Lean Enterprises Research Articles

Application of Lean Accounting for production costs management in lean enterprises: a case study in an auto parts company

The main purpose of this study is to analyse and to compare how the lean manufacturing changes, applied in the production system, are reflected in company´s financial reports. This case study practically compares the traditional accounting reports with the ones purposed by the Lean Accounting (LA) methodology version. The motivation of this case study started with the statement of unit managers of a Lean Manufacturing (LM) company, here called “lean enterprise”. They said that one of the greatest challenges, after the modifications in the production system, is the financial demonstration in costs reports. After change the production system from “push” to “pull”, the main structure for a cost per unit calculation and fix cost “dilution” are ruined. There is no mass production anymore, “the more, the better” philosophy does not lasts and the encountered results corroborate with the literature in regarding of the need of adapting the cost controlling system in Lean Enterprises.

Discussion on the Flexible Manufacturing and Operation Strategy Model for a Machine Tool Component Company in Taiwan

Recently, many manufacturing industries have been facing challenges such as rising material costs, small-volume and large-variety products, shortened production cycles, increased labor costs and longer after-sales service times, which is a very tough challenge for most small and medium-sized component manufacturing suppliers. In addition to the current hot topics in the manufacturing industry - Smart Manufacturing (Industry 4.0) and lean production management, if small and medium-sized enterprises are not able to adjust the pace of manufacturing timely and find a suitable production model, they will soon be overwhelmed by the torrent of the era of speed and accuracy. In the face of the dramatic changes in the industry structure, the company can deploy the global expansion of overseas customers in advance, and adjust to apply and implement a flexible manufacturing model system through the introduction of the Industrial Internet of Things and flexible manufacturing production management. In order to meet the market needs, the manufacturing industry is gradually oriented towards customized production and the rapid development of new products. To meet such stringent requirements, flexible manufacturing becomes one of the necessary ways for enterprises to consider their development models. Therefore, the efficiency and reliability of work can be improved through the Industrial Internet of Things that facilitates machine-to-machine communication, cloud-based big data and learning and imitations of smart robots. This study is an in-depth study of a company that is currently in the process of digital transformation, collecting relevant information and reviewing the analysis to find a suitable smart manufacturing solution for the company and to explore the impact of the COVID-19 pandemic on the strategic development of the company. The findings can provide a significant reference for homotypic companies in the development of their business strategies.

A lean view of lean

A lean view of lean

Using Enterprise Architecture to Integrate Lean Manufacturing, Digitalization, and Sustainability: A Lean Enterprise Case Study in the Chemical Industry

The chemical industry has sustained the development of global economies by providing an astonishing variety of products and services, while also consuming massive amounts of raw materials and energy. Chemical firms are currently under tremendous pressure to become lean enterprises capable of executing not only traditional lean manufacturing practices but also emerging competing strategies of digitalization and sustainability. All of these are core competencies required for chemical firms to compete and thrive in future markets. Unfortunately, reports of successful transformation are so rare among chemical firms that acquiring the details of these cases would seem an almost impossible mission. The severe lack of knowledge about these business transformations thus provided a strong motivation for this research. Using The Open Group Architecture Framework, we performed an in-depth study on a real business transformation occurring at a major international chemical corporation, extracting the architecture framework possibly adopted by this firm to become a lean enterprise. This comprehensive case study resulted in two major contributions to the field of sustainable business transformation: (1) a custom lean enterprise architecture framework applicable to common chemical firms making a similar transformation, and (2) a lean enterprise model developed to assist chemical firms in comprehending the intricate and complicated dynamics between lean manufacturing, digitalization, and sustainability.

Accounting Lean Management Model Based on Big Data

In the environment of slowing down world economic development, the uncoordinated extensive production and industrial policies in China in the past caused the imbalance of economic supply in China. In this paper, through the use of literature analysis, comparative analysis and case analysis, taking l manufacturing enterprise as a case, through the analysis of enterprise production mode and cost management mode, through the construction of lean accounting cost management framework, the cost management of l enterprise is studied from four aspects. Through the analysis, it can be seen that the non productive resources of employees account for 36.37%, of which the rework time accounts for 61.05%, and the handling time accounts for 23.26%. Compared with the traditional cost management, lean accounting is more suitable for the management of lean enterprises. Finally, the lean management of the enterprise is predicted.

