Page 295 - (DK) The Business Book

DELIVERING THE GOODS 293

Lean producers try to eliminate Workers on a production line will
overproduction and waste stock by be much more efficient if all the
using the just-in-time (JIT) system, components they need are within easy
reach. Time spent searching for items
in which production only happens
increases the movement muda, which
in response to a customer order.
incurs a cost to the business.
Companies that use just-in-time
never produce output for stock, and Tune Hotels, is based on value
if there are no orders from buyers, analysis. For Tune Hotels, affordable
production stops. Thus, production rooms are its priority. To achieve
is pulled through by the consumer, this, services that push up the price
rather than being pushed through of a room but are viewed as
by the manufacturer. The same nonessential by customers, such as
principle is extended to raw air-conditioning or toiletries, have
materials and bought-in components. become optional add-ons. The chain
Lean producers run with minimal focuses solely on core qualitites
buffer stocks, relying instead on such as cleanliness and safety,
daily, or even hourly, deliveries from production effectively, companies valued highly by the customer.
suppliers. However, the absence of need to shorten the cycle time To eliminate the seventh muda,
a stock of raw materials means that taken to make their products. To defective products, lean producers
a faulty shipment of components accelerate the pace of production, seek to create high-quality items.
could bring an entire factory to a managers will need to control the This requires managers to trust
halt. So to make just-in-time work, movement muda, the waiting muda, workers to spot any fall in quality.
lean producers require reliable and the transportation muda. At its Employees have the authority to
suppliers that produce zero defects. simplest, this could be achieved stop the production line in order to
by redesigning workstations and solve the problem, and production
Lead times production lines so that employees only restarts once the source of the
If products are to be made to order have all the tools and components problem has been found and fixed.
rather than supplied from stock, to complete the task close at hand. High product quality, achieved
there is a risk that a long lead Likewise, bottlenecks in production by lean production, leads to lower
time (the time between an order can be eliminated by deploying costs. By solving problems at their
being made and delivery to the more machinery or more labor at source, companies spend less time
consumer) could result in customer the problem area. and money on reworking defective
dissatisfaction and consequently products to bring them up to the
falling sales. Therefore, to run lean Overprocessing required standard. ■
Lean producers tackle wasteful
overprocessing, the sixth muda,
by applying a process called value
analysis at the product design
stage. Companies using value
analysis attempt to identify product
All we are doing is looking features that create cost but have Regardless of how much
at the time line, from the no value for the consumer. If these workers move, it does not
moment the customer gives us features can be removed to create a mean work has been done.
an order to the point when we simpler, cheaper product, profit Working means that progress
collect the cash. margins will rise. At the same time, has been made.
Taiichi Ohno revenues should not fall, because Taiichi Ohno
the features that have been removed
were not valued in the first place.
It could be argued that the
business model of a no-frills hotel,
as seen in the Malaysian company