Understanding Supply Chain of Lenovo

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Table of Contents

Introduction
Supply Chain Management
Conclusion
References

Introduction

Lenovo is one of the most renowned multinational companies that deal with computer technology, design, and the IT software. It operates within major regions of the world and sells its products in more than 160 countries (Lenovo Group 2013). According to the Lenovo Group (2013), most of Lenovo’s production deals are done to consumers and businesses in a number of ways.

For instance, the company sells its commodities through retail stores, channels of business account sales, and directly to consumers through internet sales. At the onset, Lenovo faces the challenge of delivering its products to customers in an economic sense and/or according to the appropriate delivery dates.

Lenovo has been challenged in terms of efficient fulfilment of customer delivery across the various channels. The primary cause of this challenge lies in the company’s supply network management sustainability issues (Hanifan, Sharma, & Mehta 2014). Sustainability issues affect the logistics network of Lenovo in terms of dangers, rate of waste, and its ecological setting.

Sustainability in the supply has been identified as an essential aspect that triggers organisations’ long-term profitability. Lenovo has implemented tools for maximising customer value. One of the most appropriate tools for Lenovo is the Lean Six Sigma.

By definition, Lean Six Sigma is a business approach towards profit improvement. The tool has helped Lenovo in terms of reducing waste in areas such as manufacturing, design, or service processes (Shukla, Garg, & Agarwal 2011). Lean Six Sigma has been the foundation of management systems in Lenovo.

As a multinational business company, Lenovo has adopted measures that give the company an opportunity to operate sustainably within its supply network. The purpose of this essay is to provide a critical assessment of the extent to which the adoption of Lean Six Sigma will be sufficient to ensure sustainability of Lenovo’s logistics system. In addition, the essay will identify parts of Lenovo’s operations that may be vulnerable whilst explaining why this susceptibility is expected.

Supply Chain Management

Lenovo is a major manufacturer and supplier of peripheral computer-related products such as software, Smartphones, tablets, servers, and high-quality laptops. Lenovo main supply chain has adopted the direct shipment method. The company’s supply network has been transformed in three parts.

First, the direct shipment programme allows the company to integrate new partners and/or meet new demands in a quick manner. The second part is the sell-on-water service, which allows Lenovo to locate its products that are being taken to customers in case the ship is in transit (Lenovo Group 2013). Moreover, Lenovo’s supply network has a chain strategy that uses a balanced mix of house-production and outsourcing partners.

The company’s direct shipment strategies include the original design manufacturers (ODMs) and the electronic manufacturing services (EMS). The approach results in the company’s optimal supply chain, cost-effectiveness, and agility. Moreover, the approach helps in mitigating risks that are associated with market volatility (Qiao & Conyers 2014).

In its supply organisation, Lenovo has vowed to be a responsible and an active corporate citizen. The main goal of the company through the supply chain is to embrace customer satisfaction. In addition, the company seeks to integrate core values of operational excellence and innovation in every aspect of global supply chain.

Lenovo has become a member of Electronic Industry Citizenship Coalition (EICC), which is a code of conduct that boosts supply practices. This code of conduct provides effective conformity to ethics, health and safety, labour, management system, and the environment (Lenovo Group 2013).

Lenovo sells its products to customers through a channel of distribution that requires different logistics networks. Therefore, Lenovo must have a sustainable supply system that necessitates the achievement of its global operations. Logistics network has a number of components (Lenovo Group 2013).

The supply complex for Lenovo has components that relate to sourcing, manufacturing, packaging, and distribution centres. In addition, the logistics system has issues of waste management and emission control (Wolf 2014). Lenovo’s production must entail the identified components for the logistics chain to evade the aforementioned challenges and limitations.

Consequently, Lenovo’s vulnerable operations have led to an insufficient sustainability in its supply complex. In addition, Lenovo’s logistics network has been recognised to be improving. In 2013, Gartner, a leading advisory and information research firm, ranked the company’s supply chain among the top 25. This ranking is a global recognition to the improvements of Lenovo’s operations, which have outperformed other companies in the industry.

