The business I’m going to use in this case
study is Tesco Plc, this business illustrates the components required to
further explain lean management. Tesco Plc is a British company and the UK’s largest
Tesco is part of British’s largest sellers.
Currently, Tesco is ranked as the third within the retail industry among USA’s
Wal-Mart and France’s Carrefour. Tesco started with the business in grocery
retailing, but now it also sells stationary, health and beauty, utensils,
clothing, home entertainment, electrical goods, kitchen utensils and seasonal
goods like barbeques and garden furniture in the summer.
Tesco, offers a wide range of products and
services for its consumers. Services and Products offered by Tesco and other
businesses cannot be attractive to all people in equal terms, because
differences in needs and wants among people. Therefore, businesses do engage in
market segmentation and targeting practices from kids to seniors.
have been successfully importing concepts and solutions from lean manufacturing
into service industries such as retail, travel, healthcare, government, and
businesses have been effectively bringing in ideas and solutions from lean
assembling into benefit ventures, for example, retail, travel, human services,
government, and monetary administrations. Financial institutions have been at
the forefront of the lean movement, with notable success stories coming from
banks, insurers, credit card issuers, and asset managers (Mckinsey&company,2012)
Lean management is a methodology, to ensure development for a businesses’
production of value. As defined by the customer by motivating and engaging the
workforce to eliminate waste, for ever greater efficiency and effectiveness in
the production of that value.
Below are the
five principles of lean manufacturing, these principles efficient usage of the
business innovation tool.
Each organisation needs a comprehension to
what the client puts the most incentive upon their items and service. It is
this value that decides how much cash the client will pay for the item and service.
This prompts a top down target costing approach that has been utilised by
Toyota and others for a long time. Target costing focuses on what the customer
is willing to pay for certain products, features, and services. From this the
required cost of these products and services can be determined. It is the
company’s job to eliminate waste and cost from the business processes so that
the customers price can be achieved at great profit to the company. (Jones and
The Value Stream
“The value stream is the entire flow of a
product’s life-cycle from the origin of the raw materials used to make the
product through to the customer’s cost of using and ultimately disposing of the
product”. “By just studying and clear understanding of the value stream and its
value-add and waste can a company truly understand the waste associated with
the manufacture and delivery of a product and/or service. Lean thinking
advocates supplier and customer partnership and radical supply chain management
to eliminate waste from the entire value stream.” (Jones and Womack, 2014)
One extremely critical key to the disposal
of waste is stream. If the “value chain” quits pushing ahead for any reason, at
that point waste will happen. The trap is to make a “value stream” where the
item (or its crude materials, parts, sub-gatherings) never stop in the
Where each aspect of production and
delivery is fully synchronized with the other elements. Carefully designed flow
across the entire value chain will tend to minimize waste and increase value to
the customer. (Jones and Womack, 2014)
The way to ensure that nothing is made
ahead of time and builds up work-in-process inventory that stops the
synchronized flow is to use a pull approach. A traditional western manufacturer
will use an MRPII or ERP style of production planning and control whereby
production is “pushed” through the factory based
The best approach to guarantee that nothing
is set aside a few minutes and develops work-in-process stock that stops the
synchronized stream is to utilize a draw approach. A customary western maker
will utilize a MRPII or ERP style of creation arranging and control whereby
generation is “pushed” through the manufacturing plant based
With the information in a forecast and a reliable
schedule. A pull approach expresses that we don’t make anything until the point
when the client orders it. To accomplish this requires extraordinary
adaptability and short process durations of outline, generation, and conveyance
of the items and administrations. It also requires a mechanism for informing
each step in the value chain what is required of them today, based upon meeting
the customer’s needs. (Jones and Womack, 2014)
A lean producer sets his/her objectives for
flawlessness. Total quality administration is to efficiently and constantly
evacuate the main drivers of low quality from the creation forms with the goal
that the plant and its items are moving towards flawlessness. This relentless
pursuit of the perfect is key attitude of an organization that is “going
for lean”. (Jones and Womack, 2014)
To further explain lean management, I will
What are the 8 wastes’?
Waste is any activity that uses resources
but does not add value for the customer.
There are seven forms of waste;
Transport, any conveyance or movement of
product and material that does not directly add value. For example, transport
from goods receiving to a store room and then to the production line.
Waiting, anytime a worker is idol because
of having to wait for some event is a waste of resource.
Overproduction, excess product consumes
resources, such as storage facilities.
Defect, having to scrap repair, regrade or
correct consumes resources that were wasted when it was not done right the
Inventory, when inventory is sitting in the
value scheme it is consuming resources and finances, adding risk without adding
Motion, unlike transport this refers to
human movement such as walking, bending, twisting or reaching. Also includes
making adjustments or realignment of equipment and tools.
Extra processing, over processing that does
not in itself add value through transformation such as adding protective
packaging, cleaning moulds and castings.
Under- Utilised staff, this relates to
employees waiting for other staff members to finish their work, furthermore
employees with skills that aren’t employed and not allowed to communicate their
ideas as well as not granted the opportunity to progress within the company.
