Is lean manufacturing the answer to surviving during difficult economic times? Productivity and profitability.

Pages:23(2)
Author:Defonseka, Chris
 
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As the global economy is getting battered by negative socio-economic forces and the world population grows steadily, the business world has to face additional economic storms of ups and downs, which affects productivity and profitability. In order to keep a business on an even keel, the standard methodology of maintaining constant process efficiency alone may not be sufficient and Lean Manufacturing practices may well be the answer.

What is Lean Manufacturing?

Lean Manufacturing or lean production is a production practice that considers the application of resources for any operation--other than the creation of value for a product or service, to be wasteful and thus a target for elimination. Simply defined, the elimination of waste of resources in any form, during each production cycle, will result in enhancement of productivity and thus collectively result in cost savings and a contribution towards increased profitability. Here, more than profitability, the immediate important aspect is these contributions towards maintaining good cash flow liquidity. From the perspective of the customer who consumes a product or service and is paying for the 'value', which can be defined as any action or process for which a customer is willing to pay for. Basically, one might say, that Lean Practices are centered on--increased value at less cost, with of course, quality in mind at all times.

Where to apply Lean Practices?

Lean practices can be applied to any sector of operations of a business and when applied effectively, could come up with great awareness and surprising possibilities. No doubt the methods of waste reduction would be challenging, exciting and rewarding. Waste does not mean only material waste but applies to all areas of operations--from administration to finished products and then again can extend to the final point of shipping operation and beyond in some cases. General Lean methodology is based on three types of waste reductions: no-value added work, overburdening a process and un even process flow.

A Lean operation is a variation on the theme of efficiency, based on optimizing a smooth and easy flow. History has shown that man has traditionally strived for improvement always, whether it is a business or otherwise and in its present day context may be considered as increasing a process efficiency and decreasing waste in all aspects of a process, which may also be termed as 'Fine tuning'. Generally, Lean means a set of 'tools' that assist in identification...

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