Lean Initiatives by Air Product
The primary innovation that improved the supply chain performance is a remote telemetry system that aggregates and transmits data from the customer to Air Product (Trent, 2009). The implementation of this system allows Air Product monitoring sufficiency of the products at the clients’ location through the telemetry units, which are attached to the tanks. The telemetry unit transmits the information about the level of availability of gas and sends the alarm if there is a necessity to replenish the customer’s reserves. The implementation of the system reduces the transaction expenses, contributes to the development of the delivery schedule, and enhances customer service. These improvements optimize the supply process and win the customers; however, the switch costs in the industry are low.
The specific lean initiatives include the building up a team, which develops and supports the system, establishment of Independent Business Units, which are terminals located in various areas, close to the customers, and introduction of the dynamic target-refill system, an inventory application that monitors the type of gas, its usage, size of tanks, and location of a client and sends data to the logistic operation unit that takes a decision about the supply replenishment based on the obtained data. Since the system is centralized, the problems can be solved quickly and efficiently.
Lean Measurement Process Used by Barax
The growing business of Barax faces the challenge of managing the flow of transportation of supply at the company’s main distribution point. The roots of the issue originate from the ineffective receiving process and a lack of coordination between two groups: one that orders items and another that receives the materials. Moreover, the receiving process requires too much time while it can be implemented faster. These complications affect the company’s customer service efficiency.
Also, Barax receives the monetary fines because the company cannot optimize the process of trailers flow and keeps trucks longer that it should be. To overcome the obstacles and make the processes lean, Barax identifies the measurements that have to increase the efficiency of the receiving process. These assessments include the following steps: the evaluation of the process of paperwork and inspection and their optimization can reduce the time of transition of materials. The application of preprinted move tickets increases the speed of transportation inside the docks, and the implementation of colorful stickers differentiates the reliable and not trustworthy suppliers and quickens the whole process.
The delivery time assessment can eliminate the discrepancies between the overload and idle time since the managers and functioning teams can familiarize themselves with the expected number of the trailers and their content. The average total system time per vehicle measurement evaluates the time that the trucks need to go through the whole process of receiving. The average processing time per truck indicates the number of hours that the workers spend receiving and unloading a trailer.
According to the author, elimination of “the checking of physical quantities, inspections, and preprinting move tickets” (Trent, 2007, p. 277) may increase the efficiency of the receiving process. The checking, inspection, and process of movement of items require physical labor and more time to be implemented. Thus, optimization of these activities with the assistance of proposed measurements can reduce the time and have the positive effect on the whole receiving process and customer service.
The Butternut Mountain Farm
The maple syrup and other products based on the syrup such as sugar, candies, cookies, and many other foods are made by Butternut Mountain Farm, a leading maple syrup production company located in Vermont. The video titled “Sweet Success” tells the story of creation: how the products are made, deposited, and delivered, along with the insights on the factors that bring the advantages to the company.
The CEO of Butternut Mountain Farm emphasizes the amount of sap (40 gallons) that is needed to produce one gallon of syrup. To facilitate the company with the sufficient amount of sap, Butternut Mountain Farm has its garden of trees with 17.000 plants. The external supply of maple juice is required for full production capacity, though. Therefore, the company cooperates with the local farmers who provide already boiled sap into syrup in big steel drums. Butternut Mountain Farm’s employees taste and grade supplied materials and then the syrup can be storaged for the following production needs (DC Velocity, 2016).
Observation of the supply process gives the insight into the lean management in this area of the firm’s functioning. First, the company relies not only on its production capacities, but also on local farmers. Second, the regional producers deliver not the sap but the syrup, which is properly packed for storage. However, it is not stated in the video, we can imply that Butternut Mountain Farm works with the same suppliers. Thus, the firm is aware of the quality of the product.
Another lean implementation is the organization and optimization of the storage, manufacture, and delivery processes. The effective execution of these activities is possible with the help of Toyota machines. For example, Butternut Mountain Farm uses Toyota forklifts for transportation and storage of supply materials, as well as for the processing of produced and packed goods. The forklifts are equipped with cameras, which prevent damaging of the drums and packed products. Moreover, the employees of the maple syrup company claim that the quality, price, and service provided by Toyota are the primary concerns.
Therefore, reliance on the quality of supply and equipment, as well as on the highly organized transportation, storage, and delivery processes, which are parts of the lean mindset and management system, contributes to the leading position of Butternut Mountain Farm in the maple syrup production industry.
References
DC Velocity. (2016). Sweet Success. Web.
Trent, R. J. (2008). End-to-end lean management: A guide to complete supply chain improvement. Plantation, FL: J. Ross Publishing.