Lean supply chain and its effect on product cost and quality: a case study on Ford Motor Company

Abstract

Purpose

The purpose of this paper is to address “how Toyota can continuously and consistently achieve its dramatic success through its competences ‐ continuous waste elimination and the objective of long term philosophy”; the paper aims to summarize some solid suggestions and comprehensive ideas for those industries planning to implement lean production.

Design/methodology/approach

The methodology used is the case based approach (CBA), which described lean supply chain (LSC) through value stream mapping (VSM) using a case study from the Ford Motor Company in Chung Li, Taiwan. The paper follows a four‐step problem solving process to demonstrate how lean supply chain affects product cost and quality.

Findings

Using VSM case study to demonstrate LSC, all the measurable indices helpful for cost reduction, quality enhancement and lead time reduction are shown. The paper also provides some recommendations and basic principles to implement VSM successfully through P‐D‐C‐A improving cycle.

Research limitations/implications

Since a comprehensive demonstration of VSM implementation is likely to be both expensive and time‐consuming, this study provides a case study from the Ford Motor Company in Taiwan.

Practical implications

VSM through lean process is considered to be one of the best practices in supply chain management. It has been shown to be successful for implementing lean production in Toyota Production System (TPS). However, other competitors struggle despite adopting similar principles. It seems that there is a special ingredient within TPS that Toyota's competitors do not fully comprehend.

Originality/value

This paper not only shows the value of VSM as a supply chain tool in implementing lean production; but also provides industrial insight for enterprising companies to follow a four‐step problem‐solving process to effectively develop their lean supply chain.

Citation

Wee, H.M. and Wu, S. (2009), "Lean supply chain and its effect on product cost and quality: a case study on Ford Motor Company", Supply Chain Management, Vol. 14 No. 5, pp. 335-341. https://doi.org/10.1108/13598540910980242