Barry O'Reilly on Lean Enterprises

Software Engineering Radio host Johannes Thones and Barry O'Reilly, coauthor of Lean Enterprise: How High Performance Organizations Innovate at Scale, discuss lean enterprises. A lean enterprise is a large organization that manages to innovate while keeping its existing products in the market. The Web extra at http://www.se-radio.net/2015/08/se-radio-episode-234-barry-oreilly-on-lean-enterprise is an audio recording of Johannes Thones talking to Barry O'Reilly, principal consultant at ThoughtWorks, about his recent book Lean Enterprise. A lean enterprise is a large organization that manages to keep innovating while keeping its existing products in the market.

ASP, The Art and Science of Practice: Three Challenges for a Lean Enterprise in Turbulent Times

A lean enterprise ties together and synchronizes all elements of its value-delivery system to provide for the needs of target customers. Organizations applying lean concepts in a systematic manner have been highly successful from operational, market, and financial perspectives. Once effectively in place, however, lean value-delivery systems can be more easily derailed than their leaders imagine, particularly in turbulent times. We identify three potential challenges for lean enterprises: (1) locked operating model: failure to change the value-delivery system in response to market and economic disruptions; (2) backward drift to pre-lean practices: regression toward wasteful inventory accumulations, backlogs, and complexity; (3) lean islands: isolation of lean practices within the walls of the company. Our observations at Quadrant Homes as it navigated the Great Recession, supplemented by our research at other companies, leads to recommendations for lean organizations to apply in countering these challenges.

A Reference Model and a vision for manufacturing system for 2030

The manufacturing enterprises are now experiencing high pressure of competition. In addition, the advancement in computer software, hardware, networks, information technologies and integration has been gradually reshaping the manufacturing companies by shifting from the industrial age to the information and knowledge era. Due to these elevated competitiveness and advanced computer technology, a number of new manufacturing and management strategies (e.g., Lean production, Just in time, Kaizen, Concurrent Engineering (CE), Cellular Manufacturing (CM), Agile manufacturing, Business process re-engineering (BPR), Agent-based systems (ABS), Computer Integrated Manufacturing (CIM), virtual manufacturing system have emerged for the innovation of manufacturing industries. The developments in organizational concepts created new concepts such as Smart organizations, Centers of excellence, Intelligent enterprises, Integrated enterprises, Virtual enterprises, Virtual enterprises networks, Dynamic enterprises, Extended enterprises, Agile enterprises, Lean enterprises, Process-driven organizations, e-enterprises, Borderless enterprises, Complicated or complex manufacturing systems, Flat structures and others. These terms have been used by researchers to describe various aspects of enterprises and its operational aspects. Although they have different definitions and scopes, there are several common issues: integration of enterprise functions; integration of enterprise resources; and collaboration. In addition Various vendors produced software applications such as Materials Requirement Planning (MRP), Manufacturing Resource Planning (MRP II), Enterprise Resource Planning (ERP),CAD/CAM systems, Manufacturing Execution System (MES), Advanced Planning & Scheduling System (APS), Supply Chain Execution (SCE), Customer Relationship Management (CRM), Advanced Order Management (AOM), Warehouse Management Systems (WMS), Transport Management System (TMS) and others. This paper proposes a Reference Model and vision for Manufacturing System for 2030 and discussed various aspects of future manufacturing enterprise..It supports the inter-enterprise functions/resources integration and collaboration over the networked environment.

Contemporary Tasks of Logistics Production

The role and tasks of production logistics in an enterprise depends on many factors, as well as the appropriate definition of logistics. Development of the concept of supply chains has caused a broader view of logistics. The fundamental goal of production logistics can thus be formulated as the pursuance of greater delivery capability and reliability with the lowest possible logistic and production cost. Currently, the integration of production planning with logistics become more common in many companies. Production systems are special performance systems which transform input material into physical goods. As logistic networks supply the input and distribute the output of production systems, production and logistics are closely interrelated. Many designers still do not take into account the supply chain and does not use the system approach. Interesting approach is proposed as part of Lean enterprises. It requires a determination of value stream, then the mapping and improvement.