Need for Sustainability and the Involved Factors

Lenovo has a growing sustainability concern. The company has recognised the relationship between the natural environment and the manufacturing operations. The company’s supply chain has become one of the most important factors in its decision-making processes.

For instance, Lenovo has been involved in undertaking technological developments, environmental stewardship, and corporate responsibility. Lenovo’s supply chain needs sustainability of the involved factors to manage its production processes. According to Salmona, Selam, and Vayvar (2010), businesses endeavour to manage their production processes and supplies appropriately while considering all factors that are involved in ensuring sustainability.

They provide a service through an environment that considers improvement and impacts on the social and economic gain based on the benefits that both parties enjoy. Businesses have been tasked with the responsibility of ensuring that customers have to buy products and services confidently in their source.

Lenovo has a supply system that promotes customer approval. In the new era, the company regards corporate sustainability, risk management, and compliance as critical plans for ensuring the company’s access to the market as well as market success.

However, Lenovo has witnessed challenges in maintaining a large proportion of its manufacturing section after adopting this unique approach of treating its customers. Businesses that encounter issues in their supply systems have higher chances of falling in terms of their operations. The manufacturer must ensure that all products benefit the client.

Some of the benefits that Lenovo’s clients have enjoyed include employee and customer satisfaction, enhanced reputation, reduced cost, retaining and improvement of the business, and increased competitive advantage (Miemczyk 2014). Lenovo has a process that combines the collection of techniques as a way of reducing the needed time to provide its services.

Exclusive to any company, the business understands its improvements and benefits through a structured programme that checks the manufacturing and distribution channels (Render 2008). The manufacturer should have an affordable process that leads to improvement of the products, their quality, and substantially. This process translates into customer contentment.

Chakraborty and Tan (2012) regard customer satisfaction as the core pillar of any business. Through an effective supply set-up, Lenovo has placed itself in a position of benefiting itself and its stakeholders. It has differentiated itself, demonstrated its commitment, promoted best practices in its production, and increased its marketability.

However, Lenovo has implemented a programme that combines the synergies of the initiative to provide the organisation with fewer processes, limited variations, greater speed, and increased impact. Moreover, effective businesses should have a structured problem-solving tool, be customer-focused, track performance of the business, and/or have the means to produce the largest gain in terms of customer satisfaction.

Lean Six Sigma Tools, Techniques, and their appropriateness at Lenovo’s Case

Lenovo’s logistics set-up has features that have placed the company ahead of others. The company has a shipment process that emphasise Lenovo’s gain. DMAIC, DMADV, and the SIPOC are some of the Lean Six Sigma tools and techniques that are appropriate at Lenovo.

Lean Six Sigma as a concept has many features that emphasise customer satisfaction, continuous improvement, comprehensive stakeholder involvement, and search for the cause of certain developments within the business (De Mast & Lokkerbol 2012). The techniques and tools for service delivery are DMAIC (Define, Measure, Analyse, Improve, and Control) or the DMADV (Define, Measure, Analyse, Design, and Verify) (Rever, n.d).

Lenovo’s operations primarily involve a process improvement, optimisation, and service delivery. One of the Lenovo’s operations is the logistics set-up that has been using these tools and techniques, which assist in the development of a sustainable supply chain. Lenovo’s processes and optimisation procedures for service delivery have been appropriate application of an approach that involves definition of the supply chain leading to customer satisfaction.

DMAIC and DMADV techniques are widely used in Lenovo’s manufacturing processes. DMAIC has helped the company in structuring and guiding the improvement of its processes and productivity (Pyzdek & Keller 2010). After manufacturing, the steps that are involved in the DMAIC technique involve several tools such as the SIPOC device, which consists of Lenovo’s suppliers, inputs, process, output, and customers.

The SIPOC tool’s definition comes from the DMAIC process (Chen & Roth 2005). These tools have been appropriate in terms of helping Lenovo to manage its supplies and processes. Regarding the logistics management, the DMAIC, as well as the DMAIV techniques have been appropriate for Lenovo to establish proper measures to achieve affordable supply effectively.

