Lean management refers to the process of running an enterprise using the principle of continuous improvement. This approach takes into account the long term goals of the company and strives to make certain small and incremental changes in the organization to enhance quality of service and improve efficiency (Fullerton, Kennedy and Widener 2014). The main purpose of lean manufacturing is to systematically minimize waste that is produced during the manufacturing process. Lean management would analyze the business process in detail and identify the steps that result in waste of money, time or effort. Consequently, measures would have to be taken to reduce the same (Clark, Silvester and Knowles 2013). Essentially, steps of the manufacturing process which do not contribute to the value of the organization should be eliminated.
Lean management in the supply chain would not be reserved simply for manufacturing companies. Any organization that has an agenda to streamline its operations and reduce waste should implement a lean management strategy for long term gains. In this process, each area within the supply chain would come under scrutiny (Sundar, Balaji and Kumar 2014). The various departments and wings of an organization would have to function in accordance with each other in order to ensure smoother flow of product and services in the supply chain. The following paper is a review of literature pertaining to lean management and lean manufacturing. Additionally, critical analysis has been provided of the lean supply chain management policies followed by organizations.
Critical analysis of lean manufacturing tools
Lean manufacturing may be defined as the process through which efficient products can be manufactured in the least amount of time at the lowest possible prices. With advancement in technology, lean manufacturing has now become a highly integrated system which includes a number of tools and techniques like Just in Time practices, work teams, cellular manufacturing, quality systems, A3 and 5S. According to Clark, Silvester and Knowles (2013), A3 can be defined as a structured technique that can be used for problem solving and also for continuous improvement in lean manufacturing. In lean management, there are bound to be numerous problems and it is important to be able to find solutions in a structured way (Schwagerman and Ulmer 2013). A3 thus provides a strict and relatively simple approach of finding a solution to these problems.
However, Teich and Faddoul (2013) have proposed an argument that 5S is a more efficient tool when it comes to lean manufacturing. This tool emanates from the Japanese manufacturing process and consists of the following – seiri (sort), seiton (straighten), seiso (shine or sweep), seiketsu (standardize) and shitsuke (sustain). This tool states that a manufacturing process should eliminate any item that cannot be sorted and organize the process in such a manner that work flow is straightened and efficiency is optimized (Filip and Marascu-Klein 2015). The flow of the manufacturing process should be clean and standardized so as to maintain consistency. The purpose of this tool is to ensure that the lean manufacturing system is sustainable over a prolonged period of time.
According to Chen, Cheng and Huang (2013), there are five principles pertaining to lean management. They are value, pull, value stream, flow and perfection. Value may be defined as the needs of a customer with respect to a particular product. However, as Kreimeier et al. (2014) argued, the timeline for the manufacture and delivery process would have to be taken into account in value stream. These must be aligned with the expectations of the customer to ensure maximum customer satisfaction. Value stream follows the principle of value. Once the goals and objectives of the company have been specified, the value stream of a product must be mapped (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-Arbós 2013).
In this mapping phase, the entire process from the acquiring of raw materials to the final delivery of the product would be chalked out. The flow of the product, as it passes from phase to phase would be planned on the map (Bhamu and Singh Sangwan 2014). This would help in identifying and removal of unnecessary steps and reduce wastage of time. Once the map has been drawn and waste eliminated, the flow of the product would be smoother and more efficient. The third principle ensures that the product moves from one phase to the next without delays or interruptions. It would occur in a tight sequence, so that the product can reach the customer in a timely manner. This would require cross functional cooperation between the various departments of the organization. In the fourth principle, the time to market or time to customer would be improved (Mostafa, Dumrak and Soltan 2013). This would facilitate a steady flow of products to the market as and when needed. The customer would be able to pull the particular desired product when he or she needs it. This means that products would not have to be manufactured in advance. This would automatically reduce the amount of waste generated. The final principle of perfection is probably the most important one since it revolves around continuous improvement. It must be remembered that lean manufacturing is a dynamic system and would require constant vigilance and effort in order to ensure successful implementation of the lean process (Dombrowski and Mielke 2013).
