We discussed the inventory and supply chain considerations such as small lot sizes, close supplier ties, and quality at the source in Chapter 6, “Lean Systems.”
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We discussed the inventory and supply chain considerations such as small lot sizes, close supplier ties, and quality at the source in Chapter 6, “Lean Systems.” What are the implications of these principles for supply chain integration? |
Chapter 14, End of Chapter, Discussion Questions , Exercise 5
Page 588
Here is a tip:
Lean production determines small lot-sizes ensure smooth flow of material.
Explanation
Lean production is about consuming less time. It promotes the idea of smaller lot-sizes and proper utilization of the available resources. Inventory holding cost plays a crucial role in the determination of the total operational cost of an organization. Planning for storage can be done in advance when the size and flow time is accurately known.
Verified Answer
These principles provide the following benefits to an organization:
Small lot-sizes reduce the wastage and overstocking of inventory.
Inventory cost can be minimized with the help of optimum level of inventory.
Optimum level of inventory also ensures the smooth flow of material.
Planning for storage can done made in advance.
Close suppliers reflect a good understanding of an organization and its suppliers.
Good service quality helps to enhance customer satisfaction and revenue generation.
Effective implementation of the above activities results in better integration of the supply chain processes within an organization.
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