Lean Production and Management - Research Paper Example

Lean Production and Management Introduction: Lean Production Lean production can be described as pertaining to the methodology that utilizes the ‘assembly-line concept’; originally developed for the brand name – Toyota – in its manufacture of automobiles. Consequently, it is often referred to as the – Toyota Production System – otherwise known as the ‘just-in-time production’ model. To be noted is that the concept, traces its roots to the Japanese nation, with credit being duly given to Taiichi Ohno, an engineer. Credit is duly deserved, for his development of the – Principles of lean production – to have gradually become adopted in the contemporary arena. With the Second World War having ended, the international arena was greatly affected; Japan being amongst the opposing nations defeated by the Allied Forces. It was a time of great reminisces, questioning and rebuilding; rebuilding the various aspects of society affected by the war. An avenue through which the Japanese Empire, turned Democracy, considered as a vital means of recovery was in its manufacturing sector. This is vividly portrayed in its continued prioritization on its industrial output, trade and commerce. Ohno’s inspiration and subsequent philosophy, was based on the need to reduce overall inventory, while improving productivity. This was through focus on both the empowering of the workforce present, while eliminating overall waste. Here, it is important to note that the ‘assembly-line concept’ was and is credited to the American entrepreneur- industrialist Henry Ford. It is this methodology, which enabled him grow the American automobile industry; as represented by the presence of Ford automobiles throughout the nation; and subsequent success of the industry (Rouse, 2009). While Henry Ford maintained his resources, in anticipation of future manufacturing requirements and potential aspects, Toyota’s management instead, opted for enhanced build-up of its partnerships with its suppliers. Effectively, it is under this direction that Toyota, became not only a renowned national (Japanese) brand name, but further into a most sort-after global brand. The production concept was based on the ideal of – made-to-order, which uniquely was unlike existing concepts. Thus, it aimed at not only maximizing the overall utility of multi-skilled workforce, in addition to focusing available resources in a flexible way; but also in the flattening of the management structure present. Due to its quick and effective implementation of these changes, Toyota was thus often able to make faster responses, in terms of market demand; unlike prevailing competitors of the time. History of Lean management / production It is upon these principles that many contemporary industries and business-entities base their bottom-line, having adopted the – concept of ‘lean production. In summary, these principles include: - the minimization of firm inventory; the elimination of waste; the empowerment of employee force; the maximization of flow; enhanced partnership with suppliers, and the meeting of consumer demands by way of product quality assurance. Critical also is the focusing of production based on consumer demand, which is founded on the principle of ‘do it right the first time’; both essential in the creation of ‘Kaizen’ – culture of continuous improvement. As a Japanese approach, concerning management, this model focuses primarily on the enhancement of quality assurance, in addition to the cutting out waste (Holweg, 2007). It is thus applicable, as Womack and Daniel (2010) portray, to various aspects of business ventures, from the design and planning phases, to the production, distribution and logistical aspects. A primary aim is the cutting of cost expenditures, by way of enhancing efficiency, as well as entity response to market trends, and needs. Through this approach, there is the presence of cutting off various procedures and activities that are not of any value-addition to the primary production process (-es) of the firm under focus. Under such activities is the holding of stock, unnecessary movement (of both product and personnel within the plant/ factory arena), and the repair of faulty products/ goods. These three aspects of business enterprise, do add unnecessary cost expenditures; which are avoidable through due diligence and effective business management. Subsequently, there is the adaptation of the aforementioned principles to various contexts; further adding the aspects of: - cell production; quality circles; Total Quality Management (TQM); zero-defect production and simultaneous engineering; as well as time-based management and corporate culture (Womack & Daniel, 2010). Lean management is closely related to its counterpart in production, as an approach in the management of an organization, which is