Research project proposal

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· Research subject:

“Optimization of Supply Chain Design Based on the Lean Manufacturing Concept: Application in Health Care System”

1. Introduction

Many people, including academics and practitioners have developed an interest in supply chain design. The practitioners are using optimization of supply chain design with the lean tools in order to reduce operational costs and to improve customer service in a global competitive environment. In addition, the pressure of fierce competition from present market forces companies to relentlessly improve their operating performances in order to achieve the maximum profit. From the managers’ points of view, profit maximization can be gained through the maximum performance of product flow and information flow.

The body of previous research demonstrates that applying Lean Manufacturing (LM) successfully, numerous companies have achieved the goal through quality improvement, cost and lead time reduction and flexibility increase. Lean means “manufacturing without waste.” Waste is something which is not value-added activity to the final product or customers. The intention of lean implementation is to find out non-value-added activities (waste) and take essential steps to avoid these activities in the process of making final product. The concept of waste includes all possible defective work or activities and not only limited to defective products (Taj and Berro, 2006). According Ohno’s, waste can be classified into seven categories (Monden,1993). The seven wastes are: over production; waiting; transportation; inappropriate processing; unnecessary inventory; unnecessary motions; and defects.

Therefore, the application of LM concept in design from the outset will help them attain significant competitive advantages. Hence, the design firstly has to be conducted within the firm internal SC which is extended to its suppliers and customers (external SC) and the whole SC (Lean SC) eventually. The Rationale of this research consists of four basic stages:

1) Study and identify the elements of Lean philosophy and their impact on SC design;

2) Apply LM concept to design a framework model for internal SC (manufacturing plant);

3) Expand to the whole SC;

4) Illustrate by a simple SC in one particular industry.

2. Literature review

The business world was first introduced to the term ‘lean’ in the early 1990s. The researchers Womack et al. (1990), from the Massachusetts Institute of Technology (MIT), USA, have coined the word ‘lean manufacturing’. LM has come of age since its introduction. Hines et al. (2004) traced its growth from its introduction to its current stage and commented that LM has emerged from being a production strategy into a philosophy. Similarly, the acceptance of LM has also gone beyond the bounds of both manufacturing and post-production efficiencies and it has reached into all the departments of business.

Only in recent times, researchers have emphasised that the theory and principles of LM and its associated tools, techniques, practices and procedures (which will be referred to as ‘elements’ from now on) can be extended outside the boundaries of an organisation to its SCs. However, the concept of LSC was proposed in 1994, when the proponents of LM – Womack and Jones (1994) – envisioned the concept of ‘lean enterprise’. The proponents realised that applying lean principles to achieve individual breakthroughs can be linked up and down the value chain to form a continuous value stream that creates, sells and serves a family of products; thereby, the performance of the whole stream can be raised to a dramatically higher level. They defined ‘lean enterprise’ as a group of individuals, functions and legally separate but operationally synchronised companies.

Recently, Vitasek et al. (2005) defined LSC as “a set of organisations directly linked by upstream and downstream flows of products, services, information and funds that collaboratively work to reduce cost and waste by efficiently pulling what is needed to meet the needs of individual customers”. In a simple term, LSC can be defined as an application of LM principles to SC to integrate the activities of all the stakeholders involved in the SC network and provide ‘value’ to the customers by eliminating wastes. However, approaching the SC process through LM principles is still a complex task.

The application of lean principles in achieving performance improvement in process industry in the form of reduction of wastes, improvement in quality, reduction in lead times, reduction in costs, efficient supply chain management and above all, high customer satisfaction (Gupta et al, 2013).

3. Expected Research Contribution

Most of the papers that were reviewed focused on the individual aspects of LSC (Anand and Kodali, 2008). However, a typical LSC involves integrating all the upstream and downstream activities into a coherent whole and only very few papers that addressed the concept of applying LM principles to the whole of SC are available. Specifically, Lean Manufacturing (LM) will be applied in designing facilities to maximize the performance of the product flow (downstream):

1) Minimize the bottleneck (to minimize waste and create line balancing by Identify which part of the manufacturing process limits the overall throughput and improve the performance of that part of the process);

2) Maximize value-added (high productivity);

3) Improve the decision making in design Decision Support System (DSS).

