When components are produced before they are required by the next downstream process, overproduction occurs (Goldsby & Martichenko, 2005). This has several negative effects. It creates a “caterpillar” effect in the production flow and results in the creation of excess WIP. This leads to staging and therefore labor required to move the WIP additional times. And it can hide defects that could have been caught with less scrap if processes were balanced to allow detection earlier as earlier use of the WIP components would have revealed the defect in time to correct the issue.
Manufacturing is a crucial aspect in a country as it creates employment, generates revenue, and backs the export sector of a nation. SABIC is not only a pride of Saudi Arabia but the rest of the Arab nation. The firm has grown and expanded across the globe. The success of the firm lies in its objective of eliminating non-value adding activities. I knew that SABIC creates value by producing products that meet the needs of its clients. However, I know that the firm uses value stream mapping which helps to classify its activities to value-adding and non-value adding. As a result, the firm can eliminate any non-value activities.
References
Alotaibi, H. J. (2015). An assessment of the connection of elements in a strategic plan: a case study of SABIC Company. International Journal of Advanced Research in Management and Social Sciences, 4(10), 19-36.
Goldsby, T. J., & Martichenko, R. (2005). Lean six sigma logistics: Strategic development to operational success. J. Ross Publishing.
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