Lean management practices to improve supply chain performance of leather footwear industry

Abstract

Leather Industry in India is among the top ten foreign exchange earners and export of footwear contributes to 44 % of the total export of leather and leather products from India. The demand for leather footwear is highly fluctuating leading to bullwhip effect and its price elasticity adds to further complications. Lean management practices are applicable to all sectors. However, suitable models need to be developed for different sectors. The purpose of this paper is to identify the set of lean practices adoptable in footwear sector and to investigate the synergistic effects of lean management practices on supply chain operational performance of footwear sector. Lean concept is not only applicable to production but can also be extended to supply chain to improve the supply chain operational performance. The enhancing attributes of Supply Chain Operational Performance (SCOP) specific to footwear industry has been identified and prioritized. A comprehensive set of lean management practices were scrutinized based on its applicability in the footwear sector and a model is designed to maximize supply chain operational performance of the footwear sector.

Full text

Lean Manage
m
Chain Performa
n
Shakila Shobana Theagaraja
n
1
Planning, Monitoring and Evaluation D
CSIR-Central Leather Research Institu
t
Chennai, India
shakilashobana@gmail.com
Abstract - Leather Industr
y
in India is amon
g
t
h
exchange earners and export of footwear cont
r
the total ex
p
ort of leather and leather
p
roduct
s
demand for leather footw ear is hi
g
hl
y
fluct
u
bullwhi
p
effect and its
p
rice elasticit
y
a
complications. Lean management practices ar
e
sectors. However, suitable models need to
b
different sectors. The
p
ur
p
ose of this
p
a
p
er is
t
of lean
p
ractices ado
p
table in footwear sector
a
the synergistic effects of lean management
p
r
chain o
p
erational
p
erformance of footwear sec
t
is not only a
pp
licable to
p
roduction but can al
su
pp
l
y
chain to im
p
rove the su
pp
l
y
c
h
performance. The enhancin
g
attributes o
f
Operational Performance (SCOP) specific to
f
has been identified and prioritized. A com
p
re
h
mana
g
ement
p
ractices were scrutinized based
o
in the footwear sector and a model is desi
g
su
pp
l
y
chain o
p
erational
p
erformance of the fo
o
Keywords—
L
eather, Footwear, Lean
p
ract
i
performance
I. INTRODUCTION
A. Leather Footwear Industry-Value Chain
Fig. 1. Flow indicating the supply chain
Tanner obtains the raw material i.e. pre
s
hides from raw material supplier and
p
r
o
convert into leather. Leather Footwear M
a
converts leather into Leather Footwear. The
are designed based on the inputs from
manufactured, marketed and sold through
b
directly to Brands (national/international) an
d
consumer through retailer. It involves b
o
support supply chain activities and m
a
throughout the process.
The primary activities of supply chain for
are (a) Inbound Logistics include movement
o
Proceedings of the 2015
I
nternational Con
fe
D
ubai, United Arab Emirates (UAE), Marc
h
978-1-4799-6065-1/15/$31.00 ©2015 IEEE
m
ent Practices to improv
n
ce of Leather Footwear
n
1
epartment,
t
e, Adyar
Hansa Lysander
M
2
Department of Manag
e
College of Engineering, G
u
University, Chenn
a
h
e to
p
ten forei
g
n
r
ibutes to 44 % of
s
