Saturday 1 December 2018

How to make business more efficient with Lean strategy

Many organizations do not realize whether they are already running in efficient mode or inefficient mode by Lean strategy. Some was thinking that their business process is already efficient, although it is not true. Many managers think that they have been running the business the way it is for many years, and they were seeing no reason for changes.

They believe this because their business has survived for many ages until now. This kind of idea will halt implementation of any improvement methodology, and will endanger organization in the future as they need to be more competitive.

Statistically, major resistance in implementing an improvement program is deal with reluctant from employee rather than technical aspects. Hence the top management support and commitment is the key to successful implementation of any improvement program.

Lean strategy

The lean strategy has been originally derived from Toyota Production System. This strategy has promoted many organizations to achieve most efficient process by eliminating all non-value add activities. It applies in small scale organization up to giant industry. In lean principles, organization are pushed to strive to eliminating eight deadly waste namely transportation, inventory, motion, waiting, overproduction, over process, defect/rework, and non-utilize employee.

All of this waste will only give burden to your process but not adding value to your product or service. Your end customer is not willing to pay for all of these, instead will add organization operational costs. As operational cost increase, it will impact to organization profitability. If the profitability decreases, the product or service offered will not be competitive.

Key lean principles

Lean is most adopted strategy originate from automotive and then later implement in various industries such as manufacturing, transaction, transportation, sales, and many more. Key lean principles are:

  • Define value from perspective of end customer

  • Identify value streams

  • Flow

  • Pull

  • Strive to perfection

Value is determine by end customer. It is what customer willing to pay for. We should evaluate all process and identify whether the process is value add. There are many process which is consider as non-value add activities, they take time, space, and resources but giving no value add to the product or service.

Examples of this activity are rework, scrap product, setup time, document waiting, searching for tooling or document, machine downtime, material transportation, approval bureaucracy, and others. Typically there are many activities will fall to this non-value add categories, they will make process not efficient and add more cost to product or service.

Method to implement lean strategy

The method to implement lean strategy begins with top management commitment. Plan and preparation is require to create team to work on continuous improvement at select area. Next, after the value is well define, all wasteful step is need to be eliminate or reduce.

The idea of flow is to make steps from raw material to finished good can flow continuously without material waiting (work in progress between process) by implementing one-piece flow or batch size reduction. This will reduce overall lead-time dramatically.

Pull is philosophy is to draw material from end process base on customer consumption instead of traditional push systems which push or introduce material from first process step to subsequent process and have risk of being overproduction and material waiting. And it will surely prolong the manufacturing lead-time or service lead-time.

Strive for perfection is continuous improvement instill in every employee heart to make process even simpler, preventing mistake, and make process more efficient.

Fundamental of lean principles

The fundamental of lean principles is making organize workplace by implementing 5S. The purpose is to make workplace area more efficient by eliminating searching, unnecessary transportation, error, defects, and other waste. Visual control at this level will help everyone can instantly spot if there is abnormality happens in the process. Such that the corrective action can be instantly taken.

Visual management is implement through glass wall whereas all key performance indicator and improvement project is display in production boards to make target become clear to everyone up to shop floor level.

Others lean tools such as single minute exchange die, total productive maintenance, replenish pull system, mistake proofing, level loading, batch size reduction, are design in such a way will help process to be as efficient as possible and make process faster, create better quality product, and produce at lower cost.

Quick Improvement

Lean can achieve tremendous success if all employee supports this program and realize the benefit. Managers also require motivating and guiding the team to accomplish improvement. Program can begin with Kaizen Blitz (Quick Improvement). Where team are select and isolate from their regular job to be train and execute improvement directly on production line during 5 days under guidance from Lean strategy Champion.

While Kaizen Event is scope by top manager assign to Kaizen team. To identify waste in that particular area and make all necessary improvement.

All in all, lean principles can be apply to any organizations and create abundant cost reduction. Make business process more efficient. Ultimate purpose of lean is to build improvement culture in every employee. So that the company can gain competitive advantage. This will help organization to be more profitable and use it for business growth.

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