Lean management is a widespread approach which enables an organization to deliver the value to the end users and supports the concept of continuous improvement and changes to acquire efficiencies and quality within the business. The current assessment is been carried out with the intention to explore the area of lean management and its benefits within the organization It would include a detailed description of the concepts of Lean management and its practical implication within the organization. The operations of Unilever, which is a leading manufacturing company, is headquartered in London, UK would be evaluated in the assessment. It would further suggest a specific concept which could help the company in its operations.
Overview of the company
Unilever is one of the oldest multinational companies located in London, UK, Rotterdam and Netherlands. It is been listed as the seventh most valuable company all over the world. The company includes a wide range of products and services such as cleaning agents, food and beverages and personal care products. Unilever is the largest consumer goods company based on revenues around the world. The company is been organized mainly into four divisions such as foods i.e. production and sale of snacks, margarines, soups, sauces and spreads; Personal care which includes sale of deodorants, oral care products, skin and hair care products; Home care such as liquids and capsules, powders, soaps and other cleaning products; and refreshments i.e. productions and sale of tea-based beverages, ice cream and weight management products being sold in developing markets.
The company is the leading supplier of the products and cover nearly about 2 billion consumers a day. It has more than 400 brands including Lipton, Dove, PG Tips, Persil, Ben & Jerry’s, Knorr, Magnum, Domestos and Lynx. This is also a dual listed company which consists of Unilever N.V., based in Rotterdam and Unilever plc, based in London. It approaches different customer segments for different product range making specific segmentation of the market. The major customer group of company is middle level income people. The organization is developing and offering the high quality and low cost goods and services to attract and retain these customers from large retail market. It has been found that the company had invested an amount of nearly about €1.04 billion in research and development so that to explore the areas of new market and establish itself effectively. The international competitors of Unilever are Procter and Gamble and Nestle and even face competition from local market brands over specific product ranges.
Lean management concepts
Lean management is basically referred to as a technique being developed with an objective of reducing the process waste. It enhances the value of the products to the consumers without making any compromises with the quality. The basic idea behind lean management is to make the most of customer value while minimizing the waste. Lean enables the business to create more values for customers with fewer resources (Bauer et al, 2018, p.147-152). The basic concept of lean manufacturing involves the never-ending efforts made to eradicate or minimize waste in different processes like manufacturing, design, distribution and customer services.
Lean management is been used by numerous organizations in their operation with the intentions to enhance the value out of customers and establish themselves within the market. This activity is been carried out by using different techniques such as total quality management, flow charts, total productive maintenance, workplace redesigning, etc. It mainly focuses upon the delivery of value to the customers (Berger, Yokoyama and Rodriguez, 2018, p.90-103). The method also aims to enhance the performance of the business by developing value to its customers as well as the employees. The major concepts being practiced within the lean management regime are:
Value Stream Mapping
The concept of value stream mapping is been applied for analyzing the present stage and designing the further stages for the series of activities which carries the products and services from the beginning to the client. The value stream mapping is basically a flowchart method which is been used to illustrate, evaluate and improve the actions required within the delivery of products and services. This concept reviews the flow of steps in the process and information from the initiation to the delivery to the end users (Seth, Seth, and Dhariwal, 2017, p. 98-419). This method is been used in supply chain, logistics, healthcare, product development, software development, administrative and office processes.
There major benefits of value stream mapping to the user are identifying the waste, acquiring an overall picture of the process, identify the issues and bring required improvements within the business. It even focuses upon the other areas such as collaboration, communication and other cultural changes required within the organization (Shou et al, 2017, p.3906-3928). The implementation of value stream mapping would also benefit the company in identifying problems such as inventory issues, process delays, excessive downtime, and other related constraints. For instance, Nike had used the value stream mapping to measure the issues faced into the products manufacturing line and inventory issues.
On the contrary to these benefits, the concepts also include some limitation which could inversely impact the processes of any company. For instance, being a technical tool the value stream mapping could limit the evaluation of nontechnical aspects within the process and lead towards the quality issues. It even fails to handle the multiple products which do not acquire identical maps and could result in adverse impact within the supply chain or other processes of the company (Minami, Bilimoria and Yang, 2017, p.9-26). Nike had used the value stream mapping in its different processes and made use of the concept to bring efficiencies into its business.
