Lean Management Strategies For Value

Introduction

The focus of this report is on the lean management approach and how the Coca-Cola Company can be able to deliver value to its customers through a critical analysis of the approach. Additionally, the writer defines the lead time between placing an order for a product and receiving the order with the right strategy of its process. Lean management is an approach adopted by companies to deliver value to their customers in different parts of the world. An elaborate understanding of the concept of lean management is provided in the assignment as well as an understanding of the lead time concept.

The Coca-Cola Company

The Coca-Cola Company is a corporation with American roots which deals with the manufacture, marketing, and retail of beverages that are not alcoholic (Miller, 1998). The company`s flagship product Coca-Cola is the most famous of the company`s products. Asa Griggs Candler bought the Coca-Cola formula and brand which was originally invented by John Stith Pemberton and incorporated the Coca-Cola Company (Grinspoon and Bakalar, 1981). Coca-Cola owns production systems and bottling facilities in almost all parts of the world, and that plays an integral role in their operations because they are among the top soft drink manufacturer`s competing only closely with Pepsi (Jones and Comfort, 2018). In Coca Cola, operations management involves management of the productive resources of an organization or its system of production and also deals with the design and subsequent management of processes, products, services and supply chains. In this, consideration is given to acquisition, development and subsequent utilization of resources needed by a firm to deliver such goods and services as required by clients. From time to time, Coca Cola has been facing problems in its operation department, and that requires them to always be on their toes to identify the issues and subsequently address them. Identification of problems aids in tabling different solutions and going through all of them and settling on the most optimal one (Liebowitz, 2016).

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Lean Management

Lean management is a management approach that supports the continuous improvement concept, which is a long-term approach that in a manner that is systematic that seeks to achieve small and incremental changes across processes to improve quality and also achieve efficiency (Bhasin, 2015). In manufacturing, lean management is used for minimization of waste within the system of production without necessarily sacrificing productivity which could bring about problems. Any form of waste is identified here, and that is either wastage of money, effort or time (Biazzo, Panizzolo, and de Crescenzo, 2016).

There are five concepts of Lean management namely; Value, Value streams, Flow, Pull and Perfection (Nicholas, 2015). This paper focuses on Value, Perfection and Pull. All companies are observed to strive to offer products and services that customers would be ready to pay for. The value a customer attaches to a company`s product determines what the customers pay for it. Establishment of value would help any company including Coca-Cola create a top-down target price.

Costs of producing the services and products are then determined. The focus of the organization is shifted to the elimination of waste for purposes of delivering the value customers expect at the highest profitability level. Value is the most critical starting point of lean thinking. The lean process enables teams to come up with ways of delivering value to their customers in a way that is faster which is partly achieved through the provision of a systematic approach to practicing continuous improvement as part of daily work (Berger, Yokoyama, and Rodriguez, 2018). Only the ultimate customer can be able to define value. In most instances, the value lies in the problem an organization tries to solve for its customers and more specifically, in the part of the solution that customers are actively willing to pay for, any such processes or activities that are of no value are considered to be waste.

any such processes or activities that are of no value are considered to be waste. The diagram of the continuous improvement cycle below would best summarise the value technique.

Global Railway versus Air

The lean principle, on the other hand, helps in ensuring that flow by building up work-in-process, ensuring that nothing is made ahead of time and halting the synchronized flow. One of the guarantees that a team could deliver work tasks much faster and with less effort is having a stable workflow (Kadarova and Demecko, 2016). To establish a secure and stable workflow, it would be necessary to create a pull system. In a system like that, work would only be pulled in the event its demand comes about. Through that, it would be possible to optimize the capacity of resources and deliver products and services only when they are needed.

For example, in the case of Coca Cola, a good pull system would help in obtaining relevant Point of Sale data, sharing it with ease throughout the supply chain and trying and testing the different demand forecast models.

Finally, lean manufacturers are observed to strive only for perfection. Process perfection is only achieved step by step as the root causes of production waste, and quality of production are addressed (Arnheiter, and Maleyeff, 2005). The pursuit of perfection drives users of this approach to digging deeper, subsequently measure more and change even more often in comparison to their competitors. In line with lean thinking, as an organisation begins to specify value more accurately, identify the entire value stream, come up with steps for creating value it dawns on the different individuals involved that there exists no end in the process of reducing time, effort, space, mistakes and costs while offering products that are ever more what is expected by the customer.

The significant benefits that managers can accrue from lean management are; Focus. Through the application of lean principles, it becomes possible to cut on activities that are wasteful. That turns the focus of the workforce on such activities that add value (Nicholas, 2015). Improvement of productivity and efficiency. Whenever the focus of employees is on the delivery of value, they tend to be more efficient and productive because tasks that are unclear do not distract them. Smarter processes. Through the establishment of a pull system, an organization can deliver work only when there exists actual demand. Better Resources. Whenever an organizations production is entirely based on actual demand, it is possible to make use only as many resources as required. In the end, principles of lean management help create production systems that are stable with higher chances of improving performance in overall (Netland, Schloetzer, and Ferdows, 2015). The different principles of lean management, however, do not provide actionable plans for managing and measuring efforts geared towards improvement alongside regular work. Here, the Kanban and WIP tools would come in handy. For purposes of improving processes, they

