Managerial challenges implementing lean service environment

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Lean is a way of working which identifies and eliminates waste to deliver improved value and services based on customer requirements. In the lean system the flow of information is from the management to the market. Lean manufacturing as a management tool has taken the manufacturing industry by storm and companies around the world have adopted lean methods in many forms and many names.

Practical results are achieved in less delivery times and low levels of inventory as an increased responsiveness to customers demand and nonstop flow of capital. Lean is one of the most appreciated and commonly used business models in the world by famous organisations. These companies have reduced their wastage and reduced the loss arising there from.

The typical approaches used by most companies do not provide an optimal return on investment to companies.

……..The ultimate aim of an organization is to gain profit in the business by providing satisfaction to their customers. This was achieved by providing customers the cost effective product by minimizing the waste and adding value to their products and services. The main objective of lean is to provide good quality product at reasonable cost in proper period to the customers. This was achieved by choosing proper methods in proper place and time. This results as organization following lean methods becomes more competitive in the market.

Introduction to Home Base

Home base retail group is a leading retailer in the UK with a turnover of more than £ 6 bn for the last financial year. It sells its products under two distinctive and complementary brands called Argos and Home base. This name is commonly known in every house hold of UK. It has a wide range for products to suit customers of all segments of the market. It advertises and offers sales at discounts frequently and provides many value added services. .it also has a thorough knowledge of the prevailing market conditions.

Lean management principles … …

Lean management stresses on the achievement of the value that is to be identified and the activities that support the core concept are to systematically arrived…all the other activities that consume time are referred as waste as they are of no value . These activities are classified as W O R M P I T - usually referred to as Waiting Overproduction Rework Motion Inventory and transportation.

This is followed by mapping the value stream thus to follow the essential ideology of the procedure formatted and to take effective steps to make the products or the services to reach the end users at the appropriate time. These value added steps contribute to the value of the product and then on value added steps are reduced. This results in adding to the quality of the product as well as to reduce the cost of the product. The aim of every business should be thus to provide the product and services at the appropriate time and to maximise the profits thereby. Thus there should be a planning in the flow of the products or services to the customers. It is very critical that unnecessary delays and interruptions should before see and prevented by appropriate measures. Thus there is an importance to the delivery of the products at the right time and thus there should be adequate storage and space for all the transferred goods. There is an atmosphere of easy shopping in all the retail stores of home base. At home base the needs and wants of the customers are frequently checked. Mainly dealt with household products like kitchen appliances, bathroom fittings and gardening equipments. There is also a thick competition within the industry that makes homebase to deliver the goods at the door of the customer when they are ordered online. Even in the retail shops the items or products are displayed according to the general taste of the people in the market. There are regular updates of the sales and offers through the internet and other forms of advertisement .there are also a wide range of choices made available to the customers. This is mainly done to target wide categories of customers from all backgrounds. It always stands as a pioneer in implementing the tastes and preferences of the customers. The company also has a number of branches in the market and it has implied the different strategies for every area as the taste and preferences changes according to the style of living. So it takes different measures to establish these different strategies and they make sure that all the needs and wants of the customers are satisfied at that particular store.

The following step is called pull which means that according to the customers demand the products will be moved out. This is a very simple concept …….The next step is the pull by the means of customer's demand which was one of the easiest methods in the lean principles…..the main concept behind this pull strategy is that there will be no movement of goods until there is a need for it.. This arises as and when orders are received. Only then a product or services moves from its place. This strategy involves less stress as the production will be based on the demand that is in the actual trend for the product and not a foreseen one. The production strategies completely rely on the orders based and the demand by the customers.

The last principle of the lean management is that which requires more outlook as it is critical to deliver the products at the appropriate time and reducing the wastes. The finished product which provides have every assets in the product adds value as a result will have zero value. At home base they deliver directly to the customer's door and at a low cost. The company avoids intermediaries in between and hence it sells at low prices to its consumers. This also provides a way to get more profit. Another added advantage is that there will be no delay in the sale of goods to the customers as the delivery mode is absolutely in the control of home base only. This gives home base a good value in the market as it is able to offer good at a low price and with no problems in the delivery of the goods.

