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Companies aim to improve their productivity and increase their profitability. Consequently, many firms adopt effective strategies and business models that enhance their operations. Lean Thinking and Just-In-Time (JIT) models help maximize their efficiency and viability. Lean thinking involves a transformational framework that organizes human activities to deliver value to human beings while eliminating waste. Meanwhile, JIT is an inventory model that allows goods to be received from suppliers only as they are needed. The rationale for companies adopting JIT is to reduce inventory holding costs and increase inventory turnovers. Therefore, Lean thinking and JIT are significant among businesses since they help reduce costs and promote business productivity.
The lean thinking framework has been adopted by many companies and has proved successful in various industrial dimensions. James Womack and Daniels Jones first used the term. The concept integrates five principles that contribute to its success: value, value stream, flow, pull, and perfection. While value involves the identification of customer value, the value stream involves the product or service lifecycle from inception to waste. Flow means how the value stream moves, and production delays or blockages hinder efficiency creating more waste (Fields & Sandes, 2021). Meanwhile, pull involves creating things based on customer demands, and perfection consists in maximizing the products and service efficiency for an excellent reputation (Fields & Sandes, 2021). Therefore, companies like Caterpillar Inc. and Nike adopt the lean thinking framework to increase productivity, reduce waste, and improve their bottom line.
Linking production to demand is significant since it helps save operational costs and reduce waste. JIT is a production system Toyota pioneered to minimize excess supplies in their inventory (Mossmann & Sarhan, 2021). The model operates on the notion that a product should be ordered or manufactured only when an order has been placed. Consequently, companies operate with minimum stocks and reduced labor. Moreover, JIT significantly reduces the costs of sourcing, manufacturing, and holding excess inventory (Mossmann & Sarhan, 2021). The model has vital features that contribute to its significance among companies like Apple Inc. and Nike that utilize JIT. The features of JIT include less reliance on forecasting, lower warehouse costs, less spoilage and waste, and a higher return on total assets. Therefore, lean thinking and JIT have cost significance among companies.
The production process is complex and may involve excess or unused materials referred to as waste. The wastes are released to the environment through numerous modes and can be hazardous to the environment. Companies are involved in waste management activities to ensure that the surplus materials are less harmful to the environment. Moreover, the unwanted materials can be managed for the reproduction of other products. Lean manufacturing considers different kinds of waste, improving the entire production system. The major kinds of waste are: overproduction, inventory, motion, defects, over-processing, waiting, and transport. Companies integrate technology and other frameworks to reduce the seven kinds of waste.
Overproduction waste is the most severe type of unused materials that firms should consider. Many companies find themselves overproducing producing products, and some go unused. The overproduced products pile up and increase inventory costs, material wastage, and wasted storage space. Moreover, overproduction can cause severe environmental costs. Inventory wastes involve unprocessed inventory. The waste includes storage waste, capital waste, and waste containers used in storing inventory. Like overproduction waste, inventory wastes have an environmental impact. Meanwhile, wasteful motion is an excess motion that could be minimized. The wasteful motion can increase machines wear and tear and increase production costs.
Moreover, wasteful defects involve products deviating from design standards or customers expectations. Defective products require replacement, that may lead to increased production costs and wasted energy in reproduction. Over-processing involves manufacturing processing components that are unnecessary (Fields & Sandes, 2021). Meanwhile, waiting involves time wasted as a result of slowing or halting a production process (Wu et al., 2019). Waiting wastes may include employees in charge of a production chain wasting time on other activities leading to a slowed production process. The waiting waste leads to delayed production and reduced product quantity, affecting a companys revenue. Moreover, transporting goods from one place to another adds no value to the products. Therefore, minimizing the costs associated with transportation help save on costs and maximize profitability.
Companies must consider the seven types of waste during production to protect the environment, save on costs, and maximize profitability. Avoiding overproduction, inventory, and transport wastes helps protect the environment. Meanwhile, increased production is associated with employees spending sufficient time in the production system. Moreover, limiting defective products help avoid wasting resources and protect the environment. Therefore, lean manufacturing help identify wastes that may lead to increased production costs and environmental degradation.
Efficient business processes promote increased profitability and improved customer services. Lean thinking is a concept that enables maximizing products and services value from inception to waste. The concept integrates activities that reduce waste during production, transportation, and delivery to the customer. In the supply chain, lean thinking involves ensuring that the products spend less time in warehouses and eliminating unnecessary costs. Companies utilize lean thinking to reduce waste, boost profits, enhance customer satisfaction, and streamline manufacturing processes. Consequently, the end-users get quality products and save on costs associated with defective products. Meanwhile, the suppliers get a constant market and avoid costs associated with overproduction. Therefore, lean thinking is significant among companies, end users, and suppliers.
Companies like CAT Inc. and Nike have adopted lean thinking since it reduces waste, boosts profits, enhances customer satisfaction, and streamlines production. Different types of waste include inventory and overproduction (Fields & Sandes, 2021). Such waste results from poor product management that involves constant production without considering product demand in the market (Mossmann & Sarhan, 2021). Increased waste results in increased inventory management costs, defective product reproduction, and overproduced product storage spaces. Moreover, customers are unsatisfied with defective products leading to losses (Fields & Sandes, 2021). The lean thinking framework allows companies to organize their activities, keeping in mind the different kinds of waste and how to avoid them. Therefore, the framework helps reduce waste, boost profitability, and streamline production.
The overall beneficiaries of lean thinking are the end users and suppliers. The end-users include customers who receive products or services of high value and quality. Moreover, they avoid detriments associated with defective products. Meanwhile, the suppliers are allowed to supply goods as ordered by companies. Consequently, they add value to companies leading to business expansion, which means increased suppliers supply, demand, and profitability. Therefore, lean thinking benefits companies, suppliers, and end users.
References
Fields, S., & Sanders, M. (2021, October). Quantum lean: the next step in lean systems. In: Powell, D.J., Alfnes, E., Holmemo, M.D.Q., Reke, E. (eds). European Lean Educator Conference (pp. 247-258). Springer, Cham. Web.
Mossman, A., & Sarhan, S. (2021). Synchronizing off-site fabrication with on-site production in construction.Construction Economics and Building, 21(3), 122-141. Web.
Wu, T., Ma, X., Yang, L., & Zhao, Y. (2019). Proactive maintenance scheduling in consideration of imperfect repairs and production wait time. Journal of Manufacturing Systems, 53, 183-194. Web.
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