The title ?Design Risk Assessment in Six Sigma? beckons to be likened with Poka Yoke or ?Mistake Proofing?. But without going deeper into the comparison part of it, what we can say is that both of these don?t have any similarities whatsoever, even though Poka Yoke appears to be the next logical step of Design risk Assessment in Six Sigma.
So What Is Design Risk Assessment In Six Sigma?
As the name suggests, design risk analysis is the procedure to determine potential risks in designs and design processes. In Six Sigma, the assessment for design risks is not a ritual that is done at the end but it is an inherent step in the design process itself. It begins from the point of conceptualizing designs where the evaluation exercise continues throughout the designing till the prototype is tested.
The design assessment for potential risks involves design simulation testing at steps including testing the detailed design and sub-assemblies (subroutines for software, etc) with a view to completely eliminate possible risks and cut down the shocks of design failures. For once, the design risk assessment in Six Sigma goes beyond the CTQ technique providing the design process the much needed broader evaluation.
Ensuring Reliability Of Design
The need for reliability of design can?t be overemphasized. The potential hazards of a faulty design extend beyond VOC and ROI parameters. Design risks can?t be overlooked even for service offerings even though manufacturing needs to take extra care of this aspect.
What ensures a systematic and rigorous scrutiny in the dependability of the design also allows capturing system-level hazards.
Design Risk Assessment Methodologies And Tools
PHA, ?Preliminary Hazard Analysis? is a qualitative assessment of hazards, constituents of the associated functional system and event successions that could potentially result in avoidable consequences. The study includes possible incidents and possible remedial actions. But significantly, this is a qualitative study whose efficacy is applicable only for initial studies.
DFMEA, an implementation methodology, serves as a quantified appraisal of the criticality of internal failures of CTQ & CTC together with performance components. The typical FMEA form may be used also for design assessments and transfers of know-how.
On the performance front, meeting customer expectations infers using CTC's, design parameters which assist meet all of the requirements. It also takes care of the manufacturability requirements. One might think of calling this CTQ.
The Need For Documentation
Results of risk analysis tests needs to be documented and then updated as the product or service moves in its cycle onto production phase, based on real time failure statistics, which serves as true risk-management and feedback document on design for future reference.
The most interesting application of the concept can be found in Bank of America?s assessment for credit products? inherent risks which ultimately helped eliminate potential fraud elements.
There are multiple instances where FMEA has served as main mast in design and failure evaluation.
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Feb 25, 2012
Feb 22, 2012
Process Simulation And Six Sigma
Six Sigma has become one of the most commonly used quality management techniques since its introduction in the 1990's. The importance of Six Sigma has continued to increase ever since companies like GE began implementing it's various concepts and techniques in their business processes. This has helped the company in saving billions of dollars since the time when the concepts were first implemented.
The Simulation Process
Process simulation is one of the various techniques used in Six Sigma, involving the use of a computerized model of an actual business process. The computerized model used in process simulation is designed by inputting all the critical components of a business process such as process inputs, process flow, and the various sub-systems used in the process. With the help of the computerized process simulation model, process managers can easily view the whole process within a few minutes that would have normally taken days or even weeks to complete in the real world. Process simulation helps in collecting large data samples, which can be further analyzed and used for predicting the effects of changes made in real business processes. This allows analysts to simulate all the possible changes that can be made in a business process and analyzing the effect of such changes on the end result. Changes that are most helpful in improving the quality can be selected and put through more rigorous simulation processes for confirming the potential benefits of such changes. Once this is done, the changes can be applied in the real process as by now it is quite certain that the changes will be successful in improving the quality of goods manufactured or services rendered.
When And Where To Use
Although process simulation is a powerful tool, it must be used in the right manner and only in appropriate business processes. If the necessary information is not inputted correctly, the computerized simulation model will not be able to predict the effect of changes made in the business process. This can seriously affect the quality of end products if such changes are implemented in the real process. Process simulation is most effective when a business process is complicated and difficult to visualize. For less complicated processes, it is better to use process mapping in combination with brainstorming techniques for generating innovative quality improvement ideas. Process simulation is helpful in simulating business processes that require managers to make informed decision at every stage of the process. Process simulation is used for improving the logistics of a manufacturing company by mapping the exact flow of materials from the time they enter the factory floor to the time when they reach the final consumer in the form of finished goods.
