1.39 to 2.28. In particular,
Enterprise resource planning (ERP) topped
the list of all IT solutions with an average mean
score 2.28, followed by Sales forecasting
system (mean score = 2.22) and Customer
relationship management (CRM) (mean score
= 1.83).
In the second group of respondents who
have applied lean between 3 to 6 years, Sales
forecasting system appeared to be the No. 1
IT solution used in the firms, which received
an average mean value of 3.00. Electronic data
interchange (EDI) and Customer relationship
management (CRM) were the second and third
most used IT solutions, both with the mean value
of 2.75. Moreover, the average mean values for
this group ranged from 1.92 to 3.00, which are
obviously higher than those in the lean beginners group. Finally, in the last group of firms
that have more than 6 years of lean practice,
the average mean values were varying between
2.25 to 4.25, which are much larger than those
of the first two groups that have relatively less
history in lean. The top three solutions applied in
the lean respondents are Enterprise resource
planning (ERP), Electronic data interchange
(EDI) and Customer relationship management (CRM), with mean scores of 4.25, 3.50,
and 3.50 respectively.
As the respondents were classified into
three groups based upon their history of lean
practice, an important subject that is worth
investigating is whether there exists any significant difference among these groups. To this
end, non-parametric Kruskal-Wallis tests were
performed for the three groups to identify their
degree of implementations of: a) various lean
supply chain management programs; and b)
various IT solutions.
First, for the implementation of lean supply
chain programs, results of the Kruskal-Wallis
test showed that the p values of the variables are
all larger than the threshold value of 0.05 (results
not reported here), implying that none of the
listed supply chain management programs/tools
demonstrated significant differences among

the three groups. The possible explanation of
the testing results could be that lean supply
chain management are still in the early phase
in most small firms, regardless of their history
of lean practices.
Second, for the implementation of IT solutions, the non-parametric Kruskal-Wallis test
results are reported in Table 9. As shown in the
table, it is clear that the level of implementation
of major IT solutions were statistically significantly different among the three groups who are
in different stages of lean practices, but only in
certain areas. While some significant differences
(Table 9, column 6) were detected in a number
of variables, which include: Electronic data
interchange (EDI), Transportation management system (TMS), Customer relationship
management (CRM), e-Procurement, and
e-Commerce, other IT solutions did not differ
significantly among the three groups.
In summary, we found some significant
differences among the three groups in their
implementations of IT solutions but not lean
supply chain programs. More importantly, differences were found in how they performed key
lean IT solutions. As the results demonstrate,
companies that are more advanced in lean
have significantly higher level of applications
of several IT solutions in their operations than
firms who has less lean experiences.
4.4. Success of Lean Supply

Chain Management
In the last part of the study, we are interested
in discovering the relationship between the
successfulness of lean supply chain management and the adoption of IT solutions in small
firms. Respondents were given 14 areas that
could benefit from lean supply chain practices,
each with a five-point scale: from 5 = very
successfulto1 = not successful. Table 10
reported selected Key Performance Indictors
(KPI) used in the survey to gauge the success
of lean supply chain management.
As can be seen in the table, KPIs that
received higher mean values include productiv-
Table 9. Kruskal-Wallis test results for the level of implementation of IT solutions

IT Solutions
< 3 years
Avg Mean
3 - 6 years
Avg Mean
> 6 years
Avg Mean
p value
Result
1.72
2.75
3.50
0.04
Significant
2.28
2.67
4.25
0.07
Not
Significant
1.78
2.42
2.75
0.37
Not
Significant
1.39
1.92
3.00
0.01
Significant
1.56
2.17
2.25
0.35
Not
Significant
1.83
2.75
3.50
0.02
Significant
2.22
3.00
3.25
0.16
Not
Significant
Advanced Planning and Scheduling System

(APS)
1.56
2.42
2.50
0.12
Not
Significant
e-Procurement
1.50
2.50
2.50
0.04
Significant
e-Commerce
1.39
2.67
3.00
0.00
Significant
ity improvement (mean score 3.18), customer

service improvement (mean score 3.09), and
manufacturing/inventory cost reduction (mean
score 3.06). In addition, waste reduction and
profitability improvement also received higher
than average value of 3.00. These results effectively demonstrated that: 1) these are considered
to be the critical areas where more lean efforts
have been put on; and 2) the implementation
of lean supply chain management have led to
positive impacts on the firm through these KPIs
To provide more comprehensive results,
we continued our efforts to investigate the successfulness of lean supply chain management
through computing overall average mean score
of the original 14 areas. Spearman correlation

tests were conducted to achieve the results,
which were summarized in Table 11.
First, observe that all correlation coefficients have positive values, ranging from 0.331
to 0.7 (Table 11, column 2). These results prove
that there exists a positive relationship between
successfulness of lean supply chain practices
and IT solutions applied in the firms, and as the
level of IT application increases, the degree of
success of lean supply chain would increase.
Second, all p values of the 10 IT solutions are
significant (p< 0.05), which show that there
exist a significant relationship between the
successfulness of lean supply chain and the
Table 10. Key performance indictors summary

