Operations Management. Lean Production/Waste Reduction Methods - Essay Example

? Operations Management Introduction Lean production is considered as a method of production which seeks to diminish waste and inefficiency. In precise, it denotes the efficient utilization of resources. Lean production method is derived from the belief that resources which are unable to create value are a waste. The objective of lean production is to minimize the expenses and to make a business more effective along with reactive to market requirements. This approach is used in order to cut every activity which does not augment value to the manufacturing procedure. The core thought behind the incorporation of lean is to enhance customer value (Black, 2008). 1. Explanation of Lean Production/Waste Reduction Methods From the case studies, it has been observed that different organizations have used lean production with the intention of enhancing their business performance. For instance, Portakabin, an international organization, which operates in the European building industry, has used lean production in its operational systems. As a part of lean production, Portakabin has utilized JIT system for the purpose of reduction of waste. In Portakabin, JIT aims to minimize the expenses of holding inventory. Furthermore, JIT is also used for maintaining minimum level of finished goods, work-in-progress and raw materials when required. On the other hand, in Portakabin, lean production is also used for minimizing the wastes. Through lean manufacturing, Portakabin has been able to minimize the quantity of waste by about 60% over a period of around three years. Furthermore, Portakabin Group was also capable of recycling 65% of the waste due to the implementation of lean manufacturing. In the similar context, Aldi, a retail food chain also used lean manufacturing in its business process. Aldi had implemented several time management methods in order to ensure that wastes are kept at a minimum level. Aldi also used the JIT approach in order to keep the cost of stock as low as possible (The Times 100, 2009; The Times 100, 2011). It is worth mentioning that the aspect of JIT deliveries have actually supported the global automakers to save substantial amount of money and also to run their respective manufacturing operations effectively. Thus, it can be affirmed that the adoption as well as the execution of JIT technique or lean production is quite effective for the automakers globally by a certain degree if they are regulated appropriately (Durbin & Krisher, 2012). Consequently, it can be stated that lean production method can effectively be used by automobile organizations as well. In automobile industry, lean production can be used in order to eradicate waste and to enhance the flexibility of the production system. With lean production in automobile segment, the products can be delivered through JIT approach without compromising with economies of scale. In this similar concern, lean production can be applied to Toyota Motor Corporation for the purpose of making incessant improvements particularly in making the vehicles that are ordered by the customers in an effective and prompt manner. It can be affirmed in this regard that the effective use of lean production can support Toyota in gaining maximum customer satisfaction by a significant level (Toyota Motor Corporation, 2013). 2. Evaluation of MRP/ERP Software ERP/MRP software is used in order to obtain a practical view of the core business aspects such as manufacturing, order processing and management of stock among others. There are several Enterprise resource planning (ERP) applications which can be used by organizations for example, Open ERP, Open Taps and Open Bravo among others. Each application has certain features which help to enhance the business performance. For instance, Open ERP provides software solution for organizations in the disciplines of accounting, warehouse, manufacturing, sales, customer relationship management, human resource and purchase. In the similar context, Open Taps is the other ERP application which provides business solution to organizations. Open Taps supports applications such as e-commerce, inventory management, supply chain management, financial management, purchasing, cataloguing and analytics. As a consequence, it facilitates to manage the business more effectively. On the other hand, Open Bravo is also one of the popular open source ERP software. The key aspect of Open Bravo software is that it is flexible in nature and permits agile business processes. It provides flexible, innovative and reasonable ERP solutions for organizations (Glenn, 2008). 3. How Lean/JIT Principles Can Be Incorporated In Aggregate Planning And Material Requirements Planning From operational perspective, aggregate planning is recognized as the development of long-term outputs. It is a resource plan which is used for measuring the capacity requirements. Aggregate planning assists in defining budget allocation and the related budget requirements. In this regard, it is to be affirmed that lean or JIT principles can be widely incorporated especially in aggregate planning and material requirements planning by a greater extent. This is because the principles related to Lean or JIT focus upon the significance of being value-driven as well as customer-centric in the operational procedure of any organization. These two particular aspects i.e. value-driven and customer-centric can be apparently viewed as the major facets of aggregate planning. It can be affirmed that the aspect of aggregate planning deals with making deliberate efforts with the intention of generating greater value to the customers at large. In this regard, the lean or JIT principles can be incorporated in aggregate planning for ascertaining high rate of accuracy and appropriate aggregation level along with focusing upon making incessant improvements (Linne & Ekhall, 2013). Apart from incorporating lean or JIT principles in aggregate planning, these principles can also be incorporated in material requirements planning. The incorporation of these principles can assist organizations to ascertain continuous enhancements particularly in the areas of overproduction, transportation, excess inventory and defects among others regarding material requirements planning. This in turn may prove to be quiet beneficial for diverse organizations for complying with the requirements of the customers, attaining greater satisfaction level, enhancing profitability and most significantly accomplishing superior competitive position over their leading business market competitors. Specially mentioning, the lean or JIT principles can be included in material requirements planning through focusing on Lean Building Blocks which would in turn enable to handle the materials quite effectively (Linne & Ekhall, 2013). Conclusion From the above analysis, it can be affirmed from a broader outlook that lean production could be applied to an organization for the purpose of eliminating wastes and also for making continuous improvements in the overall operational procedure. It has been viewed that the modern business organizations broadly use MRP or ERP software with the objective of ensuring that various operational procedures such as stock management and order processing among others are managed competently. Moreover, it can also be observed that lean or JIT principles can be incorporated in aggregate planning as well as material requirements planning by a considerable level. References Black, J. R. (2008). Lean production: implementing a world-class system. New York: Industrial Press Inc. Durbin, D. A., & Krisher, T. (2012). Crises make automakers rethink lean parts supplies. Associated Press. Glenn, G. (2008). ERP 100 success secrets: enterprise resource planning 100 success secrets--100 most asked questions: the missing ERP software, systems, solutions, applications and implementations guide. North Calorina: Lulu.com. Linne, A., & Ekhall, C. J. (2013). Lean planning. Lean Capacity Planning- Planning for Maximizing Customer Value, pp. 1-63. Toyota Motor Corporation. (2013). Toyota production system. Retrieved from http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/ The Times 100. (2009). Lean Production at Portakabin, Portakabin, pp. 125-128. The Times 100. (2011). Competitive Advantage through Efficiency, ALDI, pp.09-12. Read More