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Lean practice and performance management
Introduction
In the era of globalisation, supply chains are being treated as extended enterprises linking firms in different locations and enabling partners to gain competitive advantage. According to [24] Jagdev and Browne (1998) supply chains are responsible for the entire lifetime of the product, from preparation of materials and supply management, to production and manufacturing, distribution and customer service, and ultimately recycling and disposal at the end of a product's life. In recent years, firms have realised the potential of effective supply chain management (SCM) in the management of day-to-day operations. However, many firms fail to develop effective performance measures and the metrics needed to achieve integrated SCM. In order to achieve the supply chain goal of fulfiling customer orders more quickly and efficiently than competitors, a supply chain needs to engage in continuous improvement processes and competitive strategies. [22] Hanson et al. (2011) argued that the alignment of an organisation's activities with its strategies leads to competitive advantage. So, to understand how supply chains compete, it is necessary to understand the overall performance of the supply chain.
Another important characteristic regarding supply chain measures is the strategic fit between competitive performance and supply chain strategy. [44] Soni and Kodali (2011) found that the choice of competitive supply chain strategy impacted business and supply chain performance and they claimed that the strategic fit considering the degree of alignment between competitive situation, strategy, organisational culture and leadership can enhance business performance. As such, to achieve effective performance measures the competitive performance of a supply chain must be aligned with the market strategy and position of supply chain actors.
Lean philosophy is one of many initiatives that major businesses around the world have been adopting in order to remain competitive in the increasingly global market ([48] Womack et al. , 1991; [41] Schonberger, 2007). The focus of the lean approach is on cost reduction by eliminating non-value-added (NVA) activities and using lean tools in order to be sustainable and optimise supply. The core thrust of a lean supply chain is to create a streamlined, highly efficient system that produces finished products at the pace customers demand with little or no waste ([42] Shah and Ward, 2003). Lean is applicable in many...