KPI
Mean Value
Rank
Productivity and Efficiently Improvement
3.18
Customer Service Improvement
3.09
Manufacturing/Inventory Cost Reduction
3.06
Waste Reduction
3.00
Profitability Improvement
3.00
Table 11. Correlation between IT solutions and successfulness of lean supply chain
IT Solutions
Spearmans
Coefficient
p Value
0.398
0.010
0.362
0.018
0.331
0.028
0.521
0.001
0.403
0.009
0.543
0.000
0.447
0.004
e-Procurement
0.700
0.000
e-Commerce
0.613
0.000
Advanced Planning and Scheduling System (APS)
0.565
0.000
individual IT solutions applied. Clearly, these

information technologies play crucial roles in
helping small companies transforming into
leaner organizations.
5. CONCLUSION AND
LIMITATION
This research has addressed an important yet
under-studied area lean supply chain management in small organizations. The study
examined the driving factors of lean supply
chain management, focus of lean supply chain
practices, and major supply chain and information technology solutions applied in these
companies. Through a research survey, the study
has provided important insights into the current
status of lean supply chain practices and related
implementation issues in small businesses.
Our results demonstrated that most of the
small organizations regard lean supply chain
management as an important measure to reduce
cycle time, improve operational performance,
and improve customer service. Their lean supply
chain practices tend to focus on both internal
and external areas, such as inventory control,
manufacturing flexibility, as well as customer
value-adding activities. Furthermore, the study
identifies the relationship of IT solutions and
the successfulness of lean supply chain man-
agement in small organizations. It is shown that

