An Application of Lean Supply Chain Management for Cost Reduction in Latex Industry

The objective of this research is to reduce the total systemwide cost of the latex industry supply chain. Three major stakeholder agents: rubber grower, latex factory, and glove factory, are considered. A lean concept is employed to investigate non value added (NVA) activities, or wastes, and to propose alternative methods to eliminate them. Value stream mapping technique (VSM) is used as a tool to identify NVA in the supply chain. Three main steps in this research are: 1) creation of a supply chain model for the latex industry, 2) assessment of the current state of the supply chain by evaluating value added (VA) and NVA activities, and the total supply chain cost, 3) Analysis of root causes and identification of countermeasures to reduce the wastes. Results indicate that storage cost of raw materials and finished goods, at 58.35% of the total systemwide cost, is largest and most important. Further research on forecasting techniques and latex collecting point field design to reduce labor cost in the supply chain will be conducted.