Case Study Topic:
Lean manufacturing implementation in Malaysian Automotive Components Manufacturer
Summary of the Case Study:
The purpose of this case study is to investigate the methods used in implementing lean manufacturing by this successful company namely MJ SDN BHD where this company was awarded by Malaysia Japan Automotive Industries Cooperation (MAJAICO) on its achievement as a Toyota Production System (TPS) Model Company (Muslimen, Yusof and Abidin, 2011). This case study was chosen because it related to our assignment’s central issue in the process of implementing lean production. The issue that may face by the company in the implementation of lean production is that the process is time consuming and high in expenditure (Sandberg, 1995). Despite requiring specific tools and techniques, this long term project also need a clear direction of work progress, proper planning and controlling, and adapted to a company’s environment and needs. Most of the companies failed in implementing lean manufacturing are because they possess an ambiguous project direction, lack of planning and insufficient project sequencing (Bhasin and Burcher, 2006 as cited in Muslimen, et al., 2011).
Lean Manufacturing was distributed across countries and industries and widely acceptable and adoptable as best manufacturing practice for company due to its flexibility, fast respond, cost saving, and superior in quality (Schonberger, 2007 as cited in Muslimen, et al., 2011). Different manufacturing companies used different ways to implement lean manufacturing system. However, it is challenging in finding a suitable approach to implement lean manufacturing because it must be suitable to a particular company’s environment and needs. There is no universal sol...
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...petitive force that may face by MJ Company which is a Malaysian base company. MJ Company has to address this problem by keeping track on the pace of advanced technological improvement information and always update its company system in terms of latest design and substitution of other raw materials. In addition, Research and Development (R&D) has to be carried out frequently to make investigation and analyzation in order to follow the pace of other global automotive companies. R&D can be the intangible assets or expenses in a company based on the extent of company capacity and financial situation. Executing R&D in a small firm is pretty difficult due to insufficient time, resources and modal. As a result, R&D has the tendency or probability in leading to overspending and products’ costs increment problems especially for the long term and time consuming R&D project.
In today’s marketplace and world of business it is critical that customers receive a quality product in a timely manner from the supplier. It is also critical as a supplier and business that waste is reduce in all categories including inventory, time, facility space, storage, and also transportation. Several methods have been created and adopted over the past 20 years from top companies with successful track records such as Toyota, GE, and Motorola. One method or process that has proving to be successful is none other than Lean Six Sigma. Lean Six Sigma evolved as a concept in the early years of the 2000s which combines the Lean manufacturing method and also the concept of Six Sigma. When you blend both processes together, you have in return a better delivery schedule, better quality, outstanding employees, satisfied customers and last but not least profit. Profitability as we all know is the goal for any business, organization, or manufacturing company as well as to increase throughput while reducing inventory and operational expense (Eliyahu M. Goldratt).
There is a lot of literature on the concept of continuous improvement (CI). Studies show that CI is very important to creating competitive advantages in highly competitive industries such as the automobile industry (Bhuiyan & Baghel 2005; Li et al. 2009; Schaeffer, Cadavid, & Backström 2010). These studies suggest that manufacturing firms use CI to eliminate waste in all organisational systems and processes (Bhuiyan & Baghel 2005; Li et al. 2009). Currently, manufacturing firms use lean manufacturing, six sigma, lean six sigma, and the Kaizen methods of CI methodologies to reduce wastages, simplify the production line, and improve quality (Swink & Jacobs 2012).
Lean Six Sigma is a methodology that creates processes within an organization to cut waste and improve the company’s performance. However, studies have shown that over the past decade applying Lean Manufacturing and Six Sigma can create problems for companies financially and potential problems for employees. Companies should take great care before implementing a Lean Six Sigma solution because in some instances, going lean can do more harm than good both financially for the organization as well as destroying employee loyalty and moral.
According to Christopher and Towill (2001), there are mainly three ways to combine lean and leagile. The first hybrid approach is the Pareto rule, which means that the dominant 20% of products should use leanness and make to stock. While the remaining 80% products with less share of revenue should use agility. The second hybrid approach is about using lean approach for the base level of demand, while for the peak season or flexible demand, manufacturer can use agility
Persoon, T.J., Zaleski, S., & Frerichs, J., (2006) Improving preanalytic processes using the principles of lean production (Toyota Production System). Am J Clin Pathol. 2006 Jan;125(1):16-25.
