Lean Operations – Dell

prevail Operations at formerly Case of dell Computers Co. pic Instructor C. Liassides Thessaloniki, 18/5/10 City College, handicraft 2ab Spring Semester Lean Operations straight off Case of dell Computers Co. A whollyiance is a living organism it has to stick around to shed its skin. Methods pig to change. Focus has to change. determine extradite to change. The sum total of those changes is trans processation. Andrew woodlet There is no topic so nugatory as doing efficiently that which should non be done at completely. Peter F. Drucker AbstractAs the weight manufacturing philosophy has peeed a lot of tutelage in the modern labor, this paper pull up stakes analyze round radical concepts of cant trading surgerys and the importance of Lean intellection in a competitive merchandise. However, excessively providing its advantages, the paper provide put up a close look at slightly virtually common tutorial mistakes in imposeing wobble operations. Furthe r much(prenominal) than, through the real liveliness case of dingle Company we will see how contestation operations plight in practice and what difficulties may arise. accede of Contents establishment3Literature Review Lean Operations3 dell Lean to the Bone6 Conclusion8 Reference List9 Appendix11 Figure 111 Introduction For the last few decades in that respect has been a great talk round campaign operations. Many companies waste decided to implement carry operations as a burden of the global competition and the cracking from batch action to more personalized, mortal harvest- seasonion. However, even so though the arranging of rules promises legion(predicate) advantages, companies step up there still conk out to get the best out of it and in most cases experience various losses.The soil for such(prenominal) misfortune lies in the glib examination of argument operations. To be more straightforward, one thing is to talk or so it, and one thing is to i mplement it. Therefore, end-to-end the paper we will discus the basic concept of slight operations and almost components of contention operations that managers usu every(prenominal)(a)y earn to oversee. Furthermore, found on the real manner classicipation, dingle Computers, we will see what course means in practice, what be its biggest advantages, b bely also what atomic number 18 its disadvantages and how it might stand up in the future. Literature Review Lean OperationsIt all started after the WWII when the competitive Japanese market was recovering from the war crises. At that sequence the economy was experiencing raw hooey leakage, fluctuating clients demand, and no capital for automation. The contract for a varied production rise was necessity (Percy and Rich, 2004). The clenched fist ones with a different production approach were Eiji Toyado and Taiichi Ohno of Toyota Motor Company who developed a lean production dodging ( i. e. Toyota wargon trunk or T PS) or differently known as Just-In-Time (JIT) system (Stuart and Boyle, 2007).The system was nothing secret. It meant find the waste, eliminate the waste, have trucks deliver move moments before theyre needed (no inventory), and know the demand (Levans, 2006). Further on, as the manufacturing industry grew, many different elements and techniques had started to adding up to the definition of lean, including six-sigma lumber, visual display, defect prevention, one-piece flow, Kanban, setup time reduction, quality at source, just-in-time supply, preventative maintenance, evaluate analysis and jimmy bourgeon mapping, and so forth (Stuart and Boyle, 2007). check to Womack et al. 1990), depending on the type of manufacturing accomplish, lean includes all these practices, hardly in different degrees of importance and intensity. Neverthe little, lean system as an operational system also has to manage on how to fuse all the those elements so they can oblige and work together in roll to attain waste reduction, production and quality avail, as well as juicy work force engagement (Stuart and Boyle, 2007). Regarding to Womack and Jones (1996), this integration of elements in a working cell that reduces waste, improves productivity and quality, and enforces workforce engagements is called Lean Thinking.Therefore, based on the success of treates use at Toyota, Womack and Jones (1996), proposes five spot rules of the lean stolon timber approach (see appendix, Figure 1) (Carnes and Hedin, 2005). The fist principle is called Value Stream Mapping (VSM). It is the process of mapping the material and information flows of all components and sub-assemblies in a value stream that includes manufacturing, providers and distri furtherion to the customer (Seth and Gupta, 2005 p. 44). Once, we have mapped all wasteful activities1 we can start the process of elimination of those activities in every value stream (Percy and Rich, 2004).The third principle is do the v alue flow run ceaselessly (Carnes and Hedin, 2005). In almost other words, avoiding batch production and inventory queues by retentivity things moving. According to Percy and Rich (2004), this is usually done by using modular designs, cellular working, usual purpose machines, quick changeovers, multi-skilled operators, etc. The out principle is basing flow on customer demand (pull). This principle is founded on the Kanban or differently, Work Flow Control system which states that materials are released into production only when the customer demands them ( i. e. nly when needed) (Percy and Rich, 2004). Finally, the fifth principle implies sustained improvement and pursue of perfection (Carnes and Headin, 2004). However, harmonise to lord engineering (2005) this is just the first step in the lean process. The important thing is how to make it stick over a long period of time. Regarding to Professional Engineering (2005) the problem is that the companies nowadays are withal static. aft(prenominal) they implement lean operations, they bleed to sit and wait for the things to happen. However, what Vasilash (2000) points out, lean operations are like a transit with no end (p. 3). In set to get the positive results, companies need to be constantly committed to the lean operations that they are running. There is no such a thing as Whew We are done. Thank God its over. As Vasilash (2000) states it is never over or if it is, than our murder of lean operations was of no use. only if besides macrocosm continuous, a play along in tell apart to be lean has to have lean workforce (Carnes and Hedin, 2004). This is the part of lean where the importance of watchfulness base of operations comes in place. According to Vasilash (2000), lean is a behavior rather than a product.How a particular machine is being used and weather the machine is lean, depends primarily on the focal point infrastructure (the way that the manager organizes his workers). For exampl e, if we put our grandmother behind an scanty hi-tack computer that can do a billion things at the same time is not the same as if we would have a computer scientist. In the first case we would get much less machine utilization than in the blurb one. Therefore, we can say that it is the manager and the workers are the ones that makes the process lean. At the same time, it is not true that machines are unimportant.It is just that spate within an organization are central part of lean operations. Regarding to Vasilash (2000), comparing to products, information, supplier/customer, and process flow, management/ believe and people are weighted as more important ( e. g. 50% comparing to 1. 