Nowadays organizations face challenges in the form of intense competition , technology and quality demands. Therefore, to compete in this kind of environment, effective and efficient management is required to for the existence of the company. The basic idea behind the lean management is to deliver more value and less waste. There are many techniques to apply lean management into the projects. Therefore, lean management describes a set of principles of management to tackle waste. It defines how the waste can be eliminated in order to develop an operation that is faster, more dependable and it produces a high quality of products and provide services. Also, it operates at low cost.
The UK based company JCB production system has developed the system of lean management and has incorporated this in all its systems. The standardization technique is utilized to deal with the lean management. This lean management has benefits like improvement in quality, cost and delivery.
The Supply chain is a network of facilities that produces raw materials, transforms them into intermediate goods and then the final product. After the final product is ready the product is distributed to the customers through a distribution system. Therefore the basic aim of the supply chain is to add value to the product with minimum cost. Also, in other words, it links all the supply agents with a single team to provide a cost effective and valuable product.
This is the era of globalization (Otto, 2010). Due to so much competition in the market every company wants to maintain its position in the market and do the efforts so that market share of the company does not fall. Therefore company applies many techniques to remain active in the market. According to the researchers, these techniques help in satisfying the needs of the customers that are quality product, less price and easy availability (Stock, 2009). Therefore, according to the researchers to improve competitive position in the market and to overcome the economic crisis, the company decides to do the following:
To improve the competitive effects the location of warehouse plays an important role. It is also important to outsource the warehouse space (Baker, 2017). This helps in timely delivery to the customers. This leads to the customer satisfaction
Warehouses are used in many stages in the supply chain. These are used during
Also, according to the author due to increase in the competitiveness modern supply chain also undertook the roles of returns and transshipments. These kind of facility is also provided to the customers so as to gain competitive advantage (Kolinska, 2016). Therefore warehouse is needed for the purpose of transshipment, return of goods, and also assembling facility. Even though the modern supply chains have taken various roles, but the traditional ways of supply chains are very significant. But due to the warehouses the company’s own inventory is put on hold. Also, the problem of cross docking is arrived. Cross docking means when a customer orders a product the from a different area where the warehouse is not located then the delivery time is expanded a lot. Therefore, the customer suffers due to lack of supply chaining and therefore company reputation is spoiled according to the researcher. The researchers state that to solve this problem the design of flexible warehouses is required. The flexibility required is towards upwards as well as downwards. Therefore, flexibility is achieved by rentals and third party logistic contracts. All the necessary conditions like area and length of warehouses are mentioned in the contracts. Similar in the case of JCB which has its warehouses located in different parts where the requirement of the product is most (Ecklund, 2010).
A key role of inventory is that it acts as mediator between demand and supply. Because of the time taken by the stock to reach customers, the supply time has been lengthened. Due to this the stock in the warehouses is increasing. A Similar problem is faced by JCB. Due to assembling in different warehouses the raw products are produced in different warehouses. The stock of raw goods are increasing. Therefore, it is a matter of concern to hold inventory. Holding inventory results in deterioration, damage and blocking up the money (Werner, 2010).
When we consider the lean supply chain the inventory is treated as the waste by the researcher. Therefore, various techniques are used by JCB to reduce the amount of inventory. These are as follows:
The main lean management principles according to researchers of JCB are as follows
The main motives behind the lean management can be understood simply by three aspects that are Project drivers, Objectives and Decision for lean as optimization method. Basically going towards lean management is a desired way to improve competitiveness. The main objectives of lean management are to reduce inventory and lead times. This results in more economically growing of the company and also the competitiveness are also increased.
Implementation is possible by mainly three ways that are awareness of why change is necessary, the capacity to deal with the change, and supportive culture in the organization. Change is necessary so as to deal with the external environment and exposure to this is necessary. Therefore, according to the researchers implemented the change due to the awareness regarding the environment and also the point of view regarding the company has changed by applying the lean management. Due to the capacity of resources the JCB enabled the change and the principles were adopted. Also staff and the members of the company helped and compromised during the change so as to get better future the company implemented the management principles (Kedem, 2009).
There are various barriers to apply lean management to the organization. Though the outcomes of implementing the lean management principles will help the organization to gain competitiveness. This will also reduce the wastage and time utilization can be done properly.
Inventory management is very important for applying lean management in the company. The main problem faced during the inventory management is the large stock of goods that is placed in the warehouse. The second problem is the holding of the stock due to any time requirement which results in the degradation and depreciation of the product quality. By applying lean management the issues regarding the inventory can be sorted. These simple lean management principles will help the company to deal with these inventory issues (Krar, 2012).
With the help of lean management the goal of the company will be having the inventory as close to zero as possible. Effective inventory management allows a company to meet the customers’ expectation of product availability. For example JCB inspired from Toyota has implemented the principle of lean management and has very less raw products in the inventory. The company works on the principle of demand and supply so as to reduce the size of the inventory.
By developing the parts according to the need: By developing the parts of the final product like JCB should depend on the need of the stock. The supply of the final product can be done after a few days so that to avoid the inventory stock increase (Diekmann, et al., 2004). JCB follows the same principle so that the inventory does not have so much of the stock. The final product is supplied after the few days of order. Also, in some cases the customer cancels the order, therefore the JCB will go into inventory. To avoid this, the product must be delivered after some days of the order (Shukla & Garg, 2011).