The term Kaizen is basically referred to the continuous improvement. It is a strategy which brings the employees of each and every level together to work proactively and acquire the desired improvement in the manufacturing process on regular basis. It unites the collective talents to build a powerful mechanism for enhancement within the organization. The concept of Kaizen 5S includes a list of 5 words i.e. sort, straighten, shine, standardize and sustain. These 5 terms illustrate the ways of workspace arrangement to achieve the most efficient and effective outcome within the business process (Pinto et al, 2018, p. 5-24). It includes the identification and storage of the used items, sustaining the new orders and maintaining the items and area specifically. These 5S had become fundamental business measures and the key driver for Kaizen.
The concept is mainly focused on improving the efficiencies of the business process and making a remarkable improvement in the same. It is identified that a regular application of this concept as an action plan would develop tremendous long-term value for the business as it creates a culture needed for truly efficient enhancements on a continuous basis. The concept of Kaizen 5S could be extremely beneficial to the business as it encourages the development of teamwork and independent groups, leading them towards enhanced cooperation at the workplace (De la Vega-Rodríguez et al, 2018, p.153-174). It would prove to be beneficial for bringing improvements within the framework of the manufacturing process on regular basis. It helps the business in placing the customer requirements at the forefront of the business efforts and all the products and services are been geared on the basis of clients’ needs only. For example, the concept of Kaizen 5S is been used by a renowned company like Ford motor. The company made use of this concept by focusing upon the efficient processes which helped the organization in recovering from the Recession in the late 2000s and offering the value to the customer by developing customized products.
Despite the benefits to the business, there are some limitations which needed to be focused by the management prior to the implementation. As the concept brings overall enhancements, some companies might require to go through a complete change in their existing tactics, which could result in issues to the business processes which are not well prepared eventually (Randhawa and Ahuja, 2017, p.334-361).
Sigma is basically a mathematical term which is used to measure a process deviation from the perfection. The concept of Six Sigma is mainly focused upon continuous improvement and bring enhancement into different processes. Unlike Kaizen, which acquires a major goal of enhancing efficiencies in all processes, Six Sigma focuses upon the quality improvement of the final products and services by identifying and eradicating the causes of defects. This concept includes more statistical evaluation and aims for near to the Zero defects as possible in the process (Akpolat, 2017, p.15-22). The sigma rating portrays the maturity of the manufacturing process by representing the percentage of defect-free products being produced within the business. It is essential for the organizations to identify a suitable sigma level for each and every important process and make best efforts to reach those levels.
The concept of Six Sigma is mainly customer driven which enables the business to focus upon its quality standards and enhance the value of products as well. It benefits the business to address the complex and critical areas first and eliminates the issues in the process. It also contributes to improving business problems like poor sales of the products, inefficient employee performances and maintaining quality standards in the products specifically (Snee and Hoerl, 2017, p.50-53). The foremost organization to use the Six Sigma concept is Motorola. The company initiated the method to bring improvement in the process thereby diminishing the defects to negligible levels.
On the contrary to this, unlike others, Six Sigma is an extremely expensive approach which could raise the cost to the business. As the concept of been applied in even aspect of the planning and production process, it might result in bureaucracy and rigidity to the business. This could create delays and suppress the creativity within the business process. For example, a low-cost measure which includes a risk of higher defect rate slightly might get rejected in favour of the more expensive measure which helps in attaining the Six Sigma (Albeanu and Hunter, 2017, p.50-58).
Suggestion for concept in Unilever
Out of all above concepts, Six Sigma concept could be used by Unilever to bring efficiencies in its product line and create value out of the same. The company could make use of the concept to reduce the cost of improving quality control in the products and services and serve customers with efficient outcomes. It would help the business processes in managing the time of manufacturing and deliver as well as achieve its goals more efficiently. The concept would also help in enhancing customer loyalty and retain them for longer periods of time. For example, the manufacturing and delivery of the quality products would enhance the satisfactory levels of the customers of Unilever. The Six Sigma would also help in motivating the employees as it includes sufficient employee engagement in the business process and makes them work with their best efforts (Alhuraish, Robledo and Kobi, 2017, p.325-337).