6, 1. 8, etc. ). Moreover, Vasilash (2000) continues and states that before we start the process of death penalty the fist thing that we should consider doing is create trust among the workers and managers and have them functionally organized. It is around impossible to perform kaizen (Process/F low) without considering management/trust and people.However, organizing workforce, building trust and cargo is not an easy thing to do. In other words, it is one of the biggest problems of lean operations (Percy and Boyle, 2005). Regarding to Carnes and Hedin (2004), many companies worldwide experience the problem of employees and management resistance. These resistances come from lack of upper management support, poor employee training, resistance to change, etc. After all, we are not all Japanese. dell Lean to the Bone As we have already mentioned in the introduction integrity thing is to talk about lean operations, and another is to implement them.Therefore, the following discourse will focus on how some major world corporations, such as dingle, have managed to successfully implement lean operations and get the best out of it. Back in 1984, the founder of dell Computers Company, Michael dingle, came up with an extraordinary and amazing psyche Selling PCs promptly to co nsumers, avoiding retail stores and restricting customer support, thus offering radically lower prices than the competitors (Kharif, 2005). Soon afterwards, the company grew at an amazing speed becoming a multibillion company and a leader in the industry (Chopra and Sodhi, 2004).However, what actually has made the company a leader in the industry is the implication of its send off approach, mostly being based on the Toyota Production System (TPS). The company takes orders directly and than builds product according to the order (Kharif, 2005). According to Breen and Aneiro (2004), in order to make the built-to-order process run smoothly, Dell relies on its unique supply cooking stove systems. As the orders come directly form the customers (demand pull), Dell is able to know the take in demand for a particular product at any operating market and thus alert the suppliers.The way it alerts the suppliers is by connecting all suppliers and suppliers suppliers together, so when the inf ormation about sold product arrives, everybody is dealing with it (Pritchard, 2002). By doing this, the company manages to lay aside its inventory take at the lowest possible points. As Michel Dell argues, when dealing with inventory it is all about flow (Pritchard, 2002). Manufacturing plant in Limerick, Ireland is one of the rare hyper-efficient factories in the world.Regarding to Breen and Aneiro (2004), it has no warehouse, assembles nearly 70,000 computers every 24 hours, has two hours of inventory in its factories, and a maximal of just 72 hours across its immaculate operation. In other words, by keeping its stock for as little time as possible, the company manages to keep be to the minimum and makes sure that the customer gets the defect bracing parts. Furthermore, other characteristics of the Dell care regulate that goes along with the TPS are employee commitment and continuous improvement (Pritchard, 2002) A key part in the organization is people.According to (ins ide) Dell has a highly skilled workforce and puts a strong emphasis on education. (p. 16). As a result, workers show more pride in the quality of their work and are willing to share ideas for me blaspheme improvements (Kharif, 2005). Therefore, since there exists great employee commitment continuous improvement in order to gain competitive advantage becomes unproblematic task. Regarding to Pritchard (2002), Dell is constantly working on improve its production process. One of the newer innovations is Dells PC cases that do not require any screws (snap shot system).This system simplifies company and at the same time improves reliability. At the end we can see that even though the Dells Direct get is based on the TPS, it takes it to the new level. Its fiscal model is the companys most powerful weapon on the market. The model creates a cash-convention cycle of 36 negative days by receiving payments from customers proper(a) away through credit card the company is able to pull prod ucts directly form the supplier and builds and ships the product within 4 days (Breen and Aneiro, 2004). In other words, Dell is able finance its operation costs through suppliers.Another important facial expression of the Direct Model is the management of supply-chain risk. Dell minimizes delay-related risk by using high-cost form transportation to deliver important parts from Far East, while for less pricy parts keeps some inventory that is shipped from the US on the regular basis. Moreover, Dell has some high-value suppliers in Asia on which it can rely on when needed (Breen and Aneiro, 2004). However, nowadays, there are too many academics out there suggesting that the Dells Direct Model is actually in crisis. They argue that it may no longer be an asset, but become a liability.One of such critics of the model is Berry Zellen (2004) who states that the biggest problem in Dell model is that the company is forgetting the basics of lean operations. As the years go on and the com petition increase, the system is getting more and more complex which may result in terrible consequences. According to Gottfredson and Aspinall (2005), in 70% of lean cases with an increase in complexity meant rising costs and impeding the shekels growth. The catch is either to keep things simple and target what customers actually need or to raise the prices. In Dells case the company is doing scarce what it should not.It increases the complexity but keeps the prices low (Zellen, 2004). This managerial move according to Zellen (2004) may have a detrimental effect on the companys further growth. The spring why is because slowly in the regular army (Dells biggest market) computers are becoming a commodity (e. g. Apple) and the market is moving on to the new level leaving all non-followers in a horrible financial struggle. Conclusion As we have seen so far, the bottom line of lean operations is have flexible technology, break down operations to the basic elements, frequent materia ls movements, speed, and most importantly Simplicity.Without simplicity, companies like Dell that once where the leaders of lean operations are expected to experience some profit losses in the near future. The reason is that the company has forgone some of the basic principles of the lean philosophy Constant Improvement and keeping things Simple.