Adoption of Lean Six Sigma in Lenovos Supply Chain

Adoption of Lean Six Sigma in Lenovos Supply Chain Introduction Lenovo Group Limited is a large Chinese multinational corporation that specialises in computer technology. It manufactures and distributes various electronic products in the global market. According to the study conducted by Zhijun (2013, p. 92), Lenovo was ranked the world’s leading vendor of personal computers in terms of unit sales.Advertising We will write a custom essay sample on Adoption of Lean Six Sigma in Lenovo’s Supply Chain specifically for you for only $16.05 $11/page Learn More The company currently has active offices in over 60 countries around the world. Its products circulate in over 160 countries according to the report by the Global Reporting Initiative (2011, p. 88). Currently, the management of this firm has been working on ways of improving its supply chain management strategies. This has been done through the decentralisation of processing plants and management centres from Beijing in China to various locatio ns around the world. The decision to decentralise production plants and management centres was influenced by the desire to shorten the distance between the manufacturing plants and the market. The management of this firm realized the need to end-to-end supply chain visibility as a way of improving efficiency in its product delivery method. Lean Six Sigma may be very useful to this firm in its efforts to achieve this sustainability. Not only will this tool help the firm improve the quality of its products, but also help in reducing the cost of production (Kamauff 2010, p. 56). In this study, the researcher will focus on determining how Lenovo can use Lean Six Sigma to achieve sustainability in its supply chain management. The first part of this report will be the introduction; the second part will be the analysis, while the last section will be a conclusion of the findings of the study. In this study, Lean Six Sigma refers to a quality management tool that seeks to streamline the pro cesses in order to achieve near perfect products (Brockett Rezaee 2012, p. 77). The study will determine how adoption of this tool will help enhance sustainability of Lenovo’s supply chain. Analysis Lenovos Supply Chain The management of Lenovo has been keen on streamlining its supply chain to not only eliminate costs but also improve the quality of the products they deliver to their customers. The firm has employed a number of strategies in its supply chain.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More However, in this study, the focus will be on End-To-End Supply Chain Visibility Strategy that was employed in 2013 using E2open software to enable the management to monitor all the activities in its supply chain (Qiao Conyers 2014, p. 59). According to this scholar, Lenovo had previously been using various strategies to manage its supply chain. However, David Gillon, wh o is the current Executive Director of Lenovo’s Global Supply Chain, realized that besides having superior tools and equipments to improve supply chain at this firm, it was necessary to have a new system at the firm that will make it possible for the management to track down all the activities within the supply chain in real time. This was necessary so that the management can detect any problems within the supply chain as soon as they occur. As Lan and Unhelka (2013, p. 74) say, End-To-End Supply Chain Visibility strategy has become popular in the recent past because it gives a firm control over the activities taking place within its supply chain. End-To-End Supply Chain Visibility was meant to support a strategy employed by this firm the previous year that eliminated all the intermediaries when accessing most of the raw materials. The firm developed a new strategy that emphasised on dealing directly with the producers of the raw materials other than brokers. In order to use this strategy, the management of Lenovo had to employ the use of E2open software that not only helped in monitoring the activities within the supply chain, but also integrated the communication system within the firm. This made it possible for all the stakeholders responsible for various activities to know when there is a problem within the supply chain so that they can know the best course of action. For instance, the production manager at Lenovo’s plant in Beijing will know when there is a problem in the supply of a given raw material. With this knowledge coming as soon as this fact becomes a reality, the production manager is able to re-strategize its production activities to avoid serious negative consequences that may arise because of the unavailability of the needed materials. According to the report by Qiao and Conyers (2014, p. 78), the management of Lenovo has been able to reduce losses within its supply chain that is always associated with lack of information and co ordination between various departments because of this new technology-based strategy. According to Qiao and Conyers (2014, p. 81).Advertising We will write a custom essay sample on Adoption of Lean Six Sigma in Lenovo’s Supply Chain specifically for you for only $16.05 $11/page Learn More Lenovo’s top management committed HK$ 6.35 billion to help expand the Beijing’s 200,000-square feet production facility in early 2014 to help sustain its increased production due to improvement of its supply chain. This is a clear indication that this new approach to managing its supply chain has been a success. Need for Sustainability and Factors Involved In Achieving It According to Wisner, Tan and Leong (2011, p. 67), the issue of sustainability has gained relevance as firms struggle to secure their future in the turbulent market. In order to understand