However, there are some limitations which could be faced by the management of Unilever with Six Sigma as an inefficient application of the concept could lay an adverse impact to the business. The concept could even cost the business more to implement the concept within different processes leading towards an increase in the overall business costs. Thus, it is very important for the management to focus upon an effective execution and do not overlook the limitations (Co oper, 2017, p. 11).
According to the given scenario, Sam owns a shop and sells the wedding dresses and the products are made for individual specification. Sam has got a new order in the 26th week and discussed with the designer to manufacture it. Both designer and Sam were agreed to complete the order and place the order for the same.
- A) Lead time for dress:
The lead time refers to numbers of minutes, hours and days that require for completing the operation or the process for manufacturing the products and services according to the needs of the customers. According to give case specification, the lead time of manufacturing and displaying the dress in Sam’s shop will include the consideration of design, order for part of the dress, manufacturing, and delivery of the parts of the dress and assembling of the dress. As per the week allocation for each activity for manufacturing the total lead time for displaying the dress will 9. Sam would be able to display the dress in the 9th week after placing the order.
- B) Week number:
The process was started in week 26 and as per the calculated lead time for manufacturing, the designer will take 9 weeks to complete the requirements of the Sam. By considering this information, the dress will be displayed in Sam’s shop by the 35th week. The time of delivery and displayed will not be influenced in week calculation as the manufacturer has delivered it in the 9th week of order placing and after that, it’s up to Sam when she is going to display it in the shop.
- C) Lead time if dress parts come from Italy
For the manufacturing of dress, the Sam has connected the designer from local market of UK. Now, the parts of the dress will come from Italy which is quite far from Sam’s shop. If the part of dress comes from Italy, it will increase the lead time for delivering and displaying the dress. There are various issues that could influence the manufacturing and delivery time for the products. Following are the key issues that affect the lead time for the given scenario:
Unpredictable shipping delays:
For overseas manufacturing and ordering the parts of dress will require the consideration of unpredictable issues like flood, earthquake, changes in the export policies and other natural disasters. These issues can affect the estimated lead time for delivering the parts of the wedding dress to the designer in the UK (Sarkar, Mandal, and Sarkar, 2015, p. 26-36). For example, due to flood, the supplier will not be able to ship the parts and it will increase the time for delivering the parts which will influence the overall lead time for manufacturing and displaying dress to Sam’s shop in the UK.
Market demand in operation management plays a critical role in manufacturing and meeting the requirements. If the parts of the dress come from Italy, the supplier will look after the needs of local and regular customers and then offer the parts to UK client. The process of managing the supply to local and international customers will affect the lead time of delivery (Kuang et al., 2015, p. 2002-2009). For example, the supplier will fulfil the demand of the high volume customers and offer the goods and services to overseas customers. Hence, the lead time will be increased if the parts of the dress came from Italy.
Too many processes:
The manufacturing of parts from overseas location and delivery will involve too many processes. The political and legal aspects come in consideration for offerings the parts of dress and organization has to fulfil make regulatory functions to deliver the parts. The lead time of products delivery will be affected negatively if the dress parts came from Italy to the UK. Moreover, the processes will also involve the consideration of specification of the raw material that demand by the client and they have to check the inventory (Sarkar and Mahapatra, 2017, p. 1197-1227). This will increase lead time for delivery of parts for a wedding dress.
Table 1: Estimated lead time (Italy)
1. To design the dress
2. To raise the order for the parts for the dress
3. To manufacture and deliver all the parts of the dress
4. To assemble the dress
5. To deliver the finished product to Sam’s shop
Total lead time
The above assessment concludes with the facts that Lean management is an approach which enables the organization to deliver the value to the end users. It has been found that lean management supports the concept of continuous improvement and changes to acquire efficiencies and quality within the business. The assessment also illustrates the concept of value stream mapping, Kaizen 5S and Six Sigma being applied within the business organization to bring improvements. Further, it suggests that Six Sigma concept could be used by Unilever to bring efficiencies in its product line and create value out of the same.
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