On the other hand, DMAIV is a methodology that has offered an opportunity Lenovo to champion its processes (Kinsey 2011). This technique is mostly used when the product has not been in existence at the company. The company must demonstrate a need to develop the strategy (Cronemyr 2007). In addition, the method is used when the existing products or processes have been optimised but failed to meet customer satisfaction and specifications.

As a result, the application of the two techniques is effective in the manufacturing process. There is a need to appreciate that Lenovo is a company that is involved in manufacturing processes. DMAIC and DMAIV techniques have been key in sustaining these processes.

For example, the tools are used to fix defects in the shipment process in the supply chain. The tools have been used to minimise the amount of time between the target and the specification unit. In addition, through the DMAIC phases, the Lean Six Sigma has been applied to solve the problem of shipping the products to the user.

The five phases are also used during waste management. Lenovo’s products have wastes. The Lean Six Sigma strengthens and minimises probable and identified weaknesses. Upon the application of the tools in Lenovo’s supply set-up, the company has witnessed an increase in the process velocity and/or reduced the process variation. Moreover, Lean Six Sigma is a methodology that has initiated product quality within Lenovo’s supply chain (van der Vorst, Tromp, & Zee 2009).

A supply management for a manufacturing business such as Lenovo necessitates a strategy that is capable of measuring, controlling, defining, and completing its logistics network for sustainability (Ford 2005). The Lean Six Sigma, DMADV and DMAIC methodologies essentially have helped in the definition of the company’s supply management system.

They have been appropriate for Lenovo’s product energy, packaging, transportation, product end life, waste management, conflict materials, and environmental performance. Moreover, Lean Six Sigma application in Lenovo has been identified in engineering the momentum for the PCs, mobile internet devices, and computer software among other operations as a way of building the company’s competitive strengths of the existing brands and new products (Radhakrishnan 2011).

Promoting Lenovo’s sustainability, Recommendations, and Limitations

Lenovo has taken appropriate initiatives to promote a sustainable supply sequence. The areas the company has focused on to promote sustainability in its logistics network include transparency, climate change, compliance and risk management, building a sustainable culture, and product leadership (Lenovo Group 2013).

Actions that have been taken for sustainability from these areas include providing regular updates, minimising the impact of carbon emission, and ensuring effective tools for managing the company’s operations and the expansion of management procedures. However, the company needs to focus on core areas to provide suitable sustainability (Lenovo Group 2013).

Lenovo promotes a sustainable logistics system through a number of ways. The company has a sustainability policy in its supply chain management. Promoting sustainability calls for the implementation of corporate sustainability policies. Lenovo is a corporate that has been promoting sustainability in its activities.

As a major partner in international business through manufacturing and distribution, the company has been committed to interacting with its stakeholders responsibly. In the supply realm, Lenovo plays an integral part in sustainability. In specific, the company has a strategy, namely Protect and Attack, as a tool for steering a steady relationship in all regions.

The company has built a scale in the transactional business for the consumer market. It has also driven its shares in the emerging markets. In addition, it has expanded Smartphones and tablets in the emerging markets as a way of attaching peripheral services to become a global player.

Through these steps, the company has promoted sustainability (Assarlind & Aaboen 2014). These steps have been effective in areas that Lenovo has focused on relating to sustainable policies, goals, and progress. A continuous focus on the management areas and the performance of the product are a factor that leads to effective performance (Lowenthal 2002).

Lenovo has identified sufficient sustainable logistics system management strategies. However, susceptibility has been witnessed in some areas. Insufficiencies in the supply set-up have resulted from vulnerable areas within the company. The most vulnerable area is the supply management that incorporates the key company’s operations components.

These areas include physical distribution, global customer reach, external linkages, and environmental risk management governance on supplier relations, the procurement department, and the safety department. Management involves major areas within the operations of any business (Cohen 2013). Logistics system management is the most important area in Lenovo, although it is prone to challenges since supplies are made to various regions that have different perceptions and needs.

