Introduction
It is the purpose of lean manufacturing to remove waste in any process. There will always be some waste in a process, even if it has gone through lean many times. As long as it’s done right, lean manufacturing may lead to significant gains in operational efficiency and competitiveness. Workplace productivity may be improved by using these five concepts (Mohanty, 2007).
- Defining value,
- Mapping the value stream,
- Creating flow,
- Using a pull system, and
- Pursuing perfection.
High-value manufacturing necessitates and benefits from the strategic decision-making that goes into lean adoption. In certain cases, implementing lean might be a challenge. It might be tough to know which of the numerous lean tools to use and when. The management of change is a complication (Panwar, 2015). Organizational growth and process improvement go hand in hand in the lean implementation process.
Mercedes company applying Lean Management Principles
Defining value
Consumers define value as that for which they are prepared to pay. Customer demands must be discovered, whether they’re explicit or hidden. There are occasions when clients don’t know what they want or are unable to communicate it. For new items and technology, this is particularly prevalent (Oliver, 2006). Finding out what consumers value may be as simple as conducting interviews, surveys, compiling demographic data or using web analytics. The clients’ needs may be uncovered via the use of qualitative and quantitative methodologies such as the ones outlined in this guide.
Those who purchase a Mercedes-Benz car should expect nothing less than the finest in luxury transportation. That is Mercedes-value Benz’s proposition. We use only the highest-quality materials in every part of the interior to ensure that the drivers are as comfortable as possible. A car’s capability to perform new things on the road is continually being pushed by Mercedes-research Benz’s and engineering teams (Uhl, 2017). Mercedes-Benz vehicles are equipped with the most advanced technology, whether it’s adaptive cruise control or the peace of mind that comes from knowing that Mercedes-Benz safety measures are doing their jobs. Even if an accident does occur, features like autonomous emergency braking may assist drivers avoid or reduce the consequences. You can’t go wrong with a Mercedes-Benz; it’s an engineering and quality wonder rolled into one.
Mapping the value stream
In Lean, the second principle is to identify and map the value chain. All acts that increase the customer’s value at this stage must be identified using the value of the customer as a reference point. In the eyes of the client, any activity that doesn’t bring value is a waste of time. Both non-value-added and essential trash may be grouped together under the heading of “waste without value.” Both should be eliminated to the greatest degree possible, but the latter should be eliminated totally (Nociolini rebechi, 2020). In order to ensure that customers get exactly what they want, it may be necessary to eliminate unnecessary procedures and processes.
The things themselves, as well as the way they are made, are being transformed by the digital age. Mercedes-Benz is connecting the whole automotive value chain – from design to manufacturing to sales and service – one module at a time. The fourth industrial revolution is gaining speed. Toward a “smart factory,” the groundwork has been laid.
A few years ago, these concepts seemed more like science fiction than a reality in a Swabian factory. In the present day, these advancements are profoundly altering the manufacturing of industrial goods (Augusto pinto, 2020). In the eyes of Mercedes-Benz, “Industry 4.0” is the digitization of the whole value chain. Processing in the real world and in the digital world are becoming more interwoven. Networking with consumers is also included: Their requirements and desires are the driving force behind every aspect of the company’s activity.
Create flow
Step two after removing wastes from the process is to ensure that the remaining processes operate without interruption or delay. To ensure that value-adding activities operate smoothly, it is important to break down processes, restructure production stages, level the load, build cross-functional divisions, and train employees to be multi-skilled and adaptive.
Vertical integration is the hallmark of Mercedes-Benz Cars Group. Dividing automobile-related activities into sub-divisions makes it possible to provide a wide range of products and services related to the manufacturing and distribution of autos (Salah, 2010). To put it simply, the Mercedes-Benz Cars division consists of a wide range of automobiles from several manufacturers, including Mercedes Benz, Mercedes Benz AMG, Mercedes Benz Maybach, and Mercedes me. Smart tiny cars are of great quality, as are Mercedes-Benz luxury cars, but the corporation provides a variety of vehicles. With 15 model lines, Mercedes-Benz boasts the greatest assortment of luxury automobiles in the market, from the sporty CLA-Class coupe to the flagship S-Class and the Mercedes-AMG GT S.
There are a total of 29 Mercedes-Benz Car dealerships worldwide. Four continents are home to the factories that produce the goods. Within each unit, you’ll find anything from eight to eleven different divisions (Finance, sales, marketing, distribution & logistics, public relations, human resources, information technology etc.). The company intends to develop new plants and cooperate with more partners in order to boost production capacity (Kiel, 2020).
Mercedes-Benz employees all report directly to one person within the company. There is a clear line of command across the firm, from the lowest level to the highest. There is a wide range of control based on the kind of task. When a job is straightforward, supervisors tend to delegate greater authority to their subordinates in order to reduce the amount of time they spend micromanaging (Rahim, 2010). To improve morale and cooperation inside the organization, managers use many techniques. Managers at Mercedes-Benz are known for publicly praising their employees’ initiative and ability to solve complex problems.
