AS 1

Student id :- 19436746
Student name : Saurav Khan
Module leader :- Kapil Khanal
Contents
1. Introduction.......................................................................................................................................... 3
2. Lean Management ............................................................................................................................. 3
2.A. Building block of lean management ............................................................................................ 4
2.B. Concepts ......................................................................................................................................... 5
Kaizen ...................................................................................................................................................... 5
Kanban ................................................................................................................................................. 6
JIT (Just In Time) ............................................................................................................................... 7
2.C. Example company following Lean management concept ....................................................... 7
3. Justification of the company concept .............................................................................................. 7
4. Lead Time............................................................................................................................................ 8
4.A. Calculation of Lead Time .............................................................................................................. 8
4.B. ........................................................................................................................................................... 9
4.C. ........................................................................................................................................................... 9
References .................................................................................................................................................. 10
 1. Introduction
Ford Motor Company is a international automotive company which was established by
Henry Ford in 1903. Ford is popularly renowned for the selling, manufacturing, designing
of automobile and even the most luxury cars named under Lincoln luxury vehicles. Ford
has a diversity of products such as automobiles, trucks, buses, tractors, financial services.
In USA Ford is the second major and fifth largest in the world as the automaker company
(Wee & Wu, 2009).

Transforming fords production system from mass production system to lean

manufacturing system, it developed a new production system named Ford Production
System (FPS) (Hackett, 2019). The main idea of FPS is a lean, flexible and disciplined
common production system under the set of philosophies and procedures which exceeds
customer’s expectation quality, cost and time. Ford Motor Company generally operates
in four segmentations i.e. (i) Automotive (includes the sale of Ford and Lincoln vehicles,
parts and accessories over the world) (ii) Financial Services (includes financing activities
related to Ford Motor) (iii) Ford Smart Mobility LLC (formed to design, grow and invest in
evolving mobility services) (iv) Central Treasury Operations (involved in decision making
for investments, risk management and funding for the self-propelled segment) (Reuters,
2020).

2. Lean Management
A long-term and systematic method to work that pursues to achieve small, incremental
changes in procedures of production in order to develop effectiveness and quality is called
lean management. Continuous improvement or development in the organization due to
alteration in the process of the organization’s resources and management is what lean
management and its concept revolves around (Ramezani, 2014).

Based on the Toyota Production System (TPS), lean management system was
established in 1940. Five principle of lean management were made in practice by Toyota.
The main goal to implement these principles were to minimize the amount of process that
were not generating value. Lean management mostly emphases on defining value from
the viewpoint of purchaser, elimination of waste during business processes and
development in all the work process, purpose and people (Melovic & Mitrovic, 2016). All
in all, the key aim of lean management is to basically change the thinking and value of
the organization leading to the transformation of organizational behavior and culture over
a period of time.

Similarly, there are supporting goals and ultimate goal for lean management
system. Likewise, there are 4 building blocks that support and stand as pillars for
lean management system known as four pillars of lean management.

2.A. Building block of lean management

Generally, building blocks on which lean management stands are listed below:

 Product design:

Product design is the process of imagining, creating and evolving ideas into a unique
product. Product design takes consideration of the production cost, design process also,
concerning in the overall process of manufacturing from initial to final phase of
manufacturing until the development of the product (Fekete & Hulvej, 2013). For a product
to be nice there are three key determining modules i.e. (i) functional use of the product
(main use of the product) (ii) external appearance design (design according the demand
and requirements) (iii) quality (delivering qualitative product in order to satisfy customers).

 Process design:

There are eight elements that should be consider for process design in lean management.
Eight elements include : (i)Quantity of production must be in small lot. (ii)Setup time
reduction must be done. (iii)Manufacturing cells: maximum utilization of resources. (iv)
minimization of defects and errors and maintaining quality. (v) production should be
flexible in order to gain advantage over less switching cost. (vi) balanced system must be
maintain with the consumers and the products. (vii) less inventory storage must be
maintain. (viii)fail-safe methods must be in practice in order to prevent no harm while
failure.
  Personal / organizational elements:

Five factors for the organizational elements to be consider for lean management. Workers or
employee at first are regarded as the main assets of the company. Employee are given power
with the expectation of result to be meet. Furthermore, employers are given different training
rather from their regular job in order to obtain multi skill workers for multi-purpose. However, for
the adaptation to current rapidly evolving technology old employees should be provided with
training programs on a regular basis (Kilpartrick, 2003). Likewise, all the cost incurred must be
maintained appropriately. Managers should be leader and initiators not order givers.