from India. The
u
atin
g
leadin
g
to
a
dds to further
e
a
pp
licable to all
b
e develo
p
ed for
t
o identif
y
the set
a
nd to investi
g
ate
actices on su
pp
l
y
t
or. Lean conce
p
t
so be extended to
h
ain operational
f
Su
pp
l
y
Chain
f
ootwear industr
y
h
ensive set of lean
o
n its a
pp
licabilit
y
g
ned to maximize
o
twear sector.
i
ces, su
pp
l
y
chain
s
erved skins and
o
cesses them to
a
nufacturer then
Leather Products
design houses,
b
uying agents or
d
reaches the end
o
th primary and
a
rgin is gained
Leather Industry
o
f raw materials
from suppliers (machinery/chemi
c
leather) for the manufacture of le
a
(b) Operations include manufacturi
n
finished leather. (c) Outbound log
i
finished leather footwear from th
e
through various channels (Buying
h
Marketing, Sales and Service are
chain and value addition takes plac
margin.
B. Supply Chain Management –
Le
Supply chain management (
S
important of the areas that have rec
e
of interest in both industry an
d
considered as an integrating philo
flows of materials, products and in
f
the ultimate customers [2]. Suppl
y
practices associated with moveme
materials stage through to the
p
ractices include sourcing and
scheduling, order processing,
transportation, warehousing and c
u
asserted that for effective SCM,
i
improvement in all functions with
i
and also that the focus of supply
c
from functional and independent
[4].
The change in nature of comp
e
to environmental compliance an
organization to be more efficient
e
concept of supply chain agility a
n
p
aradigm focuses on the eliminati
o
added activities to achieve hig
h
profitability and flexibility [6].
Change is the only thing that i
requirements are dynamic and is
e
possible for SCs to deliver the righ
t
the right quantity in the right condi
t
right time at the right cost. Signific
a
in recent years in the concept of “l
e
wider principles of the “lean ente
lean approach has essentially been
o
or muda. The upsurge of interest in
traced to the Toyota Production Sy
s
reduction and elimination of waste
.
with less. Lean concepts work well
fe
rence on Industrial Engineering and Operations Manag
e
h
3 – 5, 2015
e Supply
Industry
M
anoha
r
2
e
ment Studies,
u
indy (CEG), Anna
a
i, India
c
als/we
t
-blue/crust/finished
a
ther and leather products.
n
g of leather footwear from
i
stics include movement of
e
factory to the consumers
h
ouses/Exporters/Retailers).
involved across the value
e at each step and so is the
e
an Paradigm
S
CM) is one of the most
e
ntly generated a great deal
d
academia [1]. SCM is
sophy to manage the total
f
ormation from suppliers to
y
chain is defined as set of
n
t of goods from the raw
end-user. Some of these
procurement, production
inventory management,
u
stomer services [3]. It is
i
mportant efforts to effect
i
n a firm should be made,
c
hain practices should shift
to general and integrative
e
tition, increasing necessity
d pressing need for the
e
nhance the interest in the
n
d leanness [5]. The Lean
o
n of waste and non-value
h
er levels of efficiency,
s constant. Since customer
e
ver-changing, it is seldom
t
product of right quality in
t
io
n
to the right place at the
a
nt interest has been shown
e
an manufacturing” and the
rprises”. The focus of the
o
n the elimination of waste
lean manufacturing can be
s
tems, with its focus on the
.
Lean is about doing more
where demand is relatively
e
ment