Organizational Practices Lean Enterprises Adopt to Focus on Value Streams

The purpose of this article is to investigate which practices lean enterprises adopt to focus on value streams. A case study of three plants: Delphi Diesel Systems, Sogefi Filtration, and a company within the furniture industry is presented. The three plants have successfully performed a lean transformation with significant performance improvements, respectively, to Delphi Diesel Systems, Sogefi Filtration, and a company within the furniture industry. The organizational practices under analysis are (1) the establishment of organizational units based on value streams, (2) the use of a performance measurement system based on value streams, and (3) the adoption of a formal meeting system. These organizational practices were found in all three of the studied plants and have been implemented in all of their organizational units; even concrete implementation detail differs between plants. This research provides a contribution in the fields of organizational practices and the transition to lean enterprise by est...

Imitation in Large Complex Organizations: A Case of Design for Six Sigma in the Automobile Industry

As companies seek to become lean enterprises, they can take several alternative paths. One extreme is to mechanistically copy tools that work in another company's context to give the appearance of “doing lean” (mechanistic); another is to work to learn and adapt the principles to the local environment developing a culture of organizational learning (organic). Companies that have had some degree of success with lean in manufacturing often decide to move upstream to the engineering design phase. One set of tools for doing this is Design for Six Sigma (DFSS). This article recounts a detailed case study in which executives managing a mechanistic organizational culture, General Motors, decided to copy DFSS, which was purported to be a key success factor in Hyundai's greatly improved product quality. By converting the problem into one of mechanically copying specific tools, General Motors failed to incorporate DFSS into a learning culture, and the process led to mechanistic individual learning of rote procedure...

Standardization and Certification in Lean Manufacturing for Technology and Product Development in Service Oriented Industries

An organization’s success rate completely depends on its effort to continuously innovate and develop products. Having the capabilities to launch products at the opportune time and the ability to tightly integrate them into an organization’s revenue and growth plans is the other essential factor. Critically, for a product’s success in the market, the product’s requirements must factor in the right balance of faster time-to-market and total value derived. Another important customer perspective is the quality and innovation that differentiates them from the competition. By being proactive in developing these aspects into the product development lifecycle, the success factors emerge. Lean principles and apparatus are extensively used in every tread of an entire process, from customer service to supply chain management. Although there are a lot of success stories about lean implementations, many companies are also under pressure to become accustomed their culture towards the execution of lean ideology. In this thesis, consistency of lean mechanized is calculated and an examination is providing to thrash out if standardization would help remove the major obstacles that delay successful lean implementation. Potential profit and disadvantages of having standards for lean enterprises are analyzed. As a part of the examine a survey was conducted to get reaction from lean professionals about standardization. The survey results propose that there is a largely support for incline standardization. However, there are both positive and negative views about the probable benefits and disadvantages of using lean standards as an implementation guide. A case study is also provided to measure the benefits of lean and to appreciate how lean standards may help companies implement lean principles. Based on a reproduction model that was develop to prove the benefits, a 15 % decrease in supply carrying cost and a 5% reduction in total line time was predicted.

Vehicle Routing Approach for Lean Shop-Floor Logistics

In order to satisfy the material supply needs of large scale shop-floors and production systems, various logistics solutions are applied. In lean manufacturing enterprises, the material supply is pulled by the demands of manufacturing/assembly processes; therefore, a milkrun service is often applied to support the production without glitches. The milkrun logistics planning is a special case for vehicle routing problem (VRP), and requires effective approach to solution in order to satisfy various constraints, and minimize the cost of service. This study gives an overview about lean logistics as well as the most efficient VRP solver algorithms. Furthermore, a novel initial solution with generation heuristics is proposed, which is specially focused on flexible milkrun planning. In order to demonstrate the capabilities of the solution, a software environment is developed as a demonstration that focuses on the main industrial requirements of logistics planning like effective layout definition, quick response of the delivery service and effective order handling.

