Lean management and methodology is continuously about value creation. If it doesn’t add value or the customer considers it to be wasteful - then it is time to cut it. Whatever is making your company money should stay and whatever is not, needs to go. The entire goal of this process is to work toward continued success and take a look at what is value and progress through the eye of the customer. This is by far one of the most important aspects of the methodology and stakeholders always need to be taken into account.
Another goal of this particular type of management is to maximize profits through value enhancement of products and processes. Lean management will involve a lot of examination of the process and the addition of perspectives from various leaders within the organization. Mapping the processes that are adding to the company are also essential - this is called value stream mapping. Lean management is an extremely beneficial methodology and process to implement into your operation and can provide a substantial amount of benefits. Before implementing the process, there are various aspects to consider. In this blog we are going to discuss the advantages and disadvantages of lean management.
Advantages of Lean Management
The advantages of lean management pertain to the following:
- Cost Decrease - Lean management is about maximization of profits, this means cutting costs within an operation as well as increasing revenue. While the overall selling price is impacted by various factors that depend on product qualities, there are things companies can due to control costs. Lean practices will help in cost reduction as well as savings that can be added to profit.
- Customer Interaction Enhancement - Lean management begins with a customer’s viewpoint in mind, in which they communicate with staff, responsiveness to concerns, and experiences with the product are some leading drivers of eliminating wasteful practices.
- Increased Quality - Lean also pertains to aiding in the attention of quality and value. The overall goal is to decrease the number of defects and reworks in products and this action means that processes will be optimized in order to avoid any potential mistakes.
Disadvantages of Lean Management
The disadvantages of lean management pertain to the following:
- Inventory Problems - Inventory is considered wasteful within a lean operation and low amounts of stock are usually kept on hand in order to decrease any carrying costs. While this sounds positive, this also causes companies to depend on suppliers and hope that they are able to make any adjustments to deliver quickly and efficiently. If there are disruptions in the inventory process, it could potentially derail a company.
- Implementation Costs - At times, lean management is implemented into a company that has never used it prior to implementation. It is likely that all systems and production processes will have to end in their current state. This event will bring high costs for companies who are not prepared for increased expenses of bringing in new equipment.
- Difficult Change Over - Switching over from the process that was used before is difficult due to the entire change of the facility. This will require a lot of patience and overhead and complete overhaul to work processes. Therefore, it is essential that leaders be transparent about potential changes that will happen in the company.
It is important to understand lean principles and methodologies before attempting to implement lean management into your operation. Lean methodology and mindset is a great way to improve your operation and provide thorough insight into areas that are in need of efficiency enhancement. Having said there, there are some disadvantages to the mindset as well and it can be difficult to implement. A software that can aid with this implementation and this process is Advanced Planning and Scheduling (APS) Software. Advanced Planning and Scheduling (APS) Software enables a visual scheduling process that can be extremely beneficial to the operation and locate any areas of inefficiency. APS software is being implemented into manufacturing operations around the globe and facilities are reaping the benefits associated with it.
Advanced Planning and Scheduling Software
Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.
- Create optimized schedules balancing production efficiency and delivery performance
- Maximize output on bottleneck resources to increase revenue
- Synchronize supply with demand to reduce inventories
- Provide company-wide visibility to capacity
- Enable scenario data-driven decision making
Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.