The lean principle involves the ability of an organization to increase its customer's value while using as little resources as possible. The ultimate goal of applying the lean principle in an organization is having zero wastage with maximum value output for customers. As competition increases around the globe, it is critical for any organization to ensure it maintains a competitive advantage over its rivals. By applying lean principles, a company will be able to produce high-quality goods at zero or little wastage (Staats, Brunner, & Upton, 2011). The high-quality products will ensure the company's customers are retained leading to a predictable sales pattern. Additionally, zero wastage is critical in companies as it leads to an increase in profits. A company using lean principles will, therefore, be able to maintain its customers and also expand due to the availability of funds from its profitable operations.
Types of waste that lean production can eliminate
Lean production has the ability to reduce or eliminate certain wastages such as injury minimization, transport waste, and reduction of waiting time. Additionally, lean production has the ability to eliminate processing waste, reduce defects and eliminate overproduction. Overproduction can help a company increase its profits since an organization does not produce more than what the clients need. Material and other cost are therefore not used to produce something that won't be sold for a long time (Staats, Brunner, & Upton, 2011). Lean production has also been essential in eliminating waiting time which is often caused by delays between different production processes. Transportation can also lead to wastage if the transport system is inefficient and does not deliver goods on time to customers.
Steps when implementing lean Production
A company which plans to implement lean production should first evaluate the current state of the company. By evaluating an organization, the management will be able to determine the best place where lean production can be applied to increase efficiency. Secondly, the organization should investigate areas where wastage is taking place and seal such loopholes. It is also critical to promote an understanding among the employees about the importance of lean production. Finally, the management needs to build consensus among the workers while at the same time setting up standards that will be used in implementing lean production.
Principles of Lean Production
There are basically five principles of lean production and they include; value, pull, flow perfection and value stream.
A particulate action can either increase or decrease the value of a product or a service offered by an organization. Depending on how the customer views such an action, the service offered or the product will become more desirable or lose its appeal to the clients. When a product becomes more desirable the revenue of the company increases because of the rise in sales. However, an action can reduce the revenue of a company by increasing the cost of production or service delivery (Gothelf, Seiden, & O'Reilly Media, 2016). Alternatively, the revenue may decrease if the action has caused the product to be desirable by reducing the demand for the product or service, therefore, diminishing the organization's profits. An action that leads to a reduction of the desirability of a service is referred to as a non-value task. Such an activity may result in increased production time, increase the labor or materials needed to produce a product. It is critical therefore for any company to understand the value that customers place on their services or goods. The price that a customer is willing to pay for a particular service or product is dictated by the value they place on the commodity. A company should, therefore, strive to eliminate wastage to ensure customers are attracted by the prices set and the company's profit is high
The value Stream
The value stream entails the whole process of production from acquiring raw material to production, sales, customer use and disposal of the product by the client. A good study on the value stream is critical since companies need to understand how product and service wastage can be eliminated (Shah, Chandrasekaran, & Linderman). Lean production in this stage requires a partnership between the supplier and the customer. The chain management also plays a critical role in value stream by partnering with the clients to come up with a mechanism that can enhance service delivery and reduce waste (Carrier et. al., 2006). By improving different sectors of production the entire manufacturing system can be improved. The improvement of different sectors of production can act as leverage where the management can be able to leverage and get the maximum financial output.
It is essential to ensure all the process that involves h production f a good or service is efficient. The management can be able to achieve this task by focusing on the customers need and understanding their viewpoint (Vail, Thomas, & Schmidt, 2010). It is essential to ensure all the obstacles are eliminated if one to achieve a flawless flow in the production. The bottleneck needs to be identified and the necessary steps taken to ensure the flow of products from one stage to another are not disrupted. An efficient flow is one of the critical components of eliminating and reducing waste (Cuatrecasas, Arbos, 2002). When there is a slowdown of products or the process stops, there is a high probability that waste and losses will occur. The management is, therefore, required to have a well-developed system where all the aspects of production are synchronized to achieve a flawless production mechanism.
Pull is a technique where customers who are downstream trigger the need for a product or a service. Pulls ensure nothing is made that has not been requested by the customers. The management ensures all those products or services that the customer required is produced. The management can use different tools such as forecast to determine whether a product should be pushed down the production line. For the management to achieve short orders within a short period, there needs to be a well-coordinated machinery in the organization (Jina, Bhattacharya, & Walton, 1997). There needs to be a clear and precise communication from one department to another to know what the customer needs (Staats, Brunner, & Upton, 2011). Pull technique ensure the organization does not suffer loose. It is also essential in ensuring resources such as labor, storage, electricity and other components used in the production of goods are not wasted.
A lean manufacturer will set his or her target to ensure the result of the production is perfect. The production manager works hard to ensure all the factors that cause wastage and poor quality are eliminated. The ultimate goal of a company that is using lean principles is ensuring it has acquired perfection.
Cuatrecasas Arbos, L. (2002). Design of a rapid response and high efficiency service by lean production principles: Methodology and evaluation of variability of performance. International Journal of Production Economics, 80(2), 169-183. doi:10.1016/s0925-5273(02)00316-x
Gothelf, J., Seiden, J., & O'Reilly Media. (2016). Lean UX: Applying lean principles to improve user experience. Beijing [etc.: O'Reilly.
Jina, J., Bhattacharya, A. K., & Walton, A. D. (1997). Applying lean principles for high product variety and low volumes: some issues and propositions. Logistics Information Management, 10(1), 5-13. doi:10.1108/09576059710159655
Ng, D., Vail, G., Thomas, S., & Schmidt, N. (2010). Applying the Lean principles of the Toyota Production System to reduce wait times in the emergency department. CJEM, 12(01), 50-57. doi:10.1017/s1481803500012021
Shah, R., Chandrasekaran, A., & Linderman, K. (2008). In pursuit of implementation patterns: the context of Lean and Six Sigma. International Journal of Production Research, 46(23), 6679-6699. doi:10.1080/00207540802230504
Staats, B. R., Brunner, D. J., & Upton, D. M. (2011). Lean principles, learning, and knowledge work: Evidence from a software services provider. Journal of Operations Management, 29(5), 376-390. doi:10.1016/j.jom.2010.11.005
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