stable and hence predictable and where va
r
Some would state that lean manufacturi
responsiveness (service) to efficiency and p
r
[8]. Lean manufacturing states that all n
o
activities or muda must be eliminated. The
s
b
e as flexible as possible but flexibility is no
t
be lean [9].
Lean production promises significant be
n
increased organizational and supply chain co
m
integration [10]. The core thrust of lean
p
capability of working synergistically to crea
system that produces finished products at the
p
demand with little or no waste [11].
SCM dr
a
the areas of operations management, logisti
and information technology, and strives f
o
approach [12].
The past studies enunciate that customer
dynamic and ever-changing and fast respo
n
and cost efficiency in supply chain is the key
opportunities in an industry. The presen
t
developing a model of lean supply chai
n
footwear industry to enhance the operationa
l
the industry along the supply chain. The
m
using HOQ and QFD tools to identify the L
e
Practices to be practically implemented in t
h
enhance the supply chain operational per
f
sector. The whole scaffold exploits fuzzy l
o
linguistics judgments required for re
l
correlations matrixes into numerical values.
II. METHODOLOGY
Why Fuzzy QFD?
In the present approach, HOQ represent
s
that allows the direct assessment of the
Management Practices (LMPs) on the enhan
c
Supply Chain Operational Performance
(
relationships matrices. It also allows the
possible correlations between different Le
Practices (LMPs). As the functional relations
enhancing attributes of SCOP and LM
P
imprecise or vague, it is difficult to identify t
h
p
ermits consideration of the different mean
i
given to the same linguistic expression [13].
benefit of the fuzzy set theory is
b
ased
o
represent vague data [14]. And because of t
h
approach has been so widely adopted in
d
fields, as witnessed in the numerous literatur
e
[15]. Original approach to show the applica
b
methodology to enhance agility of enterpris
e
[16]. A fuzzy set is a class of objects with
grades of membership. Such a set is ch
a
membership function, which assigns a grad
e
ranging between 0 and 1 to each object [1
7
QFD is adopted to express the impact of L
M
attributes of SCOP.
Proposed Methodology
The step-wise description of Fuzzy QF
D
the impact of LMPs on enhancing attributes o
r
iety is low [7].
ng subordinates
r
oductivity (cost)
o
n-value adding
s
upply chain will
t
a prerequisite to
n
efits in terms of
m
munication and
p
roduction is the
a
te a high-quality
p
ace of customer
a
ws heavily from
cs, procurement,
o
r an integrated
requirements are
n
siveness, quality
to avail business
t
study aims at
n
appropriate to
l
performance of
m
odel is designed
e
an Management
h
e sector so as to
f
ormance of the
o
gic, to translate
l
ationships and
s
a practical tool
impact of Lean
c
ing attributes of
(
SCOP) through
identification of
an Management
hips between the
P
s are typically
h
em. Fuzzy logic
i
ngs that may be
Thus, the major
o
n its ability to
h
is benefit, fuzzy
d
ifferent research
es on the subject
b
ility of the QFD
e
s was presented
a continuum of
a
racterized by a
e
of membership
7
] [14]. A Fuzzy
M
Ps on enhancing
D
model to study
f SCOP is shown
in Fig.2.
Fig. 2. Schematic representation of algo
r
A. Identification of SCOP enhanci
n
p
rioritization to obtain Priority
In the present work, the exper
t
mainly comprised of managers of
p
and plant o
p
erations of different
chain of leather footwear industry.
were lead time, flexibility, cost, s
e
reliability, information, product v
a
technology, profit, forecasting, p
knowledge and market demand [9]
footwear sector were then give
n
attributes specific to leather footw
e
to indicate its importance in ter
m
winners as per their expectation fr
o
their satisfaction and improve the
i
performance. Then those supply c
h
order winners as per the experts
w
attributes of Supply Chain O
p
erati
Then they were solicited to distri
b
order winners – higher points for
important role among them. The w
e
was calculated and considered fo
r
‘Voice of the Customers’ of QFD t
o
B. Identification of LMPs
The lean model requires les
movement of materials, less time
smaller workforce, fewer compute
r
technology [18]. Consequently, le
a
focus on waste reduction, helping f
i
adding activities related to exce
s
r
ith
m
followed for research study
n
g attributes and its
Weights (
W
i
)
t
team was formed, which
p
urchase, marketing & sales
partners across the value
T
he supply chain attributes
e
rvice level, quality, speed,
a
riety, capacity, inventory,
roduct life cycle, market
[24].The experts of leather
n
a list of supply chain
ar industry and were asked
m
s of order qualifiers/order
o
m their suppliers to fulfill
i
r supply chain operational
h
ain attributes that are rated
w
ere selected as enhancing
o
nal Performance (SCOP).
b
ute the 100 points among
criteria that play the most
e
ighted average of the same
r
priority weights (W
i
) in
o
ol.
s stock, less space, less
to set up the machiner
y
,
r
systems and more frugal
a
n supply chains strategies
i
rms to eliminate non-value
s
s time, labor, equipment,

