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The Lean Business

October 26, 2010 Leave a comment

Lean Operations has become a very popular practice within business organisations these days. The advantages of lean operations are several but its ability to cut down costs significantly is probably the main reason why companies are so interested in it. Today I introduce you to lean operations and give you an overview of it. In the next post I will talk about how lean operations can be an important part of change management.

By definition lean operations is a  manufacturing technique which aims to reduce all sorts of waste within a business process and, hence, in doing so making the process faster, cheaper and improve the quality of the product at the same time. The means of achieving a lean process is through Just-In-Time (JIT) method. Just-in-time is a planning and controlling method where the goods or services are produced exactly when in they are required. By doing so all inventory/ buffer/work-in-process goods or materials are eliminated from the system which speeds up the business process and makes it more efficient.  Lean operations and Just-in-Time was originated by Toyota Corporation within their car manufacturing plant sometime after World War II in order to produce higher quality car to match the US counterpart. This system revolutionised the global manufacturing system and for that it is often referred to as “Toyota Production System”. Today Just-In-Time technique can seen in action in many businesses across Asia, Europe and US.

Following are the benefits that can result from lean operations if successfully implemented:

  • Reduce cost (by eliminating anything ‘extra’)
  • Minimise process disruption
  • Efficient and faster process (low queue, setup, wait-time, transit time, lead time etc.)
  • Introduce flexibility
  • Improves product or service quality
  • Improves workers’ skill and increases dedication towards work due to involving nature
  • Management becomes more committed
  • Better suppliers

A few critical factors that will ensure the success of such a system in an organization is that firstly the management has to be committed. They have to have a vision of achieving success through lean operations and must take every necessary step to ensure that. Next comes employee training. If employees are not well trained to adapt to the changes happening to their work system then they may not be able adjust perfectly in this ‘new environment’. And finally just like any other organizational change, lean operations must be started out small – in one department or line within the organization first and then gradually moving to the other places.