To improve work force productivity in a medium size manufacturing enterprise by MOST Technique

Competitive market is forcing big organizations to utilize the untapped potential of Medium Size Manufacturing Enterprises (MSME). Lean manufacturing system (LMS) is characterized by reduced product development and manufacturing lead-time, team based work organizations, low setup/changeover times, multifunctional workers and JIT deliveries from few reliable suppliers. Effective utilization of workforce is a primary objective for any manufacturing organization is no exception to this. In-fact, considering the significant environmental and safety risks associated ,it becomes imperative to deploy the right number of associates in the plant and at appropriate locations. MOST (Maynard Operation Sequence Technique) is a work measurement technique developed by H. B. Maynard and Company, Inc. in the Unites States. MOST has been already introduced into the wide varieties of industries, such as aerospace, automotive, electronics, etc., in EU, US, and Asia. MOST is a work measurement system which can be easily implemented and practically maintained. *MOST is a registered trademark of H. B. Maynard and Company, Inc. Keywords—LEMW (Lean Enterprises MOST Way), LMS (Lean Manufacturing System), MOST (Maynard Operation Sequence Technique), MDAT (MOST Application Data Acquisition Tools), MSME (Medium size Manufacturing Enterprise), TMU (Time Measurement Unit), Productivity.

Information Modelling Strategies for Lean Enterprises

In this study, implementation of ARJS framework is considered to build an information system modeling in order to simulate the utilization of lean techniques in industrial enterprises. Five elements of the ARIS framework as organization, function, data, output and process views are used to represent information system strategies for lean enterprises. A full control over orders' processing and orders' status is provided which enables the customers having access of following up with their orders progress status. Indeed, managers and supervisors are capable of having online control on the orders' transactions and orders processing.

The implementation of technical practices and human factors of the toyota production system in different industries

AbstractThe Toyota Production System (TPS) can result in huge benefits for companies and has been widely implemented around the world. Nevertheless, most adopters emphasize only the technical practices of the TPS, but neglect the critical role of human factors in the implementation of the TPS. Therefore, this study aims at developing an integrated TPS model that fully integrates the technical elements and human elements of the TPS with Total Quality Management (TQM) practices. An empirical study was conducted to confirm the causal relationships among these constructs. In the empirical study, questionnaires were mailed and e‐mailed to 620 companies that had implemented the TPS, and 151 of the completed questionnaires were valid. These 151 respondents were divided into eight categories. The results revealed that the implementation level of each construct was significantly different in each industry. The automobile and motorcycle industries have put a great deal of effort into the application of Humanity, Human Resource Management (HRM), and TQM practices and obtained good results. Other industries, however, ignored the implementation of HRM practices. The results also revealed that the early adopters enjoyed significant benefits from the implementation of the TPS, which led high‐tech companies to start adopting TPS practices and become lean enterprises. © 2011 Wiley Periodicals, Inc.

Practical lean accounting: a proven system for measuring and managing the lean enterprise

