Question

Explain how implementing ‘Lean thinking’ can lead to a reduction in cost in a manufacturing OR service operation of your choice (start by briefly characterising the nature of the operation).

b) Select TWO of the following Lean tools/techniques, and explain how they might be

applied in your chosen operation to improve performance against its operations objectives:

• Lean supply chain management

• Pull scheduling

• Kaizen

Answer 1

Ans

I am referring to a grains procurement process that is being done by agri commodity trading company. we lost nearly 2.68% of value of inventory stored in grains warehouse spread across the country due to quality deterioration reported at these warehouse for reasons cited like moisture loss, repacking loss, quality degradation etc

The process involves the following activities:

a. procurement quantity decided based on monthly sales forecast given by sales team

b. quality checking by the staff at the procurement center.

c. weighing of the grains on weighing machine. Grains are stored in 50 kgs jute bags.

d. movement of grains from procurement center to warehouse.

e. Unloading of the grains from the vehicle

f. Movement of goods to packaging unit.

g. Repackaging of the grains into .5 kg and 1 kg pouches by automatic machines

h. Selling the quality deteriorated grains due to moisture at discounted rate

By implementing the "lean methodology" following changes were made in the process to bring down the cost:

1. Forecast accuracy started getting measured so that the same can be improved.

2. The warehouse has been provided by a special roofing of aluminium foil to prevent moisture loss which was not there earlier.

3. We have decided to keep average inventory of only 20 days (max). Any stock more than 90 days ageing is immediately sold off to avoid moisture loss and avoid deterioration of quality.

Ans

Lean supply chain management: Forecast accuracy started getting measured by Mean Absolute Deviation (MAD) method. Thus forecast method was trend adjusted exponential smoothing to improve the accuracy.

Kaizen: The warehouse has been provided by a special roofing of aluminium foil to prevent moisture loss which was not there earlier.