there exists a positive relationship between the
successfulness of lean supply chain practices
and IT solutions adopted, and as the level of
applications increases, the degree of successfulness of lean supply chain would increase.
It is also shown that these supply chain and
information technologies play crucial roles
in helping small companies transforming into
leaner organizations.
The findings from this study also revealed
factors that are considered more critical than
others by the surveyed firms. For instance,
Table 4 showed that inventory management and
control along with manufacturing and supply
chain flexibility are the leading areas that lean
supply chain focuses in these firms. Table 5
demonstrated that top supply chain programs
applied in these firms include sharing forecasts
with suppliers and certification of major suppliers. Moreover, Table 7 illustrated that ERP
and Sale Forecasting Systems are the leading
applied IT solutions.
These findings are consistent and supportive to each other in that appropriate supply
chain management programs and IT solutions,
i.e. EPR and Forecasting System, have been
utilized purposefully to address these critical
issues in inventory control and manufacturing
flexibility. They could eventually help improve
small companies profitability in general. In addition, they effectively and positively influenced
firms performance, which was summarized
in Table 11. In particular, it is observed that
e-Procurement/e-Commerce and Advanced
Planning and Scheduling System (APS) are the
leading critical IT solutions that demonstrated
stronger impacts on the successfulness of lean
supply chain management, possibly through
optimized and efficient purchasing and production planning/scheduling.
These findings also effectively provide
answers to the questions developed at the start
of the research. It is important to note that given
the overall low values of average mean scores
for varied lean supply chain and IT solution,
majority of the small organizations are still in the
early stage of lean supply chain practices with
relatively low or moderate level of application
of supply chain management programs and IT
solutions in their operations. Their focuses on
lean supply chain were driven by primary needs
in the areas of operational performance, cycle
time, customer service, as well as inventory.
Lastly, the general impact on firms performance
from lean supply chain, especially from IT
solutions are generally significant and positive.
Our study has provided important implications for the research and practice of lean supply
chain management in small businesses. However, the results of this study should be interpreted
cautiously. This study was a preliminary step
of a broader lean supply chain research project
on small organizations. It was conducted with a
limited number of organizations and locations.
The generability of its findings needs to be
validated through larger-scale studies. To that
end, the authors are designing comprehensive
surveys and more focused interviews for studies with small organizations across different
geographical locations and industries.
ACKNOWLEDGMENT
We are very thankful for the valuable comments
from the editor-in-chief Professor John Wang,
associate editors and anonymous referees. They
help us improve the article in its current version.
REFERENCES
Abdulmalek, A., & Rajgopal, J. (2007). Analyzing
the benefits of lean manufacturing and value stream
mapping via simulation: A process sector case study.
International Journal of Production Economics,
107(1), 223236. doi:10.1016/j.ijpe.2006.09.009
Achanga, P., Shehab, E., Roy, R., & Nelder, G.
(2006). Critical success factors for lean implementation within SMEs. Journal of Manufacturing Technology Management, 17(4), 460471.
doi:10.1108/17410380610662889
Agus, A., & Hajinoor, M. S. (2012). Lean production supply chain management as driver
towards enhancing product quality and business performance: Case study of manufacturing
companies in Malaysia. International Journal of
Quality & Reliability Management, 29(1), 92121.
doi:10.1108/02656711211190891
Ansari, A., & Modarress, B. (1988). JIT Purchasing
as a Quality and Productivity Center. International
Journal of Production Research, 26(1), 1926.
doi:10.1080/00207548808947838
Balle, M. (2005). Lean attitude - Lean application
often fail to deliver the expected benefits but could
the missing link for successful implementations be
attitude? Manufacturing Engineer, 84(2), 1419.
doi:10.1049/me:20050202
Chen, J., Cheng, C. H., & Huang, P. T. (2013). Supply chain management with lean production and
RFID application: A case study. Expert Systems
with Applications, 40(9), 33893397. doi:10.1016/j.
eswa.2012.12.047
Fauske, H., Alfnes, E., & Semini, M. (2008). Lean
supply chain control in hydro automotive structures.
Proceedings of Advances in Production Management
Systems Conference (APMS).
Hines, P., Holweg, M., & Rich, N. (2004). Learning to evolve: A review of contemporary lean
thinking. International Journal of Operations
& Production Management, 24(10), 9941011.
doi:10.1108/01443570410558049
Liker, J. K. (1998). Becoming Lean: Inside Stories of
U.S. Manufacturers. New York: Productivity Press.
McGill, M. E., & Slocum, J. W. Jr. (1993). Unlearning
the Organization. Organizational Dynamics, 22(2),
6779. doi:10.1016/0090-2616(93)90054-5
Min, H., & Yu, V. (2008). Collaborative planning,

forecasting and replenishment: Demand planning
in supply chain management. International Journal
of Information Technology and Management, 7(1),
420. doi:10.1504/IJITM.2008.015886
Moyano-Fuentes, J., Sacristn-Daz, M., & MartnezJurado, P. (2012). Cooperation in the supply chain
and lean production adoption: Evidence from the
Spanish automotive industry. International Journal
of Operations & Production Management, 32(9),
10751096. doi:10.1108/01443571211265701
Ohno, T. (1988). Toyota Production System: Beyond
Large-Scale Production. Productivity Press.
Olsen, E. (2004).Lean manufacturing management:
The relationship between practice and firm level
financial performance. Ph.D. dissertation. The Ohio
State University.
Panizzolo, R. (1998). Applying the lessons learned
from 27 lean manufacturers: The relevance of relationships management. International Journal of
Production Economics, 55(3), 223240. doi:10.1016/
S0925-5273(98)00066-8
Papadopoulou, T. C., & Ozbayrak, M. (2005). Leanness: Experiences from the journey to date. Journal
of Manufacturing Technology Management, 16(7),
784807. doi:10.1108/17410380510626196
Shah, R., & Ward, P. (2003). Lean manufacturing:

Context, practice bundles and performance. Journal of Operations Management, 21(2), 129149.
doi:10.1016/S0272-6963(02)00108-0
Shah, R., & Ward, P. (2007). Defining and developing measures of lean production. Journal of Operations Management, 25(4), 785805. doi:10.1016/j.
jom.2007.01.019
Wee, H., & Wu, S. (2009). Lean supply chain and
its effect on product cost and quality: A case study
on Ford Motor Company. Supply Chain Management: An International Journal, 14(5), 335341.
doi:10.1108/13598540910980242
Womack, J., Jones, D. T., & Roos, D. (1991). The
machine that changed the world: The triumph of
lean production. New York: Rawson Macmillan.
Zhou, B. (2012). Lean principles, practices, and
impacts: A study on small and medium-sized enterprises (SMEs). Annals of Operations Research.
doi:10.1007/s10479-012-1177-3
Zhou, B., Hsu, J., & Wang, Y. (2010). GIS and GPS
applications in emerging economies: Observation and
analysis of a Chinese logistics firm. International
Journal of Information Systems and Social Change,
1(3), 4561. doi:10.4018/jissc.2010070104
Puvanasvaran, P., Megat, H., Hong, T. S., & Muhamad, M. R. (2009). The roles of communication
process for an effective lean manufacturing implementation. Journal of Industrial Engineering and
Management, 2(1), 128152. doi:10.3926/jiem.2009.
v2n1.p128-152
Steve Bin Zhou is an Assistant Professor of Supply Chain Management in the College of Business, University of Houston Downtown. He obtained his Ph.D. and MBA in Management Science and Information
Technology from Rutgers University. His research interests include operations-supply chain management,
information technology, and system optimization. His research work has appeared in many journals and
books including International Journal of Production Economics, European Journal of Operational Research, Annals of Operations Research, International Journal of Systems Science, International Journal
of Management Information Systems, among others. He is an Associate Editor of Decision Analytics and
International Journal of Strategic Decision Science.
Fiona Xiaoying Ji is an assistant professor at James Madison University. She received her PhD degree in
Strategy from Virginia Tech. Her research focuses on how firms effectively balance exploitation and exploration in situation of organizational learning and innovation. She is specifically interested in researching
international firms and technology new ventures. Fiona has published in both international management
and entrepreneurship field. She is also active at providing services to the academic field, participating as
reviewer and discussant for several academic organizations.

Impact of Lean Supply Chain Management On Operational Performance - A Study of Small Manufacturing Companies PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Impact of Lean Supply Chain Management On Operational Performance - A Study of Small Manufacturing Companies PDF

Uploaded by

Copyright:

Available Formats

International Journal of Business Analytics, 2(3), 1-19, July-September 2015 1

Impact of Lean Supply

A Study of Small Manufacturing Companies

turing or Toyota Production System (TPS) in

2 International Journal of Business Analytics, 2(3), 1-19, July-September 2015

1.1. Lean Manufacturing

1.2. Lean Supply Chain

Initial lean efforts were made to reduce wastes

A supply chain is a complex system consists

International Journal of Business Analytics, 2(3), 1-19, July-September 2015 3

focused. There exists both differences and

investigate the adaptation of lean supply chain

4 International Journal of Business Analytics, 2(3), 1-19, July-September 2015

Researchers tend to agree that the concept

gained from lean implementation are widely

International Journal of Business Analytics, 2(3), 1-19, July-September 2015 5

consistent quality; saving of resources; lower

Zhou et al. (2010) examined the implementation

6 International Journal of Business Analytics, 2(3), 1-19, July-September 2015

3.1. Population and

3.2. Questionnaire Development

primary information related to the organization

International Journal of Business Analytics, 2(3), 1-19, July-September 2015 7

Table 1. Reliability and validity tests

Motivation of lean SCM

Coordination within the organization

SCM programs applied

SCM IT solutions applied

Successfulness of lean SCM

3.3. Tests of Reliability and Validity

4. FINDINGS AND ANALYSIS

We developed reliability and validity tests to

The respondent companies were contacted via

4.1. Company Profiles

8 International Journal of Business Analytics, 2(3), 1-19, July-September 2015

Table 2. Background of the respondent companies

Service, Logistics, Distribution

Years of Lean Practice

More than 6 years

Title in the Company

more than 6 business locations. Apparently,

4.2. Drivers and Focus of

International Journal of Business Analytics, 2(3), 1-19, July-September 2015 9

Figure 1. Drivers for lean supply chains

of 3.94 and Improve supply chain visibility

10 International Journal of Business Analytics, 2(3), 1-19, July-September 2015

Table 3. Level of collaboration among firms internal functional areas

Engineering and manufacturing

Purchasing and engineering

Purchasing and logistics

Engineering and marketing

Manufacturing and logistics

Manufacturing and marketing

ing (mean score of 4.06) and purchasing and

turing and supply chain systems are primary

4.3. Supply Chain and IT Solutions

Table 4. Focus of lean in the supply chain

Inventory management and control

Manufacturing and SC flexibility

Customer value-adding activities in the SC

Reduce non-value adding SC costs

SC administrative and overhead costs