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Lean during an economic downturn

Created by : Steven Bonacorsi, Lean Six Sigma Master Black Belt Consultant, Bonacorsi Consulting  | 02 08 2009 19:15:34 +0000
Industry : Management & Strategy ConsultingFunctional Area : Performance(Corporate Finance)
Keywords : savings economic lean speed downturn 5s value stream mapping steven bonacorsi toyota production system quick win process lead time setup reduction ait group value-add analysis takt time pull system
Activity:  773 views;  last activity : 07 06 2010 20:18:09 +0000

Should executive leadership increase budgets and focus on applying Lean methods during an economic downturn?

 
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Increase budgets and focus on applying Lean methods Vs Decrease budgets and focus on applying Lean methods
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Top Argument
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Executive leadership should increase budgets and focus on applying Lean methods during an economic downturn to:

1. Eliminate or minimize inventory costs

2. Eliminate or minimize waiting and maximize value creation

3. Consolidate to eliminate or minimize movement waste

4. Eliminate or minimize overprocessing

5. Eliminate or minimize overprocessing

6. Eliminate or minimize defects and target value to customers to maximize competitive value
By Steven Bonacorsi, Lean Six Sigma Master Black Belt Consultant, Bonacorsi Consulting  02 08 2009 19:15:34 +0000
 
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right now i guess budget is the main criteria with crisis, people are not investing money so one should cut down on the budget and apply lean methods to overcome the situation, one should concentrate more on the consumer behavior and the trend and try not to go with the market.so lean methods more so concentrate on consumer than the market which will help in the future as tradtional methods are not working anymore..
By Nand Jha, Construction-Heavy, Sobha Developers  02 20 2009 09:38:22 +0000
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We need to understand one thing and that is we need to add value for what customer pays.The customer does not pay for inventory,does not pay for waiting time, does not pay for wastages generated etc etc. Therefore, it is necessary to ensure that we concentrate on what the customer pays for. So quality,fast delivery,economy and aesthetics are the primary issues that need to be addressed. To address these the best manufacturing practices need to be introduced and that means increasing budget which ultimately would consolodate to eliminate wasteful expenditures.
By Tapan Kumar Chattopadhyay, Head/VP/GM-Production/Manufacturing, Self Employed  | 09 23 2009 13:33:19 +0000
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I agree with Mr. Steven and Ms.Isha Verma
By Shaju George, Facilities/Construction Manager, IBS Software Services (P) Ltd  | 05 04 2009 12:09:36 +0000
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Mr.Steven i agree with you and adding to what you said i would say the first advantage identified by experts from implementing lean manufacturing techniques and strategies are the reduction of manufacturing time. When the manufacturing lead-time is significantly lowered, it follows that the operational costs incurred from the use of energy, utilities and wages from labour's time will also be significantly reduced. Lean manufacturing  also helps companies retain, maintain and significantly increase their earnings, widen their margins and help them generate savings from lower costs.Moreover In lean manufacturing, the cultures are standardised, thus, unfavourable practices and behaviours of both the employees and the management are reduced, if not eliminated.

So yes companies should implement lean methods and also increase the budgets.What do you guys think?

 
By Isha Verma, Sales/BD Manager, Larsen & Toubro  | 04 10 2009 10:33:43 +0000
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Lean Methods are nothing but optimised process keeping in mind following paramenters

1) Cost

2) Quality

3) Delivery

Here for example for production best lean process would have been single piece flow. hence infact we are saving money by reducing inventory, scrapping red inventory & work with make to order basis.

This will infact will cause increase in money available for development or investment. once Lean methods starts implemented inhouse which is Continous improvement process. Inhouse Kizens or small improvements (my experience) rearly required any kind of outside help hence very lean overall budget.

Conclusion:- Lean is Continous process can happen with  involvement & efforts of all Top to Bottom in organisation and seperate big budget need not to be planned. it can be managed with Department level budget. 
By prashant t deokar, Project Manager, Suzlon Energy Ltd  | 10 06 2009 07:59:34 +0000
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I also totally agree with Mr.Nand ,in the down time we will require to more concentrate on the systems and not on the market.

Also we need to to cut our expenditures also and adopt the different lean methods.

With Warm Regards

Mayuresh kulkarni

 

 

 

 
By Mayuresh Mukund kulkarni, Design Engineer, Precision Automation Robotics India Ltd  | 10 04 2009 13:56:28 +0000
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in  downturn if we increase budgets then we could be in worst situation after implimentation...so better to decreasae the budgets. 
By prasad shrotri, Design Engineer, DELIGHT DESIGN PROCESSES AND AUTOMATION  | 09 27 2009 19:29:10 +0000
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Yes Nanda I completely agree with you.
By Vinit Gupta, Sales/BD Manager, Larsen & Toubro  | 04 25 2009 06:42:52 +0000
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Lean is very important for an organisation during this downturn. Organization should cut down on investment and focus on lean methods to reduce or eliminate waste....
By Sudeep Tarafdar, Senior Consultant, IBM  | 03 04 2009 09:46:19 +0000
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Yes i agree that Lean initiatives should get high priority emphasis and the necessary resources but with a recession and lower revenues likely, how should one continue on lean initiatives ??? Any suggestions
By Anil Kumar Singh, Senior Consultant, GKC  | 02 09 2009 07:53:07 +0000
Argue for "Increase budgets and focus on applying Lean methods"
Argue for "Decrease budgets and focus on applying Lean methods"
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