Question

2.
A. How do companies use benchmarking to make important decision?

B. Describe takt time as a tool to implement lean production efficinecy?

Answer 1

2 A. Benchmarking

Benchmarking is a process by which a company compares its own practices to those of another company, usually a leading company in the same industry. By finding out what a successful competitor does differently, the company can pinpoint areas that need improvement in its own policies or processes. The company can then decide what changes need to be made.

The Benchmarking Process

The benchmarking process has five steps. First the company decides on a list of processes to benchmark. These should always be the company's most important processes as measured by volume of business, expense or potential profitability. Next, the company should collect information on how other companies handle the same processes. Third, the company should identify any areas in which competitors have a significant advantage, and the differences in their processes that may contribute to this advantage. Fourth, the company should change its policies or processes based on this analysis. Finally, the company should track the results of any changes.

Selecting Benchmarks

Selecting the right benchmarks is essential to successful benchmarking. For instance, if you apply the benchmarking process to your customer service department and select time spent on hold as one of your benchmarks, this has the potential to be useful only if that really is a priority concern for your customers. If the successful resolution of complaints is a higher priority for most of your customers, time spent on hold may be a counterproductive benchmark for you to study. Pricing is one example of a useful benchmark. If your competitor is selling far more of a similar product than you at a lower price, the difference in price may well be the reason for the difference in sales.

The Benchmarking Process

The benchmarking process has five steps. First the company decides on a list of processes to benchmark. These should always be the company's most important processes as measured by volume of business, expense or potential profitability. Next, the company should collect information on how other companies handle the same processes. Third, the company should identify any areas in which competitors have a significant advantage, and the differences in their processes that may contribute to this advantage. Fourth, the company should change its policies or processes based on this analysis. Finally, the company should track the results of any changes.

Selecting Benchmarks

Selecting the right benchmarks is essential to successful benchmarking. For instance, if you apply the benchmarking process to your customer service department and select time spent on hold as one of your benchmarks, this has the potential to be useful only if that really is a priority concern for your customers. If the successful resolution of complaints is a higher priority for most of your customers, time spent on hold may be a counterproductive benchmark for you to study. Pricing is one example of a useful benchmark. If your competitor is selling far more of a similar product than you at a lower price, the difference in price may well be the reason for the difference in sales.

2. B Takt Time

Takt time is the rate at which you need to complete a product in order to meet customer demand.

How to Define Takt Time?

To define takt time, you need to divide the production time available by the customer demand.

Defining takt time is crucial for optimizing your team’s capacity. It is important for reducing the waste of your process. Takt time can help you maintain a continuous flow of work and reduce Mura (unevenness) in your workflow.

Nonetheless, takt time is valuable for optimizing storage costs as it will help you avoid overproduction.