Push method

The push method is the one that is commonly used in a majority of organisations. ..In this strategy the products are delivered through distribution channels. This distribution strategy is formulated by the management based on its production and distribution planning. Home base tries to know the various likes o the customers and it tries to satisfy them by providing an updated service for a better customer satisfaction. It makes more efforts to satisfy the expectations of the customers. This has led to the growth of homebase all across UK. The difference between the push and the pull strategy is that in the pull strategy the products and services move from customers to the management but in the push method the vice versa system is followed.

Lean techniques:

The various lean techniques are as follows: They are

SMED

Poka-yoke

Kanban

5s

total preventive maintenance

SMED

The SMED was developed by a Japanese engineer working in the TOYOTA.SMED is the abbreviation of single minute exchange of dies. This method emphasises to reduce the quality of the goods due to the change of the position of the dies. When this method is implemented there will be reduction of time from hours to minutes. As a single minute cannot specify the change of the dies but it implies that the transfer of the dies will take place in a single digit minute. The effect of this is that there is an optimum use of the stock, increased production of the product in a flexible operation method. There is also a better result in the reduction of the total production time. Home base adopts the just in time concept. This concept is an important tool in the administration of a business. This helps to improve the methods of work done in homebase. First the activities are planned and are then simplified for better performance. This will help to estimate the time for each work and thereby reducing the material handling time. Therefore homebase adopts strategies to void delay in delivery. Here a time is set up for all the activities that are planned. Then the work is segregated based on the time of delivery. This also includes the idle times as it would be an unexpected at any time. Considering this idle time will help the managers to avoid unnecessary delays. Home base thus delivers all the products in the appropriate time. These are the benefits of the just in time concept.

Poka-yoke

This is a method of the lean technique formulated by an engineer call singo. This method also has another name called mistake proofing. This method tells us about the various possible mistakes that could occur in the production process. It also provides information of how to rectify these errors and to plan the operation beforehand as the mistakes are foreseen. This method would be very helpful to workers who are new to work and are not well trained. As they would make mistake in common the application of this method would rather increase the quality. This method also is a common one as it requires only low implication expenses.

Kanban:

The word Kan means card and ban refers to bad signal. Kanban is also a version of the jit system. It is a widely used pull system. Here visual cards are used to speed up the action. This system emphasises the pull system as it suggests production on the basis of demand. This system is easy to operate and requires no further expenses to operate. This system is commonly used in the automobile industry and it stresses that it is essential to have a proper and formulated flow of operations that result in the endurance of the operations. It is used to maintain the quality standards and to control the level of production, to maintain uninterrupted flow process and to ensure good nonstop operations. Kanban is also applied to control inventory levels at the production. It forms a main part of the pull system. Here a wide variety of stock is produced and stored to make use of them a t the appropriate time. This however reduces the manufacturing cost but this turns out to be a disadvantage at times as it makes the management to invest a large sum of money in the inventory. Homebase implements all the above principles at certain levels. It has a complete different strategy and does not follow the traditional methods of the e push strategy. Homebase has many store rooms at different locations. It maintains the stock and the inventories at these stores at different levels based on the quantity of the sales of that particular store. Even in times of emergency the stock is taken from the nearest homebase store. Thus it makes sure that there is no delay in the supply of the stock and there has been no problem to deliver to the customers. Hence customers are satisfied and indeed this contributes to the growth of the business. Homebase keeps updating all the changes in the inventory control system and always been the pioneer in the industry in this regard.