supporting of the concept of ‘Kaizen’ – Continuous Improvement. In the search of long-term impacts, this approach systematically seeks out to achieve small, gradual incremental changes concerning various processes of production. This is in order to improve overall firm-entity efficiency, as well as the provision of quality assurance of products/ goods produced. Through such management, there is the elimination of time, effort and resource waste, through the identification of all pertinent steps of a given business process. This is subsequently followed up by the revision, supplementation or cutting-out of unnecessary phases of the production process. Guiding principles are hence inclusive of: - the definition of product value, from the end-consumers’ standpoint; the making of value-adding steps to occur within tighter sequences of production; identity of all pertinent business processes, with the subsequent removal of those not creating value, and lastly, the continuous observation of the aforementioned three principles, as a basic guide towards eliminating wastage. In order to better understand the aforementioned, there is need for consideration of what lean represents (Naik, 2011). Lean: A Conceptual Analysis Lean pertains to the core ideal of maximizing consumer value, while enhancing the minimization of waste. This hence regards the utility of fewer resources, in the business aim of creating more consumer-value, as the Lean Enterprise Institute (2009) asserts. Subsequently, a lean organizational-entity, understands the essential value of consumer quality assurance, thus focusing core organizational processes to the continued increase of product quality. Therefore, the ultimate goal is towards providing perfect value for consumer spending, through creation processes, which have little or no waste. In order to accomplish such, lean thinking is necessary, focusing on management’s dynamic shift from optimization of some variables, to the enhancement of other core aspects. In this regard, there is gradual reduction of focus on business assets, technologies, and the vertical hierarchical system, to the optimization of flow of goods and services (LEI, 2009). Application of the Lean Concept As a concept, focus is targeted on the firm-entity’s entire range of value streams, which continuously flow horizontally within the organization; affecting the assets present, capital input, departments, technologies used and the consumer-base as a whole. The target is the elimination of waste along existing value streams in their entirety, as opposed to isolated points. This has the potential of creating processes, which require little or no human effort, as well as less capital, time and space; in the production of goods and services at far lesser costs. By this means, there are fewer defects present, as compared to the traditional systems of entrepreneurship. Firm-entities, which utilize this concept, are hence able to respond in a timely manner, to the changing consumer trends, needs and desires (LEI, 2009). This is through implementation of low-cost, fast output, high quality and variety products and services, as John (2008) alludes. In addition, is the fact that the entity’s information management becomes not only simpler, but also accurate. In production of goods and services, the popular misconception that lean is only suited of the manufacturing sector, should be dispelled as lean is applicable to all manner of enterprises. This is not only true of the business as a whole, but further concerns the various processes present. Unlike tactics or programs aimed at cost cutting/ reduction, lean is a way of both thinking and acting; concerning the wholesome wellbeing of a given firm-entity. Consequently, various enterprises, be it in the manufacturing, mining, and production or securities sectors amongst others; including governance and healthcare provision, do utilize the aforementioned principles (John, 2008). Main Purpose of lean This concept is based on the ideal of improving overall quality assurance, while reducing the overall production of waste; within given enterprise settings. As noted, lean is neither a short-term cost reducing measure, nor a program; rather it is pertinent not only to firm-entity production, but also the prevailing organizational culture as well. Thus, as a concept, it is often given names which are symbolic of its effective utility within given organizational entities i.e. the Danaher Business System or the Toyota Production System; both attesting to the operational style of the companies. Subsequently, there is often the utility of the terms – transformation/ lean-transformation – both of which characterize a firm-entity, which makes a move from traditional thinking, to the more contemporary lean thinking manner. This requires the complete transformation of how a firm-entity operates, through