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This paper tries to find the answers by implementing Lean Theory perspective within an Indian public sector aviation company named the Indian Airlines. The Indian Airlines have enjoyed a market monopoly over 50 years in the Indian aviation sector as private airline operators were not allowed in the air transportation business up-till the year 1993 in India. But with the advent of open economy , the Indian government decided to open up its sky to the private aviation companies in the 1993 which saw an investment of about 5 billion $ within a month because it was too tempting and too large a market to not enter for the private players . The analysts reported that airlines are looking at transporting 5 million people /month in the economy sector, as the flyer base is large and potent. It was observed that there are three major players in the private sector, which poses a threat to the national career to be relevant in the business.
The new airlines were offering a competitive ticket price, better on board entertainment and looking for consolidation of routes in times ahead. On the other hand the national carrier was facing a reduced budget and a pressing schedule to meet the passenger demands as well .To overcome these challenges the Indian Airlines company decided to work on issues known as the 'hot issues' and in a way have been ignorant on training of personnel . Inspite of a training programme in place the results have been ineffective.
The objective of this paper is to introduce the Lean System theory to address the issues and help the Indian Airlines to remain relevant in the business.
ORIGIN OF LEAN THEORY:
The idea that business should reduce its costs is nothing new, the first manufacturer to have systematically approach this concept was Ford Automobile Company in USA and its assembly line was designed so that processes were performed in a logical order with minimisation of time and variety. It was observed that this mode of production tasted huge success and soon other companies started following this model as well. After the World War-ll the Japanese auto giant Toyota shifted its focus of their process to the customers. Anything that was not benefiting the customers were considered as waste or muda in Japanese and was deleted completely.
INSIGHT OF LEAN THEORY:
Lean management was created with the intention of reducing processes wastes and maximising the value of the product or the service to the customer. This is achieved through unique techniques like flow charts, total productive maintenance, just in time techniques and total quality management.
It simply maximises the customer value through reduction of work wastes and lean management guide organisations on how they can put value to each customer. The management must stay focused on what their customer are saying about their product or service and in a way putting the customer feedback above everything.
This can be achieved by adopting the lean principles. It changes how an organisation perceives things in terms of customer value. Lean management will be of help to the organisations to discern focal areas and critical problems to be resolved in proper prioritization.
There are tools available today in order to adopt this system .Some of these techniques are flow charts, work place redesigning techniques, total productive maintenance, total quality management, just in time techniques. However, adopting lean management theory will also aid an organisation to develop their own lean management tools and concepts.
Eliminating wastes is a key concept in lean theory; decreasing wastes also result in decrease in efforts, costs, defects and time. The outcome is an increased revenue, increased employee motivation and increase in customer base as well.
THE LEAN MANAGEMENT PRINCIPLES:
The lean thinking is generally divided into five broad principles:
Principle One: Specify Value:
The focal point of lean thinking is "value". It has been observed that there is a need to specify value where it stresses and should be defined by the ultimate customer. The steps have certain factors, the specified value should be based on the specific goods/services or a combination of both. The important issue is to put the organization in their customer`s place and rethink value from their perspective.
Principle Two: The Value Stream:
The value stream in theory is known to be the specific set of activities needed to create a specific product through the three phases of management functions of any business: problem solving, information management and physical transformation.
Principle Three: Continuous Flow:
It is the third step in lean philosophy, after ascertaining the value and mapping of the value stream for a specific product, the wasteful steps have been omitted from the value stream to maintain a continuous flow to achieve the higher level of productivity and lower level of errors.
Principle Four: Pull:
This principle tells us that one should avoid producing goods or services in upstream while not being asked for by the downstream customer.
Principle Five: Strive For Perfection:
The fifth principle in lean philosophy is perfection. It has been stated to lean followers that there is no end to the process of reducing costs, time, effort, space and error while the customer requirements are being followed almost at a close distance and at this stage, the organization looks for perfection.
STRIVE FOR PERFECTION
IDENTIFY VALUE STREAM
Cycle of lean principles
ISSUES ADDRESSED BY LEAN MANAGEMENT THEORY:
It has been observed that in any organization there are largely five major areas of concern which are generally gets addressed once lean theory have been implemented.
In general, sense productivity means volume, it may be the number of calls handled in a call centre, number of products manufactured in a factory, the number of transactions resolved in a system, whatever the type of productivity it is, implementing lean theory will increase in yields and thus create more satisfied customers for the organization and enhancing profits too.
PROLONGED CYCLE TIME:
It is also considered as a complaint been resolved beyond timeline creates to another complaint and it is pivotal for the organization to manage the handling time to any problem for resolution, shorter cycle times and not cycle lates should be delivered.
Organizational costs must be carefully and judiciously allotted to where it should be and profit and loss management should be clearly defined. Inspite of a increasing customer base if these issues are not defined then it will increase the organizational costs and a favourable cost report could never be achieved as well. The company must reduce expenditure by maximising resources and saving talents.
It has been observed that time, resources, cost and man-power are all subject to be wasted if not coordinated or managed properly. Reducing or eliminating factors of extra cost would enable an organization to stay focused on the critical few and focusing on these would enhance the overall improvement.