Homebase ha s adopted the SAP method since 2000. The company introduced this system to implement the concentrate the central capacity. The SAP helps the company to get away from decentralization and to make the functions of the home base centralized. Thus it helps to gain proper control of all the branches and their operations. The main aim to implement the Sap was to increase the performance of the company in terms of its nature to adapt to changing market conditions and also to produce aptly according to the demand. However the systems that were used in the past are not as efficient as the SAP. There is a possibility in SAP to adapt to new techniques easily. Hence it provides a chance to grow rapidly at times of extending demand and the appropriate production. SAP helps homebase to improve its functions. It performs more on its production and delivery especially. This brings in more number of customers. It also makes its employees to use more and more the applications of SAP in its business. The strategy formulated by home base has thus been very simple and the customers are thus the real benefiters of time. When they expanded their business to sell products for kitchens and bathrooms they were able to get all the information required through the use of SAP. The simplicity of the usage of Sap has made the employees to entre all the data that they have collected and to organize and format the necessary results. Sap is an implication for the business of home base to get rid of the complexities of the business. It presents all the data in a simplified format and thus providing an easy access for the customers. Using Sap home base is able to get a standard data from the warehouses. Thus it is able to make quick and easy decisions. As the number of stores are spread over a wide area Sap enables all the staff working at these different stores to work out on the total data bases. SAP helps home base in maintain its production level, the level of the stock in hand, the retail stores maintenance and thus an effective cost management in all aspects of the business. The dispatch department uses SAP to get data from their ware houses to make the next best possible steps in their succeeding activities like purchase and in the process to collect or to maintain the orders at the existing level. By implementing SAP the home base is able to develop a core strategy for the entire business an s a whole. It has many modern techniques for communication .home base was thus easily accessible to wireless technologies at the time of emerging changes in technology. Thus home base was able to provide radio frequency handsets to its employees which help them to communicate in between them. This again in turn helps the business to focus on the inventory management and to get to satisfy the needs of the customers ultimately. Thus home bas e is able to maintain a centralized head office instead of a divisionalised organization. SAP also provides absolute control over the data that would be reliable. Thus there is an arena of simplified methods of production and distribution. Thus the home base was able to capture the market and to maintain it consistently. The homebase also uses the Maxload Pro software from Auto logistics systems. For special usage at the time of festival and occasions. This soft ware helps home base to maintain and to deliver all the stores at the appropriate time. This enables home base to introduce a product at all the stores at one time. Here at home base the festive demand is for products such as Christmas trees and other electrical and nonelectrical decorative items. This software also aids in the arrangement of the product s in the shelves thereby to have all the things in order and also it would be easy for the staff to handle all the products. this also helps homebase to deliver the products from a centralized zone .thus even during the busiest time of the season s home base is able to access delivery to all its stores and thus to make the product available uniformly throughout the UK . This data helps home base to mange a lot of data and also to maintain their stocks and the delivery times.

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At Christmas times there will be huge demand for all the house hold products. Hence there will be a need to group and arrange the delivery of a lot of items. The homebase uses the Maxload pro to choose the right form of arrangements and the appropriate delivery channel. The company has to maintain this order for all the stores which are small, medium and large. The shelves are displayed and the different ranges of products are to be arranged so as to be easily located. They use large pallets to pack large items and small boxes to pack small items. This soft ware helps them to choose the right option in selecting the most appropriate mode of packing and delivery ensuring the cost economy. As there will be the same models and descriptions Maxload pro helps them out to sort the year of the manufacture and thus segregating the packets. The information on the software is regularly updates. they combine the excel work sheets along with the Maxload pro to enable them to sort out the most appropriate data .these data's also help in the grouping of un packed items and sorting them for the next load of delivery . The Maxload pro also helps them to sort out the information and gives them the data required to pick and pack a large number o f items. This helps in a subsistent flow of work step by step. It also enables the managers to know exactly how much they need to be distributing to each store. Thus segregating all the information the software gives the accurate information and helps to dispatch the exact volume and the proper delivery modes. Thus it turns out to be cost effective and the most economical way of delivery as far as homebase is concerned.

Home base also views that Maxload pro is very helpful in times of risk due to the shipping process. They would deal with these situations by choosing different options from the data stored in max pro. There would be a number of choices made available to them. Thus they state that the home base have achieved a good result in the pallet box utilization when compared to their competitors. Thus Maxload pro has contributed to the growth of homebase by simplifying their work.