Why Is Lean Accounting Important? How Standard Costing Can Drive Wrong Behavior We Need to Show the Financial Impact of Lean Improvements We Need a Better Way to Understand Product Costs We Need New Kinds of Lean Performance Measurements We Need to Eliminate Waste from Accounting Processes and Systems We Need Better Ways of Making Decisions We Need to Focus Our Business around Customer Value Summary Exercises and Discussion Questions Maturity Path to Lean Accounting The Maturity Path Getting Started with Lean Accounting Summary Exercises and Discussion Questions Cell Performance Measurements What's Wrong with Traditional Measurements? What's Right with Lean Cell Measurements? BMA, Inc. Performance Measurement Starter Set Day-by-the-Hour Report First-Time-Through Report WIP-to-SWIP Report Operational Equipment Effectiveness Other Support Measurements in the Cell Presenting the Information Making the Cell Performance Measurements Work Nonproduction Cells and Departments Summary Exercises and Discussion Questions Financial Benefits of Lean Manufacturing The Problem Creating the Box Score Managing Capacity Making Money from Lean Manufacturing Eliminating Wasteful Transactions What Must Be in Place? Cell Transactions Labor Tracking Material Costs Inventory Tracking Summary Lean Financial Accounting A New Perspective on Internal Accounting Control Eliminating Waste from the Financial Accounting Processes Using Lean Tools to Create Change Managing by Value Stream What Is a Value Stream? Different Kinds of Value Streams Why Do We Focus on Value Streams? Why Should We Manage the Business through the Value Streams? Continuous Improvement The Maturity Path to Lean Value Stream Organization Problems and Issues How Do We Identify the Value Streams? Do We Need to Change Our Organization Chart? Develop a Plan Summary Value Stream Performance Measurements What Is the Purpose of Value Stream Performance Measurements? Value Stream Continuous Improvement Teams Value Stream Measurements and Process Control How Do Value Stream Measurements Differ from Traditional Metrics? Box Scores Sales per Person Alternative Measurements On-Time Shipment Dock-to-Dock Time First Time Through Average Cost per Unit Accounts Receivable Days Outstanding Supporting Measurements Presenting the Information Making the Value Stream Performance Measurements Work Summary Value Stream Costing What Is Wrong with Traditional Standard Costing? How Does Value Stream Costing Work? Why Is Value Stream Costing Simple? How Can We Implement Value Stream Costing? How Do We Handle Costs Outside the Value Stream? How Do We Know the Cost of a Product? Value Stream and Plant Profit and Loss Statements Calculating the Cost of Inventory Special Problems Involving Inventory Getting Started with Simpler Methods Summary Using the Box Score Reporting Value Stream Performance Showing the Effects of Lean Improvements Showing the Effects of Strategies and Plans Summary Calculating Product Costs-Features and Characteristics What Drives Cost in a Lean Value Stream? How to Use Features and Characteristics Uses of Features and Characteristics Costing Summary Eliminating More Wasteful Transactions Labor Tracking Material Costs Inventory Tracking The Internal Control System Sales, Operational, and Financial Planning (SOFP) Purpose of Lean Sales, Operations, and Financial Planning Lean Financial Planning Lean Sales, Operations, and Financial Planning Value Stream Demand Planning Value Stream Operations Planning SOFP Planning Meeting Executive SOFP Meeting Variations on a Theme Making It Happen Summary Lean Financial Accounting II Further Advances in Lean Accounting Summary The Lean Enterprise What Is a Lean Enterprise? What Lean Methods Support the Wider Lean Enterprise? Why Are Lean Enterprises So Hard on Themselves? Summary Target Costing How Does Target Costing Work? Where Is Target Costing Used? What Are the Steps We Take? After Step 3 Target Costing at ECI, Inc.: Steps 1 through 3 Understanding Customer Value Example of Target Costing at ECI: Steps 4 through 6 Calculating the Target Costs Example of Target Costing at ECI: Steps 7 through 9 Driving to Customer Value Example of Target Costing at ECI: Steps 10 through 12 Summary Expanding Value Streams Outside Our Four Walls The Lean Value Stream Revisited A Vision of the Expanded Value Stream Examining Value and Cost within Our Own Company Example of Effective Value Stream Expansion Summary The Lean Accounting Diagnostic The Maturity Path Revisited Overview of the Diagnostic Tool Working with the Diagnostic Tool Summary Performance Measurement Linkage Chart The Performance Measurement Framework Creating the Performance Measurement Starter Set Steps for Developing Performance Measures in Your Company Summary Transaction Elimination Maturity Path Table How to Use the Maturity Path Table Transaction Elimination Process Maps Summary Value Stream Cost Analysis What Is Value Stream Cost Analysis Performing the VSCA Calculations Step 1: Define the Value Stream Step 2: Analyze Capacity Future State Step 3: Simulate Uses of Capacity Summary Value Stream Mapping Value Stream Maps and Lean Accounting More Value Stream Steps on the Value Stream Map Data Box Information Summary

Lean enterprises and the confrontation strategy

Executive Overview Competition is eternal. There is no such thing as winning. There is no end to the game. Even if you compete and win today, You must compete and win tomorrow. Kuniyasu Sakai, Chairman, Taiyo Kogyo Globalization, improvements in communications technology, improvements in infrastructure in third world countries, falling political barriers to trade and cooperation—all have combined to create a faster and, some say, more hostile world. Consider the example provided by Phil Knight of Nike and Paul Fireman of Reebok. Aggressive competitors, one says of the other: “At the end of a contest, I'd shake hands and walk away. I think he would throw a shovel of dirt on the grave.”1 While these two tigers are locked in what could be a Pyrrhic struggle. Puma enters the fray too, and beats each of them to market with a new product—one perhaps capable of obsoleting much of the technology that Nike and Reebok have spent years developing. Competing and winning today is no guarantee that a player can compete...

When lean enterprises collide: competing through confrontation

When lean enterprises collide: competing through confrontation

When Lean Enterprises Collide: Competing through Confrontation

When Lean Enterprises Collide: Competing through Confrontation