Risks And Drawbacks
Although process simulation is very beneficial, it can also create problems for an organization if not used properly. Companies very often make the mistake of employing process simulation in every business process in the hope of improving quality. This can create confusion among the employees, especially when the company and its workforce are new to the concepts and philosophies of Six Sigma. If a process is too long and involves various sub-processes, it is better to concentrate on sub-processes that affect the quality of the end product. Companies often try to simulate the whole process, which leads to the wastage of both time and effort. For realizing the full potential of process simulation, organizations need to simulate only on those processes that are critical to the quality of goods manufactured or services rendered.
read more »
The Simulation Process
Process simulation is one of the various techniques used in Six Sigma, involving the use of a computerized model of an actual business process. The computerized model used in process simulation is designed by inputting all the critical components of a business process such as process inputs, process flow, and the various sub-systems used in the process. With the help of the computerized process simulation model, process managers can easily view the whole process within a few minutes that would have normally taken days or even weeks to complete in the real world. Process simulation helps in collecting large data samples, which can be further analyzed and used for predicting the effects of changes made in real business processes. This allows analysts to simulate all the possible changes that can be made in a business process and analyzing the effect of such changes on the end result. Changes that are most helpful in improving the quality can be selected and put through more rigorous simulation processes for confirming the potential benefits of such changes. Once this is done, the changes can be applied in the real process as by now it is quite certain that the changes will be successful in improving the quality of goods manufactured or services rendered.
When And Where To Use
Although process simulation is a powerful tool, it must be used in the right manner and only in appropriate business processes. If the necessary information is not inputted correctly, the computerized simulation model will not be able to predict the effect of changes made in the business process. This can seriously affect the quality of end products if such changes are implemented in the real process. Process simulation is most effective when a business process is complicated and difficult to visualize. For less complicated processes, it is better to use process mapping in combination with brainstorming techniques for generating innovative quality improvement ideas. Process simulation is helpful in simulating business processes that require managers to make informed decision at every stage of the process. Process simulation is used for improving the logistics of a manufacturing company by mapping the exact flow of materials from the time they enter the factory floor to the time when they reach the final consumer in the form of finished goods.
Risks And Drawbacks
Although process simulation is very beneficial, it can also create problems for an organization if not used properly. Companies very often make the mistake of employing process simulation in every business process in the hope of improving quality. This can create confusion among the employees, especially when the company and its workforce are new to the concepts and philosophies of Six Sigma. If a process is too long and involves various sub-processes, it is better to concentrate on sub-processes that affect the quality of the end product. Companies often try to simulate the whole process, which leads to the wastage of both time and effort. For realizing the full potential of process simulation, organizations need to simulate only on those processes that are critical to the quality of goods manufactured or services rendered.
read more »
Feb 19, 2012
How to Choose a Six Sigma Black Belt Project
Selecting the most appropriate Six Sigma Black Belt project is the most common problem faced by students who enroll themselves in a Six Sigma training course.
The project is necessary as it helps students learn the practical aspects of Six Sigma implementation programs. The project is conducted either before the commencement of the training program or during the first week.
Identifying A Problem
Before starting a project, students first need to identify a problem, similar to real life implementation problems faced by business organizations. The problem that is identified and its possible solutions form the base of the project. For ensuring the successful completion of the project, students need to select a problem about which they have a basic level of understanding. Selecting a complex problem based on a case study published in a management journal is not recommended, as the project requires students to practically solve a given problem.
The information given in the management journal will only help students in preparing the project report and not in evolving practical solutions to the problem, which students will have to do on their own. The main reason why use of case studies are not recommended is that the resources that might have been used in solving the real life problem may not be the same as provided by the organization where students are receiving their training. Training instructors also encourage students to opt for a project that is relevant to their domain or qualifications.
