CHAPTER ONE: INTRODUCTIONBackground of the studyThe supply chain parties, namely; the suppliers, manufacturers, distributors, wholesalers, retailers, third party service providers (3PLs), are under pressure to lessen and balance their costs, time and inventories to continue to be profitable while delivering their promise to their customers. According to Borac, Milovanovic & Andjelkovic (2010), this can best be achieved upon adoption of a lean supply chain management (LSCM). However, Amarela (2017) notes from Azagedan et al. (2013) that the environmental uncertainty affects lean operations and lean purchasing practices. As a result, complex environments make it more difficult to identify, diagnose and respond to problems.Previous researches describe supply chain integration as a competitive resource that manufacturers use to create economic rents and that this could affect the overall performance positively. Supply chain integration, customer-supplier collaboration and partnership have been the trend in business practice and management across industries (Shou & Feng, 2013). Shou & Feng (2013) endeavors to show that supplier performance is relationship driven. Lacoste and Johnson’s (2015) findings are slightly counter-intuitive. They find in their study that the supplier performance is process-driven. In this case they mentioned that the supply chain integration could have effect on supplier performance from the process driven perspective. One of the process driven tools is lean supply chain modeling (Lacoste and Johnsen, 2015). This is in line with Shou ; Feng (2013) observation that lean supply chain modeling and infrastructural manufacturing decisions provides means to improve supply chains and by that supplier’s performance. Their findings confirm that there is a mutual and recursive influence between supply network characteristics and practices for extending the scope of lean programs to the supply network. They found that supply network characteristics can either facilitate or complicate the adoption of lean practices, but also that the initial match/mismatch state of the supply network characteristics is not frozen and companies can lever on lean practices to modify it toward more favorable conditions. Based on these premises, they classified practices for extending the scope of lean programs to supply networks into four groups: supplier involvement, knowledge transfer, lean program commitment and lean program alignment.Lean Supply Chain PracticesManrodt and Vitasek (2008) define lean as a systematic approach to enhancing value to the customer by identifying and eliminating waste through continuous improvement, by flowing the product at the pull of the customer, in pursuit of perfection. Typically, lean supply chain is a network of organizations directly connected by upstream and downstream flows of products, services, finances and information that collaboratively work to reduce cost and waste by efficiently and effectively pulling what is required to meet the needs of the individual customer (Lysons & Farrington 2006, Manrodt and Vitasek, 2008). Activities involved in a supply chain web entails procuring raw materials and parts, producing or assembling the products, storing the products, order processing and tracking, through to the distribution and delivery of the product to the final customer (Sanders, 2012).
Various research works and articles have acknowledged lean practices systems such as just-in-time (JIT), total quality management (TQM), total preventive maintenance programs, human resource management, value stream mapping, and vendor development, as well as their impact on operational performance (Demeter & Matyusz, 2011; Shah & Ward, 2007; Pal & Kachhwaha, 2013; Cudney & Elrod, 2011; Cua, McKone & Schroeder, 2001; Corbett & Klassen, 2006).
Davis and Heineke, 2005; Womack, 1990; and Badurdeen, 2008, identifies lean procurement, lean production and lean transportation as the components of Lean Supply Management.
Supply Chain PerformanceAccording to Haag, Cummings, McCubbrey, Pinsonneault, & Donovan, (2006), performance involves the accomplishment of a given task measured against preset known standards. It would be expected that overall performance determines an organizational survival. It is a set of metrics used to quantify both the efficiency and effectiveness of actions; performance measures need to be positioned in a strategic context, as they influence what people do. They further observe that organizational key dimensions of lean supply chain’s performance can be defined in terms of quality, delivery speed, delivery reliability, price (cost), and flexibility. Time is described as both a source of competitive advantage and the fundamental measure of lean supply chain’s performance. Under the just-in-time (JIT) manufacturing philosophy the production or delivery of goods just too early or just too late is seen as waste. Similarly, one of the objectives of Optimized Production Technology (OPT) is the minimization of throughput times (Haag et al., 2006).
Organizations use the balanced scorecard approach as a tool for measuring performance. The balanced scorecard supplies managers with answers to: how do we look to our shareholders (financial perspective)?, what must we excel at (internal business perspective)?, how do our customers see us (customer perspective) and how can we continue to improve and create value (innovation and learning perspective)?. The balanced scorecard helps the organization translate its vision and strategy through the objectives and measures defined rather than stressing on financial measures which provide little guidance. According to Edgeman et al., (2004), measurable goals and objectives is one of the most important factors to a successful strategy.