The kaizen theory

The e word kaizen is of Japanese origin that means continuous improvement. The word Kai stands for change and Zen stands for good.

This theory is all about implementing small changes to the organisation by applying changes to reach and every employee though they may be labour or a senior manager. This process though may seem complicated and time consuming in the long run will definitely bring in fruit full changes for the future. This examines the company and changes are made in the key areas of production management, reduction of wastes arising due to faults and mistakes in distribution, inventory control and over production. This will ultimately lead to the effectiveness of the company. This theory is applicable to all the industries in common. It has an increasing demand in the e key industries of any nation.

Elements of kaizen are teamwork, moral improvement, personnel discipline, quality circles, and suggestion for improvement. This implementation of kaizen results in various effects which may be mentioned as follows. Kaizen implies various applications such as quality maintenance, moral improvement, teamwork personal discipline and it welcomes suggestions for improvement .this comes under 5's. These are important concepts in the kaizen theory. Their application is described as follows.

Teamwork:

It is obvious that team work is the key ingredient for the success of every organisation. There should be allocation of responsibilities and the necessary powers to accomplish the allotted job. If this does not occur then there will be a risk in the success of the organisation. This team work also specifies that the employees must share their knowledge with their co workers and they should be vested with substantial powers to execute their responsibilities. They should also be given freedom to come up with new ideas and they should be well motivated so that they turn creative and confident

Home is a company where workers do suggest their creative ideas and Home welcomes these suggestions and new innovative ideas. As Home deals with a range of diversified products there are many opportunities of the work that would struck in between if there would be improper flow of authority. Hence it adopted the strategy to identify the demand of the customers and their preferences the employees identified this demand and they suggested new ideas to implement the proper techniques of management to achieve the targeted production in the most economical way. They also never compromised their quality.

Moral improvement:

The moral improvements of the brand are derived by the ideas and suggestion that are being collected from customers and the suppliers and distributors. Here senior mangers deal their subordinated with patience and kind. They respect the ideas of their employees. Homebase follows strict adherence to moral as it tends to test the effectiveness of their performance in the market. They follow strict ethics in sales. All these efforts are being confronted to improve the brand name among the customers.

Personal discipline:

All the employees of Home are well disciplined. They follow strict rules for personal discipline. They are educated to respect every person in the orgaisation and are advised not behave rudely with any person inside or outside the organisation who deal with their business to. This contributes to the success of the business and thus in this competitive world home succeeds. All the employers are motivated in such a way that they deliver quality and cost effective outputs amidst their competitive firms. These regulations are strictly adhered to get a good value amidst the customers.

Quality circle

The quality circle is the group of employees formed by managers who are well talented and trained. These employees intern to be skilled persons has the ability to solve complex situation. home offers regular training to employees in this regard and it also allows them to implement their own ideas and formulations of methods to solve any particular issue arising . The employees are thus aware of the customer's tastes and preferences and they get set to implement the right strategies to derive the maximum quality outputs at the minimum production cost. Thus home bas provides good standards in the work place.

Suggestion for improvement:

There is suggestion s for improvement in the Kaizen theory. This is the final step. The theory states that it is necessary to imply various critical measures obtained from the various research and development. This is carried out by the homebase based on the information collected and critically analysed. This is a continous process in the home base. It is aware that it is highly important to know about the changing trends in the markets and to change the production based upon the fags of the market. This is also one of the reasons for the success of the homebase in the UK.

There are also various factors that are important for the success of an organisation. These are commonly called as 5s. These 5's suggests the ways for an effective function of an organisation.

5's:

These 5's were developed by the Japanese. They called them as seiri, seiton, seiso, seiketsu, shitsuke which when translated into English means sorting, straightening, sweeping, standardizing and sustaining the discipline. These 5's were formulated for the effective function of an organisation. It is a methodology that suggests the simple measures that are needed d to be followed by every organisation.

