The fact that inventory reduction is typically not recognized as a cost saving due to current accounting practices has long been a sore point between manufacturing and finance. Attempts to try and pull the two functions closer together so they can jointly drive company revenues and profit have thus far led to no major breakthrough.
Yet, finance departments often apply the lean lessons learned in manufacturing in their daily activities. Two examples are ECRS — Eliminate, Combine, Reorganize, and Simplify — principles, often used in the financial context to reduce waste, and value stream thinking, deployed to identify a product cost from end to end. In situations in which outdated processes create confusion and rework for employees and delay approval from supervisors at different levels of the business, ECRS can help clean up redundant forms and procedures and shorten the lead-time of the process. As for the value stream view of the financial system, it is all about recording revenue and costs The Problem Of Lean Manufacturing each individual product from end to end.
What is the Lean Manufacturing Process?
Traditionally, financial systems utilize data that refers to a variety of products, making it difficult to calculate revenue and cost for individual products and therefore knowing whether or not they are profitable. The author, Mr. This emphasizes the importance of calculating the time loss resulting from holding large inventories as well as the lead-time of the overall process the essence of TPS according to Taiichi Ohno. Although the J-Cost theory sounds quite convincing, to my knowledge no company had actually tried to apply it. It is a relatively large group with seven independent business units serving the automotive industry and other sectors.
XinXiang Aviation Industry learned lean manufacturing many The Problem Of Lean Manufacturing ago and, like many others, started with a few tools and hiring consultants to help. Unfortunately, despite many years of lean practice, they struggled to see results in terms of revenue, profit, or employee engagement. During the first four months, Tanaka-san came to China two days per month with a The First Atomic Exploded consulting firm.
XinXiang Aviation Industry selected four business units within its portfolio to run the J-Cost experiment and appointed financial managers at each site to lead the implementation on various product lines. Before the application, they identified individual product value streams and learned how to determine the profit rate for each step in the process — from incoming material to shipping. Many of the activities carried out as part of the experiment were considered little revolutions in the company. First of all, the fact that financial and other office staff showed up on the manufacturing floor frequently and led teams to learn and try out the J-Cost approach together. Secondly, the fact that the layout of many product lines as well as many financial processes were rearranged to align with the respective product value streams.
Finally, the The Problem Of Lean Manufacturing that the CFO himself led the team to apply the J-Cost approach to one product after the other. The graph shows the lead-time of each step so that the entire team can see its impact on cost on the visual board.
It clearly reveals the impact of the time factor continue reading the overall value stream process, including the inventory of raw material, work-in-progress, and finished products as well as every manufacturing steps. The Problem Of Lean Manufacturing enabled working teams to visually identify any steps in the process that took an Manufacturign amount of time and take immediate action to reduce the lead-time.
With the early successes achieved in inventory and lead-time reduction, top management committed to using the approach as a new benchmark of manufacturing productivity. The new measurement system laid a foundation for cross-functional teams to drive material flow through value streams using on a pull system. This was a good start and the company realized that more efficiencies were waiting to be dug out of the process.
This was the first experiment with the J-Cost system ever run in a company and represented a significant breakthrough.
WhatisWhatis
This experiment proved that a cross-functional team made up of finance and manufacturing staff can effectively eliminate waste and shorten the lead-time to meet customer demand. While J-Cost is rooted in the foundational TPS concepts of flow and pull like many other lean practices, its uniqueness lies in the fact that it brings finance staff to the shop floor, thus getting the company one step closer to becoming a The Problem Of Lean Manufacturing enterprise. Words: Tue ChaoPresident, Lean Enterprise China The fact that inventory reduction is typically not recognized as a cost saving due to current accounting practices has long been a sore point between manufacturing and finance. TAGS: lean for competitiveness lean manufacturing lean production lean results lean strategy.
Related posts. Two giants, two communities, one…. A lean view on… strategic…. Bringing strategy into your digital…. Just-in-Time and the Covid pandemic. The synchronization of material flow…. What lean marketing teaches us….]
You will not make it.
You are not right. Let's discuss it. Write to me in PM, we will talk.
I thank for the information.