Question

Helen Croker has been discussing production costs with others in the garment industry. Lean thinking was a term other producers have been discussing as a way of controlling costs. Climbing costs are eating away at Helen's profits, so to reduce costs she thought of moving production offshore. Going offshore will make it more difficult to maintain quality while keeping production onshore enables her to contribute to her local community. She has come to you, a partner in Good Numbers, asking for some information about lean thinking.

Required:

Prepare a report for Helen which describes the concept of lean thinking. In this report identify a business discovered through your internet searches that has adopted lean thinking.
Using the business you identified as a case study:

explain how lean thinking has been implemented and used.

outline the benefits achieved by adopting lean thinking.

(max 1,200 words)

Answer 1

Answer:

First of all lets see what is lean thinking

Lean thinking is all about focusing, removing waste and increasing customer value. It is about smooth process flow that add value to the customers and eliminating all those that dont add value. Adding value means generating revenue, if it doesn't generate value, then it means climbing cost.

Example companies

Internet business are of these types. They carry very little inventory, customers enter their own orders via the web, make the products on demand and ship within 24 hours. Therefore keeping the order-to-delivery cycle too short.

Toyota

Toyota is the first automobile giant to adopt this lean methodology in their manufacturing process, initially calling the method Toyota Production System. They not only eliminated the waste but also mastered the techniques required to minimize products and steps that do not add value to the customers. They called the process as "Jidoka" which means "mechanization with the help of humans". This says, even though few jobs are automated, humans intervention will be there to check the quality of the product. The second part is known as the "Just In Time" model. This ensures that the next step of the process is only started once the previous phase is completed.

Following are the steps needs to conider for effective lean thinking,

* Identify and list out all the activites that creates value for the customers. While doing so, one can easily identify the activities that dont add value. Finding the value will help to determine the price at which products and services needs to be produced.

* Sort out the sequence of activities which is also called as value stream. Value stream is the product's entire life cycle from the raw materials to the disposal of the products. One should have complete knowledge of the product's life cycle in order to elimiate the waste.

* Steps materials, features and movements that do not add value can be eliminated from the process to reduce the costs. Waste is inevitable if value stream stops moving forward. Its all about creating a value chain with no interruption in the production process.

* Allow the customers to pull products/services. Rather than using the traditional manufacturing approach of pushing work based on the forecast and schedule, the pull approach dictates that nothing is made until the customer orders it. It requires an efficient way of communicating what is needed to each step in the value chain.

* Improve the process to attain perfection. When one adds continuous improvement to every step will help to attain the perfection and also helps to identify the reasons for the quality problems and production waste.

For example, lets take the order-to-delivery cycle. The activities, in sequence, are taking an order, building the order and delivering the order. The activities that do not add value are order entry, backlog, inventory and shipping delays.

In this lean operation, one can make the customer enter their own orders, then products will be made on demand so that there could be no backlog or inventory and the products can also be delivered with minimal delay.

Compaines which has very short order-to-delivery cycles are lean operations. Lean operstions will have a strong cash balance. Shorter the cycle, leaner the operations in the companies.

Advantages of adopting lean thinking

* This lean thinking is aptable for the mature, slow growth, low transaction industries or an oragnisation where mathematical tools are common.

* This system focuses on eliminatig the wastes which in result cutting/minimizing the cost. This helps in the greater productivity.

* Smoother product's life cycle by eliminating the non value added activities.

* This gives greater flexibility and responsiveness adn improves the quality of the products by adopting "Just In Time" Method.

* This helps in reduced lean time by delivering faster with the short delivery period.

* Helps in increased customer satisfaction and improved staff morale by removing waste and streamlining the processes. By doing so, you can exactly deliver what customer wants adn also invloving the staff in the lean thinking to improve the process.

* It provides the safer working environment by reducing the risk in the working environment.

Conclusion

Thus, this lean thinking being a customer centric approach, many of the benefits go beyond serving the customers. This operation also benefits the business and employees as well.