Seiri or sorting

This word makes it clear that in the work place all the items are to be sorted according to their nature of quality and usage. It also says that unnecessary items or spare parts and other components and tools are to be placed in their respective places and all the waste or unwanted parts should be discarded as when they accrue. In homebase there are a wide range of products from the kitchen to the bath room and the garden as well. Hence it is important criteria for home to maintain all the items in their respective places. This could be done more effectively based on the date of the manufacture. This will make it for the workers to display products to the customer s with ease. All the products must be sorted according to their usage and it also educates it employees not keep worn out or broken or damaged things along with the good ones.

Seiton or standardisation

This is otherwise known as standardizing. It means that everything must be placed in the respective place only. Home takes care that every product is labelled and is placed on the appropriate place. Even they are removed from the place they should be placed back in the actual place only. This would make the employers to work easily as they are aware where the products are available. It has divided the storage areas based on the category of the utilities for kitchen, bathroom, gardening separately.

Seiso or sweeping

This seiso says that cleanliness is very important in a work place. It also says that after every shift the work place should be cleaned and kept tidy and ready for the next shift. Here all the items or products should be kept in their respective places and they should be dusted as home is carefully that customers will not be satisfied with untidy and dusty products. Home maintains its workplace and all the other equipments neat and tidy. There is also a place for every product. If ever removed from that place it is cleaned before it is replaced back in its original place. All the unwanted and other old stock are removed and discarded in the proper way .this helps to maintain a clean and neat atmosphere at home base.

Seiketsu or straightening

Straightening is a very important concept .it mentions that all the flow of authority and the procedure of work should be consistent. The staff should be made clear of all the organisational strategies and values it should also be checked that the employees follow it properly. As and when there are new changes or new standards of improvisation the employees must be informed .this thus helps home to develop and maintain its staff and to make them work coherently.

Shitsuke or sustaining

This concept stresses to maintain the strict adherence to the above standards. It also says that a periodical review should be done to check the quality of the work done by the workers and to make the necessary changes in terms of any new strategies. Home base consistently follows all the above concepts and provides thus a scope for expanding market even in faces of thick competition. This has increased the company's value amidst consumers and competitors. The implementation of updated strategies brings more success to homebase.

Total preventive maintenance:

Total preventive maintenance is as equally important as the maintenance of the quality management. It is always very important to foresee the upcoming period and to fore cast the nature of the market and the economical conditions. Thus it becomes necessary to formulate strategies based upon these forecasts. This step would mainly include the preventive measures that would help in the reduction of the possibilities of occurrence of mistake that would lead to total disaster at times. It should be noted that this should never fail to promote job satisafaction among the workers.

Waste management

Waste might be due to the over-utilization of resources of any form as all the resources are obviously cost oriented. When the input applied does not produce the cohesive out put the result I s that it turns out to not to add any value to the end product. There will be a lack in the balance of the cost and the profit that would already be formulated. There may be the accrual of wastes due to the mismanagement of all or any one of the factors of production.

The 7 wastes are described as below-

The waste of labour - wandering in the work place, delaying the work, frequent absenteeism may result in the delay of the total process. This delay in the workplace is a waste of the money spent for the labour. Any idle time which doesn't involve any useful work was referred as waste.

Materials - Overproduction of goods before clearing the existing stock will lead to early production of goods. This may be due to a false anticipation of the demand. These goods turn to be idle stock and remain in the ware house as long as they are required in the market. This tends to retain money with it. It turns to cash only when it is sold.

Producing defective products - Producing damaged parts will also be a waste and cannot be sold to customers. Even if they are sold they can be sold only for a value that would be lesser than the cost of the goods. Otherwise these products turn out to be goods meant for scrap.

Transportation - the transport of goods will never add to the value of the goods in any case. Any delay in the transit will definitely affect the transportation cost hence which will lead to waste in the expenses of transportation.

Over processing - this will happen in the times of unnecessary processes in the production methods. This happens when unnecessary process takes place adding no value to the product.

Inventory - inventory is a main form of waste and is the most common one for all types of industries. This arises due to the unnecessary storing of materials and other finished goods this also includes the work in progress accruing due to improper planning or any other external factors .

Unnecessary Transportation - unnecessary transportation internally or externally more than once is a waste of time.

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