Level 2 certificate in lean organisation management techniques powerpoint

Level 2 Certificate in Lean Orga

NCFE
Level 2 Certificate in Lean Organisation Management Techniques.

My assessment onUnit 1: Lean organisation techniques in businessByMark Lyall

Content of Unit 1

Introduction

Section 1. A lean environment

Section 2. Implementing the productivity needs analysis process

Section 3. Producing a process map.

introduction

This unit covers the 5 main principles of lean and the benefits of a lean environment. The productivity needs analysis process, what it is and how to implement it in a case study. Also how to produce a process map.

This assessment of unit 1 (lean organisation techniques in business) is my interpretation and ideas based on the information provided by the course provider.

Mark Lyall
Section 1: A lean environment

This section will help you to evidence Learning Outcome 1: Understand the concept of a lean environment.

1.1. Explain the principles of lean organisation techniques

1.2. Explain the benefits of a lean environment

1. What are the principles of lean organisation techniques? Name and describe the 5 main principles below.

Principle 1: Specify what creates value for customers.

This means discussing with the customer what they want and delivering a service or product that has value for the customer, this means producing something that the customer wants for the right price at the right time. Once youve gain all necessary information from the customer you can then look at the process to identify whats classed as added value to the customer. You can then look for any waste issues and try to reduce or eliminate them.


Principle 2: Identify steps along the process chain.

By identifying all the individual steps and processes from the beginning of the process to the finished product delivered to the customer. Once you have identified the steps needed to produce the product or service that the customer wants, you should then be able to spot any potential forms of waste and also some non-value added processes, which can then be addressed.


Principle 3: Make processes flow by eliminate waste.

When all the processes have been finalised, you can then scrutinise and highlight any problems that would be classed as non- value processes and waste according to the seven types of waste, which are transport, inventory, motion, wait, over-producing, over- processing and defects. Once identified you can then look for solutions that can reduce or solve the waste issues. Some of the non-value processes which can cause bottlenecks in the production of the product can be either reduced but not eliminated or eliminated totally, other non-value processes cant be solved due to the limitations of machinery or systems.


Principle 4: Respond to customer demands.

This means if the customer wants the product or service provided, you can then deliver it on time and in full whenever they want. It can also make sure that once you have streamlined the process, you can then measure the time it takes from receiving an order from the customer, to the customer receiving the final product or service, whether its sufficient for the customers needs, or whether it has to be looked at again to identify how you can reduce waste or improve the process you have in place further, so that you can then respond to the customers demands.


Principle 5: Strive for perfection by continuous improvement.

It means that as a company using lean you will always be looking for ways of improvement. With continuous improvement youre always striving for perfection, whether its introducing more lean techniques to the business and for the employees, so that everybody in the business is always looking to reduce or eliminate waste further and to make the process more efficient, because then the customer is still getting the best quality product or service available for the right price and still on time.

Explain the benefits of a lean environment.
Case study

Foods R Us is a local supermarket in Any Town. It tries to operate to the principles of a lean environment. Read the case study and explain the benefits of the lean environment in which Foods R Us operates.

It is a small chain.

It is not a 24-hour supermarket. It operates between the hours of 9am and 9pm.

It has free parking.

It sources its fruit and vegetables locally from the local fruit and vegetable wholesaler. The supply chain starts locally.

Its staff are trained to be multi-skilled in a range of different roles. They can operate anywhere within the store and are poised to deal with the majority of customer queries themselves. Staff have a varied working day and are paid decent salaries to reflect the skills they have.

It stocks a limited variety of each product. So, for example, it has 3 varieties of tinned tomatoes, 3 varieties of baked beans etc. All tinned products are available in one size only. While this limits customer choice, it does mean that Foods R Us can bulk-buy more effectively.

It has a scanning system that requires customers to put each scanned item in the trolley, to be packed away from the checkout.

The shop only carries stock that it requires it does not store surplus stock in a warehouse. This means that it must buy often but also that it does not tie up any money in holding stock, or paying for warehouse premises or warehouse staff.

Food R Us does not have any promotional displays at the tills, or at the ends of aisles.

This is my explanation on the case study provided.