Achieving quality of conformance involved conform to specifications that involve providing customers with a quality product at the right price which accounts for the cost of materials. In order for a company to achieve and produce a successful product that customers want and need, it is vital that quality management and lean systems play front row. Quality management helps organizations to reduce waste and inventory. “Lean is about challenging the way things are done and opening our eyes to that waste and inefficiency” (Lean Benefits - Benefits of Lean, Why Lean is Important, 2015). Within each of these concepts are important tool and techniques that organizations can use to achieve a quality product. In this paper I will discuss “cost of quality” from the quality management side and “kaizen’s” from the lean system side, while discussing how each of these concepts are implemented into my own life or
The production process is determined by the way its elements are designed within the organization according to the overall vision of the company. The managerial belt is therefore responsible for designing the processes and the flow of manufacturing of products or services. One way to operate the production is called traditional. It is based on the presumption that the previously met demand on the market will determine the upcoming one. Thus, the operation is planned the way that allows to create enough inventory for being ready to address any customer’s need. It turns out that this inventory, or work-in-process (WIP) accumulates, whilst the empirical evidence shows that in dependence with the
During this project, I am going to mention the details of TOYOTA production process system which was developed more than 40 years ago by Taiichi Ohno, the president of Toyota Motor company at that time. The production system that Toyota company uses now and before is relevant to the concept of the process costing system which is currently used in all department of the company.
The management in the company is not structured. The cash position and contribution of various businesses into profit is also worrisome. We are in serious need of cash for the technological advancement in our tool business. The only way we can compete in the market is on the basis of technology. The inefficient production techniques lead to much higher cost of production.
A LEAN Company is our best description and our business philosophy (creating more value for customers with less resources), which pursues to deliver what the customer wants, when they want it, at maximum value with minimum misuse.Through the application of LEAN, we achieve more fulfillment as it helps to reduce the possibility to constantly be fighting a battle against difficulties. Besides, we promote a Continuous Improvement Culture in our performance.
Toyota is a pioneer of the LEAN manufacturing principle. Lean, as a process, is a way to add value to customers while minimizing waste (LEI, 2011). It can also be thought of in terms of flow, which is how Toyota likes to think of it. It is simply a process of decision making where the problems tend to be thought of in terms of flow, reducing starts and stops or unnecessary motion increases flow, reducing waste.
As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.
After a period of continuing growth, the stagnant sales growth of the automotive industry in the late 1970s led all car makers to start to look for methods to fit the new climate. With the purpose of using money on research and development more effectively, spreading the risk of making main components in greater volume, and accessing to new market which were hard to enter, more and more automobile producers reached to the conclusion of collaborating with others. In addition, to remain independent, joint venture seemed to be the best answer. (Campbell, Stonehouse & Houston 2002)
Its objective is to integrate people, process, and technology. Toytoa’s product development procedure is essentially different from a manufacturing process. Its backbone is not visible, but knowledge and information which are untouchable. The product development’s cycle time is much longer than hours. It usually takes weeks or even months. The production chains are non-linear and multi-directional. Workers are no longer manufacturing workers but specialists with high diverse technology. This product development strategy is viable for Toyota. This is because this strategy does help Toyota to prolong the life cycle of current product. For instance, Toyota Camry is a very successful current product which is prolonged its life. Camry has been made since 1980s. Camry is set at an middle-high level of family veichle. After 30 years development, Camry is still very famous all over the world. This cannot be separeted by Toyota’s successful product development strategy. One of the key features of the Toyota product development system is functional engineering managers. They are primarily teachers in the Toyota system, who are the most technically competent engineers, with the highest levels of experience. Toyota’s management group is consist of high educated experts. They were all engineers and their technical excellence is very famous. But recently, Toyota’s product development system does not work very well. In
The main idea is to fulfill the internal or external customer’s wants. Through lean thinking, it is hoping that nonmanufacturing company’s can provides value to the customers with minimum cost, effort and can save time. Thus, it will lead to improve performance and optimum utilization of the company’s additional capacity and resources.