utility of long-term strategy, perseverance and goal/ perspective. Ideally, the term ‘lean’ traces its roots to the subsequent description of Toyota’s business model; especially during the 1980s (LEI, 2009). this was during MIT’s International Motor Vehicle Program; ever since being equated to the Japanese model of business enterprise. Womack and Dan (2010) portray this in their work – Lean Thinking - pertaining to the characteristics of both supply chain and lean organizational structure. In it, they make various recommendations to both executives and enterprise managers in terms of three core issues requisite in guiding the business venture transformation. Ideally, they regard them as the 3Ps, standing for: - Business Purpose, Process and the People. In purpose, focus is placed on whatever consumer problems that may be solved, as an avenue towards achieving firm-entity prosperity and wellbeing. The business process pertains to how the firm-entity assesses each core value system, in the aim of ensuring each phase is not only valuable, available and capable, but also flexible and adequate. Fundamentally so is the need for these stages to be linked by way of the – flow, pull and leveling concept. Lastly, People pertains to how the entity can ensure that all pertinent process have individuals who are responsible (in the overall); with regard to continual evaluation of these value systems. It is in terms of both the lean process, and the firm-entity purpose; necessitating the inclusion of all who are concerned, with the aim of actively engaging their capacities (Womack & Daniel, 2010). This is concerning correct and optimal operation measures, as well as continued improvement initiatives and efforts. Therefore, lean thinking requires a visionary/ strategic input prior to the implementation of pertinent measures; through deep thought on issues regarding the above 3Ps, as the key step. Focus will be on two firm-entities, which have continuously proved the positive outcome of implementing this strategy as Wilkes (2013) portrays. One will be the Toyota Motor Corporation, representing the automobile sector, and the other being the Kimberley-Clark Corporation; representing the consumer-goods sector. Toyota: Japanese Global Brand Mention the word Toyota in any region of the world, and chances are that almost all individuals will have an inkling as to what it pertains to. This is concerning the entity’s organizational culture, often termed as – the Toyota Production System (TPS) – otherwise known as Toyotism. The ‘lean concept-value’ is attributed as being behind the entity’s great growth and success; this from its early times as a small entity, to the current place, as the leading global automaker. This is what elicits the great debate, attention and focus on the entity, precisely because of the impressive success witnessed. Through its strategy of working from the consumer perspective/ point of view, Toyota was, and continues to add value to its products; through all actions pertinent to its enterprise (Wilkes, 2013). As a brand name, the essence of its lean-production system was influenced by Henry Ford’s mass assembly-line formulae. It exhibited a higher degree of firm entrepreneurship based upon continued increased quality assurance; better workers’ pay and treatment, and focused cost-reduction for the end-consumer. The firm developed various ideals that were ‘lean’, starting earlier with the founder’s (Sakichi Toyoda) concepts; as exemplified in his textile factory. In this case, when a single thread broke, the looms present did stop themselves. This is essentially what became the core-basis of ‘automation within industry’, to be later replicated in the global automaker. The move enabled Toyota to develop TPS, having moved from textile production to automobile manufacture (Ruffa, 2008). Kiichiro Toyoda, the founder of the global enterprise – Toyota Motor Corporation – was in charge of directing the engine-casting phase. It is here that he notices many problems being prevalent during manufacture. Thus, he decided on the need to stop the repairing processes, because of poor quality production; by way of keenly studying each of the phases individually. Through subsequent observations, he was able to develop the concept of ‘Kaizen’; implementing this through specialized improvement teams. It is through subsequent input as Taiichi Ohno (1988) observes that he (Ohno) enabled the firm’s refocus from the scheduling of work based on production targets or projected sales; but rather by actual sales volumes. Due to the financial difficulties of the Post-War Japanese economy, where economies of scale did have little impacts, let alone space for application, there was need for the avoidance of over-production. It is upon this basic concept that that the firm’s production scheduling became founded on; founded on the