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Alan
Times are getting hard, and people are feeling the pinch which will result in customers spending less and watching their pennies. Trends will fall and may be replaced with things they ‘need’ rather than ‘want’. People will be looking for deals and savvy ways to pay for Christmas without getting into too much debt. Businesses will feel the strain in more ways than one and would need to look at how they can reduce costs and minimizing as much waste as possible. For example, if a certain trend is falling, it would be beneficial for the business to tune into the customers’ demands and halt production of the falling trend, so they can attempt to minimize any inventory waste.
Three Core Areas Of Lean Management
According to Routledge Tayor & Francis Group. (2021) Lean Management focuses on three main areas:
- Defining value from the customers viewpoint
- Eliminating all waste within the business
- Continuously improve all work processes (this includes people and purposes)
Toyota successfully developed five key principles that must be adhered to in order to meet these three core areas of lean management.
5 Principles
These five principles of lean management techniques are:
- Specify what creates value for customers
- Identify steps to achieve along the process chain
- Make the processes flow by eliminating waste
- Respond to customer demand
- Strive for perfection by continual improvement
Let’s look into each of these and, under the heading ‘Respond to Customer Demand’, we will examine the various types of waste a business can accumulate.
Defining Value
First of all, we need to define value. When working to ensure the customer receives the best quality and value of service, it is important to ensure that everything is completed to the correct standard so that the customer receives exactly what they have paid for and no less. For example, in the case of Laura Wiltshire (Steve Schifferes. 2007) Laura and her team have been trained in Lean Management techniques and understand that they must always work as a team to achieve the best result. They know that if they must halt production because something is wrong with the product, they work together until the mishap is resolved. And only then do they recommence work on the production line. Laura discovers that something is wrong with the seatbelt fitting on the Camry that she is working on at the Toyota production line in Kentucky.
Appropriate Actions
She pulls the cord to alert the production team that there is a problem with the product. This, in turn, leads to the halting of the production line and all her colleagues must regroup to ensure that the issue is resolved before recommencing the work. If Laura had not pulled the cord or alerted other members to the problem, this would not have been as simple as putting a promotional sticker on a faulty bucket and hoping for the best.
Product Recall, Fatal Accident Or Even Death
This could have led to seatbelt failure for the customer, and in the case of an accident, the customer could have suffered from fatal injuries and/or death. This would have happened because Laura did not want to raise the alarm and as she did not want to cause others ‘unnecessary stress.’ I put these in speech marks and italics because obviously it was not ‘unnecessary,’ because the company would have been liable for all faults, the cars would need recalling, checking, and fixing which could lead to large compensation pay-outs from the company too had she not pulled the cord.
Identify Steps Along The Process Chain
All of Laura’s colleagues were in Laura’s process chain. Laura’s position in the chain would mean that she had to make sure that the materials she was given were fully functional and not faulty at all. She would need to inspect the previous work that her colleague had done and ensure that it was how it should be, before starting on her task. She would then need to make sure that she had everything she needed to complete her task in the process chain because if she had to go looking for the parts, this would be a waste of time and a decrease in productivity (they need to eliminate all waste, including time). She would then need to make sure that the work she had carried out was pristine before handing it down the production line. In the case of the faulty seatbelt fitting, when Laura pulled the cord, everything needed to be stopped at once. Following the recommencement of work, the product would have been passed onto the next colleague to do complete their task in the process line.
Make The Processes Flow By Eliminating Waste
If Laura, like many process line workers do unfortunately, dismissed the fact that there was an issue with the seatbelt fitting and left it to fate, all the Camry’s that had been manufactured at the plant would need to be recalled and checked. This would be a waste of valuable resources. If an injury or death had occurred due to this failure, the company would be liable to pay compensation and the Toyota name would be tarnished for an extremely long time (if not forever) as being an unsafe product.
Respond To Customer Demand
Many products are made in large batches to ensure they do not run out. This is seen as ideal for those companies that are selling popular, high trending gadgets of that time. However, as times are changing so are trends.
Overproduction
What may be popular this week, may be seen as ‘geeky’ next week. Therefore, it is always better to keep your eyes peeled for the changing demands of your customers. The last thing you need is half a factory floor full of useless products that you can no longer sell! There are many different forms of waste that can be a direct result of overproduction, such as:
Inventory Waste
This kind of waste is known as ‘inventory waste’ brought on by overproduction and can rapidly accumulate over a short space of time. Having the warehouse stocked with surplus stock also means needing extra warehouse staff to move things around to accommodate for the new stock that comes in.
Motion Waste
Because of need for extra staff, heavy lifting and any other hazards that come from working in a warehouse, there would be a lot of unnecessary ‘motion waste’ too. This would be seen as a waste because the surplus stock would not have been accounted for and should not be there.
Defects
If the company makes enormous quantities of products at once, it may be difficult to examine each product for defects. As discussed further up, many process lines are target driven such as was the case of the Amazon Tilbury warehouse in Essex (Alan Selby. 2017). Having heard of the disgusting working conditions, Alan Selby, a reporter for the Mirror, decided to go undercover and see for himself. His written experiences of unachievable targets and appalling working conditions which saw ambulances repeatedly called to the factory, completely inhumane. You can read the article here. In these drastically difficult target driven environments, it would be completely impossible to feel comfortable, or even able to, pull the cord to stop processing, like Laura did at the Toyota plant. In the Amazon case, the customer would send the defective item back, which would result in a waste of additional resources needed to replace/fix them.
Over-Processing
As defects are a waste of resources, so is over-processing. It is not a terrible thing that a company wants something to be perfect, but it is not great if you are wasting your valuable resources on things your customers will not see or even use.
Transportation Waste
Another form of waste that can be generated from over-production is transport waste. If the companies’ suppliers or the companies’ factory is not connected to the warehouse, then transportation would need to be paid to transport them to the warehouse. If these products, that have already been transported, are not selling for some reason, or have been sent back due to defects, this would be a huge waste. A lot of companies do not factor in transportation from factories or suppliers; therefore, a wasted journey would hit the profits hard.
Waiting
This examines the wasted time that is spent anywhere in the production line. However, as seen in the Toyota example above, where Laura pulls the cord and stops production until a problem is fixed, in these circumstances they are called for because it avoids all the issues involved with dealing with a defective product and upset customer. As I have explained, waiting can happen anywhere in the production process, from pulling the cord to issues involved with transporting the goods from the factory/suppliers.
Strive For Perfection By Continual Improvement
A workplace will never be perfect, but it needs to be the best it can be to maintain good working standards and ethics. Regular training for all members of the team, including management, can help to reduce waste and work together harmoniously. By implementing Lean Management techniques to the business, everyone can work together to achieve the best possible results. If we can refer to the case of Laura Wiltshire above and the Just-In-Time diagram, we can see how she implemented the instructions.
So, the machine that Laura was working on detected a problem and let her know. Laura then pulls the cord to alert other members of the production line to the problem. The situation then deviates from the normal workflow to so they can solve the problem, and all work on the production line stops. Once the supervisor or manager rectifies the issue – in Laura’s case a screw needed adjusting to solve the issue – they are then able to continue. When continuing they incorporate the improvements into the workflow (diagram courtesy of Toyota. (undated).
