You are an \"up-and-coming\" analyst at a local manufacturing company that upper

Question

You are an "up-and-coming" analyst at a local manufacturing company that upper management has been considering for a management position. Your company and the current management are relatively "old fashioned" and there have not been any significant productivity improvements in the last 20 years. In fact, the writing is "on the wall" since foreign competition is forcing your company's management to consider re-locating most of the manufacturing operations to Taiwan. However, you have successfully completed the highly touted "Productivity Strategies" course at MTSU and decide that if changes are made to make the company "lean," profits would go above what is possible with lower labor costs overseas. What do you do to convince management to change, without jeopardizing your position, and how do you "sell" them on "lean manufacturing."

Explanation / Answer

I’ll convince the management that we need to review our productivity strategies and implementation lean manufacturing to keep up with the competition; otherwise we will be out of business.

Lean Manufacturing is the need of the time, as flow of goods at the pull of the customer (JIT) is necessary to prevent the wastage in our processes such as Transport, Inventory, Motion, Waiting, Over-processing, Overproduction, and Defects.
These wastes have a direct impact on our costs, and they are non-value adding operations.

I’ll give the management following reasons to implement lean manufacturing

·         Quality performance, lesser defects and rework (both internal and external).

·         Lesser Machine downtimes and Process failure.

·         Lower Inventory holding.

·         Higher inventory turnover leading to better cash flow of capital.

·         Lesser Space Required.

·         Increased efficiencies.

·         Faster development and go to market.

·         Increased Customer Satisfaction.

·         Increased motivation of employees.

·         Better relations with Suppliers and partners.

·         Better Margins / Profits

·         More Revenues

I’ll also share some statistics with the management to demonstrate the objective value of lean manufacturing. These figures are taken from the Manufacturing Advisory Service in UK, which has been doing projects on lean manufacturing. Their findings about the benefits of lean manufacturing are as below. These figures are the aggregate average results of firms in different industries, of varying sizes and information collected over several years.

To summaries, we need to implement lean manufacturing to sustain the modern day challenges of competition and business environment, so that we can look forward to a sustainable growth oriented future for the company.

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