According to Mersino (2013), emotional intelligence may be defined as the process of managing and dealing with emotions and personal feelings in a tactful and effective manner. However, Mayer, Caruso and Salovey (2016) elaborated on this vague definition and defined emotional intelligence in relation to leadership qualities. It was then defined as the ability of an individual to monitor his or her own emotions, along with that of others, discriminate among these emotions and finally use the obtained information to direct thinking process and actions.
Lean management may be termed as a process that requires a number of steps, spread out across a number of departments. As such, there are bound to be conflicts. It is then the duty of the lean manager to pave the way for effective communications, resolution of conflicts, solution to challenges and to create a warm and empathetic environment for operations. However, the concept of emotional intelligence in lean management has garnered a number of criticisms. For example, Murphy (2014) states that emotional intelligence can often get in the way of a person’s ability to think and analyze a situation critically. This could be detrimental to the lean manufacture process as a whole and resist positive thoughts.
According to Olakitan (2014), emotional intelligence, or EQ, is extremely important for the smooth functioning of any organization. It essentially comprises the following components – self management, self awareness, relationship management and social awareness. Emotional intelligence in a lean manager would help in reducing stress in the workplace. It would also help the managers identify his emotions and that of the people working for him (Druskat, Mount and Sala 2013). In order to ensure smooth functioning of the lean manufacturing process, it is important for the leader or manager to connect with his team members on an emotional level. This would also help in resolving conflicts and reduce chances of chaos in the process.
Emotional intelligence has been found to contribute to the value of the organization as a whole. In such lean processes, the managers would have mastered the art of employee engagement and would be able to facilitate immediate understanding of the situation. Additionally, emotional intelligence enhances employee motivation (Coetzee and Harry 2014). The corporate environment is a highly competitive one. Employee motivation can be said to be one of the pillars of success for an organization in this case. Earlier, in lean management as stated by theorists, the lean management practices were rational and analytical and failed to acknowledge the emotional capabilities of the employees. However, as Njoroge and Yazdanifard (2014) stated, employees are no longer motivated simply by monetary rewards. They are more attracted and indebted to organizations that take into account their emotional and social intelligence.
A large number of companies in the United Kingdom and across the globe have successfully implemented lean management principles. According to Martinez Jurado and Moyano Fuentes (2014), Toyota would be one of the first companies to have implemented this policy. The management system which is now known as Toyota Production System entails lean management in the logistics and manufacturing segment of the company, along with customer and supplier interactions. The policy was first implemented by the founder of the company, Sakichi Toyoda, in accordance with his son and the chief engineer. The first step of the process was to eliminate the seven kinds of waste at the organization. These included overproduction, waiting, inappropriate processing, unnecessary inventory, defects, transportation and excess motion. The main purpose of such a system was to optimize each and every step in the manufacturing process. This would also reduce chances of waste and defects, so as to provide for seamless and flawless operations. Such a system would also minimize manufacturing costs. This would naturally increase the profitability of the company and also help in producing products that the customer demands. The Toyota Production System is a flexible one that can adapt to the changing circumstances. It would also strengthen the relationships between the suppliers and the customers. A Just in Time manufacturing system would mean that there is no excess of raw materials, thus reducing waste generated.
However, as Camacho-Miñano, Moyano-Fuentes and Sacristan-Diaz (2013) argue, the lean management process has undergone a revolutionary change since it was first implemented by Toyota. According to these authors, Henry Ford, who founded the Ford Motor company, was one of the first proponents of such a management practice. Ford opined that every organization should strive to reduce waste and not simply improve on the existing systems. One of the top footwear brands in the world today, Nike too follows a principle of lean manufacturing. Their system is based on a foundation of innovative products and flawless manufacturing (Distelhorst, Hainmueller and Locke 2016). The company has integrated lean principles in its manufacturing process to provide for continued improvement. At Nike, the lean manufacturing policy is both a business strategy and an opportunity for long term improvement. It is aimed at production of top quality products and simultaneously reduces the waste generated. For example, one of the most important aspects of their lean manufacturing system is training programs for the employees. Employees involved in the manufacture would be trained to improve operations from the grassroot levels.