In addition, the emerging competitors pose a threat to the company’s products. Lenovo needs to adopt a strategy that can minimise vulnerability in its supply network. An effective strategy would be supply chain traceability. Lenovo must ensure that it has traceability schemes. Traceability is a technique for assuring and verifying sustainability claims that are related to the company’s products as a way of ensuring respect and good practices in the environment where diverse people are involved in the supply chain (Czinkota et al. 2014).

Lenovo engages in the manufacturing of products that need to be supplied in major regions of the world. As a result, supply management, the distribution chain, and its components form the basis of understanding its supply chain. Lenovo has succeeded in avoiding the use of materials that can later bring side effects or other conflicts.

The company has demonstrated maximum concern with its supply chain. Traceability ensures clients’ reliability of the company in the areas of human rights, environment, as well as, health and safety. Any business that does not focus on its supply network may fail (Breyfogle 2002). The supply management reveals how best the business can achieve.

Lenovo considers an evolving procurement strategy in its management to achieve sustainability in its supply network. Procurement sustainability has guaranteed the company a sustainable sourcing (Moosa & Sajid 2010). In addition, Lenovo has moved from conformity to a method that has performance enhancement. Over the last years, Lenovo has been involved in the invention of new products.

The products have been an effort to comply with the set standards. Standard products are one of the major factors that attract customers and/or build the reputation of a business (Czinkota, Kaufmann & Basile 2014). Lenovo has been in this trend for many years. The company has moved beyond this approach and exercise risk management.

Lenovo has combined this approach with new initiatives while at the same time using its capital to become a supplier to the emerging markets. Engaging new markets is a crucial development that helps in the provision of new services and new bulk of raw materials (Harry 1992). The best practice for a manufacturing company is the guaranteeing of a reliable source of raw materials and innovation that significantly improve the lives of the new market as well as the operations of the company (Antony et al. 2012).

Lenovo sustainability is an indication of competitive advantage and performance. The company has developed a collaborative and functional logistics management system (Pyzdek 1999). For instance, it has explored effective decision-making and communication plans to maintain an excellent supply sequence.

A sustainable approach with a competitive advantage should converge in a decision or an approach that measures the intensity of its operations. Lenovo collaborates with its customers for mutual benefit. The mutual benefit from a sustainable supply network is an indication that the business has the concern of its product and its impacts on users (Qiao & Conyers 2014).

Lenovo’s strategy of taking the initiative of collaborative and functional chain management has given it a competitive advantage. However, the company should make decisive conclusions to develop a sustainable logistics plan across its areas of operations.

Conclusion

Lenovo has understood customer value improvement and satisfaction. The company has been committed and focused on ensuring that it makes the necessary approaches that can transform it into a successful entity. A disciplined process such as Lean Six Sigma has benefited Lenovo in enhancing communication, participation, and satisfaction.

The business should appreciate that the environment where it operates in is crucial in developing a sustainable supply set-up. Lenovo has addressed major factors such as packaging, end-product-life and distribution channels. In addition, the company has used effective tools and techniques such as DMAIC and DMADV, which have been integrated within the Lean Six Sigma method to help in achieving sustainability.

Lenovo understands that these tools help to upgrade the existing products while at the same time elevating new inventions. The company uses such tools to ensure competitive advantage. Moreover, sustainability in the logistics system has pushed Lenovo to incorporate sustainable tools and techniques that promote sustainability. The process of sustainability for Lenovo, however, has its limitations that arise from vulnerabilities in some areas.

Nevertheless, there is a need for Lenovo to identify sustainability approaches in its supply network as the core factor for its progress. The organisation should also understand that sustainable logistics complex has to incorporate other measures. It should abandon the traditional approaches and adopt new ones to foster a competitive advantage. Lenovo’s sustainability is based on a competitive plan that adopts tools and techniques of Lean Six Sigma.

Sourcing, manufacturing, packaging, distribution management, and waste management processes can help Lenovo to achieve success if effective measures such as Lean Six Sigma and its components are effectively applied. A collaborative approach through the Lean Six Sigma ensures sustainability in the logistics network. Furthermore, any vulnerability in Lenovo’s operations can be addressed through a traceability supply chain management.

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