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Lean management


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  • 1. Lean Management Assignment 1 LEAN MANAGEMENT Organizational DevelopmentLean management is a way to eliminate waste and improve efficiency in a manufacturingenvironment.Lean focuses on flow, the value stream and eliminating MUDA a Japanese word for waste.It is basically to produce the goods with less of everything: human effort, material,inventory, time and space.For a lean project to be sustainable, the following four phases in a project are of utmostimportance viz- 1. Foundation 2. Preparation 3. Implementation 4. SustainabilityAny inconsistency in the above phases can lead to failure of lean methodology. Lean failureis caused majorly if there are hurdles in individual, group and organizational objectives. Page 1 of 10
  • 2. Lean ManagementSome of the factors that can be associated with failure in the implementation of leanmanufacturing initiatives are: leadership, organizational culture, skills and expertise,absence of bottom-up implementation approach team autonomy, senior managementcommitment and participation and organizational communication, training, projectselection, employee engagement, desire to improve, management’s resistance to change,absence of feedback system, accountability and ownership.Successful Implementation of Lean Management: Subway: Eat Fresh, Live GreenThough Subway does not advertise themselves as a Lean corporation but their restaurantsseem to employ some basic Lean principles.This example is based on our understanding of the lean management concept and ourobservation at the Subway Outlet.The sandwich area is laid out in the form of an assembly line from taking the order topaying for the order. There are signs with pictures along the assembly process to support thecustomer order. Everything used to make the sandwich is displayed on the line through clearviewing panels. Page 2 of 10
  • 3. Lean Management Reasons for successful implementation: Overproduction: Subway makes their sandwiches to customer demand. They make the exact sandwich the customer wants at the time the customer orders it. They process one customer at a time. They follow the principle of one-piece flow. Also the main commitment of Subway is Eat Fresh they do not make any sandwiches beforehand. This reduces overproduction. Defects: The sandwiches are made according to the demand of the customer & as per their will. Even the quantity of toppings is as per the requirement & demand of the customer thus the changes of defect is zero. Transportation: During heavy volume times they apply one-piece flow using a team instead of individuals. Team members will assemble parts of the sandwich passing it from one to another along the serving line. Each person performs a specified task in a specific sequence. Hence this reduces the transportation of the product from one hand to other as the arrangement is in the form of an assembly line. Waiting Time: The waiting time of the customer as well as the person making the sandwiches is reduced as he is busy making one sandwich after the other. Inventory: While the sandwich is made just in time the materials to make all the sandwiches have been prepared beforehand. Due to the need for freshness and longer cycle times the Page 3 of 10
  • 4. Lean Management bread is baked, cheese is sliced, and vegetables are cut prior to the store opening. For example, lettuce and tomatoes will be found closest to the team member in multiple large size bins while the hot peppers and olives will be in smaller bins further away. Some of the inventory is kited for accuracy and efficiency like the meat. This allows Subway to produce the same size sandwich every time for a 12 inch or 6 inch sandwich in every restaurant. The kit also helps control inventory by knowing how much is consumed for each sandwich enabling a simple replenishment scheme. As the team member is preparing the sandwich if he consumes the last item in the bin he was using and turned to the refrigerator behind him to replace the bin. He slides the older bins closest to him and placed the newest bin in back of the others. This technique meant the customer was getting the freshest produce while not spoiling their inventory. This also reduces the motion from one place to another to get the toppings. Over Processing: Subway uses simple methods to make the sandwiches. The product undergoes minimum processes since the sandwiches are handmade. This reduces over processing. Motion: The raw materials are stored at the point of use in bins in the assembly line. They are placed in the order in which the sandwich is prepared creating a standard while mistake proofing the preparation sequence. The amount of the vegetables prepared and the location in the line is based on the popularity of the product. Food is Always a Good Motivator. Page 4 of 10
  • 5. Lean ManagementFailure of Lean Management:The derailment of a Lean initiative at Environs, a Northern New EnglandcompanyEnvirons, a Northern New England company is a manufacturing unit which deals inproducing pumping components for automotive and industrial concerns worldwide. Openedin 1968, it began making machined parts from steel bar stock at the plant in Northern NewEngland. The company was purchased by Midwestern corporation in 1985, a leader inmotion services. This led to its listing on the Newyork Stock Exchange and expansion aswell as rapid changes.The Company experienced many good years from 1985 through 2000. This tide, so tospeak, changed after 2000, when NNE Co. struggled to satisfy increased customer demandfor product units, for the quality thereof, and for rapid delivery. To combat the poorshipping performance and to recoup money lost every day on premium freight costs, theplant manager moved to implement lean manufacturing in 2000.Factors that led to failure:  Resistance to Change: Resistance to changes was a common theme at NNE during the lean implementation from 2000 to 2008. In 2002, the CEO at NNE decided to purchase upgraded automation equipment, even though the fuel product line department had plenty of capacity with existing older equipment. This purchase was expected to reduce both the time for set-ups and the level of mechanical skill needed for set-ups. Nonetheless, these expected improvements met strong resistance from the assigned employees until the older equipment had been removed from the area. The main reason for resistance in the organization for change was: Page 5 of 10