Using the case study above the benefits of using lean in this situation are that with it being a small retailer, they would have found that being open between the hours of 9am and 9pm they will probably have a steady stream of customers, that will mean they are making the most of the employees time and reduce any waiting around. By not being open through the night they will also reduce energy and wage costs, it also mean that the employees with not be working unsociable hours therefore they will not be tired and bored. With parking being free they are providing a service that adds value for the customer.

Sourcing their fruit and vegetables locally reduce transport costs which also reduces the impact on the environment, it also means that the produce will be fresher therefore more appealing to the customers and will have a slightly longer shelf life. If customer demands changes they can react more quickly to supply and demand.


With the employees being multi skilled, it means that theyre increasing productivity because every operation within the store will be covered, so that if theres one part of the process busier than somewhere else then they can ask another employee who is not so busy to help alleviate the problem, it also mean that they can rotate the employees so they dont become bored and will keep them aware of their environment so reducing the chance of injury through poor concentration. As they are also being paid a good wage there is less likelihood of them looking for a new job elsewhere, they then dont have the cost looking for another employee and then have to train them.

As they are limiting the variety of product to 3 varieties per product it means theyre not overproducing on the items, so theyre less likely to have stock that they may find difficult to sell, so theyll save money and it means they should have a steady flow of stock on the shelves therefore no product should be thrown out because it is past its sell by date.


They have implemented a scanning system, so customers can scan their items then put them back in their trolley to be packed away from the checkout. This means that theyve identified that the checkout area is a potential bottleneck, so by putting a scanning system in place theyve reduced the process, which means theyre making more use of their staff. If theyve got more than one checkout then you will just need one member of staff to oversee any problems that may occur. It also means with the customers scanning their items, putting them in their trolley and then moving away from the checkout will then be making the flow from that area better, therefore making that part of the process more efficient. Also by using the scanning system it will show when stocks are getting low so they can order more stock so they dont run out of product.


As they carry just enough stock they are reducing their inventory, which means they save on the cost of storing the stock. It also means that they are reducing the amount of space needed in the store for these items, so it doesnt encroach on the shop floor therefore making movement and the transportation of the goods easier around the store and less likelihood of injury due to tripping over stock which may be in the aisles. It also means that theyre keeping costs down by not having to pay to holding stock elsewhere and for staff to look after it.

As they have chosen not to put promotional displays at the tills and in the aisles they are not occurring extra cost for the promotional displays such as the cost of printing banners and other processes just to highlight the product. Once the promotion is over they then have the problem of taking all the promotional merchandise away incurring more costs of disposal. These are a form of defects waste. It also means theyre creating more work for the staff because they are having to move the product from where it usual is, then put it on the end of the aisle or the tills. Then after the promotion they have to put the product back to where it was. It also has the potential to cause injury and could impact on the morale of the staff. That creates transportation and motion waste. By not putting the promotion on, it means they are thinking of the customers needs, because theyre not trying to sell a product that they dont want or need. This creates a stable environment where they know that they can purchase the product they want, whenever they want, so looking after customer demand.

Section 2: Implementing the productivity needs analysis process

This section will help you to evidence Learning Outcome 2: Be able to implement the productivity needs analysis process.

2.1 Describe the process for conducting a productivity needs analysis.

2.2 Undertake a productivity needs analysis in a selected organisation

1.Describe the process for conducting a productivity needs analysis (PNA). Use the boxes below to complete your answer. . [2.1]

What is the purpose of the PNA?

The purpose of the PNA is to give you a starting point so you can measure the businesses productivity. Through using a sequence of steps you can identify areas within the production process, which can then be improved further to make your productivity more efficient, so you can still react quickly to customer demand. It also gives a good indication of where your business is and where you want it to be, so there for highlight the areas that need more attention which will get you up to where you need to be.

1.Describe the process for conducting a productivity needs analysis (PNA).

What are the steps of the PNA and who is involved in these steps?

There are 5 steps involved in PNA.

Step 1 Measure the relevant information areas.

Step 2 Prioritise measures.

Step 3 Set objectives.

Step 4 Processes to reach objectives.

Step 5 Deliver required outputs to reach desired productivity.

Depending on your business, the people involved in carrying out these step are usually management and staff, but it could be someone who has stake in the business, you should also involve your customers


What areas should be covered in the PNA?