Warehouses play an important role in managing the inventory. It serves as an important part of the company by managing the supply and demand. It acts as the intermediater between the supply and demand. The main issues related to the warehouse are controlling the inventory, lead time and the third one is working capital. Due to the globalization and providing satisfactory services to the customers the companies are holding lots of stock in the warehouses and this results in an increase in the expenses of the company. As, the warehouse requires the maintenance and product also require the maintenance and service. All this is creating a lot of wastage of money as well as creating a lot of waste in the warehouses. As per the researcher the stock in the warehouses is treated as the waste. Lean management help in solving these problems and it is also environment friendly. These techniques also help in increasing the competitiveness of the company (Phogat, 2013).
Lean warehouse management plays an important role in controlling the inventory, reducing lead time and working capital. Lean management also helps in improving financial expenses of a company.
Lean management can be applied in the warehousing by controlling the stock. The stock controlling can be done with the help of the demand list. The production can only be done only if there is a demand of the product. No production will be done anyways. This can be achieved with the help of warehouse staff. The register of demand should be maintained so that no extra production of goods can be done. Also, regular check on the inventory will also help in reducing the stock (Seely, 2008).
Also, by reducing the time of delivery of the product the management can be done. Time of delivery can be reduced if and only of traditional way of warehousing is followed. For example the same criteria is followed by JCB. The workers are appointed instead of machinery at the warehouses so that any problem like fault in the tool or product can be handled. Also, maintenance can be done by the workers. This will indirectly affect the delivery time as the product is made with good care and will be in time. So, the final product is also delivered in time (Maree, 2015).
Working capital can be reduced by doing the good quality of work at one time and there should be no defects in the product. This can be achieved by employing workers at the warehouses and also by making a check over the machinery. The work should be stopped if there is any fault in the machinery.
Also, supply chain management plays an important role in the making and delivery of the final product. The proper working of the chain management will help with delivery of the raw goods in the warehouses in time. As a result of which the product is ready in time. Due to any faults in chain management the delay in the service occurs that leads to wastage of time as well as money. Therefore, supply chain management plays an important role in applying lean management to a company like JCB.
Conclusion:
From all the above discussions it is clear that applying the lean management system to the company will help the company to save time as well as money. Also supply chain management plays an important role in the application of lean management. Effective supply chain management can be done with the help of better communication between each unit of the warehouse. Therefore, an effective communication plan should be built so that the customer demand and supply can be communicated properly to each warehouse (Harsha & Nagabhushan, 2013). This will result in less stock in inventory. JCB used the same principles of lean management, It helped in reducing the stock in the warehouses and also reduced the delivery time of the JCB. Effectively applying the lean management in the company took a lot of efforts. Reduction in the stock and inventory took a lot of time. But due to this the competitiveness is increased.
It is also discussed that employing workers in the traditional manner will help in the reduction of faults in the final completion of product. This is done with the help of workers in the warehouses who will keep an eye on the manufacturing process. Also, they will hold the work if default persists. This helps in supplying the good quality material to the customers (Kumar, 2012). Customer will be satisfied and the possibility of the return will be reduced. This will enhance the company status in the market and will result in increasing the market share as well. Also, it will save money as well as the time of the company. The same is done by JCB by supplying good quality trucks, JCB’s and other machineries with no fault in the production.
Therefore, JCB focused on the principles of lean management and has successfully implemented the management in the company. Supply chain management has played an important role. This approach helped in the effective and efficient working in the company and added the value to the company. Due to this approach JCB has saved money and has reduced its expenses on the warehousing. Also, time is utilized in the proper manner.
References:
Baker, P., 2017. The Role and Design of Warehouses in Modern Supply Chains, Available at: https://www.novapublishers.com/catalog/product_info.php?products_id=28058
Diekmann, J., Krewedl, M. & Balonick, J., 2004. Application of lean manufacturing principles to construction, Available at: https://www.ce.berkeley.edu/~tommelein/pt191report/CII%20Lean%20Construction%20Final%20Report.pdf
Ecklund, D., 2010. Warehousing Efficiency and Effectiveness in the Supply Chain Process, Available at: https://www.scmr.com/article/warehousing_efficiency_and_effectiveness_in_the_supply_chain_process/
Harsha, N. & Nagabhushan, S., 2013. Enhancing Project Management Efficiency using Lean Concepts. IOSR Journal of Mechanical and Civil Engineering (IOSR-JMCE), October, 8(4), pp. 20-22.
Jeffrey, M., 2014. Organisational transformation programme that developed the JCB Production System and ensured that JCB remain the world leaders that they are toda: LT Consulting, Available at: https://www.lt-consulting.com/wp-content/uploads/2014/06/JCB-Case-Study.pdf
Kedem, Y., 2009. A conceptual framework for applying lean management methodology in higher education institutions, Available at: https://www.mofet.macam.ac.il/prof/nihul/Documents/A_CONCEPTUAL_FRAMEWORK_FOR_APPLYING_LEAN.pdf
Kolinska, K., 2016. Role of warehouse space in the supply chain, Available at: https://www.wsl.com.pl/tl_files/wydawnictwo/publikacje/logistics_management_2016/Logistics_Management-modern_development_trends_part2_chapter_4.pdf
Krar, S., 2012. Lean Inventory control, Available at: https://www.automationmag.com/images/stories/LWTech-files/57%20Lean%20Inventory.pdf
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