Select Manageable Projects
Every Six Sigma Black Belt project needs to have a defined objective. Many students make the mistake of opting for a project having multiple objectives, which is often not achievable within the stipulated timeframe. Even after giving it their best shot, most of these students are often unable to make progress in their quality improvement projects. The only option left for these students is to either reduce the scope of their project objectives or opt for a completely new project, which will mean more hard work and time. In most cases, these students opt for the first alternative in order to allot adequate time to theoretical training as well.
No doubt, there are students who have completed even the most complex projects, but going by statistics, the number of failed attempts is a lot higher than the number of successful attempts. Students who are not sure of their abilities should not try to achieve everything at the first go. Instead, they should try to concentrate more on learning the basics involved in Six Sigma programs. There will be plenty of time in their professional career for solving the most complex of Six Sigma implementation problems in an organization.
During the course of the project, the primary objective of students should be to develop insights, which will help them a lot when they become true professional after the completion of the training program. Concentrating their efforts just on achieving the objectives may not help them, as by doing so, they are most likely to miss the basics of Six Sigma. The scope of objectives in a Six Sigma Black Belt project does not matter as long as students are able to develop a thorough understanding of their individual projects and are able to assess the impact it will have on the quality of the outcome.
read more »
The project is necessary as it helps students learn the practical aspects of Six Sigma implementation programs. The project is conducted either before the commencement of the training program or during the first week.
Identifying A Problem
Before starting a project, students first need to identify a problem, similar to real life implementation problems faced by business organizations. The problem that is identified and its possible solutions form the base of the project. For ensuring the successful completion of the project, students need to select a problem about which they have a basic level of understanding. Selecting a complex problem based on a case study published in a management journal is not recommended, as the project requires students to practically solve a given problem.
The information given in the management journal will only help students in preparing the project report and not in evolving practical solutions to the problem, which students will have to do on their own. The main reason why use of case studies are not recommended is that the resources that might have been used in solving the real life problem may not be the same as provided by the organization where students are receiving their training. Training instructors also encourage students to opt for a project that is relevant to their domain or qualifications.
Select Manageable Projects
Every Six Sigma Black Belt project needs to have a defined objective. Many students make the mistake of opting for a project having multiple objectives, which is often not achievable within the stipulated timeframe. Even after giving it their best shot, most of these students are often unable to make progress in their quality improvement projects. The only option left for these students is to either reduce the scope of their project objectives or opt for a completely new project, which will mean more hard work and time. In most cases, these students opt for the first alternative in order to allot adequate time to theoretical training as well.
No doubt, there are students who have completed even the most complex projects, but going by statistics, the number of failed attempts is a lot higher than the number of successful attempts. Students who are not sure of their abilities should not try to achieve everything at the first go. Instead, they should try to concentrate more on learning the basics involved in Six Sigma programs. There will be plenty of time in their professional career for solving the most complex of Six Sigma implementation problems in an organization.
During the course of the project, the primary objective of students should be to develop insights, which will help them a lot when they become true professional after the completion of the training program. Concentrating their efforts just on achieving the objectives may not help them, as by doing so, they are most likely to miss the basics of Six Sigma. The scope of objectives in a Six Sigma Black Belt project does not matter as long as students are able to develop a thorough understanding of their individual projects and are able to assess the impact it will have on the quality of the outcome.
read more »
Feb 18, 2012
How To Manage Six Sigma Teams
Six Sigma is a continuous procedure, which can help companies reduce the over all expenses and expenditures, and increase profits by streamlining operations, improving quality and eliminating all the problem areas.
Not only does 6 Sigma benefit an organization, but also the organization can benefit Six Sigma by managing it. Management must be led by highly qualified and trained individuals.
Managing a 6 Sigma team is not an easy task and it is fairly impossible for a single person to manage a 6 Sigma project on their own. 6 Sigma is a team process that requires teamwork at most levels. Managing a Six Sigma team starts from the uppermost levels of the organization. The company's leaders must provide resources to the teams and the authority to apply these 6 Sigma concepts in their day-to-day activities. Company leaders must also ensure that the company goals are associated with 6 Sigma projects and they must see to the removal of any obstacles that might stand in the way of 6 Sigma deployment.