space and inventories across the supply chain [19]. Such
strategies enable firms to improve quality, reduce costs and
improve service to customers [20].
The experts brainstormed on various Lean Management
Practices (LMPs) including Information technology (IT)
integrated LMPs for its importance and applicability in
Footwear sector. The LMPs listed by the experts and that
collated from the literature review were then integrated.
The experts were then given a questionnaire on the
integrated lean management practices and were asked to give
rating on a 5 point likert scale based on its importance and
practical applicability in leather footwear sector. Lean
management practices were shortlisted based on the experts’
opinion on its importance and applicability and considered for
further study.
C. Determination of Interrelationship between LMPs and
SCOP enhancing attributes () and Correlation among
LMPs ()
While linking the enhancing attributes of SCOP and
LMPs, most measures were described subjectively using
linguistic terms that cannot be handled effectively using
conventional approaches. However, fuzzy logic provides an
effective means of dealing with problems involving imprecise
and vague phenomena [13]. It was exploited to translate
linguistic judgments required for relative importance of LMPs,
relationships and correlations matrices into numerical values.
In this step, the degree of relationship between enhancing
attributes of SCOP and LMPs was stated by the corresponding
TFNs and placed in the HOQ matrix. Moreover, the degree of
correlation between LMPs was then expressed by TFNs in the
fuzzy HOQ. Both of these correspondences are shown
in Table 1 and Table 2.
TABLE I. FUZZY NUMBERSa FOR DEGREE OF RELATIONSHIPS
Degree of relationship Fuzzy number
Strong (S) (0.7; 1; 1)
Medium (M) (0.3; 0.5; 0.7)
Weak (W) (0; 0; 0.3)
aSource: adapted from Ref.[23].
TABLE II. FUZZY NUMBERSa FOR DEGREE OF CORRELATIONS
Degree of correlation Fuzzy number
Strong positive (SP) (0.7; 1; 1)
Positive (P) (0.5; 0.7; 1)
Negative (N) (0; 0.3; 0.5)
Strong negative (SN) (0; 0; 0.3)
aSource: adapted from Ref. [15]
Triangular Fuzzy Number (TFN)
The TFN can be denoted as a triplet (a, b, c) as shown
in Fig.3, where a ⩽ b ⩽ c. When a = b = c, it is a non-fuzzy
number by convention. The membership function can be
defined as per [21] [22]:



⁄ ,
,
: 


⁄ ,
,
0  (1)
A fuzzy set N in a universe of discourse X is shown by a
membership function which associates a real number in
the interval [0,1] with each element x in X as shown in Fig. 3.
Fig. 3. Triangular Fuzzy Number (TFN)
If M = (a1, b1, c1) and N = (a2, b2, c2) represent two TFNs,
then the required fuzzy calculations are performed as below
[23].
Fuzzy Addition: MN= (a1+a2, b1+b2, c1+c2) (2)
Fuzzy Multiplication: M⊗N= (a1×a2, b1×b2, c1×c2) (3)
Fuzzy Division: M⊗ 1/N = (a1/c2, b1/b2, c1/a2) (4)
Fuzzy and natural number multiplication: r⊗M=(r.a,r.b,r.c)
(5)
D. Calculation of the relative importance (RIj) and priority
weights of LMPs (RIj
∗
)
The aim of computing these two parameters was to
determine which LMP has the most effect on enhancing
SCOP. RIj was computed by fuzzy multiplication of Wi to Rij.


1
   1, … . ,  6

∗


   1, … . ,  7
 was shown in the roof part of HOQ. The mentioned
parameters are shown in Fig.3. Furthermore, normalization
was performed by dividing each

∗ by the highest one
according to the fuzzy set algebra [22]. Then, in order to rank
the LMPs, the normalized scores of

∗ were de-fuzzified.
Suppose M (a, b, c) is a TFN; then, the de-fuzzified value is
computed as (a+2b+c)/4 (8)
LMPs with high crisp values indicate that they can be
usefully exploited to enhance SCOP. Thus, such LMPs must
be selected for implementation.

III. RESULTS AND DISCUS
S
Enhancing attributes of Supply Ch
a
Performance (SCOP) identified by Experts w
e
the Voice of the Customer of QFD tool a
n
Table III along with its priority weights (W
i
).
capacity utilization and Inventory managem
e
lean attributes that contribute to efficiency an
d
importance followed by lead time, qua
l
flexibility, delivery speed, delivery reliabili
t
responsiveness.
TABLE III. VOICE OF THE CUS
T
Lean Management Practices (LMPs) s
h
experts
b
ased on its importance and applic
a
Footwear Industry are shown in Table IV.
TABLE IV. MATRIX OF L
M
LMP 1 Organized Work Environment (5 S methodo
LMP 2 Throughput Improvement (Bottleneck Anal
y
LMP 3 Level Scheduling method
LMP 4 Semi-Automation
LMP 5 Just In Tim e Inventor y (J IT)
LMP 6 Continuous Improvement (KAIZEN)
LMP 7 KANBAN Pull Production system
LMP 8 Zero Defects ( POKA YOKE Error Proofin
g
LMP 9 Set up time reduction
LMP 10 Takt Time
LMP 11 Total Preventive Maintenance (TPM)
LMP 12 Value Stream Mapping
LMP 13 Long term contract with suppliers (Supplier
Management)
LMP 14 Centralized/Collaborative Planning of Prod
u
LMP 15 Systematic Information sharing through ED
Data Interchange) across all Supply chain p
a
LMP 16 ERP (Enterprise Resource Planning) imple
m
LMP 17 Customer Relationship Managemen
t
implementation
LMP 18 Workforce Management including multi-s
k
and cross functional teams
The Relative importance of LMPs (

)
weights (

∗
) are calculated with
p
riority
w
enhancing attributes, Interrelationship bet
w
SCOP enhancing attributes and Correlatio
n
using (6) and (7). Then normalization of



and 

∗
values were obtained. The cri
obtained using (a+2b+c)/4
SCOP enhancing Attributes Priority
W
Lead Time
0
Quality Consistency
0
Flexibility
0
Supply Chain Operations Cost
0
Delivery Speed
0
Delivery Reliability
0
Customer Responsiveness
0
Information Accuracy
0
Capacity Utilization
0
Inventory Management
0
Technology Adaptability
0
S
ION
a
in Operational
e
re considered as
n
d are shown in
Operations cost,
e
nt are the prime
d
are given equal
l
ity consistency,
t
y and customer
T
OME
R
S
h
ortlisted by the
a
bility in Leather
M
Ps
logy)
y
sis)
g
technique )
Relationship
u
ctio
n
I (Electronic
a
rtners
m
entatio
n
t
(CRM)
k
illed labour
)
and its priority
w
eights of SCOP
w
een LMPs and
n
among LMPs


