Globally, major businesses strive to reduce the total cost and waste across their supply chain to remain competitive in the market. Notably, at least 70% of start-ups or small businesses fail, but with the introduction of a new methodology known, as “lean start-up” or the lean technique, the process of starting a company or business can be less risky. Lean technique refers to creating more value for clients with fewer resources with the aim of minimizing waste. A company that uses this method understands customer value and is determined to continue increasing it through a process that has zero waste. The lean technique is the most popular investment choice used by most companies because is enables companies to be more flexible and profitable; therefore, they remain competitive in the market. The objective is to reduce wastage of finances, which can be focused on the human resource or production processes and activities. The term “lean” was first used to describe Toyota’s business during the 1980s at Massachusetts Institute of technology (MIT’s) International Vehicle Program by a research team lead by Jim Womack.
The lean method has three major principles; instead of engaging too much time on planning and research, entrepreneurs should come up with a business model that state their hypotheses, showing how the company will create value for itself and the customers. Secondly, entrepreneurs should test their hypotheses through the approach of customer development. Notably, this involves seeking the approval or feedback of potential clients about the business model as well as the product (Blank, 2013). As such, they can improve on their product through customer input. Lastly, agile development is a practice employed by most start-ups to eliminate wasted time and resources by creating the minimum viable products to be tested. The basic principles include focusing on delivering quality services and products to customers; treating clients with respect and dignity; eliminating all types of waste by improving the value system, and striving for perfection. The customer defines what value the product has, thus offering quality services is paramount. Therefore, lean strategy must improve the product or service so that the customer would be willing to pay for it.
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Grand Rapids
Grand Rapids is a small furniture company that produces chairs and tables on contract for example for schools, colleges and offices. It uses materials such as tubular steel, wood, plastic, plywood or aluminum chairs; and cast iron, steel or aluminum table bases. The company maximized a constant work in-process model in order to produce these materials. In 2004, the company faced a major loss that increased quality expectations, which called for a change. The major issues included reduced profits, increase of energy prices and materials, poor staff morale, and lack of space. The company then decided to implement the lean strategy, which helped it become more operationally stable. Through lean technique, the company was able to produce more efficient work cells and increase profit by reducing waste. The use of lean techniques helped the company in terms of higher productivity, removal of unwanted items from the shop, more space creation and increased motivation for workers. The key observations were that all tools were placed randomly, which increased time wastage. Notably, there was no particular arrangement of machines thus more floor space was used.
The 5S system was used in this case, which normally focuses on primarily safety considering the nature of work, organization, cleanliness and hygiene, and standardization to improve efficiency, profitability and service. The basis of the 5S system stands for sort, set in order, shine, standardize and sustain (CGMA, 2015). Sorting involves clearing out the work area leaving in only the tools needed to perform the task. Set in order simply means that all items and tools should be placed and stored in its rightful place if possible, with tags. Shine is the appearance and display of products, therefore, the workplace should be clean and neat. Shine involves housekeeping efforts, improving the appearance and promoting hygiene. Standardize means that all people involved should put in effort to ensure that work is done efficiently and on time. Sustain is all about integrating the lean technique and 5S system into culture. Moreover, ‘sustain’ involves culture change; therefore, for it to be successful, cleanliness and neatness should not be a onetime practice, but a system that is used from time to time.
After the implementation of the lean methodology, a tool rack was created, all spares were stored in racks with proper identification, and trimming wastes fall directly into a waste bag. Furthermore, instead of doing finishing in the last minute of deliveries, the workers completed the finishing on time, which were then stored separately. The management created an extra room that was used to specifically store finished products awaiting delivery. The monthly product average increased to at least 15%. Finishing was done every day which in turn created a relax day on weekends, instead of doing finishing on products on Sundays. Time was used efficiently now that materials were stored properly with nametags, reducing the amount of time that was used in searching for them. The factory became hygienic and workers were disciplined in finishing their end day shifts on time. Daily dispatch was possible because finishing was done every day. Moreover, lead-time and operation costs were reduced while the rate of productivity was increased. The lean technique also promoted teamwork, and minimized wastage of time and resources.
To improve the use of lean technique, the company need to involve the staff with an understanding of the bigger picture of the model. Suppliers should also be included in business lay outs to maximize performance. The company should conduct trainings for the staff to improve on their skills in various lean manufacturing techniques.
In conclusion, a business needs proper implementation of a good business model such as the lean strategy. Understanding what the customer needs and want is more important to know how the business will satisfy the customer. A good problem-solving approach is key, which involves figuring out the root cause of a problem or challenge, coming up with the right solutions and using the right resources to solve the problem. Moreover, it is important to acknowledge that there is always room for improvement. Sticking to one model will not necessarily be the solution therefore having an open mind is key in business. Ensuring how results are achieved is more important to utilize resources. Lean manufacturing technique is sustained by finding the solution in every failure by identifying, modeling and encourage techniques to the advantage of the company or organization.
References
Annalisa L. Weigel. (2000) A Book review: Lean thinking by womack and jones.
Assignment for ESD.83: Research Seminar in Engineering Systems. Massachusetts Institute of Technology.
Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review .
Retrieved from https://hbr.org/2013/05/why-the-lean-start-up-changes-everything
Chattered Global Management Accountant (CGMA). (2015) Lean management techniques. 10 best practice checklist. New York, NY: American Institute of CPAs
Fogg, E. (2016). 5 lean techniques that will improve your manufacturing processes.
Retrieved from https://www.machinemetrics.com/blog/5-lean-techniques-that-will- improve-your-manufacturing-processes
Miller, G., Pawloski, J. & Standridge, S. (2010). A case study of lean, sustainable manufacturing,Grand Rapids Chair Company. USA: School of Engineering, Grand Valley State University