Selection And Training Of Six Sigma Team Leaders
6 Sigma team leaders need to be properly selected and trained, as they play a crucial role in the management of the entire team. Not only are they responsible for managing the team, they are also the main change representatives for the Six Sigma process. 6 Sigma team leaders are directly responsible for managing their teams. A 6 Sigma Black Belt is the team leader and the responsibility of the Black Belt is to facilitate 6 Sigma as part of the culture.
Black Belts need to be trained in Six Sigma methodology and they must have prior experience in leading teams. The 6 Sigma team leader or the Black Belt must have leadership qualities, they should be able to understand the team dynamics and should be able to assign to each team member their individual roles and responsibilities. They help the teams achieve and sustain noteworthy results.
Important Aspects Of Managing A Six Sigma Team
Leading and mentoring are the two most important aspects of managing a 6 Sigma team.
As the leader, the Black Belt should be willing to adjust to circumstances. They should be able to recognize and manage occasional setbacks. By directly being involved with the team, the Black Belts help implement improvements in a quick and efficient manner. The main role of the Black Belt includes minimizing group conflict and handling out-of-control meetings. 6 Sigma includes practices that substitute hasty, imprudent habits with a dynamic, open and practical method of management.
It is important for the team leader or the Black Belt to be a mentor to everyone on the team. After their training, new candidates must be given proper guidance. This ensures the timely completion of projects and regular corrections being made in the course. 6 Sigma supports teamwork and the Black Belt should work towards creating a healthy and productive team environment. The Black Belt should arrange the team in such a way so as to best utilize the individual knowledge and techniques of the individual team members. Black Belts should help improve and increase members' morale. Every circumstance should be regarded as an opportunity by the Black Belt to help guide and instruct the individual team members and to improve the organization as a whole.
read more »
Not only does 6 Sigma benefit an organization, but also the organization can benefit Six Sigma by managing it. Management must be led by highly qualified and trained individuals.
Managing a 6 Sigma team is not an easy task and it is fairly impossible for a single person to manage a 6 Sigma project on their own. 6 Sigma is a team process that requires teamwork at most levels. Managing a Six Sigma team starts from the uppermost levels of the organization. The company's leaders must provide resources to the teams and the authority to apply these 6 Sigma concepts in their day-to-day activities. Company leaders must also ensure that the company goals are associated with 6 Sigma projects and they must see to the removal of any obstacles that might stand in the way of 6 Sigma deployment.
Selection And Training Of Six Sigma Team Leaders
6 Sigma team leaders need to be properly selected and trained, as they play a crucial role in the management of the entire team. Not only are they responsible for managing the team, they are also the main change representatives for the Six Sigma process. 6 Sigma team leaders are directly responsible for managing their teams. A 6 Sigma Black Belt is the team leader and the responsibility of the Black Belt is to facilitate 6 Sigma as part of the culture.
Black Belts need to be trained in Six Sigma methodology and they must have prior experience in leading teams. The 6 Sigma team leader or the Black Belt must have leadership qualities, they should be able to understand the team dynamics and should be able to assign to each team member their individual roles and responsibilities. They help the teams achieve and sustain noteworthy results.
Important Aspects Of Managing A Six Sigma Team
Leading and mentoring are the two most important aspects of managing a 6 Sigma team.
As the leader, the Black Belt should be willing to adjust to circumstances. They should be able to recognize and manage occasional setbacks. By directly being involved with the team, the Black Belts help implement improvements in a quick and efficient manner. The main role of the Black Belt includes minimizing group conflict and handling out-of-control meetings. 6 Sigma includes practices that substitute hasty, imprudent habits with a dynamic, open and practical method of management.
It is important for the team leader or the Black Belt to be a mentor to everyone on the team. After their training, new candidates must be given proper guidance. This ensures the timely completion of projects and regular corrections being made in the course. 6 Sigma supports teamwork and the Black Belt should work towards creating a healthy and productive team environment. The Black Belt should arrange the team in such a way so as to best utilize the individual knowledge and techniques of the individual team members. Black Belts should help improve and increase members' morale. Every circumstance should be regarded as an opportunity by the Black Belt to help guide and instruct the individual team members and to improve the organization as a whole.
read more »
Feb 16, 2012
Future Of Six Sigma
Since its introduction in the 1990's, 6-Sigma has become the buzzword in both the manufacturing and service industries. The various methodologies used in 6-Sigma are based on a disciplined and data driven approach that help in eliminating defects and achieving near perfection by restricting the number of possible defects to less than 3.4 defects per million.
