LEAN SYSTEM
There are far too many definitions and descriptions of lean systems for all of us to be speaking the same language, and so it seems worthwhile to put forward a unifying view of lean systems. Some have interpreted lean as merely a collection of tools, such as 5S, JIT, kanban, and so on.Others have described lean as working people harder, working people smarter, kaizen, or Total Quality Management. Some definitions are wrong and some are just inadequate.
So how instead can we describe lean systems? At a very high level, lean systems gives people at all levels of the organization the skills and a shared way of thinking to systematically drive out waste through designing and improving work of activities, connections, and flows. By cultivating the skills of a learning organization, creating an environment of real-time learning nearest to the problem or point of impact, all employees can contribute to the robust success of the firm. This simple and universal definition of lean broadens the scope and required skill set beyond traditional views. Many organizations have had great success using lean systems, regardless of how they defined it, towards creating world-class companies Wal Mart.
Refer to the bar code system of Wal Mart, we will deeply discuss how the lean system affect the Wala Mart by doing the JIT strategy. Before we go into the process, we will talk about what is just in time strategy firstly.
Philosophy of JIT is simple: inventory is waste. JIT inventory systems expose hidden causes of inventory keeping, and are therefore not a simple solution for a company to adopt. The company must follow an array of new methods to manage the consequences of the change. The ideas in this way of working come from many different disciplines including statistics, industrial engineering, production management, and behavioral science. The JIT inventory philosophy defines how inventory is viewed and how it relates to management.
Inventory is seen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting. This does not mean to say JIT is implemented without an awareness that removing inventory exposes pre-existing manufacturing issues. This way of working encourages businesses to eliminate inventory that does not compensate for manufacturing process issues, and to constantly improve those processes to require less inventory. Secondly, allowing any stock habituates management to stock keeping. Management may be tempted to keep stock to hide production problems. These problems include backups at work centers, machine reliability, process variability, lack of flexibility of employees and equipment, and inadequate capacity.
In short, the just-in-time inventory system focus is having “the right material, at the right time, at the right place, and in the exact amount”-Ryan Grabosky, without the safety net of inventory. The JIT system has broad implications for implementers.
Main benefits of JIT include:
-Reduced setup time. Cutting setup time allows the company to reduce or eliminate inventory for
"changeover" time. The tool used here is SMED (single-minute exchange of dies).
-The flow of goods from warehouse to shelves improves.Small or individual piece lot sizes reduce lot delay inventories, which simplifies inventory flow and its management.
-Employees with multiple skills are used more efficiently.Having employees trained to work on different parts of the process allows companies to move workers where they are needed.
-Production scheduling and work hour consistency synchronized with demand.If there is no demand for a product at the time, it is not made. This saves the company money, either by not having to pay workers overtime or by having them focus on other work or participate in training.
-Increased emphasis on supplier relationships.A company without inventory does not want a supply system problem that creates a part shortage. This makes supplier relationships extremely important.
-Supplies come in at regular intervals throughout the production day.Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced.
We already discuss bar-code system which is the system the Wal Mart used. Despite the Bar-code system is useful for Wal Mart to manage the inventory, but the system also has the defence. When the delivery occurred or the merchandise keep in the warehouse, the inventory always broken by over keeping time or delivery broken. These will be ineffective. So, we can use lean system to improve that. The strategy we can use is just-in -time.
Refer to the just-in-time. We should consider customer requirements. Different group of customer need different product or service from Wal Mart. So, R&D department is particularly important. They should do the research from the niche customers. After achieved the information or feedback, Wal Mart can order the merchandise from the suppliers specifically. Bar-code system become a intermediate part. When the order was taken place, the bar-code system would report to the database or the information system to acknowledge suppliers Wal Mart need inventory. Then the suppliers should deliver the merchandise to the Wa-Mart on the time which the Wa-Mart need. By doing the process, Wal Mart was not only reduce the operation time, but also avoid the loss from the maintenance time or delivery broken loss.
Bar-cord system not only helped the Wal Mart to manage their inventory, but also linked the customers and the suppliers more directly, the lean system also improve the conditions for Wal Mart to make more effective operation.
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