∗
was performed
sp values were
(8)
The Fuzzy QFD model depi
c
between the enhancing attributes o
f
correlation among the LMPs in nu
m
Fig.4.
Fig. 4. A Fuzzy QFD based Lean Suppl
y
IV. CONC
L
Lean Management Practices
values has to be practically imple
m
sector so as to enhance the
S
Performance of Leather Footwear I
of their crisp values are listed in Ta
b
TABLE V. LMPs IN THE ORD
To conclude, 11 enhancing att
r
identified through scientifically
d
soliciting inputs from experts. L
M
followed and widely accepted by
t
have been chosen. The interrelati
o
W
eights (Wi)
0
.09
0
.09
0
.09
0
.10
0
.09
0
.09
0
.09
0
.08
0
.10
0
.10
0
.08
1 Systematic Information s
h
Data Interchange) across a
l
2 Takt Time
3 Just In Time Inventory (JI
T
4 Customer Relationship Ma
n
5 Workforce Management i
n
cross functional teams
6 Level Scheduling method
7 ERP (Enterprise Resource
P
8 Centralized/Collaborative
P
9 Throughput Improvement
(
10 Semi-Automation
11 KANBAN Pull Production
12 Long term contract with
Management)
13 Continuous Improvement (
K
14 Zero Defects ( POKA YO
K
15 Organized Work Environ
m
16 Total Preventive Maintena
n
17 Set up time reduction
18 Value Stream Mapping
c
ting the interrelationship
f
SCOP and LMPs and the
m
erical values is shown in
y
Chain Model
L
USION
(LMPs) with high crisp
m
ented in leather footwear
S
upply Chain Operational
n
dustry. LMPs in the order
b
le V.
E
R OF THEIR CRISP VALUES
r
ibutes of SCOP have been
d
esigned methodology of
M
Ps that are predominantly
t
he industry numbering 18
o
nship between enhancing
h
aring through EDI (Electronic
l
l Supply chain partners
T
)
n
agement (CRM) implementatio
n
n
cluding multi-skilled labour and
P
lanning) implementatio
n
P
lanning of Productio
n
(
Bottleneck Analysis)
system
suppliers (Supplier Relationship
K
AIZEN)
K
E Error Proofing technique )
m
ent (5 S methodology)
n
ce (TPM)

attributes of SCOP and LMPs to indicate the appropriate LMP
tool to attain the objectives of each enhancing attribute have
been derived as a model of QFD. Correlations among the
LMPs have also been deduced. LMPs accordingly have been
prioritized based on crisp values. With the developed model,
the footwear industry may opt for LMP tools that would be
appropriate to their own organization to maximize the output
with minimum inputs along the supply chain.
ACKNOWLEDGEMENT
The Research Work is part of the doctoral programme (PhD)
of author and the co-author is her guide for the doctoral
programme.
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BIOGRAPHY
Shakila Shobana is a Scientist in Planning, Monitoring and Evaluation
department of CSIR-Central Leather Research Institute at Chennai, a
constituent laboratory of Council of Scientific & Industrial Research,
New Delhi, India. She is a faculty of Leather Technology, Anna
University and has taught courses in TQM, Principles of Production
Management and International Marketing to B Tech students. She
earned Bachelors in Leather Technology & Information Technology as a
dual degree from Anna University, Chennai. She gained Masters in
Marketing Management, part time from Jamnalal Bajaj Institute of
Management Studies (JBIMS), Mumbai University. She is pursuing her
Ph.D. in management from Department of Management Sciences, CEG,
Anna University. She worked as a Senior Executive – Market
Development, Leather Chemicals followed by Business Development
Manager-South for Care Chemicals – Detergents & Formulators at M/s
BASF India Limited (a German based Chemical Company). Her
Research interests include Production & Supply Chain Management,
TQM implementation and Operations.
Hansa Lysander Manohar is currently an Associate Professor in the
Department of Management Studies at College of Engineering (CEG),
Anna University, Chennai. She gained Bachelors in Textile Technology
from Alagappa College of Technology, Anna University in 1985. She
secured her MBA (Masters in Business Administration) in Systems &
Marketing from CEG, Anna University in 1987. She holds her Ph.D. in
Operations & Technology Management from Alagappa College of
Technology, Anna University in 1997.She has taught courses in
Operations and Systems for MBA students of Anna University. Her
Specialization in Research includes Operations, Systems and
Technology Management. She holds membership in MMA (Madras
Management Association) & ISTE (Indian Society for Technical
Education). She guides Ph.D. students in the areas of Operations,
Systems and Technology Management.