By removing as much
of these 8 wastes as possible, organizations experience many benefits. Among
the benefits of removing the 8 wastes are, Increased profits. This is
experienced thanks lower overhead and better utilization of time and resources More
satisfied customers. Your customers will appreciate your ability to deliver
higher quality products more quickly and affordably. Improved operational
performance. By streamlining and automating your business processes,
overall operational performance is improved. Lower risks. Your product
quality improves through lean practices. If you implement software as part of
your lean management, you can also achieve better traceability and compliance
What are the 5s’s?!
The 5S’s process is the foundation to the
achievement of an effective lean conversion. It is the instrument by which organizations
can sustain an enterprise-wide cost reduction and development program that will
unswervingly translate to the bottom line.
In this first step of the process, needed
and unneeded items
are separated and all unneeded items are
seemingly a simple step, it normally
requires input from several
people in the work area to determine what
needed and the best method of dealing with
Examples of sort include removing jigs that
are no longer used for
production from the workplace, discarding
from desk drawers old
pens and markers that no longer write, or
removing extra wrenches
from a pile on a worktable, keeping only as
many as needed.
There is often a tendency to keep too much
in the workplace.
The challenge is to see the area through
“new eyes” so that unneeded
items become clearer.
In this step items are arranged so that
they’re easily accessible, easy to find and easy to return to their correct
place. Labels and other visual indicators are devised and deployed. Painting
outlines of tools where they are to be hung, color coding tools and parts of
like sizes, numbering tools and their corresponding storage places, and placing
small office supplies into compartmentalized caddies are examples of
Straighten. The tendency is for workers to become accustomed to using poorly
placed materials, tools, equipment, etc. and the wasted time
The third step in the 5S process initiates
a work ethic of keeping everything clean and in order always. The connection
between cleanliness, quality and safety are emphasized. Examples of Scrub
include wiping machinery, sweeping, tightening loose belts or bolts, cleaning
gauges and indicators, tracking the source of leaks, overheating or undue
noise, and organizing papers and books on office desks and shelves. The
tendency is for personnel to clean their areas periodically, letting clutter,
debris and dirt collect between cleanings, rather than to clean as-they-go, always.
The challenge is to combat the attitude that “I don’t have time right now –
I’ll do it later” until it becomes clear that daily scrubbing is both easier
and more effective.
The first three steps will slip unless
standardized procedures, schedules and expectations are clearly identified and
regularly measured. During this step, a customized standardization method is
devised and implemented. Standardization examples include use of checklists,
institution of preventative measures to keep unneeded items from entering the
workspace, and job charts that delineate responsibilities for maintaining
various aspects of the 5S system. The tendency, after the first 3 S’s have been
deployed in an area, is for them to slowly begin to erode. The challenge is to
create clear, concise and complete standardized measures that prevent this from
happening and to institute a system that guarantees they will be followed
improvements made during deployment of the first 4S’s old habits will have to
die. Changing the culture and instituting new habits takes time and attention.
It doesn’t happen by itself. Examples of Sustain include scheduling time for 5S
Teams to do periodic reviews and improvements, prominently displaying posters
or other visual reminders in the workplace, and offering rewards and
recognition. The tendency is for 5S leaders and team members, management,
and/or operational personnel to expect changes to stay in place once they’re
made and not to notice they’re slipping. The challenge is for 5S leaders and
team members to take refresher courses, and conduct refresher 5S deployment
activities periodically to ensure the necessary cultural change, and for
management to offer continually strong support.
5S is a standout amongst the most practical
lean procedures accessible, and it is the establishment to all other lean
systems. That makes it the ideal beginning stage for conveying the advantages
of shelter your working environment.
It is easy to begin with 5S, it starts with
cleaning and association. Utilising a DuraLabel name printer you can check and
name everything with the goal that devices, supplies, gear and materials can be
legitimately distinguished and put away. Stamp machines and gear with marks
giving institutionalized working and support directions. Guarantee you are
completely in consistence with all OSHA prerequisites by making required
wellbeing signs, pipe markers and GHS names. Clear a path discovering signs to recognize
work areas and the most secure and most effective ways through your office.
Just in time also
known (JIT) for short, is another popular concept of lean management commonly
used for organisation turn around.
(JIT) aims to ensure that input into the production process only arrive when
they are needed.
are determined through a “‘pull’ system of production
This needs a
compound production development, evidently this will be pursued with the help
of unique software to enable a reliable connection between the production and
This ensures that
Supplies that are delivered to the production line are only produced when required
not beforehand, this may stress the need for close collaboration with suppliers
Below are both Benefits
Advantages and drawbacks of the
implementation of “JIT” to an organisation.
lower stock holding
means a reduction of storage which saves rent and insurance costs
As stock is only
obtained when it is needed, less working capital is tied up in stock
Less likelihood of
stock perishing, becoming obsolete or out of date
Less time spent on
checking and re-working production as the emphasis is on getting the work right
the first time around.
There is little room
for mistakes as minimal stock is kept for re-working faulty product.
Production Is highly
reliant on suppliers and if stock is not delivered on time, the whole
production schedule can be delayed.
There is no unused
finished product accessible to meet unanticipated orders, because all the products
are made to meet actual orders.
The need of a complex,
specialist stock filling system.