...The term ‘lean production’ came about to describe the Toyota production system in the late 1980’s. This came to pass through a research group from MIT who over five years analysed the automotive industry in fourteen countries. It was called ‘lean manufacturing’ rather than the Toyota production system to make it easier for competitors and organizations to adopt this type of system. The concept of lean production in a manufacturing organization basically means to try and maximise the use of materials to achieve optimum customer value and at the same time reducing waste and ensuring the same standard of quality in the finished product. Reducing the resources means it will cheaper for the organization to create the product plus also for the customer to buy it. With regards to a manufacturing organization ‘lean production’ is basically a list of rules, tools and techniques which improves the organization in questions manufacturing processes. The main concept of ‘lean’ in a manufacturing organization is to reduce waste which can be broken down and understood as the seven wastes:- 1. Over-production – One of the worse types of waste which is the manufacture of the product before it is actually needed. This can create excess inventory. 2. Waiting – Time between the manufacturing processes 3. Motion – Time wasted from moving people around 4. Transport – Time wasted from the movement of materials from each manufacturing stage. 5. Inventory – Having too much stock...
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...Lean Production Manufacturers and companies are seeking methods in order to provide customers with the best quality of products and services in all over the world. These entities try to eliminate or reduce their products wastes, inefficiency, and anything that might affect their products or customer service. Lean manufacturing has been created as a consequence of the Toyota Production System (TPS) and it was called “Lean” in the 1990s. Based on the article called, “Lean manufacturing”, the following facts have been stated: Lean manufacturing or lean production, often simply, "Lean," is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. Lean operation is a costly process, but the manufacturers see that its profit is worth to pay a lot of money in order to change their systems into this system. Some of its benefits are: Minimizing inventory and cost, increasing profit, and maximizing efficiency. In order to change to this lean production, manufacturers need to do some additional jobs, so that their employees and products can meet the minimum requirements for a lean operation. Quality is much more important than quantity in this system. Businesses prefer to produce less amount with...
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...1) Lean production is an assembly-line methodology developed originally for Toyota and the manufacturing of automobiles. It is also known as the Toyota Production System or just-in-time production. The philosophy surrounding lean production focuses on eliminating waste and empowering workers, reduced inventory and improved productivity. 2a) As it relates to inventory management, the lean production system strives to reduce the amount of inventory kept by the company which in turn reduces storage costs. This is done by producing goods to order rather than producing them based on expectation of demand. Because goods are produced in this way, the business keeps no stock .of raw materials at the production plant/ facility but rather orders them from the suppliers only when orders are received from customers to produce the goods. The business also doesn’t have to worry about stock of unfinished goods because all goods that go through the production process continue right up until completion and then are shipped out to the consumer, which also means that there is no stock of finished goods kept at the facility either. 2b) In the lean production system, the goods produced are of a very high standard. This is achieved due to the fact that there is never a massive amount of goods being produced at any one time because goods are produced to order. So because there are less goods in production at the same time, each worker at his/her particular stage of production can focus on doing one...
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...www.thetimes100.co.uk Competitive advantage through efficiency Curriculum Topics • Lean production • Reducing costs and eliminating waste • JIT • Benefits of lean production Introduction The food retail industry is a highly competitive market. More so than ever, organisations need to offer customers value for money. Customers want the best quality products at the lowest possible prices. With such tough competition it is vital for organisations to understand what their customers want. Aldi understands that its customers want value for money but do not want to compromise on quality. This case study will demonstrate how Aldi uses a lean approach to its business operations to offer its customers quality products at competitive prices. Since opening its first store in 1913, Aldi has established itself as a reputable retailer operating in international markets including Germany, Australia and the U.S. Aldi has over 7,000 stores worldwide. What distinguishes Aldi from its competitors is its competitive pricing strategy without reducing the quality of its products. In fact, in some cases Aldi’s products are 30% cheaper than those offered by its competitors. Aldi can do this because the business operates so efficiently. Efficiency is the relationship between inputs and corresponding outputs. For Aldi operating efficiently involves reducing costs in all areas of the business. Some of the key areas where Aldi is able to minimise costs are by saving time, space, effort and energy...