According to Jacobs, Chase and Lummus (2014), a number of companies are currently implementing lean management in the supply chain industry in the United Kingdom. This is because such a practice would enhance their competitive position in the market. The ultimate purpose of the supply chain process is to ensure that the company gains a competitive edge in the industry. As such, the principles of lean management can be integrated into the supply chain to improve the flow of product to the customer. In the supply chain industry, the process of lean management would lay emphasis on the value of the manufacture process. Moreover, it is important to consider the perceived value from the customer’s point of view. Once insight into the value stream is gained, lean would also recognize opportunities for adding value to the process. This would enhance the effectiveness of the management system as a whole. It would reduce costs and at the same time increase the profitability and revenue outcome of the company (Cooper 2017). Lean management in companies like Tesco in the United Kingdom have helped in managing variability, controlling volatility and reducing costs associated with supply chains. Furthermore, there are a number of challenges in supply chain management which require the implementation of short interval control and analysis of the root cause. With the help of lean, available to promise quantities and sales promotion strategies would also be optimized. Since the waste produced would be decreased, high inventory levels would also be minimized.
However, it must be argued that the integration of lean principles in the supply chain industry in the United Kingdom is still in the exponential phase. As a result, a number of companies are still struggling to implement these policies into the supply chain lines. In addition, as Dües, Tan and Lim (2013) argue, the need of the hour is to ensure that the supply chain industry is environment friendly. Yet, a large number of companies are still struggling to incorporate green lean practices as part of their supply chains. It is important to use lean manufacturing processes that not only reduce costs but also reduce the toll on the surrounding environment.
According to Martinez Jurado and Moyano Fuentes (2014), a large number of companies in the supply chain industry have implemented the lean management principles to improve efficiency of operations. On the other hand, as Yusuf et al. (2014) have argued, a number of other industries have implemented the same principles, like the oil and gas industry. Similarly, Fernie and Sparks (2014) have opined that not just the manufacturing industry, the retail industry too can make use of the lean management principles. One of the major similarities in all these industries would be that the management principle is based on a policy of eliminating waste as far as possible. Across all these industries, the purpose of lean management is same – to optimize the manufacturing and production and process and to make it as efficient as possible. This would not only help in streamlining the production process but also increase the competitive positioning of the organization. Moreover, such a streamlined process would ensure that the customer receives the product on time and that it meets his expectations. This would automatically increase customer satisfaction and customer retention rates.
Nevertheless, since each industry is unique, the lean management principles would vary from industry to industry. For example, as Yusuf et al. (2014) mentioned, implementation of lean management would increase the agility of the production in the oil and gas industry. In this particular industry, more than manufacturing, agility plays a key role in determining business performance. This industry is a highly unpredictable one, encountering high levels of risk and volatility on a regular basis. Agility would refer to the way an organization responds to such a situation. It would also imply the speed at which such issues are addressed and resolved. Moreover, it would help companies in this industry save energy, which would not only be a step towards green lean management but also reduce waste. In the retail industry, the competition is fierce. Garment retailers are pressurized to manage their production and operations in such a manner that quality of products is improved. Lean manufacturing in this industry would reduce the bottlenecks encountered in the inventories. This is known as lean retailing (Noda 2015). This practice ensures that the customer gets the product when he or she wants it and in the way he or she wants it.
Although most companies in the supply chain industries are implementing lean management, some companies are doing it more efficiently than others. It is a well known fact that any business strategy can be successfully implemented in an organization provided it has the requisite resources and support. Large scale supply chains have the necessary raw materials, finances, human resources and capabilities required to implement lean management. According to McCann et al. (2015), in large companies like Tesco or Toyota, the manufacturing process is planned from the beginning to the start. Every step of the process is evaluated and assessed to study the amount of waste produced. Measures are then taken to remove these wastes. Such an elaborate process would require support, funding and resources that small scale companies lack.