The methodologies are effective in managing business processes of both the manufacturing and service industries. In manufacturing industries, the concepts and methodologies are used for reducing the number of defects whereas in service industries, they are used mainly for reducing transactional errors.
Although many companies have been successful in reducing the number of defects through Six Sigma projects, the arguments raised against the efficacy of 6-Sigma in all aspects of business processes still do not seem to die down. Some management experts think that Six Sigma is inherently flawed, as it does not take into account the flaws that might be present in the system itself. They are of the opinion that the analytical and statistical tools used in 6-Sigma only expose flaws in the execution and do not account for a process that itself is riddled with defects.
Supporters of Six Sigma offer a different viewpoint. According to them, quality management tools such as Total Quality Management (TQM) and 6-Sigma are conceptually quite similar except for their labels. Business organizations may use any of these for improving overall quality. However, they often give preference to 6-Sigma as they believe that Six Sigma is more than just a process improvement program and is based on concepts that focus on continuous quality improvements. They have the opinion that 6-Sigma concepts combine statistical measurement tools with contemporary management techniques for achieving extraordinary results.
The Limited Use Of Six Sigma
6-Sigma gained prominence as an effective quality improvement technique after it was successfully implemented in Motorola. Since then, many large organizations have implemented 6-Sigma programs and improved the quality of manufactured goods or services rendered. However, the full potential of 6-Sigma has not been realized so far because many competent small to medium level enterprises have still not implemented Six Sigma programs. These enterprises have all the resources to implement such programs, but are often wary of the final certification, as they believe that it is meant only for large organizations. These companies often do not realize that 6-Sigma delivers the same benefits to both large as well as small business enterprises. The only difference may be in the volume of goods manufactured or services rendered.
The Future Of Six Sigma
6-Sigma may appear similar to other quality management tools such as TQM or Kaizen Events, but in reality, it is quite different. Other quality management programs often reach a stage after which no further quality improvements can be made. 6-Sigma, on the other hand, is different as it focuses on taking quality improvement processes to the next level. This means that 6-Sigma has the potential to outlast other quality management programs in the future.
The scope of 6-Sigma is also much broader than other quality management programs as it can be applied to every business process of an organization. The future is bright for 6-Sigma programs with the growing awareness in small and medium enterprises about the potential benefits that can be derived from implementing such programs.
read more »
The methodologies are effective in managing business processes of both the manufacturing and service industries. In manufacturing industries, the concepts and methodologies are used for reducing the number of defects whereas in service industries, they are used mainly for reducing transactional errors.
Although many companies have been successful in reducing the number of defects through Six Sigma projects, the arguments raised against the efficacy of 6-Sigma in all aspects of business processes still do not seem to die down. Some management experts think that Six Sigma is inherently flawed, as it does not take into account the flaws that might be present in the system itself. They are of the opinion that the analytical and statistical tools used in 6-Sigma only expose flaws in the execution and do not account for a process that itself is riddled with defects.
Supporters of Six Sigma offer a different viewpoint. According to them, quality management tools such as Total Quality Management (TQM) and 6-Sigma are conceptually quite similar except for their labels. Business organizations may use any of these for improving overall quality. However, they often give preference to 6-Sigma as they believe that Six Sigma is more than just a process improvement program and is based on concepts that focus on continuous quality improvements. They have the opinion that 6-Sigma concepts combine statistical measurement tools with contemporary management techniques for achieving extraordinary results.