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...Lean Production Planning Lean production planning is a concept developed in Japan, which is based on finishing goods when they are needed (Chase, Jacobs, & Aquilano, 2006). For Riordan to implement this type of plan, an entire new strategy will need to be developed for handling inventory. Currently, each Riordan plant handles inventory independently. Now Riordan must centralize inventory and ordering systems. The two systems need to be centralized because lean production is based on the theory that goods are produced when needed, thus eliminating waste (Chase, Jacobs, & Aquiliano, 2006). Current Situation In China, the suppliers’ on-time delivery rate is only 93%. This is an unacceptable rate in a lean production planning environment. To increase this percentage, the plant will need to have deliveries more frequent so materials are always on hand. This would eliminate a potential bottleneck by having inventory on hand to mitigate a negative effect on production times. Another change to implement is in the receiving of raw materials and the shipping of their finished goods Process Improvement Part of the just in time theory of lean production is it reaches the customer “in time”. This can be accomplished by proceeding with the Shanghai move. This would reduce the steps needed to distribute products to customers. In addition to a decreased throughput time for finished goods to reach the customer, Riordan could save money, thus eliminating wasteful spending...
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...Advantages & Disadvantages of Lean Production by Scott Shpak, Demand Media Lean production originated in the auto industry to address waste and efficiency. Related Articles Advantages & Disadvantages of Licensing the Rights to the Company's Production Process What Emphasis if Any Should Be Placed on Lean Production? Advantages and Disadvantages of Opening a Production Facility in a Foreign Country Advantages and Disadvantages of Market and Product Development Strategies The Advantages & Disadvantages of the Beef Production Industry What Are the Advantages & Disadvantages for Every Company Becoming a Customer-Focused Business? Lean philosophy centers on the elimination of waste in all forms in the workplace. Specific lean methods include just-in-time inventory management, Kanban scheduling systems, 5S workplace organization, Scrum and other "agile" software development methodologies. Many of these concepts and systems were pioneered by automobile manufacturer Toyota dating back to the 1940s and were subsequently adopted as best practices in many industries beyond automotive production. Applying these principles to your production has the potential for both improved profitability and increased complexity. Sponsored Link Lean Manufacturing Implement Lean Manufacturing, Visual Management, 5S & CIwww.corporatepartners.com.au Types of Waste Lean principles aim to minimize all forms of waste, from sources as varied as material defects to worker ergonomics. Many sources...
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...Lean Production at Riordan Manufacturing OPS 571 Lean Production According to Chase, Jacobs, & Aquilano (2006), “Lean production is an integrated set of activities designed to achieve high-volume production using minimal inventories of raw materials, work-in-process, and finished goods” (p. 471). According to lean philosophy, parts move quickly through the manufacturing process in a “just in time” method. The logic behind lean is that nothing is produced until it is sold and needed. Currently Riordan’s entire supply chain methodology is responsive and flexible to their customer’s needs, but they are not practicing lean techniques. Riordan assembles and stores finished fans in a finished goods stockroom awaiting sale. In order to improve quality and productivity and focus more on lean production, Riordan must focus on eliminating waste. One way to eliminate waste is through mass customization. “The key to mass-customizing effectively is postponing the task of differentiating a product for a specific customer until the latest possible point in the supply network… By adopting such a comprehensive approach, companies can operate at maximum efficiency and quickly meet customers’ orders with a minimum amount of inventory” (Chase, Jacobs, & Aquilano, 2006, p. 419). By designing their fans so the customization is done at the very end of the manufacturing process, Riordan can still achieve a high level of production while reducing safety stocks and finished goods...
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...Japanese Lean Production versus World Mass Production “The basic and fundamental differences amongst the nations and territories of the world are rooted in the inherent rule of government and the associations the government has with its people. . . In so far as, if the associations are relatively close, prosperity in all forms of human evolution should be at hand; for, if the association is by principle of counteracting parties, the growth and stability of the individuals of the country is in question.” These words from a very wise philosopher deliver the overwhelming resolution of the theme of this book, Japanese Lean Production versus World Mass Production. The book provides a concrete foundation on the relationship between lean production and mass production and how lean production is shown to be a better technique within the automobile industry. A further review will allow for the facts to be born out. The book begins with an overview of the three techniques discussed in the book, craft production, mass production, and lean production. Craft production is characterized as having a highly skilled and decentralized work force who use “general-purpose machine tools” and yield low volumes of production. Generally, with craft production costs do not drop with production, consistency is not achievable, and new technology can not be created. This lead to an improved system called mass production. This technique perfected by Henry Ford replaced craft production in the...
