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Lean Operation - Coggle Diagram
Lean Operation
Lean Production
Create value for customers
Focus on customer (not product)
Demand-led
Essentially depends on JIT
Very small batch sizes
One-piece flow
Lean Accounting
Freeing-up production capacity
Provide accurate cost information
Target costing
Value stream costing
Records costing within production process only
Taking cost of activities not individual product costing
Including activities, functions, workers
Benifits
Less data required
Less updating information need
Fewer resources and cost less to operate
Feed-forward mechanisms
Inventories minimised
Incompatible absorption costing & ABC
Limitation
Not suitable for one-off bespoke (一次性訂製)
Take years to adopt rather than months
Cannot used to decrease inefficiency immediately
Six Sigma Rules
Focus on quality and reliability
From a statitical anlysis approach
Focus on variation rather than average time
DMAIC
Define - Identify problems
Measure - Quantify current performance levels
Analyse - Determine causes of problem
Improve - Eliminate causes of problem
Control - Monitor this routine/procedures
Limitations
Employee training is critical
Much data to be analysed
Only suitable for repetitive processes
Benchmarking
Internal Benchmarking
Divisionalisation or departmentalisation
Comparison of similar functions
Competitive Benchmarking
Comparable competitor for its advantages and disadvantages
But difficult to obtain information
Direct competitor
Functional Benchmarking
Comparing the performance of a specific business function or process
Similar sized funcitons
Generic Benchmarking
For understanding the market environment
Comparing in a general way (similar in size)
Criticisms
Focuses on competition not improvement
BPR (Business Process Re-engineering)
Concept
Eliminate non-value added activities
Minimise inefficiencies and costs
Focus on simplification and elimination
Scope
Aimed at making large improvement (unlike Kaizen costin)
Redesign new system rather than improve them
Limitations
Often becomes 'downsizing' the business
Need more than one person for the process
Disadvantages
Hard to implement
Difficult to distinguish between value-adding and non-value adding activities
Employee fear to lose job