Applying lean to the procurement function and the impact on the supply chain : a case study within a local manufacturing firm

Abstract

This investigation was carried out at a manufacturing company in Malta. The Lean concept is considered to be one likely mode for the improvement of an organisation’s performance. Lean procurement integrated as a complete chain within an organisation can help organisations to unfasten the power of lean principles. In a demand driven world the concept may be considered the future of supply chain management. One of the essential aspects is to attain the maximum level of possible satisfaction amongst the internal and external customers of the procurement department, through Lean concepts. In this case the benchmark would be cost and quality; aspects which have become paramount for manufacturers in terms of customer satisfaction. This research shall be carried out in order to determine how applying a ‘Lean Procurement’ philosophy shall benefit both the department and the Supply Chain. This helps in reducing costs and improving efficiency in order to continuing being able to compete in a challenging market place. The term ‘Lean’ is generally associated with improvements in the manufacturing process. However as supply chains hold so much potential for lead time management, quality improvement and cost reductions, it presents an excellent opportunity for applying lean solutions to find even greater efficiencies that will have an impact much further down the line. Lean procurement is in essence, about simplification and making processes and communication, apart from being simple, clear and direct. The study shall seek to analyse how Lean thinking can be adapted to the procurement function whilst assessing its benefits and possibly, drawbacks. It shall also seek to better understand and form a concept of lean procurement, within the context of a manufacturing medium sized enterprise.