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...Summary More than ever before, the project management becomes a matter of concern. Through applying the various types of managerial methods, processes and tools, the project can results in different profits. Due to the intense competition of market, an emerging system has been created, called the Lean Production Delivery System. In the report, it investigates, analyzes and discusses the methods, processes and tools in current project management approaches and LPDS. Through the comparison of them, the report concludes that the traditional project management is steady and reliable, still the main stream for the current environment. Furthermore, the LPDS is modern and excellent, but it is open to question. Introduction In recent decades, project management plays an essential role in various areas, from the architecture, national defense, and aerospace to the computer, telecommunications, financial industry and even government agencies. Project management developed after the Second World War as one of the new management technologies, organized in the United States. It is defined as that the project managers use the systematic views, methods and theories to effectively manage and operate all the works involved the project, under the condition of limited resource. In other words, project management is planning, organizing, conducting, coordinating, controlling and evaluating from the start of invested...
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...Pedro Blanco Bou S00981542 Achieving sustainability through lean production Nestlé es una compañía de clase mundial que tiene mas de 70 marcas de productos de nutrición en el Reino Unido. Nestlé tiene mas de 8,000 empleados en 23 localidades en el Reino Unido y exporta casi 400 millones de euros en sus productos cada año. Nestlé ha sido diligente en proveer productos seguros y de calidad. También se ha enfocado en su sostenibilidad para que el negocio sea exitoso al largo plazo. Con esto tratan de crear un balance entre la economía, el ambiente y el impacto social del negocio y tienen un compromiso con las comunidades y el ambiente en donde operan. Como iniciativa de responsabilidad social, Nestlé se ha enfocado en tres áreas: nutrición, agua y desarrollo rural. El negocio de agua embotellada ha crecido tanto que se ha convertido el más importante de Nestlé y han tenido que invertir en plantas de embotellamiento para poder ser más eficientes en el proceso de producción. La producción Lean es un concepto que se enfoca en reducir desperdicios en la operación. Los desperdicios se ven en términos de tiempo, dinero y cantidad de recursos utilizados en la producción. Teniendo una producción Lean uno se enfoca en minimizar los recursos utilizados en la producción. De esta manera se busca la manera de utilizar el espacio, los equipos, labor, materiales y tiempo eficientemente. El Kaizen es un concepto que busca el mejoramiento continuo. El mejoramiento se convierte...
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...recognized and fashionable brands globally (Rodrigue, 2015). As the largest package delivery and express carrier firm in the world, it delivers approximately 15.6 million documents and packages on a daily basis. In addition, the company provides specialized logistics, e-commerce, and transportation services to over 200 destinations worldwide (Rodrigue, 2015). To achieve such success, UPS is committed to provision of quality services to all its customers. The company is known as an industry leader in relation to quality. For example, in 2010, UPS was ranked third behind Intel and Disney for provision of quality services (Frankr, 2013). In particular, UPS commitment to quality is apparent in the operation management activities such as lean operation systems, forecasting, scheduling, inventory control, and performance measurements. This essay analyzes UPS worldwide services commitment to quality based on the principles from the course. First, UPS ensures quality in the supply chain through “direct-to-store approach” to eliminate increased costs in the distribution and transportation, and ensure faster delivery (United Parcel Service of America, 2005). This direct distribution ensures that inventory moves from manufacturers to final consumers thereby eliminating storage at the warehouse. Since it is possible to minimize the fulfillment cycle and shrink inventory costs, the direct distribution inventory control approach by UPS provides an appropriate balance between logistics...