 Manufacturing Planning and Control

Elements of MPC are very vital for lean management system. Firstly, level loading means
to gain stable production control over each cycle in other words, production should be
maintained according to demand. Production of the concluding operation pulled by
customer demand, following pull systems. Visual systems refer to Kanban, any device
that can communicate demand for work or materials from the previous station. Limited
Work In Progress carries benefits such as flexibility increase, minimizes costs of scraps
and rework. Key feature of lean management is keeping close relationship to vendor.
Reducing transaction process benefits minimization of costs from different logistical,
balancing, quality and change transactions (Dekier, 2012). Finally, equipment should be
well maintained and workplace should be clean and free.

2.B. Concepts

Kaizen
Kaizen is a Japanese word combined of two different meaning characters “kai” and “zen”
which means “change” and “good”. Hence, kaizan refers to non-stop process of
development. The main motto of kaizen is “There is always a better way of doing
anything”. The main idea of kaizen is to make humble, sensible developments and
alterations for precarious end to end business procedures, supporting the general
‘Continuous Improvement’ strategy of the organization. Currently for greater productivity,
speed, quality and profits with minimization of cost, time and effort Kaizen has been in
practiced in many companies (Shettar & Rangaswamy, n.d.).
‘5S’, is one of philosophies of Kaizen where, it can be implemented in most of the areas
like factory, offices, warehouse, hallways, parking area etc. ‘5S’ the acronym of the
Japanese words is described below:

 Seiri (sort): means to categorize items into necessary and unnecessary class and
remove the unnecessary items from the workplace specifically from the hidden
areas. The unnecessary item can be sold as a scrap if possible or dump in the
trash.

 Seiton (straighten): means organizing the required items for easy, efficient access
so, that the items like labeling, storage etc. can be found easily. All in all, it means
that everything must be in right place.

 Seiso (shine): means cleaning the workplace and keeping it dust free including
repaint. This will remove the discomfort in the workplace.

 Seiketsu (systemized): means setting the benchmark for actions to implement the
first 3 ‘S’ explained above.

 Shitsuke (sustain): means executing and sustaining the program through proper
training and implanting discipline in all the employees.

Kanban
Kanban is one of the most effective concept of lean management, where “Kanban” in
Japanese means signboard. Kanban theory is used in trade line as a tactical operative
judgment and supports in increasing the output of organization and minimize the waste
in manufacturing. For example, kanban system assists as an effective and visual
production control mechanism of the Toyota Production System (TPS) at the shop level
and ensured timely and coordinated production and delivery if right quantity across the
whole manufacturing and supply chain (Domingo, n.d.). This theory helps at maintaining
minimum stock at the time of maintaining less stock.
 JIT (Just In Time)
Just in time (JIT) this concept works on to remove sources of industrial waste by
attainment of right quantity raw materials and creating the right quantity of products in the
right place at the right time.. Generally, just in time means the delivering of product at the
time of need. The objective for JIT is to produce the quality product with features that the
customer demands. To achieve zero idle inventory, the production should be with no
waste of effort, material or tools, every movement must have a purpose. The production
at JIT should be with the methods that allow the development of people (Mahmoud, n.d.).

2.C. Example company following Lean management concept

Ford’s owner Henry Ford used the application of Just in Time inventory control during the early
20th. Ford is one of the company practicing lean management system concepts i.e. Just-in-Time
and Kaizen for the production.

3. Justification of the company concept

As already described above about 3 of the lean management concept, from where Ford Motor
Company uses kaizen and just-in-time concept for the manufacturing of the product. Ford was
able to implement the just in time concept and knew its importance of not creating large amounts
of inventory and managed their supply chain to have enough materials on hand to manufacture
the product based on demand. Ford motor company has adopted these concepts and started
producing quality product with minimum lead time (Cankovic & Varney, 2009). Furthermore, the
company products are of with no wastage of labor, material with the purpose of zero idle inventory.

