This paper deals with the productivity increment through construction of lean production system for automobile factory in China. This lean production system has been progressed according to 5 steps. Step 1 is the work preparation. Step 2 is the process design. Step 3 is the establishment of method to count production quantity. Step 4 is the establishment of measuring method for input and output. Finally, step 5 is the construction of flexible production system able to adapt for environment change. This lean production system is expected to obtain the productivity increment by 50% for plastic plant and reduction by 50% in inventory quantity.

The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as manufacturer, the supply chain includes all functions involved in filling a customer request. these functions include, but are not limited to, new product development, marketing, operation, distribution, finance, and customer service. Lean Supply chain coordination improves if all supplier of chain take actions that together increase total supply chain profits. To design of Modularity by the grouping supplier, the proposed method is to develop the most appropriate production system models in the Supply Chain Management which is necessity of the times and its importance. The objects of this study is development of model and cost analysis to the modular production system in Lean SCM. Introduction of modular production system in Lean SCM is effective in reducing the cost in processing, manufacturing, inventory holding, ordering, etc.