Innovation of the balanced scorecard has ensured that while the balanced scorecard retains traditional financial measures telling the story of past events, where investments in long-term capabilities and customer relationships were not critical for success, it has factored in, the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation (Halldorsson, Kotzab, Mikkola, Skjoett-Larsen, (2007). The balanced score card is the performance measurement tool adapted to aid in investigating the lean enterprise and the supply chain performance of pharmaceutical companies in Kenya focusing on lean supply chain management practices; increase in lean supply chain efficiency; cost leadership; customer satisfaction; waste reduction; best practices and lean supply chain benchmarking (Onyango, 2011).
Pharmaceutical Industry in Kenya According to Kenya National Bureau of Statistics (2012), Kenya is currently the regional hub for production of pharmaceutical products in the Common Market for Eastern and Southern Africa (COMESA) region, contributing about 50% of the regions’ market. Currently, over 60% of the region’s estimated 50 recognized pharmaceutical manufacturers are based in Kenya with about over 10,000 drug molecules being registered by The Kenya pharmacy and poison board -(Export Processing Zones Authority, 2005). These products are grouped according to various and specific levels of outlet as free sales/ over the counter, pharmacy technologist dispensable, or pharmacist dispensable/ prescription only.
The pharmaceutical industry business chain entails three segments, namely; the manufacturers, distributors, retailers and the final consumer. All these play a major role in supporting the country’s health sector, which is estimated to have over 4,600 health facilities countrywide (Kenya National Bureau of Statistics, 2012).
Pharmaceutical manufacturers function in an intricate atmosphere due to their production processes that involves numerous interconnected steps that use lots of materials from diverse suppliers (Altria and Carleysmith 2009).
Kenya Medical supplies Agency (KEMSA) manages all drug supplies to government hospital in the country and hence is the biggest purchaser of medicine produced both locally and through importation (Mussumba, 2014). KEMSA procures about 45 % of the pharmaceuticals in the Kenyan market by advertising through open tendering program and supplies them to hospitals categorized from level 1 to level 6 and referral hospitals in the country, all giving a total of about 4600 health facilities in the entire country.
After a drug is launched, McFarlane ; Sheffi (2003) observes that a completely different set of objectives, drivers, and constraints become dominant. The key stakeholders in this supply chain include multiple government agencies, hospitals, clinics, drug manufacturers, drug distributors, pharmacy chains, retailers, research organizations, and the FDA. To compound matters further, the same supply chain is responsible for the distribution of prescription drugs, over-the-counter (OTC) medicines, generics, as well as biologics having different handling needs and operational objectives (McFarlane ; Sheffi, 2003). Indeed, there are numerous other organizations, such as insurance companies, healthcare management organizations, and GPOs, that further increase the complexity. Due to very different business objectives, these organizations make the task of managing supply chain even more difficult. Furthermore, due to the regulatory nature of the industry and numerous merger and acquisitions to acquire more R;D expertise, many pharmaceutical supply networks have grown in an uncontrolled fashion rather than being planned for optimal performance (McFarlane ; Sheffi, 2003).
The impact of lean practices on a business success is paramount. Lean instruments and methodologies have enabled companies to be more flexible and more profitable. The process comprises pull production, quality development, process focus, continuous improvement, value stream management, and worker empowerment. The objective of lean practices is to satisfy customer demands on the highest possible level through waste reduction (Shah ; Ward, 2007, Pal ; Kachhwaha, 2013). Elimination of wastes can be considered in the human resources, design, production processes and activities, distribution, and inventory sections (Sang, Khairuzzaman, Abdul, Boon ; Yew, 2013; Kannan, Selladurai, ; Karthi, 2013). According to the concept of LP, implementing its tools and techniques help minimize such wasted effort (Shah and Ward, 2003). During the first steps, supply chain partners should understand the lean concept, and then implement its practices through high levels of collaboration and cooperation.
Various research works and articles on lean practices focus on the implementation of systems, as well as their impact on operational performance (Demeter ; Matyusz, 2011; Shah ; Ward, 2007; Pal ; Kachhwaha, 2013; Cudney ; Elrod, 2011; Cua, McKone ; Schroeder, 2001; Corbett ; Klassen, 2006). Fewer studies investigate the implementation of the lean concept in the supply chain and identify the most important tools and techniques that carry out the objectives of the lean concept in the supply chain. The study by Onyango (2014) among state corporations in the health ministry connects LSCM and organization performance with workplace organization taking the biggest effect while problem solving showed the lowest effect on the firms studied. Research of Azagedan et al. (2013) has found that the environmental uncertainty affects lean operations and lean purchasing practices. As a result, intricate atmospheres make it hard to detect, diagnose and respond to hitches.