The Limited Use Of Six Sigma
6-Sigma gained prominence as an effective quality improvement technique after it was successfully implemented in Motorola. Since then, many large organizations have implemented 6-Sigma programs and improved the quality of manufactured goods or services rendered. However, the full potential of 6-Sigma has not been realized so far because many competent small to medium level enterprises have still not implemented Six Sigma programs. These enterprises have all the resources to implement such programs, but are often wary of the final certification, as they believe that it is meant only for large organizations. These companies often do not realize that 6-Sigma delivers the same benefits to both large as well as small business enterprises. The only difference may be in the volume of goods manufactured or services rendered.
The Future Of Six Sigma
6-Sigma may appear similar to other quality management tools such as TQM or Kaizen Events, but in reality, it is quite different. Other quality management programs often reach a stage after which no further quality improvements can be made. 6-Sigma, on the other hand, is different as it focuses on taking quality improvement processes to the next level. This means that 6-Sigma has the potential to outlast other quality management programs in the future.
The scope of 6-Sigma is also much broader than other quality management programs as it can be applied to every business process of an organization. The future is bright for 6-Sigma programs with the growing awareness in small and medium enterprises about the potential benefits that can be derived from implementing such programs.
read more »
Feb 4, 2012
Lean Production
To start off with, what is lean production? One definition of lean production is; a manufacturing performance improvement approach and philosophy that emphasizes the minimization of the amount of all the resources (including time).
It involves identifying and removing non-value-adding activities in design, production, supply chain management, and dealing with the customers. Put simply it's a way to cut costs by taking away/minimizing time consuming activities. Note that implementing lean production is difficult.
The lean manufacturing history is thought to stem from the research Ford carried out in 1986 on Toyota, the business strategies implemented reduced production times, giving lower costs per unit, but it also gave an increase to quality. The lean manufacturing success of Toyota sparked the beginning of a new production method.
A common mistake among students is to identify lean production with Just in Time (JIT), although it is a part of it, it is not the basis of the production method. When/if a business decides to become a lean producer there and 4 principles they must apply for the lean strategy to work:
Lean quality
Lean design
Lean people management
Lean component supply
Lean Design
The first of the lean techniques involves assessing and improving upon product development, or product modifications, so that the firm can quickly and efficiently adapt to the changing business environment. Computer aided design (cad software) is one of the most flexible and quickest method for firms to design new products quickly, and transfer new product ideas from the conception stage to the market, this can lead to first mover advantage. First mover advantages include such things as; A high, if not 100% market share in the product, brand loyal customers (since they can see you as the first, therefore the best) and allows the business to establish a foot-in-the-door effect, which is needed to focus customers on their specific product when the copy firms move in.
When lean companies look for speedy product development and launch, time-based management plays a crucial role. Time-based management is, essentially, minimizing the time between product design and product launch. It looks for the areas in the business where simultaneous engineering can take place (decision trees are a good example of this) which cuts costs by saving time and money.
Lean quality
Quality is an expensive area for business organisations, but there are greater costs when ignoring quality. Bad quality can lead to bad publicity, a poor brand image and a great loss of customer loyalty. On the human resource side of things, one of the best ways to increase quality is by training the employees in all aspects of the production, making them multi skilled and making them feel more empowered giving greater motivation. The importance of quality will also be reflected throughout a firm's culture. Quality techniques include quality circles and kaizen groups: using both of these would be the best way to bring in ideas from employees, this brings greater employee motivation and productivity.
Lean people management
What is people management? People management is simply as it says, a way in which people involved in and outside the business are treated and used. Lean producers will aim to fully utilize all the skills and ideas of their workers. They will attempt to ensure that all their workers are fully trained and multi skilled in the businesses production methods. Empowerment and delegation are key to lean people management and they therefore create participation schemes to enable staff to contribute their ideas and experiences. This not only makes them feel valued, but also benefits the firm by getting ideas from experienced workers. This delegation of decision-making power makes workers feel more involved and, therefore, more committed to the business objectives of the firm. Motivation is key to productivity and therefore lower costs.
Lean Component supply
Just-in-time (JIT) is a system of stock management that involves only requesting a new supply of materials once there is a definite need. This is the moment students say 'Good, JIT, I know all about that.' But, in addition to understanding the benefits of JIT such as: saving money on space and insurance and removing the risk of holding stocks that may become damaged or obsolete (as with food), the opportunity costs also need to be considered. The firm will no longer be able to benefit from bulk-buying discounts (economies of scale) or be able to respond immediately to a customer order. The conditions necessary for JIT to work also have to be recognised. The firm must have reliable suppliers who are able to supply on demand with a short delivery time. Proximity is always good and accessibility is also important for a quick supply and delivery.
