Question

Explain why companies are adopting a Lean approach to business and how to conduct a Kaizen event to identify issues in current processes and drive out waste. Explain the role of IT in this process.

Answer 1

Solution:

The companies across the world are now operating in a competitive environment where the market in most of the industries is completely competitive. In such a scenario it becomes necessary for the businesses to ensure their bottom lines are not affected because of the serious competition posed by the companies in their industry. This is why most of the businesses now focus on methods to reduce the costs and expenses related to their business in order to ensure they have a healthy bottom line. This methodology of eliminating waste from the business processes is known as lean methodology.

Lean methodology is widely accepted throughout the world for the immensely lucrative benefits it brings with itself. This is why lean methodology has gained increasing popularity among businesses. The lean methodology states that by eliminating the waste from the business processes can help in reducing the costs associated with those business processes. Most of the business processes are redundant up to a certain level and thus it becomes necessary for them to cater to such processes and optimize them for costs. Hence, this is how lean methodology helps businesses in reducing the costs.

In order to understand the areas which can be used by the lean methodology, we must assess the priorities of the business processes. After prioritising the business processes we must assess them for the costs involved and the resources involved. This helps us in listing down the low priority processes taking supermajority of the costs of the business. Hence, we can then apply Kaizen methodology to such processes to break them down and ensure we eliminate the waste from such processes.

The use of information technology is huge in the implementation of lean methodology in businesses. The use of IT reduces the use of resources such as papers, files etc and helps in managing the resources more efficiently. IT can be useful to store information and records for years together and the retrieval of information is even easier and hence it reduces the dependence of the business on paper information and can save a lot of time with the IT infrastructure in their business. Hence, this implementation of IT also eliminates the waste of time by the employees who can now focus more on value creating activities.

Hence, this is why companies are adopting lean approach to their busiensses.