notion of ‘Pull’ – where manufacturing was based on order rather that the ‘target-driven Push’ concept. Under his (Ohno) influence, these themes were incorporated within the firm, building on the already prevailing internal ideals/ schools of thought. In totality, the essence of this incorporation, in terms of spreading its utility and breath, became what is now commonly referred to as TPS – the Toyota Production Model. It is based upon this model, as well as input from various other sources that the concept of Lean production continues to develop. As they say, the rest is history, as the leading automobile manufacturer attests to, making its various models present in one out of every three cars globally (Ohno, 1988). The Kimberley-Clark Corporation: American Personal Care Corporation Dealing primarily with personal care products, the Kimberley-Clark Corporation is famously known for its Kleenex brand of facial tissue amongst other products i.e. Cottonelle, Wypall utility wipes, Kotex feminine hygiene products, KimWipes, Scott and Andrex toilet paper and the famous Huggies disposable diapers. Based in Irving, Texas the U.S., the corporation is amongst America’s Fortune 500 List of successful firm-entities. This is also influenced by the fact that it has diversified into two main subsidiaries i.e. Kimberly-Clark Professional, and Kimberly-Clark Health Care. While being in a different field of enterprise altogether, this firm is amongst the global top 10 lean manufacturing entities. Recent strategies have necessitated its outsourcing of logistical capacity concerning its Barton Mill UK plant, to Unipart which represents global leading Lean thinkers. Just as would be the case with Toyota, this firm-entity primarily relies on the assembly-line concept; hence, the presence of similar issues regarding quality assurance, staff wellbeing and overall efficiency. Of pertinent importance, was the fact that the staff at the plant, had for a long time resented and complained about the long-working shifts, as well as overtime. This was further negatively impacted by the resulting absenteeism that was gauged at a high of 10% of total workforce population (Ruffa, 2008). Because of the aforementioned partnership, Unipart has been able to guide the firm, about spending further on the enhancement of its workforce. This has been through continued engagement, as well as further development; which subsequently means that it saves on various negative aspects as absenteeism. Adding to this is the notion of continued improvement on overall efficiency that is influenced by the subsequent betterment of staff morale. The aim has thus been similar to other top lean manufacturers, in terms of reduced waste, improved quality assurance and enhanced workforce management and development. All these have resulted in better service delivery, quality product, enhanced staff-management relations and above all efficiency and effectiveness of production (Wilkes, 2013). Conclusion Lean production and management is a novel ideal, which continues to impact majorly on contemporary business enterprises the prevailing contexts notwithstanding. Because of the primary focus on waste reduction, augmented by enhanced quality assurance, many firms envisage brighter futures. This is pegged on the gradual achievements made, which enhance overall efficiency and effectiveness, based on actual consumer demand, trends and needs. References Holweg, M. (2007). The genealogy of lean production. Journal of Operations Management, 25 (2): 420–437. John, S. (15 Oct. 2008). What is Lean Management? Lean Enterprise Institute [Knowledge Center: What is Lean Management], retrieved from: http://www.lean.org/shook/DisplayObject.cfm?o=1447 LEI. (2009). Principles of Lean. Lean Enterprise Institute [What is Lean? Principles], retrieved from: http://www.lean.org/whatslean/principles.cfm LEI. (2009). What is lean? Lean Enterprise Institute [What is Lean? Principles], retrieved from: http://www.lean.org/whatslean/ Naik, V. (21 Sept. 2011). What is Lean Management? SmashingMagazine [What is Lean Management?], retrieved from: http://whatisleanmanagement.com/2011/09/what-is-lean-management/ Ohno, T. (1988). Toyota Production System. Productivity Press. Rouse, M. (October, 2009). Lean Production. SearchManufacturingERP [Lean manufacturing basics explained: Lean Production], retrieved from: http://searchmanufacturingerp.techtarget.com/definition/lean-production Ruffa, S.A. (2008). Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits. AMACOM. Wilkes, J. (13 Sept. 2013). The Top Ten Lean Manufacturers. Digital Manufacturing [How it’s made: Top Ten], retrieved from: http://www.manufacturingdigital.com/top_ten/the-top-ten-lean-manufacturers Womack, J.P. & Daniel T.J. (2010). Lean Thinking; Banish Waste and Create Wealth in Your Corporation, (2nd Ed.). Simon & Schuster, Inc. Read More