Mutual interactions between lean practices and supply chain integration across the supply chain network were previously studied, but no studies were found that described the conditions for lean adoption and integration within an intricate pharmaceutical network.
This research intends to determine ways to effectively implement lean practices and evaluate the supply chain performance of Pharmaceutical companies in Kenya.
This research endeavors to answer:
Which are the most important tools and techniques that carry out the objectives of the lean practices in the supply chain of the pharmaceutical industry?
What are the appropriate connections and circumstances for the extension of lean practices across the supply chain in the pharmaceutical industry in Kenya?
Specific Research objectivesThe study will be guided by the following objectives:
To identify the most important tools and techniques that carry out the objectives of the lean practices in the supply chain of the pharmaceutical industry.
To evaluate the appropriate connections and circumstances for the extension of lean practices across the supply chain in the pharmaceutical industry in Kenya.
Value of the StudyPharmaceutical manufacturers: this study will provide industry policy makers and managers with valuable information regarding manufacturing.
Other organizations: organizational policy makers and managers with benefit with valuable information regarding lean practices in manufacturing emanating from the findings of this study.
Academicians and practitioners: It is expected to add more knowledge in field of supply chain management and therefore scholars are to benefit from this.
CHAPTER TWO: LITERATURE REVIEWIntroductionThis chapter entails a review of theories related to this study, a review of previous literature related to lean practices, implementation of lean programs to supply networks, empirical literature review and a conceptual framework of the study.
Theoretical FrameworkIn this section, the research introduces and explores the Theory of constraints (TOC) and Systems Hypothesis and in respect to this research.
Theory of Constraints (TOC)
The focus of the TOC theory is to maximize the system’s performance (Gupta & Andersen, 2012). Three global measures identified for the TOC theory for evaluating organizational performance toward the goal of the company are finished goods, inventory, and operating expenses (Gupta & Andersen, 2012). These three measures are company -level operational measures of performance and may be used by the company’s management to achieve continuous improvement (Gupta ; Andersen, 2012). In addition, Gupta and Andersen (2012) stated that the TOC’s primary assumption is that at least one constraint in each system limits the ability of achieving higher levels of performance relative to its goals. Any organization can improve its performance and move toward achieving its goals by improving the weakest operating activity (Rhee et al., 2010). When an organization removes the constraint, and moves to a higher level of production or service, a new constraint appears and the cycle of managing the system with respect to the new constraint resumes (Gupta & Andersen, 2012).SCM is the basis for a firm’s competitive advantage because it enables the firm to lower operation costs, increase the service reliability, decrease the inventory level, reduce order cycle time, lower the number of backorders, improve customer satisfaction, and improve overall competitive advantage (Talib ; Hamid, 2014).
Oglethorpe and Heron (2013) used the TOC technique to distinguish and overcome the operational, supply chain blockades, and constraints that happen in the pharmaceutical supply chains, particularly with smaller producers, as they look to build market penetration over a more extensive geographic territory. Oglethorpe and Heron (2013) observed that the TOC approach provides an advancement of knowledge in the area of pharmaceutical supply chain analysis and is done in a way that is more viable in use. Further, Oglethorpe and Heron (2013) prescribed seven general classes to conquer the operational obstructions: constraints due to the nature of the market, due to scale and the nature of products; constraints related to employment and skills; institutional imperatives; constraints in supply chain relationships; certification, policy, and regulatory constraints; and constraints on individual convictions and humanoid attribution.
According to Ackoff (1981), a system is an arrangement of more than two interrelated components that operate by at bare minimum every component influencing one other component. Systems hypothesis incorporates design, developing of connections and how they function in solidarity towards a shared objective (Laszlo, 1995a). Organizational activities supply chain links and interphases form the system segments to this theory. These interphases together shape well-knit cross-connected operations designs that work interactively in accomplishing a definitive supply operation chain goal (Bertalanffy, 1968). Flynn, (2011) demonstrates that general consequences of a lean operations supply chain is credited to the systems theory’s aggregate intervention areas, in which all chain operators together contribute to formulate, institutionalization and usage of lean tools and procedures. This gives an ideal scientific approach to continuous improvement and subsequently performance as every one of these connected activities.
Lean Practices Providing for the Seven Muda Model one of the fundamental strides in the execution of a Kaizen system, is the determination of the appropriate devices for the application of Kaizen methodology in each organization or industry (Imai, 2012). In view of articles published by a several writers, this segment presents data gathered on some Lean instruments and the examples on the application of these instruments. These entails lean practices systems such as Value Stream Mapping (VSM), 5s, Just–In-Time (JIT), Kaizen (Continuous Improvement), Kanban (Pull System), Heijunka (Level Scheduling), Jidoka (Automation), SMED (Single Minute Exchange of Die), TPM (Total Productive Maintenance), and Visual Management.