  • 6. Lean Management No Involvement of Employees in Decision Making:- The Company had 12 hr shift, it was learned that the night shift employees resisted change to the new procedures on 1 of the project . The main reason of these resistance was that the night shift employees were not involved in the project , the area experts were entirely left out of the decision making about the changes to be made. No Support/help was provided:-There was nobody during the night shifts who could help the employees if they had any problem with the new procedure (followed in lean management) or other concerns Lack of Timely Communication: The failure of top management to create, embrace, and communicate a strategic organizational plan, a compelling vision, and purpose and goals about lean manufacturing created a communication gap between leaders and followers at NNE. There were great opportunities here for communication improvement throughout the organization. Even though employees reported instances of good ideas coming from low in the organizational hierarchy, their managers largely ignored those ideas. Timely communication was missing as in some cases the off shift people knew about the project after they came to work and the saw the changes. Resentment from other shifts occurs whenever the lack of communication causes the work to be more difficult to accomplish. “If problems occur on the first shift, they may carry over to the second or third shift. Hence, communication between shifts is critical. Training and development: Managers at all levels of the organization must participate in the training and must both understand the benefits of lean and have the necessary capacities for its Page 6 of 10
  • 7. Lean Management implementation. To support the organizational transformation to lean, the company should invest in continued mentoring. At NNE, Lean training classes stopped after 2 years, leaving a basic skill gap for newer employees. The employees were not given classroom training on topics such as Company’s Management Philosophy, leadership development, problem solving, safety, etc. The organization did not have a good reporting system so it was a problem. To monitor and maintain both the success of training and the project, itself, team members should develop a good reporting system of numerous key measurements to identify, track, and measure project gains. Lean training classes were stopped after few years leaving a basic skill gap for newer employees. Loss of Focus & Leadership Vision: “Under the leadership factor, management should have a clear vision, strategic initiatives, a good level of education, and the willingness to support productivity improvement initiatives like Lean manufacturing”. The vision, while clear, must be shared with all in the organization. Initially when the organization implemented lean management there was a steering committee which discussed the regular training that need to be given, the new projects that would be undertaken etc. The group remained active until the plant manager who began the lean implementation was transferred in December 2005. The new plant manager, who was supportive of lean, attended the meetings only occasionally; and therefore, the weekly meetings became less important to committee members. Previously, this lean meeting had been just about the most important hour of the week for committee members, and people were fined if they came late. The lean manager regularly scheduled and attempted to facilitate the meetings, but soon group members stopped attending the meetings. Weekly Page 7 of 10
  • 8. Lean Management meetings have since stopped, there have been no training classes, waste reduction implementations were not being submitted on time, there was no recognition of employees’ accomplishments, and projects were no longer planned. Project Selection: A best practice for an organization is to prioritize potential projects against clearly identified strategic business objectives. Selection criteria should also be well communicated to team members to ensure adequate time is spent on selected projects. It was reported that the project selection process of the organization was either completed too quickly without sufficient thought or that projects were initiated because they were “pet projects” and biased in their selection process. Managers and line employees differed in their beliefs about the criteria used for determining which projects should be implemented and the level of gains made in those projects Lack of Accountability / Ownership Lean projects require managers to take responsibility to produce lean results within a specific time frame as well as ownership for the results and there should be follow- up by management and team project members to ensure continuous improvement. Lack of attention to lean manufacturing over several months gave employees the impression that lean is good to do only if they have time; and that if they have other things to do, then it is okay to ignore it. So here in many case the Projects were lost because the managers stop watching. In many cases people will only follow new standard work as long as management watches Page 8 of 10
  • 9. Lean Management Project Team Selection During the Implementation phase of a lean project, a first step would be to select appropriate team members. Since selected employees for the project help determine its direction, this vital step, when done correctly, will have positive effects on the project, ensuring the proper mix of personnel who will take ownership and responsibility for the sustainable implementation of the project. A standard lean team makeup includes a facilitator, leader, area expert, an observer, plus an occasional maintenance person. It was observed that Instability in the projects is created by not having sufficient personnel to follow the standard-work that has been implemented by the continuous improvement team. An example is that often the standard-work requires that changeovers be completed with a “two-man” set-up. In actual practice this rarely happens after the 30-day follow up has been completed. It was also observed that whenever the project was large, more team members were selected from a pool of employees interested in participating. Since projects were often done with only one area person as a team member, the result was that only one person became familiar with the focus area and able to make key decisions about change Absence of benchmarking employee satisfaction: The projects should have conformed to at least three criteria for benchmarking: process improvement and simplification, quality improvement, and safer work stations. There was failure to address all the above employee concerns. Page 9 of 10
  • 10. Lean Management  Employee Engagement: The scope and level of employee input in the decision making process were low. The employees at NNE felt disconnected and devalued primarily because the management often predetermined the paths of projects, thus discounting employee engagement in the decision making process. The employees here, did not feel empowered to share their voice in continuous improvement initiatives. Lack of flexibility: The project mainly had four types of employees, viz. facilitator, leader, area expert, observer and an occasional maintenance person. There was lack of flexibility among these employees.  Lack of continued follow-up: The management system did not adequately provide needed follow-up to ensure accountability for sustaining project gains. This laid back attitude on the behalf of the management lead the employees to believe that lean is good to do only if they have time or else it is okay to ignore it.The basic pitfall that happened here was that only the management was accountable to allthe changes that were happening in the organization. Had the employees been equallyinvolved from the beginning, the lean approach would have been a success. Page 10 of 10