Lean Thinking Case

Lean Thinking

A highly evolved method of managing an organization to improve the productivity, efficiency and quality of its products or services (Industrial Technology Centre, 2004). The creator of the Lean system of thinking was Taciichi Ohno(Lean Enterprise Institute, 2012) and was first used by Toyota Corporation. Lean Thinking forms a part of the Six Sigma which is being used by companies worldwide. The key elements are focused on eliminating waste as much as possible to improve inventory levels, thus resulting in quality products, increased responsiveness and ultimately excellent customer satisfaction. Slack, Chambers and Johnston (2004) mentions that the 3 main elements of Lean Thinking are Waste Elimination, Involvement of Staff in Operations and the drive for continuous improvement.

Waste elimination means to identify and remove all unnecessary materials / processes which do not add value to the organization as a whole. This is a very important principle of Lean thinking as this is what determines how effective the Lean Thinking actually is. This results in better time management, increased responsiveness, higher productivity and efficiency ultimately resulting in increased profits in the supply chain which is the goal of any organization.

Involvement of staff means that organizations should realize that their employees should be entrusted with responsibilities and power. They are the backbone of the organization and the ones that get the job done. By doing this, it increase employee morale as well as loyalty. This also means that all employees should be placed in their suitable positions. This increases productivity. Also, employees should be trained to do multiple jobs. This encourages job overlapping and is helpful in case of a time constraint when some employees are not present at work.

The changeover to a Lean thinking system won't happen overnight. The organization has to stay focused on their goals and strategies taken towards this. This is known as Continuous Improvement where the organization tracks their progress and strives for increased efficiency which results in better profits thus ensuring continuity, offers resources for increased performance and helps to stay in the business.

Let me explain the above points through the real life example of Dell.

Dell Incorporated, a world class manufacturer of computer systems, manufactures 80,000 computers every 24 hours (Breen, 2004). Dell has a steady inventory of parts in their US factories thus making thrice many computers in half the production floor space. A decade ago, Dell adopted the Lean thinking system and replaced all their time consuming and unnecessary warehousing activities for highly efficient and responsive contacts with their suppliers and shippers. From the sales side, they eliminated all the middle men, thus finishing up orders in less than eight hours by directly interacting with their customers. Within the time limit, improved quality, happy customers and increased profits, the CEO, Michael Dell says, "he's pleased but never satisfied" (Breen, 2004). He is always looking ahead and strives for continued improvement.

Just in Time (JIT)

To deliver the customers what they require at the right time, perfect quality and in the right quantities. JIT is mainly used nowadays by the manufacturing industries in US and Japan. JIT is defined as a group of practices aimed at continuous improvements through elimination of full wastes and full utilization of human resources (Shingo, 1981). The key elements of JIT are Just in Time Manufacturing, Total Quality Management (TQM) and Respect for People (Ried and Sanders, 2007).

Just in Time