The business world is a quickly changing phenomenon that demands every business entity to be aware of the recently introduced trends and policies. The company that tries to be the leader of its market area should always update its information about the technological, human resources, and economic sides of its business. In case of any problems in the performance of the company are observed, this company looks for the techniques to eliminate the issues. New techniques are daily introduced to the business world, but some management tools prove their efficiency through the years. Lean management is one of those techniques, as it allows updating the company’s technological and HRM position and standing the competition in the market. Focus Plastics is one of the companies that experience management issues and demand lean management to solve them.
The major problems experienced by Focus Plastics are concentrated in the sectors of production, planning and control, and new product development. The point is that the company transforms its activity to leave the industrial goods market and enter the more specialized market of fashionable, ‘designer’ products for the household. Drawing from this, the change in the production focus loosens the control over the production process and causes shortages of certain goods in the greatest demand in the market.
Thus, the problems include the absence of the schedule for the work of the production department for weekends. This leads to the reduction of batch size and brings the levels of the production process utility down. The inability of Focus Plastics to adjust to the short-term situational changes in the supply and demand balance of the market is also a problem. It makes the production department workers produce goods during the over norm time and confuses shifts in the production facilities. Unexpected demand changes also result in unscheduled mold changes that are time-consuming. Stockouts are thus also observed in Focus Plastics as the forecasting system is not efficient enough to provide production facilities with accurate demand forecasts. Drawing from this, the production department has to choose between producing the urgent goods and changing the molds.
New product development is also problematic because it is time-consuming and costly. The long procedure of designing and mold processing is complicated by the frequent necessities to extract and modify molds directly at the production facility. This takes a lot of time and makes employees work over the norm; thus shifts are also distorted and additional planning time becomes vital. Finally, the excessive concentration on the Focus product range is also viewed as the issue that prevents the proper development of Concept and Concept Office product lines.
The evidence to the above issues can be retrieved from the case study compiled by Chambers (2005). The problems are reported directly by the company’s officials including the planning manager Sandra White, the manufacturer manager Grant Williams, and the managing director Jim Thompson. Thus, Ms. White argues that “the factory is usually not scheduled for weekend production, and maintenance is usually performed on Saturday mornings” (Chambers, 2005, p. 3). According to the words of White as well, “general reduction in batch size has unfortunately brought down average utilization” (Chambers, 2005, p. 3) and this leads to the inability of the company to face short-term challenges and demand changes. Ms. White is sure that “better forecasts would help” (Chambers, 2005, p. 3), but the situation is complicated by the need to meet the seasonal demand for the designer series and properly develop “seasonal color promotions” (Chambers, 2005, p. 3).
Mr. Williams stresses the technological side of the problem saying that the new product development “process can take up to 24 hours, so we sometimes miss a night’s sleep if there is an important trial in progress” (Chambers, 2005, p. 4). Mr. Williams assesses “the technical challenge of solving production problems” (Chambers, 2005, p. 4) as the most difficult one in the situation that has been formed in Focus Plastics. Also, according to Jim Thompson, the company gives “too much time for the Focus range” (Chambers, 2005, p. 5), which has been already dropped to focus on Concept and Concept Office lines.
The potential harm of the above-considered issues observed in Focus Plastics can be rather considerable. The first, and the most dangerous, impact of the production and planning issues can be the inability of the company to compete in the market with the companies that operate with more updated planning and forecasting systems and have the higher utility of production processes. The inability to provide the distributors with enough quantities of goods demanded in the market is also an effect of planning and production issues. The case when the company had to urgently produce 5,000 extra rain forest green pasta strainers due to the unexpected, and not predicted by the forecasting department, demand over these goods in the market is one of the brightest examples of the potential damages caused by the planning issues to Focus Plastics.
As the introduction states, lean management is viewed as one of the best ways to solve the issues observed in Focus Plastics currently. Scholars have long been studying lean management and have concluded the definition of the term lean management. This definition is summarized by Clark (2009), who argues that “lean is a practical and engaging way of breaking the overwhelming tasks into manageable ones and delivering the improvements” (Clark, 2009, p. 2). The first lean management system was developed and introduced by Toyota, and as Clark (2009) and Emiliani (2006) argue, it combined four basic elements including world-class high productivity, ‘just-in-time’ practice, the policy of error-proofing, and standardization of both the production operations and products manufactured (Clark, 2009, p. 8).
Considering the question of why it is lean management that is chosen for solving Focus Plastics’ problems, the opinion by Emiliani (2006) can be considered: “Since the later 1970s, lean management has become an important route for improving businesses in the USA” (Emiliani, 2006, p. 169). Moreover, Rothenberg (2001) and Arnheiter (2005) argue about the considerable natural and environmental usefulness of lean techniques that, for example, “contribute to more efficient use of paints and cleaning solvents” (Rothenberg, 2001, p. 230) and the possibility of applying all the three lean components, i. e. “buffer minimization, work systems, and human resource management” (Rothenberg, 2001, p. 232) to environmental issues, which is rather important in the modern world.