Powell, Riezebos and Strandhagen (2013) argue that in medium and small scale companies, implementing lean management can be challenging because of a dearth in resources. Moreover, these companies lack the planning and infrastructure that large scale supply chains have. Such companies have the means to completely alter their business operations with minimum or no damage to sales and profits. But a number of smaller enterprises have incurred losses while trying to incorporate the same into their organizations.
Clark, Silvester and Knowles (2013) claimed that implementation of lean management principles would benefit all businesses in a number of ways. On the other hand, Arnaboldi, Lapsley and Steccolini (2015) argue that such practices would not be practical for smaller supply chain industries. This is because to shift an organization from traditional manufacturing systems to lean ones would pose a serious challenge. Such a change involves all the stakeholders, including the employees and the customers. Such companies are usually segmented on the basis of characteristics, individual personalities, knowledge, abilities and skills. One of the main issues that arise during implementation of lean management would be the managerial and cultural impacts of the process. Conflicting measures would create illusions of progress, where lean is used as a tool instead of a technique of working.
Moreover, such industries are deficient in resources like expertise, time and financing. Smaller supply chain industries are founded on principles of a firm corporate culture, which can be difficult to overcome. Additionally, in such industries, the emphasis would be on the individual tasks, rather than the comprehensive set of goals and objectives of the entire organization. Resistance to such changes is more common in smaller companies than larger ones. Finally, ignorance about various tools and techniques of lean management and lack of robust implementation strategies could pose to be a challenge.
According to Handel (2014), lean management is crucial for the success of small scale companies in the supply chain industry. Theoretically speaking, such practices are expected to boost profits, improve operations and enhance the performance levels of the organization. There are a plethora of benefits associated with lean management. Since unnecessary wastes or steps have been eliminated, the operations would be experiencing higher levels of efficiency. All steps which were surplus and added no value are removed. This would reduce defects and flaws within the system. Using lean management would reduce the amount of flaws in the system and consequently enhance the quality of the end product. Such a practice emphasizes on the need for top quality products and works towards the desired results. The root cause underlying the defects would be specified and measures would be taken to eradicate the same. Since the process of production would be in compliance with the demands of the customer, the company would be able to attain better results through fewer employees. This paves the way for better use of human resources.
However, as Dal Forno et al. (2014) argue, there are numerous issues that plague supply chain industries when it comes to lean management. One of the most common challenges would be maintenance. It must be remembered that lean management is constantly evolving and it is a dynamic process. Once a company utilizes lean management, it is expected that the policies would be evaluated and revived from time to time to ensure that it is up to date. Such commitment would require a lot of resources and financial support that most companies lack. Moreover, the lean management systems are usually knowledge intensive. This means that lean not only penetrates the system, but the minds of the people involved in it. Thus, this gave rise to the concept of “thinking lean.” However, most companies would not be inclined towards investing huge sums of money and time in developing such a mindset. As mentioned earlier, lean management requires drastic changes to the way a company operates. Most companies might not be agile or strong enough to take on the pressure of such change. Additionally, every member of the organization must be convinced of the importance of lean management. Disagreements or conflicts and refusal to coordinate could pose as an obstacle in the path of successful implementation.
According to Douglas, Antony and Douglas (2015), there are eight kinds of waste in lean management. They are – transportation, inventory, motion, waiting, defects, overproduction, non utilized talent and over processing. Defects refer to the flaws in the product manufactured or those within the manufacturing process itself. Overproduction refers to the process of producing too many products without first evaluating customer demands. Waiting refers to the time wasted spent waiting for a previous step to be completed. Non utilized talent refers to the way employees and human resources within an organization are not effectively utilized. Transporting items unnecessarily often leads to waste of both time and valuable resources. Inventory or data that has not been processed also leads to waste. Unnecessary or excess motion of equipment, information or people due to various economic or space issues also contributes to the waste generated. However, Fercoq, Lamouri and Carbone (2016) have added to the list of wastes and emphasized on the importance of green practices in waste reduction.