The areas you should look at are.

Common data, which comprises of the turnover of the company. That would be how much money they make and also take into consideration staff leaving. Profits should also be taken into consideration as well as bonuses. Cost of customer service and also how much your energy costs are to produce the product.


Customers. With this areas you would find out whether theyre satisfied, dissatisfied, if there were any complaints, if any products returned and finally if there had been any recommendation by the customer.

Delivery. This area you would be looking at how often you deliver on time, the cost of delivering the product and whether the customer has had to wait for the delivery.


Overheads. Which could be penalties due to not fulfilling their contract with the customer, usually not delivering on time and in full. Also utilisation of floor space.

Quality. Looking at defects which can be measured by either part per million or part per thousand, what kind of defects they are, where they are from, whether they can be reworked or have to be scrapped.


People. What their learning abilities are, how proficient they are, if theyre happy in their work, what their sickness record is like and what qualifications they hold.

Safety. Here you would look at accidents, what kind they are and if they resulted in loss of time. You could also look at whether any of the activities done in the production process are of a repetitive motion.

Costs. Here you would look at how much the product is, the cost of the service per hour, if there are any days outstanding and finally payments to the suppliers. Once you have looked at these measures and gather all the information you can then move to the next step. (You may find that not one business is the same so you may not need to use all the measures above, but just the one that are relevant to your needs.)

2. Undertake a Productivity Needs Analysis (PNA) for the organisation in the case study. [2.2]

You must remember to follow the steps of the PNA:

Measuring relevant areas

Prioritise measures

Set objectives

Processes to reach objectives (across scales of the organisation)


Case study

A small-scale but rapidly growing cereal manufacturer, Rise Right, is considering adopting lean organisation techniques to improve its business. Currently, the organisation produces over five types of different breakfast cereals although they would like to develop the range further.

Rise Rights production plant is too small to meet the demands of the business growth. In addition, it struggles to accommodate the frequent deliveries of incoming materials and outgoing finished goods. The plant itself is inconveniently 30 miles away from the organisations storage depots. Therefore, the transport costs to move produce to storage is an unwanted financial burden for Rise Right. If this cost and delivery issue isnt resolved soon, Rise Right will see a considerable dip in their profits.

The Product Development team at Rise Right is aware of how competitive the cereal market is. There are plans to trial two new cereal bars. If the campaign is successful and well received Rise Right will look to permanently produce the bars alongside their traditional cereal. However, this will depend on customer satisfaction of price, consistency and taste.

Recently, Rise Right has had some safety concerns with the team lifting raw materials in to production areas. Last month, there were 24 reported incidents of spillages and injuries through incorrect manual handling. Whilst safety is usually of an incredibly high standard this minor issue is still an area of the business which needs looked into and amended in the future.


Use the sections below to complete each step of your Productivity Needs Analysis.

Which areas should be measured to increase Rise Rights productivity?

The areas that should be measured to increase productivity are.

Delivery.

Overheads.

Safety.

Customer.


Now that youve identified measures, prioritise the measures from most important to least important. Give reasons for your answer.

The first measure should be delivery. As the storage depot is 30 miles away, transportation costs will be high and this will impact on delivering on time.

The second measure should be people. Because there are incidents with injuries and spillages due to manual handling issues, it shows that there is a gap in training which needs addressing.

The third measure should be overheads. As they are a small business they are finding it difficult to handle incoming material and outgoing finished product.

The fourth measure should be the customer. Because the product development team are planning to trial two new cereal bars, it will take time to plan, execute, then gather and process all the information from the trial, so it is not a priority. Because the other steps need to be addressed first, so that if the trial is a successful it will be easier to introduce the new products with the minimum of effort.


Set objectives to close the productivity gap by suggesting what the company could do to close the productivity gap in these areas.

The first objective would be to reduce transportation costs and delivery issues by looking to increase efficiency of deliveries, by aiming to have a 10% increase in on time and in full deliveries within 6 months.

Second objective would be to eliminate spillages and injuries due to poor manual handling practises by looking to reduce accidents and spillages by 20% within 6 months.