Kaizen Strategy Planning (KSP) is an instrument created by Kaizen Institute whose primary objective is to design and plan the program of ceaseless change and social change of an organization or association. The KSP is directly identified with the mapping and planning of the organization’s Value chain and is a simplification of the VSM in the following four stages: analysis of the present circumstance, in which the targets and extent of the strategy are clarified, with the quantification of the present state and identification of the improvement suggestions; overview of Kaizen Strategy, which comprises of the prioritization of the activities proposed in the previous stage; Strategic Improvement Plan – planning feasible activities to implement in a transient period; and follow-up, creation of a mission control room and impression of the lessons learned so as to enhance knowledge (Kaizen Organization, 2014). The principle focus of this tool is the advancement of a strategic plan for persistent change through demonstrating how to enhance QCDM indicators (quality, cost, delivery, motivation) and explain the role of leadership and support of a constant improvement program bolstered (Kaizen Establishment, 2014).
The Five S (5S) 5S is a tool that intends to shop floor organization and adds to great condition and functionality of all workplaces, by cleaning, housekeeping and disciplining (Melton, 2005). Like the name specifies, the tool is divided in five stages: sort (seiri) – remove superfluous things; straighten (seiton) – arrange the items so they can be effortlessly picked; shine(seiso) – clean the work environment; standardize (seketsu) – maintain the three past steps; and sustain (shitsuke) – keep all the standards in order (Imai, 2012).
The objective of Visual Management is to outwardly distinguish the area of work. It is used to help communicate, as well as to help highlight anomalies and to abstain from committing errors (Tenera e Pinto, 2014).The improvement of visual management is portrayed as a one amongst the best Lean tools and one of whose effect is felt quickly, as its viable application to production systems adds to the rapid increment of the primary indicators of performance: safety, quality and productivity, acting as an interface amongst employees and production system (Murata and Katayama, 2010).
Single Minute Exchange of Die (SMED) was developed by Shingeo Shingo at a time Taiichi Ohno was implementing Just-in-Time in Toyota, One of Taiichi Ohno’s principle objectives was to produce smaller, more regular batches to create flow and eradicate stocks. In this setting he employed Shingeo Shingo with the motivation behind lessening the changeover times with the goal of producing smaller batches without diminishing productivity (Ferradas & Salonitis, 2013). SMED methodology is divided in five steps: observing the present methodology; isolating the internal and external activities; converting internal activities to external; reducing the internal activities; and finally reducing the external activities (Shingo, 1985). Upon combining these five steps, Shingo reached unexpectedly positive results in reducing changeover times, but the general success rate was only accomplished when all the people whose duties were involved in change were incorporated, such as the cleaning crew, the maintenance team, the quality division and all providers of materials and tools needed to implement the changes. Hence, it is concluded that it is not only necessary to contemplate the system but also achieving the commitment of all employees included. (Almomani et al., 2013).
The Kanban system was created as a subsystem of Toyota Production System with the goal of controlling stock levels, production orders and the supply of parts and raw materials. Kanban is entails a control mechanism that enhances material flow and screens the production of the required items in the right amount at the appropriate time (Lage Junior e Godinho Filho, 2010).
Implementing lean programs to supply networksKenyan pharmaceutical manufacturers operate in an intricate atmosphere since their production process entails multiple inter-related processes that use various materials from several distinct suppliers. Many of these manufacturers have implemented lean practices to reduce waste, cost, cycle time and variability in outputs (Altria and Carleysmith 2009). Reports show that pharmaceuticals manufacturers applying lean have lowered cycle time and enhanced efficiency of manufacturing and procurement processes (Altria and Carleysmith, 2009).
Research of Azagedan et al. (2013) has discovered that the ecological vulnerability influences lean operations and lean procurement practices. As a result, intricate atmospheres lender it more problematic to detect, diagnose and respond to challenges. For instance, in an intricate supply chain, it may be difficult to diagnose whether a production shortfall was due to a quality issue in the raw material, a late conveyance from a provider, or an internal procedure issue that happened during final assembly. Complex atmospheres also enhance the possibility of operational errors. For instance, firms in a more intricate atmosphere have more providers, which intensifies the chances of errors in projecting raw material requirements and handling in -bound logistics (Azadegan, Patel et al. 2013). The higher levels of volatility and uncertainty in changing environments undermines lean operations to harmonize production process and reduce inventory, which undermines the efficacy of lean operations (Azadegan, Patel et al. 2013). Previous researches define supply chain integration as a competitive resource that manufacturers use to create economic rents and that this could influence general performance positively. Supply chain integration can be realized through adoption of; supplier involvement, knowledge transfer, lean program commitment and lean program alignment strategies.