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...The Principles, Benefits and Compliance of Lean Accounting As a way to reduce costs, manufacturing businesses today are looking for a leaner approach to production and are focusing on the overall process of producing an item to eventually sell to a consumer. This process is called the value stream, which is defined in Cost Accounting: A Managerial Emphasis as “the value-added activities needed to design, manufacture, and deliver a given product or product line to customers” (Horngren, Datar, & Rajan, 2014, p. 635). With the assistance of technology advancements to support with the communication of the different components of the value stream, processes have been developed, like Just in Time (JIT) production, that allow for the lean production of merchandise. Dan Woods describes this lean production process, in an article published in Forbes: “In a lean process, the demand signals pull the materials through the flow processes and the right number of products is created with as little waste as possible. When all the suppliers of materials are also making their processes lean, the result is that the entire supply chain is extremely responsive and efficient. “ (Wood, 2009) To go along with this lean production system, lean accounting was developed as “a costing method that focuses on value streams, as distinguished from individual products or departments, thereby eliminating waste in the accounting process” (Horngren, Datar, & Rajan, 2014, p. 635). This paper will summarize...
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...Lean Management In Automobile Industry Lean Management In Automobile Industry Arvinder Singh, Bargavi Poloju, Inderpreet Kaur, Inderjeet Kaur, Jaskaran Singh Gill Eastern Institute of Technology September 10, 2015 Abstract Lean and six sigma are widely known business improvement processes for industries /organisations these days for achieving drastic results, which are majorly cost cutting, quality maintenance and time management by specializing in processes to boost performance. Nowadays, There are some industries that are even integrating lean and six sigma into a more cohesive strategy i.e., lean sigma in order to establish even more powerful and effective process which focuses at eliminating wasteful activities and retaining most of the strengths of each activity. Lean Sigma aims to combine waste eliminating strategies of Lean Thinking with variability reducing techniques of six sigma to promote growth and increase revenue from the bottom line of organisations(M. Kumara). Lean management is outlined as a consistent and a methodical approach to determining and eliminating waste through continuous improvement, flowing the merchandise at the pull of the client in pursuit of perfection. The idea of lean management was developed for maximizing the resource utilization through reduction of waste, and eventually lean was developed in response to the unsteady and ever-competitive business organisations. For organisations to face major challenges and competition can be...
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...University of Petroşani, Economics, 10(3), 2010, 333-340 333 LEAN MANAGEMENT - THE WAY TO A PERFORMANT ENTERPRISE AMALIA VENERA TODORUŢ, CECILIA IRINA RĂBONŢU, DORU CÎRNU * ABSTRACT: In this work we approached issues related to new methods of production organization such as Lean Management, a method specific for a flexible production of great success which represents the guarantee for a performant enterprise. In this paper we presented the main concepts, the application and adaptation way in different contexts, both in industry and in services. We showed a modern tendency which is taking shape more and more in the contemporary economic context, such as the integration of this concept with the Six Sigma concept, and thus we can talk about Lean Six Sigma, as an integrator method which guarantees high-class quality and lower costs. KEY WORDS: lean management, quality, performances, Six Sigma, the diminution of the defaults JEL CLASSIFICATION: L15, L16, L25, M10, M11, M16 1. INTRODUCTION Researches on production technologies, operations and performance reflect the increasing context of industrial competition in the global economic environment. A key objective is the creation of a systematic knowledge base by applying the systemic approach and quantitative analysis, which will lead to a better understanding of fundamental factors, determinants of growth and industrial decline. An example is the Lean method and the Lean manufacturing principles, concepts and principles outlined after...
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...characterised by both short production cycles, reduced costs incurred upon production, while the models and varieties of products continues to increase. In addition to that, the global structures of business present many enterprises with a challenge to limit the production period in a bid to maintain the supply in an ever-innovative market setting. The purpose of this paper, therefore, is to dissect the nature of lean thinking, by investigating the definition of the term lean production and the methods and goals that associate with this concept. In addition to that, this essay will explain into detail how the lean management style differs from the other popular management concepts. As such, the article aims at giving a clear presentation of lean thinking and production and the manner in which they influence the business operations. This will happen through a review of the contemporary literature on the term lean, and a summary of the principles and practises associated with lean thinking as well as the stated purpose of the management style in event management operation. Based on this an in depth evaluation of the validity of lean thinking will be made in line with effective event management operations. Literature review Lean is often a short-term waste reduction and cost cutting technique. Lean thinking, therefore, is set of cost reduction toolkits that form the basis of a programme or initiative. The fundamental concept of creating a successful lean business system lies in...
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