Previously published as: Integrated Manufacturing Systems
Online from: 2004
Subject Area: Operations and Logistics Management
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|Title:||Enabling lean procurement: a consolidation model for small- and medium-sized enterprises|
|Author(s):||Mark M.J. Wilson, (Department of Management, Marketing and Law, Faculty of Commerce, Lincoln University, Canterbury, New Zealand), Ram N. Roy, (Faculty of Business & Computing, Eastern Institute of Technology, Napier, New Zealand)|
|Citation:||Mark M.J. Wilson, Ram N. Roy, (2009) "Enabling lean procurement: a consolidation model for small- and medium-sized enterprises", Journal of Manufacturing Technology Management, Vol. 20 Iss: 6, pp.817 - 833|
|Keywords:||Lean production, Procurement, Small to medium-sized enterprises, Supply chain management|
|Article type:||Conceptual paper|
|DOI:||10.1108/17410380910975096 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
Purpose – Gaining access to the cost savings and production efficiencies derived from lowering inventories in the supply chain is as vital for small-to medium-sized enterprises (SMEs) as they are for larger manufacturing firms. Lean procurement as a concept has been advanced as a method for achieving this. The purpose of this paper is to discuss a method of addressing some of the critical barriers to implementing lean procurement methodologies in an SME environment through the application of procurement consolidation techniques.
Design/methodology/approach – First the relevant theoretical and practitioner literature is reviewed, a theoretical consolidation model is developed, and a worked example is presented.
Findings – The barriers face by SMEs trying to implement a lean procurement philosophy are significant. Low volumes, small lot sizes and high frequency purchases incur significant additional distribution costs. The paper argues that the use of a double freight consolidation model (DFCM) is useful to SMEs for maximising the trade-offs between volume and frequency in an international supply chain.
Research limitations/implications – Whilst this research suggests that SMEs can indeed use the DFCM for lean procurement, the next step is to apply the model in practice.
Originality/value – This paper synthesises consolidation modelling and lean procurement principles. This synthesis is further enhanced by applying a simulated example to the challenging SME environment. The application of the categorisation of both buyers and vendors to the consolidation model is novel.
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