Further on, Cuatrecasas (2004) argues about the nature of the transition from the conventional to the lean management system. Cuatrecasas (2004) stresses the importance of the comprehensive character of such a transition in which both the technological side and the theoretical framework should be considered. Arnheiter (2005) and Cuatrecasas (2004) argue that an organization that plans to implement the lean management system should consider all pros and cons of this transition, calculate potential benefits and expenses, and consider manufacturing optimization.
In the context of building operations, Sacks and Goldin (2007), Cuatrecasas (2004), and Arnheiter (2005) also consider the elements of lean management, the ways to implement it in an enterprise, and the potential benefits lean management and lean production might bring. Sacks and Goldin (2007) call “pull scheduling, reduced batch sizes, and a degree of multiskilling” (Sacks and Goldin, 2007, p. 376) and emphasize the possibility to reduce production cycle times and costs through the implementation of lean management.
Lean management, according to Arnheiter (2005), can also be combined with other management techniques for a better effect on organizational performance. Arnheiter (2005) argues that the so-called Six Sigma, the technique of the six-step management transformation including problem investigation, disintegration, and gradual solution, can be one of the alternatives. Emiliani (2006) stresses the fact that “Lean management must apply both “continuous improvement” and “respect for people'” (Emiliani, 2006, p. 178) as the parts of its success.
Thus, the literature review of the works of other scholars in the area of lean management allows making the following statements. Lean management, as Clark (2009) argues, is the system of breaking the problem into several manageable elements for better convenience in handling the problem. According to Arnheiter (2005) and Emiliani (2006), lean management can be used both alone as the management policy and in combination with certain other techniques like for example Six Sigma. In any case, Emiliani (2006) and Sacks and Goldin (2007) stress the comprehensive character of lean management that should include the technological side and the theoretical framework for its proper operation.
Finally, Sacks and Goldin (2007) argue that lean management is a complex process combining several elements among which the ability to timely complete tasks, dissemination of tasks, and the multiple skills of workers are the most important ones. Drawing from this, the company that wishes to implement lean management should conform to these criteria, but in case of proper implementation lean management can benefit the company allowing it to reduce costs and cycle times and increase the productivity of the manufacturing process.
In more detail, the benefits of the lean management operation include both technological and HRM points. Concerning the former, the company becomes able to:
- approach every business problem with greater precision and in more detail;
- carry out the manufacturing process at greater precision rates (Clark, 2009);
- control the planning, new idea development, and manufacturing processes with the guarantee of the proper performance of each of the departments responsible for those processes;
- reduce cycle times required for the production and packing processes (Emiliani, 2006).
The HRM side of the lean management allows the company to structure the work of the employees in the number of shift that fits the company’s demand conditions. Lean management is a comprehensive improvements program that affects all the layers of the organizational structure of the company allowing the latter to:
- implement the shift-based schedule of work;
- improve the quality of production through the increase of employee satisfaction levels;
- increase the efficiency of the company’s work through the combined effect of the structured work and levels of employee satisfaction (Rothenberg, 2001).
According to the scholarly data and the details of the case study on Focus Plastics, the company under consideration experiences several planning, new product design, and production problems connected with the transition of the company from the industrial goods market to the area of plastic household goods. These issues can be solved by the way of implementing the lean management system. The following changes can be offered as ways to solve the issues of Focus Plastics and improve its planning and production operations.
- Implement the strict and clear schedule for the production processes of the company and ensure the firm compliance of the employees to the schedule;
- Adjust the company to the short-term changes in demand, probably by the means of introducing the subdivision of the production department to deal with urgent orders only;
- Update the equipment of the company to cut the cycle times and save funding for other operations;
- Develop a more precise forecasting system to allow the new product development and production departments to be informed about the expected market changes;
- Focus on the household goods from the Concept and Concept Office lines instead of distracting attention between them and the formerly rejected Focus range.
The above steps are viewed as the potential solution to the Focus Platics’ issues. Although they cannot be considered the only cure for all problems, they will start the implementation of the lean management system in the company and allow for the clearer structure of the work as such.
- Arnheiter, E 2005, ‘The integration of lean management and Six Sigma’, The TQM Magazine, vol. 17, no, 1, pp. 5 – 18.
- Chambers, S 2005, Cases in Operations Management: Focus Plastics, Pitman Publishing.
- Clark, F 2009, ‘Senior Management Lean Engagement’, Office of Government Commerce, pp. 1 – 30.
- Cuatrecasas, L 2004, ‘A lean management implementation method in service operations’, International Journal of Services Technology and Management, vol. 5, nos. 5 – 6, pp. 532 – 544.
- Emiliani, M 2006, ‘Origins of lean management in America’, Journal of Management History, Vol. 12 No. 2, pp. 167-184.
- Rothenberg, S 2001, ‘Lean, Green, and the Quest for Superior Environmental Performance’, Production and Operations Management, vol. 10, no. 3, pp. 228 – 243.
- Sacks, R and Goldin, M 2007, ‘Lean Management Model for Construction of High-Rise Apartment Buildings’, J. Constr. Engrg. and Mgmt. Volume 133, Issue 5, pp. 374-384.