Operations Management - Lean and Agile

This Chapter focuses on the concepts of Lean and Agile within operations management, considering aspects such as Just-In-Time (JIT), Kaizen, Six Sigma, and Leagile. The Chapter notes how Lean is essentially an operating philosophy focussed on improving business results over time through the elimination of waste within organisational processes.  This supports a subsequent examination of Just-In-Time (JIT) approaches to productivity improvement and the elimination of waste, considering the importance of process simplification and an attitude of continuous improvement.

In outlining Agile approaches, the Chapter emphasises the importance of a business being able to react to (and anticipate) changes in markets or operational circumstances. As Agile examines the speed and effectiveness of organisational responses to management information (and the quality of the subsequent decisions made), the processes and procedures applied can support the implementation of JIT methodologies. This review of Lean and Agile sets the scene for a consideration of Leagile approaches, where organisations aim to have tightly defined (lean) processes, whilst still retaining the ability to adapt and respond to changing circumstances. 

As the Chapter has stressed the importance of controlling waste within manufacturing organisations to deliver Lean, JIT, Agile and Leagile benefits, the nature of waste in this context is reviewed in some depth. Generally, there are stated to be seven types of waste within manufacturing organisations - overproduction, excess inventory, waiting (lost time), unnecessary motion, unnecessary transportation (double handling, or moving excess stock), re-work (poor quality) and over-processing/over-engineering.

Further consideration is also given to less tangible types of waste such as the poor use of human capital (not being creative or innovative) and the losses associated with under-utilised or missed business opportunities.

The basic working practices that can be followed to develop a culture of continuous improvement are reviewed, noting how they each require the collective involvement of all employees. The importance of discipline, flexibility, equality, autonomy, employee development, working quality, creativity and total involvement to sustaining any continuous improvement initiatives are emphasised.

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In outlining practical approaches to operations management efficiency, the Chapter also reviews the Toyota Production Systems (TPS). TPS is an integrated approach to manufacturing, bringing together ‘jidoka’ (automation with a human touch) and continuous flow (JIT).  TPS argues that repetition and experience increase organisational competence and if this can be simplified then processes become more robust.  The key is to have effective communication and process transparency to avoid subsequent waste.

The Chapter also considers the core challenges and fundamental criticisms of Lean approaches, noting that creating the physical environment and working culture required is costly. Critically, the need to recognise and address change resistance is emphasised, highlighting that such issues are likely to be exacerbated if the organisation concerned has operated well-embedded more traditional operational practices for a considerable period of time.

The Chapter closes with a brief consideration of Kaizen (creating a ‘pull’ rather than a ‘push’ through organisational processes, using visible symbols - Kanbans - to control flows).  Six Sigma (using statistical techniques to identify quality defects) is also outlined.


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