Application of Lean in Supermarkets

Application of Lean in Supermarkets

Lean is a system is a tool that has changed the way in which the world operates. Lean is a concept of supply chain management that incorporates a diverse approach of conducting business with main aim of minimization of waste.  The Japanese concept was pioneered by Toyota automobiles in 1960 but since then, has moved to not only other manufacturing industries but also to retail and service industries. Materials (raw materials, semi-finished inventory and finished stock), flow through the supply chain without or with little retention in the warehouses. Error is reduced because the products are availed directly to the customer from production.

This essay will explore how lean can be used to attain efficiency in a supermarket setting. A supermarket that has adopted lean model is characterized by small size of inventories and lack of a warehouse. In simple language, lean can be summarized as an inventory system but it comprises of much more as it eliminates waste (non-value adding activities).  It will feature crucial issues in a supermarket and the way by which lean can address them. The essay will also highlight the several challenges that arise with the implementation of lean concept.

Lean model can be applied in many ways in retail stores. The supply chain model is applied in receiving, storage, distribution and maintenance of products. Reduction of cost is normally the key objective for lean, but it also considers the delivery speed and quality of items. It aids in rearranging of products to show their varying popularity and counter reshuffle. Lean is also important as it ensures that the commonly paired products are set close to each other and that there is minimization of checkouts ‘waiting time (Lukic 2012).

There are crucial issues in a supermarket that needs adoption of lean in a supermarket. Wastage is a critical issue that generally leads to loss of huge profits in a retail entity. The wastes could arise in overproduction, unplanned logistics, time and energy wastage and stocking of goods that are obsolete or products that does not meet the customers’ requirements. In addition to the long hours that customers can be kept waiting for the delivery of a product, defective and obsolete items are realized at times in a supermarket. Most businesses, supermarkets included, still operate under the traditional model where labor costs are mandatory in provision of better customer service. Furthermore, there is a notion that customer demand cannot be predicted and hence a supermarket must be ready for anything. It is also perceived that availability of product is met through an increased supply of the available stock and hence the need to invest a lot of capital in inventory.

A supermarket can embrace various lean’s tools that can be used in efficiency and quality enhancement. First, through the establishment of an autonomous maintenance system, the model can help in elimination of loses and equip skills to the workers (Mason and Evans 2015).JIT (just in time) strategy is a tool that reduces in-process stock and its related costs. Zero quality control and SMED (single minute exchange of die) tools uses employee’s knowledge to operate on inventory hence reducing cost of employing and enhance value addition. Kanban cards can be used to ensure the order is processed on demands. A supermarket can also adopt poka yoke, a procedure that hinders defects in the process of stocking and damage prevention. Adoption of total management tool, SIGMA, can enhance the supermarket to attain an overall fitness for its operations (Mason and Evans 2015). Adopting   of Lean can assist in of eliminating wastage, attaining of high levels of efficiency, ensuring of smooth flow of operations and ensuring quality in supermarket. Moreover, application of the concept can enhance faster customer service, minimization of inventory space, lowered cost of operations and facilitation of greater accuracy.

Lean incorporates liaising upstream with suppliers, emphasizing on efficiency, minimizing stocking and integrating downstream with customers.

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A technique of removing bottlenecks helps to eliminate wastage of time, movement and materials throughout the supply chain and hence enables the supermarket to attain an overall improvement.

Lean provides a layout of wide consistency and regulation that improves customer satisfaction without the increase in labor costs. Even though the general demand may be very variable, lean’s model helps in analysis of demand such that it becomes more predictable (Lukic 2012). By implementation of an integrated performance program, the lean concept can help a supermarket to reduce its inventory level without experiencing stock outs. Adoption of lean approach will solve re-works that are normally associated with errors and reduce the number of supervisors.

According to Kovacheva (2010), adoption of the lean strategy may not be the easiest approach to undertake as it requires diverting from the every day process to a new one. Resources are vested in the approach. Process improvement incorporates problem identification and resolution. However, this process takes a lot time and hence immediate issues are unresolved. Additionally, the change requires continuous assessment which may create another task for management. Improvements may be guaranteed but the question arises to how long the changes will create an impact to a supermarket. Incase of a mismatch of information or miscommunication with the suppliers or customers, a supermarket can suffer terribly as it may lead to unavailability of a product. Communication and enforcing of the new strategy can be a challenge to the management as it involves changing the culture and the way a supermarket operates.  A change to lean’s approach may lead to unemployment of the employees because of reduction of activities. Furthermore, application of lean can be a hindrance to the employees who lack the skills and knowledge to apply the strategy.

In conclusion, lean concept is a very significant in the working of a supermarket. Issues such as high levels of wastage and reduction of costs are a huge hindrance to the efficiency of the retail set-up and hence the need for Lean. Lean outlines a simple framework of a workflow that eliminates the loss of materials, effort and effort. Additionally, lean provides a guideline with which managers can adopt to eliminate activities that do not add value. Lean ensures a minimization of wastes in supply chain process hence becoming an effective way to solve the supermarkets issues. However, few challenges such as that of input of resources and time are experienced with the approach.

Bibliography

Kovacheva, A.V., 2010. Challenges in Lean implementation: successful transformation towards lean enterprise. Unpublished Masters Thesis). University of Aarhus, Denmark.

Lukic, R., 2012. The effects of application of lean concept in retail. Economia. Seria Management, 15(1), pp.88-89.

Mason, R. and Evans, B., 2015. The Lean Supply Chain: Managing the Challenge at Tesco. Kogan Page Publishers.