Current Trends in Lean Management within the Manufacturing Industry - Literature review Example

Lean management Name: Student number: Module name: Module number: Module tutor's name: Date: 25th February 2014 Word count: 2500 Introduction It is every business owners’ dream to meet and satisfy the demands of the customer as this would most likely translate to increased sales and consequently, great financial returns. Therefore we often see businesses struggle to maintain the lead by promising value for money to their customers. In order to ensure impeccable quality, many organizations especially the very large ones have resulted to applying the lean management tools to improve on quality delivery and reduce on their costs. In lean management, there is s a focus on the value stream where focus is laid on understanding the customer’s needs before producing the products. Value stream therefore represents the activities that are required to create a product, keeping in mind the customer’s perception of a quality product. Additionally the value stream transitions to value stream mapping, a process that is used to help identify the steps that are value adding and need to be adhered to. Further value stream mapping enables the management to envision the wastes generated within the company and identify the possibility of eliminating these wastes. The animal feeds manufacturing industry is one such competitive industry today and every player is determined to convince customers about the superiority of the products. With many people venturing into animal rearing, the demand for animal feeds is high, but the product quality cannot be compromised at any cost. Many feeds manufacturing plants are largely run on a very manual basis and this in turn results to a lot of wastage right from the moment an order is placed to the delivery of the product. Most of this waste is non-value adding and actually costs a lot to the company. Therefore, the management must be very keen on employing value stream mapping and eliminate waste if they have to achieve their objective for profit. In this case the value stream map will be used to analyze the materials available for production and examine the required flow of information within the facility tasked with production. According to Suciu, Apreutesei & Arvinte (2011), the starting point for improvement lies in understanding and defining the present state of affairs and then identifying the points where improvement is required in order to ensure a smooth process. In a simple outline this section will explore the value stream map for one customer in a typical feed manufacturing company. As a feeds manufacturing company we will explore a scenario where a customer requires 1400 kilograms of dairy meal and 1000 kilograms of layers mash. The raw materials such as wheat bran, rice bran, maize bran, limestone among others are available since they are always delivered in bulk by the supplier. The customer trusts that the final product will be of high quality, and the following process ensues: Information from the customer is relayed to the production unit by the production manager who is already aware of the materials available. The production team sets out combining the raw materials using the appropriate portions for the different products. Different mixers are utilized in this scenario, ensuring that production runs consecutively Following this process the production should and packaging should be complete within a period of 10 minutes and the delivery team which has been on standby take over. The products are loaded and transported to the customer. As a result there is waste in this process is minimal since communication flow is well managed and both products were produced within the same period of time. Costs and time are reduced and the customer’s demands are met very quickly, yet quality was not compromised. Literature review This chapter reviews in detail the current trends in lean management within the manufacturing industry, with a greater focus on the electronics manufacturing industry. Begam, Swamynathan & Sekkizhar (2013) in their review of this topic argue that the implementation of lean management practices within an industry is a very important step towards ensuring complete and efficient business processes. Lean management is a concept that was developed by the Toyota manufacturing company and has been highly adopted by other industry players. It is defined as an approach that allows companies to systematically identify and eliminate waste in the process of production. This is practice through continuous evaluation and improvements throughout the production process, such that the final product is free from any defects, thus ensuring that consumers get high quality products (Suciu, Apreutesei & Arvinte 2011). On the other hand the company is spared from spending extra production costs through product recalls and handling customer complaints. In addition, through production of high quality products, the company stands to gain a good reputation within the industry and as a result, growth is realized. Lean management concepts, applications and frameworks Lean management on the other hand is a framework that encompasses a series of steps, processes and principles which are combined together as to form a system for the benefit of a company. According to Wong and Wong (2011), this framework is rolled out in a series of three parts which are; the foundation, improvement practices and finally the final step is the outer circle which calls for continuous improvement processes. Being a process, there are concepts that are associated with lean management and these are: value and the value stream, waste, flow and pull. Value and the value stream is a process aimed at identifying a products value and thereafter identifying the most appropriate processes that can be applied to achieve that value. The value stream in particular involve the series of