Establish Pull
In every manufacturing system, inventory is regarded to be one of the major wastes. To reduce inventory and WIP items, pulled systems are intended to ensure that the resources and information needed for a smooth flow of work are always available. Using a pull-based approach, items may be created on demand and supplied in the precise quantities needed. The demands of the end users are always taken into consideration while designing a pull-based system. Following the value stream and working backward through the manufacturing process ensures that the items produced will meet the expectations of consumers.
Goods managers have a tough time knowing exactly when and how much inventory to order. A lot will be determined by the sort of product being manufactured when it comes to the inventory management system used (Antony, 2012). It’s possible that the just-in-time or pull inventory management methods can’t be used to create certain commodities, like vehicles. Only producing the quantity required for a given client order would be too time-consuming and complicated in the manufacture of major commodities, such as vehicles. While raw materials and products are bought and kept in advance for Mercedes, the computer itself isn’t constructed until a consumer place an order.
Pursue Perfection
The most critical stage in the pursuit of perfection is the fifth. An organization’s culture of continual process improvement and Lean thinking is created. While delivering goods that meet the expectations of customers, every employee should strive for excellence at all times. Every day, the corporation should strive to improve itself just a little bit more.
Mercedes-Benz is most known for its constant innovation, not its flawless engineering. Since 1886, Mercedes-Benz has not only been a symbol of the automobile’s past, but of its future as well (Tung, 2011). A steady succession of firsts in safety, performance, and driving pleasure make it an intriguing blueprint for the future. While the list of accomplishments is never-ending, there is only one reason why the world’s first automobile manufacturer stays at the top of the innovation rankings.
Benefits and challenges of Lean Management
Lean production, sometimes referred to as lean manufacturing, was first used in Japanese car manufacturers decades ago and has since extended to a broad range of sectors and businesses all over the globe. Lean manufacturing generally refers to manufacturing without waste, and it has been employed by numerous organizations to significantly improve their production times and procedures (Fullerton, 2009). Although lean manufacturing has its drawbacks, the advantages of lean production frequently exceed the drawbacks.
Advantages
Less Infrastructure
Lean manufacturing is a manufacturing process that employs just the resources required to satisfy the immediate needs of customers. A lean manufacturing plant does not have any unused space, unlike a large production facility. Only the quantity of space required to meet demand is required (Ahmed, 2020). In the same way, the company doesn’t want to have unneeded equipment and tools lying around. Workers are also given shifts so they don’t have to sit around doing nothing.
Limited Waste
In contrast to mass production, the fundamental goal of lean manufacturing is to reduce waste. Having a lot of unsold merchandise lying around waiting for customers to buy it is not something businesses desire. Expired or out-of-date merchandise will not be a concern for you. Getting rid of garbage is a good use of resources. Until the additional inventory is acquired, no space or personnel are required for its management.
Strong Customer Relationships
When it comes to customer connections, there’s no better strategy than lean manufacturing. The goal of lean manufacturing is to satisfy the demands of regular customers on a timetable or predictably, as opposed to mass production, which tries to meet all customers’ needs as they arise (Hossain, 2020). Keeping your most valuable clients satisfied and in constant demand reduces wastage while also making them feel like your most essential consumers. As a result, it is simpler to tailor your goods to specific customers or to change manufacturing techniques.
Disadvantages and challenges
Equipment or Labor Failure
When it comes to lean manufacturing, there is minimal room for mistake. There is a risk of losing the advantages of increased efficiency if equipment fails or more staff is needed for certain processes (Mwacharo, 2013). If a piece of equipment in a large manufacturing facility stops operating, employees may simply switch to another one. Equipment and tools are scarce in a lean manufacturing environment.
Forgotten Shipments and deliveries
There is a direct correlation between the lack of flexibility or margin for mistake and the risk of missed delivery dates. Customer relationships might suffer if you fail to deliver on your promises as a result of breakdowns. In order to satisfy their clients, your distributors and wholesalers require your products delivered on time (Damrath, 2012). Any customer looking for a new supplier will search for one that regularly delivers on time. There are instances when you don’t have a second opportunity to make things right.
Negative opinion of the company by the workforce
Workers may get upset with lean manufacturing’s emphasis on effective human resources management. In order to save time and money, employees may be opposed to this. An effective shift needs the assistance of all those impacted.
Uneven economic growth
Lean implementation makes extreme measures expensive. There are many examples of this, such as when you import a machine that produces twice as many things in a single day. On first glance, the equipment seems to reduce manufacturing expenses. There will be no use for the final products, which will be thrown away.
Risks of Implementation
Lean is not a one-size-fits-all technology that can be implemented overnight! Everyone in your company must be committed and involved. In order to look good at the end of each month, companies frequently sabotage Lean initiatives by working around its principles (Zhou, 2016).
A lack of general emphasis on a lean culture might lead to the loss of gains obtained by particular implementations of tools in a short period of time. Unless rules are in place to redeploy people in an effective way, people will reject changes that might render their positions obsolete.
