Many companies desire to have persistent improvement in all activities in the supply chain including value creation, product quality improvement and elimination of waste. All these need to be linked up to form a continuous value stream with shared logic and shared pains and gains. Then only a company will be able to create and form an efficient Lean Enterprise.
How can a company like Weststar moves from lean production to lean enterprise?
One has to understand the legitimate needs of individuals, functions and companies all of which are to be synchronised. The Manager needs to ensure security of individual’s career as threat and resist change can disrupt momentum in the value chain.
Processing of new vehicles for delivery for example involve the needs of individuals, functions and companies. Because to create new values, members must learn new knowledge, adopt new practices in the value stream; establish new behavioural codes and work together to solve the problems. Vehicle preparation takes more than necessary time due to poor management of manpower, delayed supply of materials, unspecified procedures or perhaps due to weak process flow. A vehicle is prepared according to specifications more often determined by both customer and manufacturer.
PDI is done according to manufacturer’s standard. Mechanics goes through all 50 points check and satisfies himself. Everything must be done right the first time at the right time. In most cases, preparation of vehicles is on the basis of demand and priority. All parts and materials are to be made available on time. As always there are set back that need improvement. These include:
1. Mechanics keep on repeating the same mistake and action taken to institute teach and learn approach.
2. The salespersons and mechanics and the PDI supervisor do not share common goal
3. We have either too many or too few vendors with misaligned objectives thus we should revamp current bidding and purchasing functions and make procurement more transparent and open to other functional heads for direct discussion.
4.The value stream is not followed through
Work out target price for customer and work backward to get a competitive cost and agreed shared profitability
Decide on supplier for long term attachment, it is more likely that we are able to work out competitive cost and shared profitability. However, terms and conditions for such arrangement must be reviewed periodically. To trash out unwanted elements. At the same time we should drag along other functional manager to get involved and head in procurement. Allow him to find the best practice for adoption. Although this move may invite controversy.
Change the head for each new project. This will also eliminate hidden cost and other unwanted extras. Thus able to get the best possible price without compromising on quality.
The supplier must optimize flow and synchronize all value chain, adopt lean technique to appreciate the pain-gain sharing principle.
Employer, employees and vendors to work together to gain competitive advantage. In brief, everyone including the vendors must share a common goal.
Managers must be able to pull all groups together to focus on customer benefits.
Everyone must have the lean enterprise thinking. Employees, whilst focus on getting the job done, must also learn to improve themselves. Vendor cannot just think of making more money and self interest.
Excellent planning required ensuring efficient flow of goods, material and services.
By narrowing the scope of responsibilities and activities and segmenting the value stream, companies can greatly benefit from its improvement efforts. Depending on situation, control may be considered more important than responsiveness or efficiency.
In brief, Weststar desires to have persistent improvement through the following: Optimise flow and synchronization of value chain
Elimination of waste and unnecessary steps in value chain or value stream Excellent partnership/relationship with suppliers. Both supplier and company equally implement lean technique Create a culture of continuous improvement
Speed up product development
Continue gung-ho involvement of every employee and allied companies
Embracing trust for each other through a new code of behaviour.