Conclusion
To summarize, the key aspects of lean production students should know that: Lean production is expensive, there are high start up costs and it cannot be applied to every business, most economies of scale advantages are lost and it can take a long time for the workforce to adapt to a such a change and some employees may reject the changes.
read more »
It involves identifying and removing non-value-adding activities in design, production, supply chain management, and dealing with the customers. Put simply it's a way to cut costs by taking away/minimizing time consuming activities. Note that implementing lean production is difficult.
The lean manufacturing history is thought to stem from the research Ford carried out in 1986 on Toyota, the business strategies implemented reduced production times, giving lower costs per unit, but it also gave an increase to quality. The lean manufacturing success of Toyota sparked the beginning of a new production method.
A common mistake among students is to identify lean production with Just in Time (JIT), although it is a part of it, it is not the basis of the production method. When/if a business decides to become a lean producer there and 4 principles they must apply for the lean strategy to work:
Lean quality
Lean design
Lean people management
Lean component supply
Lean Design
The first of the lean techniques involves assessing and improving upon product development, or product modifications, so that the firm can quickly and efficiently adapt to the changing business environment. Computer aided design (cad software) is one of the most flexible and quickest method for firms to design new products quickly, and transfer new product ideas from the conception stage to the market, this can lead to first mover advantage. First mover advantages include such things as; A high, if not 100% market share in the product, brand loyal customers (since they can see you as the first, therefore the best) and allows the business to establish a foot-in-the-door effect, which is needed to focus customers on their specific product when the copy firms move in.
When lean companies look for speedy product development and launch, time-based management plays a crucial role. Time-based management is, essentially, minimizing the time between product design and product launch. It looks for the areas in the business where simultaneous engineering can take place (decision trees are a good example of this) which cuts costs by saving time and money.
Lean quality
Quality is an expensive area for business organisations, but there are greater costs when ignoring quality. Bad quality can lead to bad publicity, a poor brand image and a great loss of customer loyalty. On the human resource side of things, one of the best ways to increase quality is by training the employees in all aspects of the production, making them multi skilled and making them feel more empowered giving greater motivation. The importance of quality will also be reflected throughout a firm's culture. Quality techniques include quality circles and kaizen groups: using both of these would be the best way to bring in ideas from employees, this brings greater employee motivation and productivity.
Lean people management
What is people management? People management is simply as it says, a way in which people involved in and outside the business are treated and used. Lean producers will aim to fully utilize all the skills and ideas of their workers. They will attempt to ensure that all their workers are fully trained and multi skilled in the businesses production methods. Empowerment and delegation are key to lean people management and they therefore create participation schemes to enable staff to contribute their ideas and experiences. This not only makes them feel valued, but also benefits the firm by getting ideas from experienced workers. This delegation of decision-making power makes workers feel more involved and, therefore, more committed to the business objectives of the firm. Motivation is key to productivity and therefore lower costs.
Lean Component supply
Just-in-time (JIT) is a system of stock management that involves only requesting a new supply of materials once there is a definite need. This is the moment students say 'Good, JIT, I know all about that.' But, in addition to understanding the benefits of JIT such as: saving money on space and insurance and removing the risk of holding stocks that may become damaged or obsolete (as with food), the opportunity costs also need to be considered. The firm will no longer be able to benefit from bulk-buying discounts (economies of scale) or be able to respond immediately to a customer order. The conditions necessary for JIT to work also have to be recognised. The firm must have reliable suppliers who are able to supply on demand with a short delivery time. Proximity is always good and accessibility is also important for a quick supply and delivery.
Conclusion
To summarize, the key aspects of lean production students should know that: Lean production is expensive, there are high start up costs and it cannot be applied to every business, most economies of scale advantages are lost and it can take a long time for the workforce to adapt to a such a change and some employees may reject the changes.
read more »
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