According to Douglas, Antony and Douglas (2015), the first step in the waste reduction process would involve an identification of the eight wastes in lean management. For example, an enterprise resource planning policy or ERP, may be used by an organization. Such a process would evaluate the utilization of resources and assess if they are being used in an optimum manner. Similarly, there are ways of tracking and identifying defects within the system using paid software. A Just in Time manufacturing system may be used to identify room for improvement. Waiting can be reduced through sufficient training, improved changeovers, enhanced communication systems, processing in small batches and even workstation loading. Evaluation of employees and their performance levels must be carried out at regular intervals to ensure that every employee is putting his best foot forward. This would optimize their productivity as well. However, as Mostafa, Dumrak and Soltan (2015) state, elimination of these wastes would require strategic planning and efficient implementation of lean management principles.
Belekoukias, Garza-Reyes and Kumar (2014) have discussed about the various tools and techniques related to implementation of lean management principles in supply chain management system. On the other hand, Teich and Faddoul (2013) have proposed the 5S model when it comes to lean management. The first step in implementing the 5S practice would be an assessment of the current status of the organization. Next, the management would have to sort or separate the various resources in order to organize them. This would help identify the various wastes being generated. Any item that is unnecessary must be gotten rid of. In the next step, the necessary items would have to be systemized so that employees can easily access them. This would include efficient storage methods. Next, the management would have to take adequate measures to ensure that the workplace is kept clean and free of defects. This can be done through regular inspections. Standardizing the workplace would include guidelines and visual controls which emphasize on the importance of cleanliness within the organization. All of these steps would help get the organization back on track.
In order to implement the aforementioned principles of lean manufacturing, an organization would have to first devise an effective plan to eliminate waste. Next steps would include reduction of unnecessary inventory, shortening of production cycles, speeding up the response time, solicitation of customer feedback, extension of employee autonomy and ensuring that each component of a product have been tested in terms of quality.
Bottleneck analysis is another technique in lean management which helps in limiting the overall throughput of the manufacture process and improves its performance. It would identify the weak links in the process and get rid of them. The first step in this process would be identification of the factors that have led to the bottleneck in the first place. Next, steps will have to be taken to eliminate these factors so as to prevent such situations in the future. This can be achieved through an effective implementation plan.
According to Clark, Silvester and Knowles (2013), continuous improvement is a concept in lean management where there exist ongoing efforts towards service processes and improvement of products. This concept either focuses acquiring incremental objectives over a period of time or sudden and breathtaking advancements immediately. The best way to ensure continuous improvement at an organization is through the PDCA cycle (plan, do, check and act). In the first step, the organization would have to recognize opportunities and devise plans for change. Then, the organization would have to implement the change and test to see if it makes a difference to the organization. Analysis of the data would be through quantitative methods. If the test results come out positive, the change would be implemented on a larger and more wholesome scale (Bernardo et al. 2015). This cycle continues and strives to bring in positive changes to an organization. The implementation plan for continuous improvement should be customer oriented and focus on increasing the effectiveness and flexibility of their processes, keeping in mind customer needs.
Conclusion:
To conclude, it can be said that lean management in the manufacturing, supply chain or other industries would include an analysis and evaluation of existing strategies and practices and elimination of unnecessary steps which lead to waste. Eradication of waste that slows down the production of a company and hampers its profitability must be done away with. The purpose of lean management is to improve the product and service offered to the customer. In order to get desired results and to strengthen customer relationships, the product must be delivered to the market in a timely and efficient fashion. The above paper analyzes and critiques literature available on the aforementioned concepts. The concepts of eight wastes, principles of lean management, lean manufacturing tools and supply chain management have come under scrutiny. It is important to study their relevance in order to understand the impacts of lean management practices on supply chain industries.
References:
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