Currently, firms view supply chain management through integration as a vital apparatus to expand their competitive edge. Supply chain traverse all movement and storage of raw material, work-in-progress inventory, and finished merchandise from point of origin to point of consumption (Qrunfleh and Tarafdar 2013). This is to say, a strategic supply chain signifies a set of practices that complete key tasks in support of its network methodology such as building relationship with suppliers, eliminating waste, facilitating customization, and exchange of information within the supply chain (Li et al., 2005; Li et al., 2006; Wong et al., 2005; Zhou and Benton, 2007). These practices are believed to represent the most important forms of integration that are employed in supply network: external integration (observed through tactical supplier partnership) and delivery integration (observed through postponement) (Frohlich and Westbrook 2001).
Strategic supplier partnership is the lasting bond between the organization and its suppliers, which affects the tactical and operational competences of participating companies to help them realize substantial constant benefits (Li, Rao et al. 2005). Empirical Literature Review
In a study regarding lean enterprise and supply chain performance of pharmaceutical companies in Kenya, Onyango (2011) observes that Global Benchmarking, Electronic inventory management, TQM practices, ICT integration in the supply chain, Innovation and creativity, Satisfactory customer services, zero waste tolerance, JIT delivery services were related to Performance of Pharmaceutical companies in Kenya with a 70% variation. Onyango (2011) further observes that those practices were linearly related with Performance of Pharmaceutical companies in Kenya.A study carried out by Wainaina (2009) on supply chain management best practices in large private manufacturing firms in Kenya identified that lean enterprises experience challenges like; insufficient monitoring and control to the suppliers’ delivery time, lack of suppliers ngagements, lack of supply chain integration and collaboration especially with trade marketing and distribution teams, lack of close inventory review out of not having periodical checks, lack of clear responsibility line inside supply chain management, lack of understanding and visibility to the desired marketing activities, lack of understanding and recognition to the production constraints and management, as well as capacity planning.
A study carried out by Bolo (2009) on selected strategy variables on firm’s performance indicated that various challenge which include; resistance to change by management and inadequate technology to support the concept were key hindrances of the practice. The key aspect of supply chain management practices are supply chain integration, information sharing, customer service management, geographic proximity and JIT capabilities. Simone & Kleiner (2004) focused on five practices at supply chain level that are a key to create supply chain responsiveness. They include outsourcing, strategic supplier partnerships, customer relationship, and information sharing and product modularity. Locher (2007) also conducted the research regarding supply chain management practices; they investigated long-term relationship, cross-functional teams, supplier base reduction and supplier involvement.
McManus (2007) examined that long-term relationship, information sharing, cooperation process integration and supply chain leadership underlying the supply chain management practices are the key determinants of lean supply chain practices of competitive companies. Schonberger (2007) identified supply chain management practices in form of strategic supplier partnership, customer relationship and information sharing. This research adopts the same supply chain management practices (supplier partnership, customer relationship and information sharing).
A study carried out by Kamaru (2012) on Lean supply chain practice in urban Road construction projects revealed that companies have adopted various lean supply chain management practices which include emphasizing on customer focus, developing avenues for waste reduction, practicing continuous improvement in their processes and adopting JIT techniques in inventory management. Benefits accrued from implementation of lean supply chain practices include cost reduction, waste elimination and profit maximization.
Conceptual frameworkA research by Bortolotti et al (2016) posits that there is a shared and recursive effect amid supply chain attributes and practices for extending the scope of lean programs to the supply network. Based on this research and other case studies we designed the conceptual framework below.
CHAPTER THREE: RESEARCH METHODOLOGYIntroductionThe chapter summarizes and gives the methodology used to carrying out the study. Therefore, it encompasses research design, target population, collection of data and analysis of data.
This study shall adopt a cross-sectional survey design and shall aim at evaluating the implementation of lean practices and supply chain performance of pharmaceutical companies in Kenya. Cross-sectional surveys give a chance to assess links and interrelationships between variables and sub-groups in a population (Easterby-Smith, Thorpe Jackson & Lowe, 2008). The study shall be descriptive and concerned with finding out the what, where and how of a phenomenon and data will be collected from a sample selected to represent a larger population (Hines, 2004)
Targeted population for this survey shall consist of 20 major pharmaceutical manufacturers of the 43 listed in the Kenya Pharmaceutical society directory (KPA, 2016) that are listed as local manufacturers. The study shall target those that are tasked in running and own the key processes in the supply network and directly engage with employees such as supply chain managers, engineering managers, finance managers and production managers given.