activities that are carried out in the process of producing a product right from the minute the concept of that particular product is conceived to the moment it is available in the market for consumption. This process involves value stream mapping which is a process used to identify channels of reducing or eliminating waste (Mostafa, Dumrak & Soltan, 2013). Waste in lean management is very significant since companies strive to reduce the amount of waste involved in their processes. There are two types of waste, with the first being defined as the activities involved in the production process, which are necessary but add no value to the process. The other type involves the activities carried out, but they are completely unnecessary and can easily be done away with since they do not add value to the production process as well as to the customers. Flow refers to the way the activities within the value stream are achieved without interruptions or stoppages (Worley and Doolen 2006). It is viewed in terms of how the process progresses from one stage to another, right from the conception of an idea, to developing a product until it fall into the hands of consumers. Ideally companies should strive to achieve this without encountering stoppages and without producing scraps. The pull principle refers to the process by which the production process and the instructions for delivery flow from one channel to the other. This principle relies on three conditions which are timing, alignment and transparency. Alongside these principles the lean management framework calls for team work, effective communication (Worley and Doolen 2006), application of continuous improvement practices and a striving for perfection within the business processes. According to Mostafa, Dumrak & Soltan, (2013), Lean management is applied using different methods given the nature of a company and these methods are inclusive of: total quality management, Just-In-Time production, Pre-Production planning, Six Sigma, Cellular manufacturing and Lean Enterprise Supplier Networks. Operational benefits of applying lean management concepts within a company This concept is has gained and is continually gaining popularity especially within the manufacturing industries. This can be attributed to the fact that its application within a company’s operations brings about a myriad of benefits. Once implemented, growth is achieved in terms of quality improvement, reduced costs and improves the delivery system to suit the company’s needs. Consequently this leads to the achievement of excellence (Wong and Wong 2011). Mostafa, Dumrak & Soltan, (2013) argue that the success of lean management activities is also dependent on how this process is applied. The success rate is higher when they are introduced into a company as a framework or a roadmap. Lean management works out very well when employees are fully involved in the implementation of the concepts. Therefore the employees should be educated on the basics of this philosophy because once they understand how their contribution will influence the company’s performance, they are more likely to be dedicated. This means that the implementation should be integrated with the implementation of other business strategies. The application of lean management practices within a company has been discovered to drive profits on the upper side (Rajenthirakumar and Shankar 2011). To begin with, a reduction in wastage along the production line results to improved productivity because costs are minimized and time is utilized efficiently. Consequently, the end product is of very high quality and this ensures that there are no product recalls, thus reducing the amount of scrap and the time which would have been spent on handling customer complaints is utilized in other productive processes. Lean production also reduces the amount of financial resources that are tied up by large inventory and work in progress (Sanchez and Perez 2004). The period of time between which a company purchases inputs to the time payments for delivery are received is shortened. Proficient of the lean management tools within the animal feeds manufacturing industry would result to greater efficiency as different scholars have discussed. Since there is a lot of non-value adding waste involved in the process of production, the process will be geared towards eliminating this waste. On the other hand, an endless quest for perfection in the end product marks the beginning of seeking to ensure competitiveness. In addition the company would largely benefit from continuous training programs to sensitize the employees such that they fully understand the framework (Liker and Hoseus 2010). The human resource department is tasked to ensure that employee welfare is taken care of and such that they feel proud to be part of the company. This accounts for an increase in organizational commitment which is a key resource to the company’s productivity. As discussed above the lean management practices have gained a lot of popularity especially within the large companies. As a result some have successfully managed to eliminate waste and boost their productivity resulting to huge monetary returns (Sanchez and Perez 2004). In the next five year to come, we believe that this philosophy will be very common and even the small and medium enterprises will be embracing it. Consequently not every player who adopts this process will stand to reap the benefits. However, lean management is here to stay because focusing on waste minimization especially within the manufacturing sector means that there is reduced environmental pollution. According to the (U.S. EPA 2003), the application of lean management works as a powerful tool for improving the environment. Therefore, it is possible that more scholars will dedicate their research towards the external benefits of lean management. External in this case means that focus will shift from the benefits achieved