Therefore, the optimization processes across supply chain facilities (maximize or/and minimize) are needed to maximize the performance of whole supply chain. In this research, meta- heuristics approach will used to optimize SC. In following section, will present the proposed Methodology.

4. The Proposed Methodology

Since the research goal is to apply LM concept to design a framework model for internal SC and developing lean tools for an optimization process (maximize or/and minimize) in supply chain design. Especially, to minimize the bottleneck, it is anticipated that the dimension of problem will grow rapidly as the network expands. As a result, the ability of finding the optimal solution to a large extent depends on the searching ability of the optimization algorithm. Metaheuristics approach is chosen as the optimizer in the framework.

The term metaheuristics approach, first introduced by Glover (1986), generally refers to any optimization methods that implements certain strategies for searching the space to find the global optima. Although there is no theoretical guarantee that they can always find the global optima, it has been reported that metaheuristic algorithms are able to produce very good results, as reported in research and in practice.

Furthermore, metaheuristics are known to have the advantage to deal with optimization problems with non-convex and non-differentiable functions. In order to fully utilize those advantages offered by meta-heuristic, it is of interest to do a comparative study and select a highly efficient metaheuristic algorithm for the supply chain model. The key to achieving high performance for any metaheuristic algorithm is to maintain a good balance between exploitation and exploration during search.

Reference:

Anand G., Kodali R., (2008). A conceptual framework for lean supply chain and its implementation, Int. J. Value Chain Management, Vol. 2, No. 3, pp.313-357.

F. Glover. (1986), Future paths for integer programming and links to artificial intelligence. Computers & Operations Research, 13(5):533–549. doi:10.1016/0305-0548(86)90048-1.

Hines, P., Holweg, M. and Rich, N. (2004) ‘Learning to evolve: a review of contemporary lean thinking’, Int. J. Operations & Production Management, Vol. 24, No. 10, pp.994–1011.

Gupta, V., Acharya, P., Patwardhan, M. (2013) “A strategic and operational approach to assess the lean performance in radial tyre manufacturing in India: A case-based study”, International Journal of Productivity and Performance Management, Vol. 62 Issue: 6, pp.634-651, doi.org/10.1108/IJPPM-Jun-2012-0057.

Ohno, T. (1988) The Toyota Production System: Beyond Large-Scale Production, 1st ed., Portland: Productivity Press.

Panwar, A., Nepal, B. P., Jain, R., & Rathore, A. P. S. (2015). On the adoption of lean manufacturing principles in process industries. Production Planning & Control, 26(7), 564–587. doi:10.1080/09537287.2014.936532.

Monden, Y. (1993), Toyota Production System: An Integrated Approach to Just-In Time, 2nd ed., Industrial Engineering and Management Press, Institute of Industrial Engineers, Norcross, GA.

Tsai, C.-W., Chiang, M.-C., Ksentini, A., & Chen, M. (2016). Metaheuristic Algorithms for Healthcare: Open Issues and Challenges. Computers & Electrical Engineering, 53, 421–434. doi:10.1016/j. compeleceng.2016.03.005.

Taj, S. and Berro, L. (2006). “Application of constrained management and lean manufacturing in developing best practices for productivity improvement in an auto-assembly plant”, International Journal of Productivity and Performance Management, Vol. 55 Nos 3/4, pp. 332-345.

Vitasek, K., Manrodt, K.B. & Abbott, J. (2005). “What makes a lean supply chain? Supply Chain Management Review”. 9(7):39-45.

Womack, J.P. and Jones, D.T. (1994) ‘From lean production to the lean enterprise’, Harvard Business Review, March–April, pp.93–103