Sampling designThe study shall use random sampling method and shall target all the supply chain managers, engineering managers, production managers, and the finance managers from the 20 firms selected.Data Collection
The study shall use questionnaire method to collect primary data directly from the sampled 48 managers. The study shall target supply chain managers, engineering managers, finance managers and production managers. Supply chain managers are responsible for supply chain function of the organization. On the other hand, engineering managers are responsible for the design and layout of production as well overall machine efficiency and availability. Production managers supervise transformation of raw materials to finished products. Finally, finance managers have the information concerning financial performance in the organization. The questionnaire will be administered by the researcher supported by research assistants.
Descriptive inferential statistics will be used to analyze demographic information of study respondents, and lean practices applied by the pharmaceutical manufacturing firms. By using this technique, the researcher shall be able to elucidate which practices for help in extending the scope of lean programs to supply networks. That is, the lean practice which has the highest influence on organizational performance. REFERENCESCorbett, C.J.; Klassen, R.D. (2006). Extending the horizons: Environmental excellence as key to improving operations. Manuf. Service Oper. Manag. 2006, 8, 5–22.
Cudney, E.; Elrod, C. A. (2011). comparative analysis of integrating lean concepts into supply chain management in manufacturing and service industries. Int. J. Lean Six Sigma 2011, 2, 5–22.
Cua, K.O.; McKone, K.E.; Schroeder, R.G. (2001). Relationships between implementation of TQM, JIT, and TPM and manufacturing performance. J. Oper. Manag. 2001, 19, 675–694.
Deisingh AK (2005) Pharmaceutical counterfeiting. Analyst 130(3):
Demeter, K.; Matyusz, Z. (2011). The impact of lean practices on inventory turnover. Int. J. Prod. Econ. 2011, 133, 154–163.
Kannan, G.; Selladurai, D.V.; Karthi, S. (2013). Swaging process for productivity improvement in the manufacture of spindles. J. Sci. Ind. Res. 2013, 72, 681–684.
Kimani, M.W, (2013). Lean supply chain management in manufacturing firms in Kenya. UON. November, 2013
McFarlane D, Sheffi Y. (2003). The impact of automatic identification on supply chain operations. The international Journal of Logistics Management 3:1-17
Nordin, N.; Deros, B.M.; Wahab, D.A.; Ab-Rahman, M.N. (2011). Organisational change framework for lean manufacturing implementation. In Proceedings of the 15th International Conference of ISO and TQM, Kajang, Malaysia, 26–28 July 2011.
Pal, A.; Kachhwaha, S.S. (2013). Waste cooking oil: A promising feedstock for biodiesel production through power ultrasound and hydrodynamic cavitation. J. Sci. Ind. Res. 2013, 72, 387–392.
Shah, R.; Ward, P.T. (2003). Lean manufacturing: Context, practice practices and performance. J. Oper. Manag. 2003, 21, 129–149.
Shah, R.; Ward, P.T. (2007). Defining and developing measures of lean production. J. Oper. Manag. 2007, 25, 785–805.
Sang, L.C.; Khairuzzaman, W.I.W.; Abdul, R.S.Z.; Boon, H.K.;Yew, J.L. (2013). Sustaining customers’ loyalty: A survey of a coating resins manufacturer. J. Sci. Ind. Res. 2013, 72, 731–734.
Tenera, A., Pinto, L.C. (2014). A Lean Six Sigma (LSS) project management improvement model. Procedia – Social and Behavioral Sciences, 119, 2014,) 912 – 920.
Ferradas, P.G.; Salonitis, K. (2013). Improving Changeover Time: A Tailored SMED Approach for Welding Cells. Procedia CIRP vol. 7, 2013, 598-603.
Almomani, M.A., Aladeemyb, M., Abdelhadic, A., Mumani, A. (2013). A proposed approach for setup time reduction through integrating conventional SMED method with multiple criteria decision-making techniques. Computers ; Industrial Engineering Volume 66, Issue 2, October 2013, 461–469.
Shingo, S (1985a). A revolution in Manufacturing: The SMED System. Stamford, CT: Productivity Press.
Murata, K., ; Katayama, H. (2010). Development of Kaizen case-base for effective technology transfer–a case of visual management technology. International Journal of Production Research, 48(16), 2010, 4901–4917.
APPENDIX II: INTRODUCTION LETTERJuly 26, 2018.
RE: RESEARCH DATA FOR MASTER OF BUSINESS ADMINISTRATION
I am a postgraduate student pursuing a Master of Business Administration in the School of Business at the University of Nairobi. As a partial fulfillment of the requirements for the award of the MBA degree, I am carrying out a research on “implementation of lean practices and supply chain performance of Pharmaceutical companioes in Kenya’. I, therefore, kindly request for information regarding lean supply chain practices in your organizational.