DISSATISFIED CUSTOMERS AND EMPLOYEES:
It is easily understandable that the heart of any organization is its employees and its soul is in the form of its customers. Companies must have a line of thinking called "WOCAS" which stands for' what our customers are saying '. It is very important to capture the voice of its workforce through regular group discussions.
PROLONGED CYCLE TIME
LEAN MANAGEMENT MAJOR STAKEHOLDERS:
Practise of lean management mainly targets three major stakeholders namely customers, employees and the organization.
It seems that nothing is more rewarding than to see the customers delighted. That delight might be due to the satisfaction to the product or of an encompassing customer service. The idea is customers are always right and even if they are not, they should feel that they are valued. The theory is to solve or address all of their concerns upfront and to strictly avoid any false promises. The concept of value added service always comes with a catch that it prevents the decline in number of its customers.
This is the potent workforce, the rank and file the level. As it is widely touted as in they are the organization`s wheelbarrow. It is not a secret that a happy employee would merit a delighted customer , an employee who is properly compensated with his/her professional directions well defined and are empowered would make a star organization without a doubt.
The organization also consists of the board members, CEO, owners, the house rules and other implementations. They are the fuel that drives the company and an organization, which is well balanced, well maintained and without a bias which also has a heart for its customers are the model organizations for the present world. As it is also popularly said that they are the echo of the lean management system.
ADVOCATES OF THE LEAN MANAGEMENT:
It is also observed that when it comes to business, the lean management is not selective. It could be applied to any types of business, manufacturing, operations, customer services and any other type can adopt the principles of lean management. The only consideration is as long as the goal coincides with what lean management is teaching then the application will be proper.
There is also no "SPOC" or "single point of contact" that all have to rely on. Applying lean management should be a collaborative effort among all the departments, teams or groups. The only point noteworthy is whether an organisation will designate one team to drive the principles and collect efforts. The business improvements should not be focused on a specific department, at the end, all the departments, teams, groups should provide inputs on how to better performance, increase profit, reduce wastes and implement proper processes.
IMPLEMENTATION OF LEAN IN THIS CASE:
After the introduction of lean thinking philosophy and concentrating on appropriate measures on the above lines, we should try to start the process of implementation in reality. Thankfully after many years in lean theory research , it have been observed that there is only a specific sequence of steps , combinations and initiatives of lean tools that yields the proper outcome for the system . It is important to find the appropriate change agents and appoint them with the right knowledge as well. However, the starting point should be the creation of value stream. As a result, there will be some serious changes in the routine tasks. After conveying the pilot plans to convince and involve everyone in the transformation process, the proper wave of change will be spread in the organization. Though the lean philosophy is a long-term strategic tool so the organization needs to be patient.
The initial phase in implementing lean management is to consider the training issue of the national carrier in this case the Indian Airlines. The proper lean training would enable to prevent the inefficient movement of people due to their new lean mindset.
Another important issue in an organization is improper integration among risk management processes. This will result in non-value added processing where processes do not understand each other because of lack of coordination and will produce more wastes.
The company needs an organisational direction from the top as it needs to have a clear assigning with proper authorities with their boundaries of responsibility and decision making abilities clearly stated .
There is a genuine problem of outdated aircrafts, which needs to be phased out over the time and substituted by more fuel efficient and comfortable modern age aircrafts as well.
The public sector company India Airlines has a large section of employee who could be classified as an aged group and hence could not be more productive to meet the new targets. Since it has a recognised employee union, consultation should be done to offer them voluntary retirement options to introduce fresh recruits and a more active work force too.
The redesign of the work process should enable to attain a continuous process flow so that the organization stays better off to cut down its idle times.
The organization must look internally to ascertain that whether there exists any overburden and unevenness of job tasks in the different stages as a waste and needs to cut down as well.
The value of slowing down to fix problems at the first time should be established with anyone and everyone associated with the lean implementation and this way long term productivity would be enhanced.
The airline company needs to develop strong lean focused cultural bases within individuals and teams in order to have a consistent followers of lean corporate philosophy over long term. The Indian Airlines needs to build cross-functional teams and the quality or productivity will enhance in this way.
The lean management as a theory of management technique, emphasizes to make decisions without rushing. It is strongly advised to include everyone who are being affected and make decisions by consensus after considering other alternatives as solutions.
LACK OF STRONG PROCESS FOR INTERNAL & EXTERNAL COMMUNICATION
IMPROPER ASSIGNING OF PEOPLE TO THEIR PROFESSIONAL ROLES CONSIDERING THEIR TALENT
UNDER UTILISED PEOPLE
PEOPLE NEED TO RECEIVE PERMIT ON ANY NEW SITUATION IN HIERERCHICAL ORGANIZATION
Cause and effect diagram for the waste of underutilized people.
The Lean Theory is very much practical and relevant in solving most of the management problems. It has been observed that Lean Theory and risk management have coexistence in most of the cases. In the Lean thinking, the organization needs to cover the whole company regarding the personnel involvement but when these two theories merge together then the organization improves in a steady upward curve. Applications of Lean Theory make a prompt response with a proper flexibility in an organization. The Lean tools can vary according to the nature of the organization and the focus sector as well. Through the proper integration of Lean management principles, the organization would obtain the achieved target.