steps that have been taken to promote sustainability at Lenovo, it will be necessary to analyze v arious stages of supply chain where sustainability is necessary. Sourcing is one of the most sensitive areas of management in the supply chain. As Shah (2009, p. 23) observes, a firm needs to ensure that there is a reliable source of raw materials to ensure that the production process is not interrupted due to shortage of inputs. According to Aras and Crowther, (2009, p. 280), the management of Lenovo has formed strategic partnerships with its suppliers, especially those who supply sensitive products such as rare earth metals through long-term contracts. These long-term contracts bind these suppliers to this firm and reduce chances that the suppliers can suddenly stop their business transactions with this firm. The management has also been keen on fostering a close relationship with these suppliers. As Taylor (2003, p. 56) observes, in most of the cases they are considered integral part of this firm. These steps were taken to ensure that the suppliers remain loyal to this firm. It r ealised that it needed to do this in order to protect its sources of raw materials. Manufacturing is another sensitive process in the supply chain management. In the current competitive market, it is very critical to have sustainable manufacturing strategies that can help a firm secure its future in the market (Timans et al. 2013, p. 340). The management has embraced technology in its manufacturing processes as one of the main steps towards achieving efficiency in its supply chain. As mentioned above, the firm is putting up a 200,000-square meter production complex in Beijing that has state-of-the-art machines to help in running its production processes. The society has become so sensitive about environmental conservation. If this firm fails to embrace environmental-friendly manufacturing strategies, it may have a bleak future due to the regulations that are expected in the near future. Similarly, the issue about packaging will need to be re-evaluated. Many firms are now considering using bio-degradable materials to package their products in order to protect the environment.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Lenovo will need to take a similar path in order to remain relevant in the market that has become very dynamic. The distribution centre management that has been embraced by Lenovo is in line with the changing environmental factors (Liu 2009, p. 574). Devolving the management and setting up various offices across the global market is needed so that this firm can act locally based on the prevailing market forces in different regions around the world. According to Mahadevan (2009, p. 37), waste management is a factor that firms can no longer ignore, especially at the production plant. Lenovo will need to find proper ways of managing wastes according to the international standards given that it is operating in the global market. This will mean recycling its wastes or finding better waste disposal methods for the products that cannot be recycled. Another sensitive issue is the emissions control. According to Gorman (2011, p. 570), many countries around the world are reducing the limit of emissions of greenhouse gases per given time. With these new developments, Lenovo will need to find a way of reducing its emission rates despite its increasing levels of output in order to remain sustainable. Tools and Techniques Associated With Lean Six Sigma Lean Six Sigma is one of the management tools that many firms are using to improve their operations and enhance sustainability. At this stage, it will be important to critically analyse what can be achieved through Lean Six Sigma and to determine how it applies to Lenovo. According to Tompkins and Harmelink (2004, p. 45), Lean Six Sigma refers to â€Å"A methodology that relies on a collaborative team effort to improve performance by systematically removing waste.† The term lean in production context means maximum elimination of wastes and unnecessary processes. The current environmental forces may require Lenovo to employ lean manufacturing in order to improve quality and eliminate wastes as much as possible. The foll owing are some of the tools and techniques associated with Lean Six Sigma at Lenovo. According to Bolstorff and Rosenbaum (2012, p. 56), when using Lean Six Sigma there are eight kinds of waste that must be eliminated in order to manage the costs of production, and each requires different tools and techniques. The first kind of waste is the problem of defects. The study by Qiao and Conyers (2014, p. 112) reveals that Lenovo has embraced the use of modern technologies as means of reducing defects at its production plants. These defective products always have very little value because they cannot be sold and some cannot be recycled (Sarkar 2005, p. 427). The management of Lenovo emphasises on the zero of Globalisation of Chinese Enterprises, Journal of International Business Studies, vol. 38. no. 4, pp. 573-577. Mahadevan, B 2009, Operations Management: Theory and Practice, licensees of Pearson Education, New Delhi. Panneerselvam, R 2012, Production and Operations Management, Cengage, New York. Qiao, G Conyers, Y 2014, The Lenovo Way: Managing a Diverse Global Company for Optimal Performance: Managing a Diverse Global Company for Optimal Performance, McGraw Hill Professional, New York. Reverte, C 2009, Determinants of Corporate Social Responsibility Disclosure Ratings by Spanish Listed Firms, Journal of Business Ethics, vol. 88. no. 2, pp. 351-366. Sarkar, D 2005, Lessons in Six Sigma–72 Must-Know Truths for Managers ,Indian Journal of Industrial Relations, vol. 40. no. 3, pp. 425-429. 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