The information you provide is purposely meant for this study and will solely be used for academic purposes. Your organizational identity will remain confidential. I hereby undertake not to make any reference to your organization’s name in any presentation or report stemming from this research.
I am aware that filling the questionnaire is time consuming and I will greatly appreciate your assistance. Any additional information in form of suggestions and comments that you deem necessary to make my research findings more conclusive, relevant and reflective of the study will be highly appreciated.
Thanks in advance.
GRACE MUTHONI KIUNDU
University of Nairobi
MBA, Postgraduate Student
APPENDIX III: RESEARCH QUESTIONNAIRE
SECTION ONE: COMPANY GENERAL INFORMATION
Position of Respondent
Head of Sales ( )Head, Business Development( )
Head, Supply Chain ( )
Head of Operations ( )Finance manager ( )
Engineering /Environment safety manager ( )
How long have you been in this position in this organization?
less than 5 years ( )5 -10 years ( ) 10-15 years ( ) Over 15 years ( )
PhD ( )
Masters/Post-graduate ( )
Graduate ( )
Undergraduate ( )
Diploma ( )
Which products does your company deal in?
SECTION TWO: ADOPTION OF LEAN SUPPLY CHAIN PRACTICES
How long has your organization adopted lean practices?
less 5 years ( )
5 -10 years ( )
10-15 years ( )
Over 15 years ( )
Show the extent of adoption of lean practices in the practices listed in the table below.
Kindly use a scale of 1 to 5 where 5 = means to a very great extent, 4 = great extent, 3 = moderate extent, 2 = small extent, 1 = very small extent),
Lean Supply chain Tool 5 4 3 2 1
1 Value Stream Mapping
2 Just In Time-(JIT)
3 Kaizen (Continuous Improvement)
4 Heijunka (Level Scheduling)
5 Kanban (Pull System)
6 Kaizen (Continuous Improvement)
7 Jidoka (Automation)
8 SMED (Single Minute Exchange of Die)
9 TPM (Total Productive Maintenance)
10 Visual Management
11 5s (Sort, Straighten, Shine, Standardize & Sustain)
12 Any other (please indicate
To what extent does your organization apply the following tools and procedures of lean supply chain management practices?
Use Likert scale 1=to a very great extent, 2=to a great extent, 3=to a moderate extent, 4=to a small Extent, 5=does not affect at all, and tick ? where appropriate.
Kanban 5 4 3 2 1
· control inventory levels
· control production orders
· control the supply of components
· control raw materials
Single Minute Exchange of Die (SMED)
· observing the current methodology
· separating the internal and external activities
· converting internal activities to external
· reducing the internal activities
· reducing the external activities
· reducing changeover times
· attaining the commitment of all employees involved
· Enhance ability to highlight anomalies
· visually identify the area of work
· rapid increase of safety
· rapid increase of quality and productivity
· acting as an interface between employees and production system
FIVE S (5s)
· removing unnecessary items
· arranging the items so they can be easily picked
· cleaning the workplace
· standardizing production activities
· keeping all the standards in order
Kaizen Strategy Planning (KSP)
· analyzing of the current business situation
· quantification of the current business state
· identification of the improvement suggestions
· creation of a mission control room
· reflection of the lessons learned in order to increase knowledge
· prioritization of the proposed initiatives
· a strategic plan for continuous improvement
· methods to improve QCDM indicators (quality, cost, delivery, motivation)
· defined role of leadership
· support of a continuous improvement program supported
Kindly rank by ticking in the prescribed box the nature and the extent to which the Lean Manufacturing practices implementation has impacted your organization performance by use of the ratings as shown;
5 = To Avery great extent, 4 = Large extent, 3 = Moderate extent 2 = Small extent 1 = Very small extent
Lean Manufacturing implementation impact 5 4 3 2 1
1 Reduction in Work-in-progress
2 Low production cost
3 Stock/Inventory reduction
4 Reduced Lead- time
5 Reduced Set -up time
6 Productivity improvement
7 Waste elimination/reduction
8 Quality improvement -Product and service
9 Improved Sales volume
10 Enhanced Profitability improvement
11 Increased return on investment
12 Reduced Labor
13 Enhanced material flow and through put
14 Increase in company market share
15 To gain competitive advantage
SECTION THREE: PRACTICES FOR EXTENDING THE SCOPE OF LEAN PROGRAMS TO SUPPLY NETWORKS
Based on your experience, which of practice below is efficient in extending the scope of lean programs in the supply chain of your organization?
