Question

the course will focus on the Lean Enterprise. Discuss the components of a lean production system and how this type of system would assist Amazon with production. Must be at least 150 words of more

Answer 1

John Krafcik coined the term lean production in 1988 in his article title “Triumph of the Lean Production System”. Lean production/manufacturing is customer oriented and focuses on reducing waste from the manufacturing process and ensuring quality simultaneously. This system works on the simple assumption that when there is waste, there is loss in profit; so the logical solution for any business is to eliminate this waste. Waste here can be defined as the efforts or expenditures that go into the manufacturing process but do not generate any value in the final product from the customer’s point of view.

As waste reduction is a major component of lean production, let us see the 8 types of wastes it identifies.

1. Defects in products- these can cause major losses for companies both in terms of money and reputation. These can include poor design, poor quality control and lack of standards and documentation

2. Overproduction- when the company manufactures more product than what is actually needed, it creates an excess in stocks which may go unsold and lead to losses. It can occur due to an erroneous estimate of the demand.

3. Unnecessary or excess processing- the longer the processing takes, the more delay manufacturing faces. This generally occurs due to inadequate administrative structure, poor communication, excessive paperwork and human error at times.

4. Waiting Time- this includes the waiting time for both people and equipment which sit idle, waiting for production process to finish or resources to arrive. In attempts to make up for lost time, a company may try to speed up its production, this increases the risk of defects.

5. Unnecessary Transportation- poor choice in location of production plants and ineffective process lead to unnecessary transportation of both people and material, which can cost a significant amount of money.

6. Unnecessary Motion- motion of people, equipment and raw material costs money and whenever this occurs without adding any value to the product, it is identified as waste.

7. Inventory- inventories of processes and finished goods are identified as waste due to the cost incurred in their holding. It can be caused due to overproduction, inefficient estimation and poor communication.

8. Underutilized Talent- this waste is not associated with the manufacturing process but rather points out the failure of the management in ensuring that all the talent of their workforce is being utilized. Talented individuals can contribute a lot to the manufacturing process and help reduce wastes.

Another component of lean production are lean tools. There are as much as 25 different lean tools which can be used as per the choice of the business. These include the 5S’s (Sort, Shine, Set in Order, Standardize & Sustain), bottleneck analysis, Just-in-Time (JIT), Kaizen (continuous improvement), Kanban (pull system), standardized work, heijunka (level scheduling) etc.

Lean Culture is another important part of the lean production system. The lean culture has to be inculcated in the company by the managers to the employees. When both are focused on waste reduction and quality enhancements, lean manufacturing can work better. Lean culture can be developed through proper teamwork, effective communication and leadership and empowerment of employees.

The final major component necessary for the success of lean production is lean planning. This is a 20 minute planning process where one can review progress, make changes in the plans and take the business to greater heights. It replaces the traditional lengthy business plan. Lean planning revolves around the cycle of PDCA i.e Plan, Do, Check, Adjust.

It would not be wrong to say that lean production system made Amazon the machine it is today and elevated Jeff Bezos to the position of the richest man in the world. Jeff Bezos has speaheaded the lean revolution at Amazon through continuous improvement, understanding the needs of the customer, empowering employees and standardized processes of production.

Bezos has time and again emphasized the use of components of lean production in order to improve Amazon and the services it offers to its customers. Amazon's low prices, fast delivery options and add ons included in Amazon Prime are an example of their committment to customer satisfaction. Their efficent manufacturing process and inventory has helped reduce wastes in the manufacturing process. Amazon has made effective use of Kaizen (continuous improvement)  and Andon ( a system to remove defective items) in their manufacturing process, which are a part of lean tools. These practices too have help in reducing wastes.

Thus, Bezos' lean mindset has been a boon for Amazon which has established itself as a company that is imbibed with the core values of lean prodction.