With the apply of these concept Ford has gained continuous improvement in quality with reduction
in cost. It even has controlled the elimination of waste, minimization of manufacturing time, lower
work in progress. Furthermore, it has been able to maintain better supplier relationships and
defect free output has been obtained. Hence, with the adaptation of lean management concept
Ford has gained a competitive advantage over their competitors and has been very benefit to
their company.
 4. Lead Time
The overall time taken between the initiation and execution of the process is known as
lead time. In general from the view point of manufacturing, lead time is the overall sum
of time essential for completing a product starting from the date of getting the order to
the delivery of the goods to the client. Companies assess lead time in engineering,
supply chain management and project management during pre-processing, processing
and post-processing stages (Lead Time Reduction, 2008). Lead time reduction can
increase productivity, output and revenue. Hence, sales and manufacturing processes
will be affected by longer lead times.

4.A. Calculation of Lead Time

Sam has a shop that trades wedding dress. In 26th week, Sam and manufacturer
discussed a design for a new wedding dress and agreed on a specification and placed
the order with the manufacturer.

DESCRIPTION Time
DESIGNING DRESS 2 weeks
ORDER RAISING FOR DRESS 1 week
MANUFACTURING AND PRODUCING 4 weeks
ASSEMBLING 2 weeks
DELIVERING 1 week
LEAD TIME= 10 weeks

Thus, 10 weeks is the lead time needed for Sam to display the wedding dress in her shop
after the placement of the order.
4.B.
DESCRIPTION Time

Initial order receive 26th week

Lead Time 10th week
TOTAL 36th week

Therefore, the dress can be displayed at 36th week in the shop.

4.C.
According to question, Sam’s shop is located in United Kingdom. If the dress part were to come
from Italy would have less lead time rather than the lead time for the dress part to come from
China. This is because of the geographical aspect Italy who is 2469.2 Km far where as, the
distance between China to UK is 7,775 km. Since, UK is geographically near to Italy and lies in
the same continent to lead time will have less affect than China as it is located in Asia.

Hence, trade barriers and delivering time may affect lead time as China is much more farther
than Italy so, it is easy to bring dress parts from Italy rather than China and will have less
barriers and less lead time.
References
Cankovic, M. & Varney, R. C., 2009. The Henry Ford Production System: LEAN Process Redesign Improves
Service in the Molecular Diagnostic Laboratory. The Journal of Molecular Diagnostics, Volume v.

Dekier, L., 2012. Th e Origins and Evolution of Lean Management System. Journal of International
Studies, Volume 5, pp. 46-51.

Domingo, R. T., n.d. Lean Management Principles, s.l.: s.n.

Fekete, M. & Hulvej, J., 2013. LEAN MANAGEMENT AS A HOUSE FROM THE PAST TO, s.l.: s.n.

Hackett, J., 2019. Ford. [Online]

Available at: https://corporate.ford.com/company.html
[Accessed 15 1 2020].

Kilpartrick, J., 2003. Lean Principles, s.l.: Utah Manufacturing Extension Partnership.

Lead Time Reduction (2008) Marjan Hassanzadeh Rad.

Mahmoud, D. M. A., n.d. JUST IN TIME (JIT), LEAN, AND TOYOTA PRODUCTION SYSTEM (TPS), s.l.: s.n.

Melovic, B. & Mitrovic, S., 2016. The role of the concept of LEAN management in. Matec wave of
confrences.

Ramezani, A., 2014. Lean and its Basic Components. Academic Journal of Research in Business and
Accounting.

Reuters, 2020. Reuters. [Online]

Available at: https://www.reuters.com/companies/F.N
[Accessed 15 1 2020].

Shettar, M. & Rangaswamy, N., n.d. Kaizen - A Powerful Tool of Lean Manufacturing.

Wee, H. M. & Wu, S., 2009. Lean Supply Chain and Its Effect on Product Cost and Quality—A Case Study
on Ford Motor Company. Supply Chain Management.