within a company to the benefits that the physical environment stands to gain from the application of lean tools and concepts. Application of lean management tools to a sub-standard process Animal feeds manufacturing companies have a tendency to lean towards the mass batch production method. The company we are exploring within this scenario often registers massive inventory levels especially in terms of the finished products. This results to a lot of wastage especially in for the stored finished products, some of which expire in storage. Therefore the cellular manufacturing method as well as the just-in-time production system would be beneficial to this type of company. The value stream identifies waste in the form of over production, unnecessary inventory and work in progress. To reduce or eliminate this waste the Just-in-time production is applied into the production process, ensuring that production is based on the customer’s needs or order. To begin with a lot of time is wasted in the process of receiving and recording raw materials, even though it adds value to the production process. To counter this problem, the company should consult with their suppliers to deliver smaller quantities of raw materials such that one the process of receiving and inventory taking can continue smoothly without interfering with production since another team would then be involved in the production. This works to reduce cost because then they will not have to hire casual labourers to help in the process. Consequently the work in progress is reduced because two tasks are running simultaneously. However, this process cannot be complete without the participation of other departments. The flow of information is an important aspect that needs to be enhanced right from the top to the bottom levels and vice versa. To ensure the successful implementation of this process, the company will be required to facilitate trainings and drills for all the employees and the human resource team is tasked to handle this (Liker and Hoseus 2010). This spells out the need to align the interdepartmental relationships in order to build a foundation for cooperation. Cooperation in turn creates a foundation for strong teamwork within the system. Team work facilitates motivation and as a result employees demonstrate a commitment to the organizational processes. Commitment and a deep understanding of the lean management framework by the employees translate into increased productivity. In summary, the process calls for the integration of all business processes involved in the supply chain. Evidence based analysis The value stream and all the other principles of lean management are geared towards reducing cost, increasing productivity and ensuring quality of production. It is necessary to monitor and evaluate whether the process was really cost saving or not. In our case scenario the current value stream map was carried out and identified 10 improvements to be carried out in order to achieve quick financial turnaround time. 8 improvements were considered valid and workable, resulting to a 10 minute production cycle for one unit. This saves about $50 per unit thus when there is a lot of production given the number of orders available the costs reduce considerably. The process improvements involved the creation of work teams with each team having a leader and an overall supervisor for all the teams. Dynamic scheduling was implemented such that the different teams would work on different tasks simultaneously and a team that finished a task early enough was able to pull another task and continue working. At the end the company was able to register in approximation; a 10% reduction in operation costs, 40% reduction of wastes (both value adding and non-value adding) and 30% reduction in the finished goods inventory that used to tie up a lot of capital. Conclusion Lean management is a sure way of enhancing productivity by reducing wastage and cutting down on costs. However, the process can be detrimental to a company if not properly understood and applied. Business owners should strive to understand this concept and develop a framework for implementation, and then make sure every person working in the business is part of the implementation process. Reference list Begam M. S., Swamynathan, R. and Sekkizhar, J. (2013) Current Trends on Lean Management – A review. International Journal of Lean Thinking, 4(2) Liker, J.K. and Hoseus, M. (2010) Human resource development in Toyota culture. International Journal of Human Resources Development and Management, 10(1):34. Mostafa, S., Dumrak, J. and  Soltan, H. (2013) A framework for lean manufacturing implementation. Production and Manufacturing research: An open Access Journal. 1(1) Rajenthirakumar, D. and Shankar, R. G. (2011) Analyzing the Benefits of Lean Tools: A Consumer Durables Manufacturing Company Case Study. International Journal of Engineering Sanchez, A.M. and Perez, P. P. (2004) The use of lean indicators for operations Management in services. International Journal of Technology and Management, 5(6): 465-478 Silva, S.K.P.N. (2012) Applicability of Value Stream Mapping (VSM) in the Apparel industry in Sri Lanka. International Journal of Lean Thinking, 3(1) Suciu, E., Apreutesei, m. and Arvinte, I.R. (2011) Value Stream Mapping - A Lean Production Methodology. The Annals of The "Ştefan cel Mare" University of Suceava. 11(1):13 U.S. EPA (2003) Lean Manufacturing and the Environment: Research on Advanced Manufacturing Systems and the Environment and Recommendations for Leveraging Better Environmental Performance Wong, Y. C. and Wong, K.Y. (2011) A Lean Manufacturing Framework for the Malaysian Electrical and Electronics Industry. 3rd International Conference on Information and Financial Engineering, 12 Worley, J. M. and Doolen, T. L. (2006) The role of communication and management support in a lean manufacturing implementation. Management Decision, 44: 228–245. Read More