Operational Excellence
First, let’s take a look at economy in the middle of the world’s COVID-19 flow. This time COVID-19 has similarities with the SARS 2002-2003 epidemic but on a much larger scale.
The Covid-19 strain, which originated in Wuhan, has a mortality rate of less than 3%, lower than that of conventional flu, but the ability to spread is many times greater. And when it spreads at such a rapid rate, to a certain extent it will surpass the response of the health system leading to many critically ill patients without special care.
When the number of cases and the number of serious cases exceeds the capacity to respond, that is when the health care system is overloaded, and especially in countries with an aging population, the mortality rate increases rapidly. This is the phenomenon of overloading (Overburden or Muri) a cause of waste according to lean lenses.
Then the startled governments realized their subjectivity when they had not stopped early. As a result, a large-scale blockade order, which took place first in China, Europe, and the United States, spread worldwide.
The wide blockade and isolation led to a serious imbalance of both supply chain and large demand. Industries will be affected:
– Travel
– Service
– Retail
– Air
– Passenger transport
– Cargo
– Entertainment
– The export industry to China
– Industries using raw materials from China
– Oil and gas, energy
– Real estate
…… ..
In the past few days, surely business owners are struggling to maintain their operation, production, and keywords such as: “Solutions for businesses in times of crisis” or ‘How to turn risks’. success in this turbulent economic period ”… and countless other concerns about personnel, machines, factories, orders … Frequently appear in business groups / forums.
In this article, OPEX will introduce to you a tool, which is considered to be a great dose of vaccines that businesses can apply immediately and always for their businesses to survive in this turbulent period, that is: Lean Manufacturing.
First of all, Lean as its name – Lean – is a way of doing and thinking to maximize value for customers. Eliminate waste, continually improve the entire business by everyone, anytime, and anywhere.
Put simply, lean provides a systematic and optimized method. The method helps to create more value, productivity, quality with less resources.
Here are some of the results you’ll find clearly when applying lean to your business:
1. The leader board is more flexible with market changes:
– Response time (Lead time) is shorter, from the time customers order to delivery shorter (read lead time and just in time)
2. Reduce inventories: reduce the backlog of working capital in raw materials and semi-finished products (sometimes accounting for 60-70% of the product cost), help capital turnover faster and even turn around for each profit. 10% is twice as fast, which is more profitable than twice.
3. Improve quality throughout the system: lean helps the factory find the root causes of problems and deal with them at the root, meeting all the most stringent customer requirements for quality.
4. Reduce costs: optimize raw materials used, optimize energy consumption to create a product, increase labor efficiency and machine efficiency, reduce errors leading to lower repair costs and remove the error row.
5. Developing production capacity: increasing production capacity to meet the changing demand of the market without having to invest more machines or workshops.
6. Not pre-production, redundant production: due to the increase in capacity in step 5, just following orders.
7. Reduced dependence and error of order forecasting: progressing to follow orders, can skip the forecast types, because most forecasts can not be 100% accurate. When the market fluctuates as strongly as today, the most obvious effect of increasing the production capacity of enterprises.
8. Team capacity development: team capacity development at all levels, especially production workers directly by being constantly involved in the process of problem solving and suggestions for improvement.
9. Stardom in the eyes of customers due to: superior quality, competitive costs, fast and timely delivery, strong team capacity, so it is difficult for customers to find alternative suppliers.
10. Optimize the use of factories, warehouses, and machinery by eliminating a series of non-value creation, waiting, and wasting.
It is no coincidence that lean is the most popular management method of the modern world. Some examples of companies that have adopted Lean and dominated the market for decades, unrivaled: Toyota (Cars), Boeing (aviation), Samsung (Electronics), Amazon (Supply Chain) , Nike (sporting goods).
If you want your business to achieve the same achievements as the above brands, don’t be afraid to change the way you operate with LEAN! Read other LEAN articles on opexvn.com to gain knowledge before applying to your business. Or contact OPEX to get private advice on the problem you are having.
Business is our brainchild. It experienced many joys and sorrows with us. It appears in the dream every night and is the alarm bell every morning. If you give it a few dozen percent more chances to live, grow and last, do you take another step? In order for their businesses – their spiritual children to be able to survive through this stage, business owners need to act immediately, strongly, decisively and energetically as their own spirit. when starting a business.
If you are interested in the solution to help your business turn risks, let’s discuss.
OPEX Consulting – Operational Excellence Your Business