Third objective would be to address the problem accommodating the deliveries of incoming raw material and the transportation of outgoing finished product to the storage depot by looking at increase efficiency by 10% within 6 months.

Fourth objective in this case would be the customer, look at putting in place a plan to introduce the two new cereal bars into production within a year, if theyre successful.


What processes could be implemented to meet objectives? Think about scales of organisation (individuals, teams, departments, organisation). State the objectives you have already mentioned (in 2c) in the left-hand column. In the right-hand column.

Describe processes that could be implemented to close the productivity gap and conclude the PNA.


Objectives

Processes

Objective 1:

Look at increasing on time and in full by 10% within 6 months.

The company could look at delivery records to see if theres any inconsistencies, if there is then they can address those issues, look at reducing the number of deliveries to the storage depot by making sure they only send full wagon.

Objective 2:

Reducing accidents and spillages by 20% within 6 months, with a view to reducing further or even eliminating the problem after a year.

The company could look at either individual training if its just certain people within the team, if its different people then they could implement training on manual handling and transporting material safely for the whole team, in the short term they hold a toolbox talk to help them refocus on their tasks in hand. They could also look at the process to see if theres room for improvement or a better equipment to make their tasks easier.


Objectives

Objective 3: increasing efficiency by 10% within 6 months, within the incoming and outgoing good department.

Objective 4:

Put a plans together to introduce the new bars to production within a year, if successful.

Processes

The company could look at trying to utilising the space within the department better, look at how the material flows to see if theres any bottlenecks, look at inventory to make sure they only have enough for what they need when they need it. Look at flow of deliveries in and out of that area.

The company could look at reducing any waste within the production of their existing products, look at production schedules to see how they can introduce the new products with the minimum of disruption.

Section 3: Producing a process map

This section will help you to evidence Learning Outcome 3: Be able to produce a process map.

Learning objective

3.1 Produce a process map using appropriate symbols and terminology for an identified process

1. Using the scenario provided, produce a process map. Make sure it includes the appropriate symbols and terminology. You can find commonly used symbols below to copy and paste into your process map. On your process map, give consideration to value added and non-value added steps in the process and any waste which occurs. [3.1]


Scenario

A large supermarket takes customer concerns very seriously and has implemented a customer complaints procedure so that they are dealt with properly. At the moment, customer complaints must be recorded in writing by a member of staff and then passed on to their line manager. Depending on the severity of the complaint, the line manager will either act upon the complaint or pass it on to a senior manager. Once a complaint has been dealt with it is then physically stored as well as documented in an electronic database. When creating your process map you might consider:

Who complaints should be passed on to

Whether complaints should be acted upon

How severe the complaint is

How complaints are reported, documented and stored.


Flow chart for the scenario

Receive complaintRecord complaint in writing by a member of staffLine manager receives complaintSection 3: Producing a process map

Flow chart continued:

Pass complaint to line managerIs the complaint seriousYesPass it to senior managementNoSection 3: Producing a process map

flow chart continued:

Act upon the complaintAct upon the complaintComplaint resolvedSection 3: Producing a process map

Flow chart continued:

Complaint physically storedStore in a electronic databaseComplaint dealt withSection 3: Producing a process map

Now summarise your conclusions about the process. Include your consideration on value-added and non-value-added steps in the process and any waste which occurs.

The customer complaint procedure that has been implemented by the supermarket is a good example of over-processing. For example, instead of writing the complaint down by hand, then having to physically pass it to the line manager, they could introduce a computer system where they can log the complaint and also a section where they can put in the action taken as well, which then stores the complaint and sends it straight to the line managers phone. It will then reduce the time it takes for the complaint to get to the line manager. If the complaint can be resolved straight away then let the member of staff who received it deal with it then they can log it and put in action taken, then send it to the line manager. If the complaint cant be resolved then they can send it to the line manager. By introducing the computer system and letting the member of staff deal with the easy to resolve complaints then the line manager will not spend most of his time on complaints, but he will still get to be aware of the complaint and also what action was taken. The management can then review all complaints for that week and act upon them. With the computer system in place it would mean they no longer have to physically store the complaints.

summary

Thank you for taking the time to read this assessment on Unit 1: Lean organisation techniques in business.

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Level 2 certificate in lean organisation management techniques powerpoint