Supply Chain Management

Production is a key function in the supply chain. This chapter focused on the role of production in the supply chain and its evolution. Manufacturing processes have been influenced by changing business conditions. In this chapter, we discussed the three key forms of intrafirm production processes - craft production, mass production and lean production.

Intrafirm lean production only helped firms to remove inefficiencies within their internal operations. This led firms to explore opportunities outside the firm to increase efficiency. As a result, interfirm production systems have emerged. The focus of interfirm production is to establish a long-term relationship with suppliers and distributors, and to make joint efforts to achieve efficiency in the supply chain.

The two main interfirm productions systems are - interfirm JIT production and tiered production. The increased pace of globalization, competition, need for better quality, flexibility, and speed in the manufacturing process, has led firms to think beyond their immediate suppliers and customers.