Use Likert scale 1=strongly agree, 2=agree, 3=neutral, 4=disagree 5=strongly disagree, and tick ? where appropriate.
EXTENDING THE SCOPE OF LEAN 1 2 3 4 5
1 Intricate atmospheres lender it more problematic to detect, diagnose and respond to challenges.
2 Complex atmospheres also enhance the possibility of operational errors.
3 Firms in a more intricate atmosphere have more providers, which intensifies the chances of errors in projecting raw material requirements and handling in -bound logistics
4 Collaboration is a vital apparatus to expand their competitive edge
5 Building relationship with suppliers helps eliminate waste, facilitate customization, and exchange of information within the supply chain
6 All the supply network actors should restructure and align the internal production systems to reduce inconsistency in the supply network
7 There is a common and recursive impact between supply network qualities and practices for expanding the scope of lean programs to the supply network.
a) Lean Program 1 2 3 4 5
8 Lean management improves the overall operational performance of accompany
9 It is essential to distinguish between lean planning at the strategic level and lean production at the operational
10 Managers should be aware of lean strategy, understand its advantages, difficulties encountered during its implementation, and how these problems can be solved.
11 Management cognizance of lean strategy can be gained through a variety of external and internal knowledge sources.
12 Lean strategy should increase integration with their key suppliers and customers
13 Employees should be involved in supporting intricate lean tools.
a) Knowledge transfer 1 2 3 4 5
14 Lean concept should be extended by including internally related practices and supplier and customer related practices
15 Lean concept should be extended by including personnel related practices in conducting constant improvement programs, such as top management leadership for quality, small group problem solving, and employee training.
16 Both social mechanisms and standards are usually vital for sharing and enhancing lean practices
17 Social components can be utilized for preparing workers hence making lean cultural qualities
18 Teams can be made among lean specialists of various plants to train workers
19 Training can be done by means of ICT by creating a common database where plants can transfer standardized records on lean usage to encourage shared learning
20 Self-development and capability ought to be bolstered with standardized problem-solving schedules, that point on systematic and ritualized utilization of Plan-Do-Check-Act
21 At the point when there is in-congruence amongst knowledge and adopters’ contextual conditions, pressure helps maintaining a strategic distance from relapses in a program and triggers social change
a) Lean program commitment 1 2 3 4 5
22 Managers need to constantly examine the internal and external conditions and set productivity and quality goals and fortify a culture of continuous improvement.
23 Apportionment of an industrial engineer for change, employee training, ensuring a sufficient number of personnel are accessible to undertake “lean improvement activities, providing employees time for learning and testing new techniques and processes
24 Committing the necessary monetary investments and providing active supervisory management support”
25 Strengthening of the habitual constant improvement can be achieved by task support.
26 Failure of lean programs is the absence of work on the delicate side, the social parts of lean deployment such as communication and the leadership that is basic for building a lean culture
27 For an effective risk management, supply network must be divided into components such as suppliers, manufacturers, warehouses, distribution channels and so forth and the dangers related with every component ought to be analyzed and identified particularly and intricately.
a) Lean program alignment. 1 2 3 4 5
29 Can be achieved through sharing of proprietary information on internal activities and costs so as to give room for counterparts in supply networks to align their processes and operational performance.
30 To lead in a free market, a firm must share information with its suppliers
31 To lead in a free market, a firm must install systems and procedures to ensure smooth supply flows, in bid help resolve routine supply problems
32 To lead in a free market, a firm must ensure that both buyers and suppliers develop innovative supply chain projects to support long-term and cooperative goals
33 A successful information sharing should be regular, bi-directional, informal and non-coercive
34 There needs to be some kind of supply chain approach.
35 For effective performance evaluation, measurement objectives must embody organizational objectives and the metrics selected should mirror a balance between financial and non-financial measures that can be associated to strategic, tactical and operational echelons of decision making and control
36 It is vital to reduce numerously established performance metrics to a fairly low number that are more effective for performance assessment
Thanks in advance
APPENDIX III: MAJOR PHARMACEUTICAL MANUFACTURING FIRMS IN KENYA
Bayer East Africa Limited
Aventis Pasteur EA
Alpha Pharmaceuticals Ltd
Cosmos EA Ltd
Dawa Pharmaceuticals Ltd.
HighChem EA Ltd.
Elys pharmaceuticals Ltd
Manhar Brothers (Kenya) Ltd.
Novartis Rhone Poulenic Ltd.
Diversey Lever Kenya.
Phillips Pharmaceuticals Ltd.
Harley’s limited- Nairobi.
Laboratories and Allied-Nairobi.
Source: Kenya Pharmaceutical Association (2018)