must first be understood fully. Kanban is a visual process workflow tool that facilitates the management of work by organizations through an understanding of processes that are shared (Anderson, and Carmichael, 2015). Teams can be able to identify opportunities for process improvement through adoption of Kanban. Data is automatically generated as organizations use Kanban boards for management of their work which they can use to assess the impact of their continuous efforts geared towards improvement (Urban, 2015). On the other hand, implementation of work-in-progress for an organization would also go a long way in improving the lean process. Teams place WIP limits on themselves with the intention of improving throughput and minimizing switching of context. That goes a long way in helping them deliver work with higher quality and in quick succession. Additionally, implementation of WIP limits also helps teams focus on improvement of how they collaborate and prioritize on work. Through this, all members of an organization get encouraged to discuss work status, priority and opportunities for pair programming while also keeping improvement at the top of their minds (Ansah, Sorooshian, and Mustafa, 2016). Coca-Cola could use different lean principles in establishing start-ups in different parts of the globe. Adopting lean manufacturing techniques would see it use the minimum viable products to test assumptions quickly and also get to learn. Minimum sustainable products would help them get to learn and subsequently deliver value to end users and customers, the goal of such products would be to establish whether the solutions being developed can sell. Parker Hannifin which is one of the largest motion control technologies company`s in the globe today employs up to 58,000 people worldwide. The company has since 2000 embarked on implementing the best programmes in productivity, cost reduction, customer service, and throughput all which have been aimed at creating value for their customers. The company has adopted E-Business strategies which have been observed to cut on human intervention while at the same time speeding up the process of supply chain management.

The lean manufacturing philosophy is by far and wide derived from the Toyota Production System (TPS) which is an integrated socio-technical system that is made up of Toyota`s management philosophies and practices (TOYOTA, 2019). Toyota adopts the pull system to ensure a measured queue of materials (components, work-in-process, raw materials) and whatever is ready to be pulled by the next step of production. After pulling of materials, signals are sent to the preceding step for purposes of replacing what was taken.

Lead Time

Sam owns a shop that sells wedding dresses. These are one-off products made according to specific individual specifications. In week 26 Sam holds a discussion with his manufacturer about a design for a wedding dress. They agree on a spec and subsequently place an order with the manufacturer. To calculate the lead time, the following information is required;

The effects of getting the parts from China or Italy in the Lead time

In the supply chain of any business, time and distance are essential factors. One of the advantages of domestic sourcing instead of overseas sourcing is that the turnaround time on orders made in the UK would be significantly faster than those made in China and Italy. A lead time that is shorter would present designers an opportunity for being more flexible, creative and would go a long way in increasing cash flow, preventing loss of business and ensuring that there is a consistent quick turnaround that would help any business out space its competitors and further gain traction (Suri, 2016). That does not imply that domestic manufacturing operations in the UK are speedier than those of either China or Italy; however, with the quality control checks, importing and shipping activities, getting orders to their final destinations would take longer. The transportation of a product is the most significant source of wasted time. Internationally, the industry standard for moving goods by boat averagely takes three weeks.

All Chinese that most parcels from China go through the Global Postal Union which requires that the parcel has to pass through different union member states before it gets to its destination. All these are processes that would delay the period of delivery of the dress as such increasing the lead time.

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Conclusion

This paper has provided an analysis of lean management and especially its different principles that companies adopt for purposes of delivering value to customers. An understanding of the concept of lean management if fully demonstrated in the assignment, where it is evidenced that different lean management tools could be used for minimizing errors and elimination of wastage. An understanding of the lead time concept is additionally provided, where it is evidenced that acquiring goods from abroad increases the lead time as a result of the numerous quality control checks involved and time spent on shipping. As evidenced in the paper, their adoption of the lean management approach at Coca Cola would see reduced wastages, provision of value to customers and an increment of effectiveness and efficiency in the operations of the company.

References

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  • Berger, S.L.T., Yokoyama, T.T. and Rodriguez, C.M.T., 2018. An overview of Lean Supply Chain Management: concepts, principles, and impacts. Journal of Lean Systems, 3(2), pp.90-103.
  • Biazzo, S., Panizzolo, R. and de Crescenzo, A.M., 2016. Lean management and product innovation: a critical review. Understanding the Lean Enterprise (pp. 237-260). Springer, Cham.
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  • Kadarova, J. and Demecko, M., 2016. New approaches in lean management. Procedia Economics and Finance, 39, pp.11-16.
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  • Millard, M. (2018). Principles of the Continuous Improvement Model. [Blog] KaiNexus. Available
  • Miller, D., 1998. Coca-Cola: a sweet black drink from Trinidad. Material cultures: Why some things matter, pp.169-87. Netland, T.H., Schloetzer, J.D., and Ferdows, K., 2015. Implementing corporate lean programs: The effect of management control practices. Journal of Operations Management, 36, pp.90-102.
  • Nicholas, J., 2015. Lean production for competitive advantage: a comprehensive guide to lean methodologies and management practices. Productivity Press. Suri, R., 2016. It's about time: the competitive advantage of quick response manufacturing — productivity Press. Toyota. (2019). Toyota Production System. [online] Available at:
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