Toyota Lean Supply Chain Strategy

In those markets where competition is fierce, companies have to build their supply chain strategies on leand and agile principles in order to be successful. Lean supply chains are mainly preferred for standard products and focus on reducing wastes, continuous improvement and maxiumum utilization. An agile supply chain, however, is used in cases when there is a need to be able to respond to the demands of the customers in an environment with demand fluctuations, meet the demand for prime quality products or services and tackle with obsolescence or short life of products. Nevertheless, only a few supply chains use the lean or agile strategies alone. It is now possible to use different strategies in different parts of a supply chain thanks to

The goal of lean thinking (Womack and Jones, 1996) is to reduce or eliminate all kinds of wastes to survive in a competitive market (Muruganantham et al., 2014). Enterprises know that both their processes will be improved and the cost of their products and services will be reduced when lean principles are applied (Chiarini, 2014). These major principles include the identification of the value, mapping the value stream, creation of the flow, responding to pull and pursuing perfection. From a supply chain perspective, lean thinking is defined as a value stream that could smooth production and eliminate all wastes including time.

Quality, cost, flexibility, delivery and reliability are the basic values important for a supply chain. Lean principles can be applied to all actors of a supply chain in order to eliminate the losses, create value and increase flexibility along the chain (Kumar et al.,

Product flow refers to the activity that adds value to a product or service in the time-span from the procurement of raw materials from the suppliers to the delivery of products to the customers. Information flow means the flow of data that supports the creation of value, and customer demand refers to the output of the supply chain. Finally, the customer-supplier relation that influences the product and service movement is also required for the successful implementation of a lean supply chain (Mohammed et al., 2008). The sub-systems of a lean supply chain that aims at producing the right service or right product at the right price and in the right volume by using the right material, with the right quality, at the right time and in the right place include lean suppliers, lean purchasing, lean storage, lean logistics and customers (Amir, 2011). The lean supply chain that is unable to adapt easily to the changing market conditions and thus better at coping with the constant demands can fulfil its goals through eliminating the wastes; reducing the inventory, lot sizes and number of suppliers; assessing the suppliers on the basis of their quality and delivery performance; establishing long-termed relations with the suppliers; eliminating the paper works and etc. In markets where the demand remains constant and