Strengths and Weaknesses of Lean Management
As a result of lean manufacturing, productivity rises and waste is reduced. As a result, there are several advantages: Product quality has improved: Improved efficiency frees up time and resources that would have otherwise been squandered, allowing for more innovation and quality control (Cox, 2005).
On the weakness side, lean involves a significant amount of preparation and effort up front: it needs a thorough examination of the present workflow and team activities, as well as a conversation with team members and the leaders of adjacent departments (Maleyeff, 2006). Additionally, teams should be encouraged to meet often (many Lean teams perform a daily standup) in order to address work that has been accomplished, work that still needs to be done, and any issues that may arise.
The relationship between Quality and Performance Measurement and Lean Management intervention
When discussing corporate strategy, one cannot manage or control what one cannot measure. Various economic sectors and international commercial operations have created a competitive environment that necessitates a wide range of modifications and adaptations in a wide range of circumstances (Wempe, 2009). The significance of an efficient manufacturing process, reduced costs, and increased value added in the products and services supplied to consumers are critical elements for companies today, and it has become a component of the company’s strategic strategy to achieve better outcomes.
Metrics have become a need for all kinds of businesses. However, there are a few issues that need to be addressed since determining what to assess is so critical. Erroneous data analysis may lead to wrong decisions, raising the risks and the losses that may be included. It is thus vital to devise a strategy for gathering accurate and concrete information on the organization’s internal and external processes, so that management may have a clear picture of the company’s current state and use it to guide decision-making (Hudson, 2001).
Correct performance indicators, when correctly assessed, aid in gaining a better grasp of the current state of a company’s operations. For an in-depth examination, a comprehensive picture of the linkages between processes is necessary, ensuring that any choice in one area of the business does not affect another (Jayanth Jayaram, 2016). Aside from assisting in decision-making, the right performance indicators immediately help to the improvement of the quality process of goods and services. If the current state of affairs does not meet the objectives outlined in the strategic plan, the indicators will likely be used as information to help design a strategy for reversing the situation.
There are a variety of approaches to addressing the problem of process improvement. Lean Production, an ubiquitous and widely utilized manufacturing strategy, is based on the car manufacturing system’s structural traits and basics. A book by Womack and Jones, “The Machine That Changed the World,” described Lean Production as a “systematic resource for eliminating waste,” “improving quality,” “reducing costs,” and “addressing the customer’s wants” in a commercial context (Gronroos, 1988). Nonetheless, Lean Production is used in the production business with the necessary modifications.
For example, a company may design a performance management system rather of a measurement system in order to better assess the whole chain of firms rather than concentrating exclusively on a single organization’s internal performance. Set up an atmosphere where management can be adaptable and make quick decisions in the face of changing conditions (Parasuraman, 1985). This is particularly relevant in today’s competitive business world, when organizations operate on a global scale. Measuring financial health (profitability, labor costs, cash flow, etc.) as well as the quality of the product or service being delivered (productivity and flexibility) is critical for optimizing the effectiveness and efficiency of business processes and decision making. As a result, the measuring of business performance is always evolving and incorporates both qualitative and quantitative methodologies (Sheu, 2003).
Some of the most common examples of Lean Manufacturing include cell-based manufacturing lines, Kanban’s for production control, and many more. To put it another way, these technologies don’t really drive lean implementations; they provide the means by which transformational teams may put the ideas into practice. Once you know what you want to accomplish, these are the steps you should take to get there. However, it’s intriguing to see how these actions will affect the Lean metrics that have been reported thus far (Womack, 1990). However, this also helps to indicate why adopting particular techniques without clear understanding of “why the company is doing this?” and “where the organization is headed” may result in poor outcomes, as seen in the example above.
A company’s many operations are now included under the umbrella of lean concepts, which were formerly exclusive to manufacturing. Maintenance, product development, marketing, and human resources may all benefit from using lean concepts. Even yet, all of these operations might be regarded the exclusive domain of a single corporation. Creating Lean Supply Chains, where real-time logistical information flows to the places of need and organizations interact on a daily basis, is a goal of many business networks value networks (Womack, 2003). In order to provide the greatest possible value experience for consumers, these networks operate together in a coordinated and cooperative manner. Lean Supply Chains need to establish metrics systems that span the whole network of value in order to enhance the customer’s experience and raise the advantages for the cooperating enterprises. This is a natural progression of metrics given in this article.
Establishing an environment that facilitates the other aspects of the process is essential to Lean Manufacturing deployments. This atmosphere (created by management) will provide workers the confidence and resources they need to take ownership of products and processes, work in cohesive teams, and exercise their own judgment in coming up with solutions and process improvements (Seth, 2005). A Lean transformation’s progress may be gauged along five primary axes. There is a focus on the elimination of waste, as well as a commitment to continuous improvement, continuous flow, and pull-driven systems. Each of the dimensions has four or five metrics assigned to it.
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