Business Policy for Lean Management in Manufacturing Systems

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This report delves into the application of lean management principles within a business policy framework, using Aeroquip Vickers Inc. as a case study. The report explores the company's journey in implementing lean strategies, highlighting the positive outcomes such as quality improvement, lead time reduction, enhanced customer service, and increased profitability. It justifies the effectiveness of lean implementation through a review of relevant literature and discusses the importance of visual management, outlining its benefits in lean operations. The analysis covers the implementation of visual management techniques, providing examples and illustrating how they contribute to problem-solving, standardization, and overall operational efficiency. The report emphasizes the significance of visual communication in lean environments, providing a detailed understanding of how it supports continuous improvement and waste reduction, with the ultimate goal of achieving sustainable operational excellence. The report provides a comprehensive understanding of lean management, business policy and the practical application of lean principles within a manufacturing context.
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Running head: BUSINESS POLICY FOR LEAN MANAGEMENT
Production of a Business Policy for Lean Management in a Manufacturing or Service
System
Name of the Student
Name of the University
Author’s Note:
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BUSINESS POLICY FOR LEAN MANAGEMENT
1a. Brief Overview of the Case Studied Company in context to the Lean Intervention
Strategies
Aeroquip Vickers Inc. has eventually built their air conditioning components plant,
New Haven, IN in the year of 2005. They have mixed the components of lean management as
well as considering about the machinery and mortar. During this time, several US companies
has started learning about the respective Toyota Production System and Aeroquip Vickers
Inc. initiated the lean journey the previous year (Sanders, Elangeswaran & Wulfsberg, 2016).
The most vital aspects of lean improvement had sustained to be the portion of the culture of
the plant and hence they survived two acquisitions and multiple reorganizations. This
particular plant was termed as one of the most important plants within North America on the
basis of 5 years of quality increase, reduction of lead time, excellent customer services as
well as profit improvement. During the year of 2017, the plant was named as CLS or Climate
Systems Division and it created a culture of value stream centred on autonomy, lean
continuous improvement and entrepreneurialism.
There had been ups and downs in the journey of Climate Systems Division plant.
They have a lean culture and it required creativity and flexibility when there was change in
the conditions. When the plant had reduced lead time for several years, it had the ability of
responding to demands and not building to inventory (Tortorella & Fettermann, 2018).
Moreover, the product mixture has grown extra complex and the subsequent growth came
from supplying different assemblies for the basis of just in time and not only on supplying the
elements by its weekly truckload. A proper lean practice is required in the plant for
determination of the inventory for any specific process and also continuously decrease it
whenever possible, so that it becomes effective in reducing downstream variations within
demand and also incrementing stability and capability of the upstream process (Rohani &
Zahraee, 2015). Different goals and objectives of the business were required to be achieved
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for building a specific inventory buffer within their off season to ensure that need of overtime
is reduced to a high level.
1b. Justification with the Case Study and Current Literature for understanding process
of Lean Effectiveness for Lean Implementation leading to Quality Increase, Lead Time
Reduction, Better Customer Service and Profit Improvement
According to Andrés-López, González-Requena and Sanz-Lobera (2015), lean
management refers to a specific technique that is being developed with the core objective to
minimization of the procedural waste and also maximization of the values of different
products and services to the respective client, without even compromising on the quality.
This type of management is being coined by the Toyota Production System, being a
significant part of the lean thinking. It is possible via several distinctive techniques like total
quality management, flow charts, total productive maintenance and work place redesign. It
majorly emphasizes on delivering subsequent value to the clients (Yang et al., 2015). Several
tools are being implemented by the lean management system for the purpose of linking
customer value to organizational people and processes.
There are five vital and significant principles of lean, which include identification of
the value, mapping the value stream, creation of the flow, establishment of the pull and
seeking perfection. Each of these principles of lean is required to be considered on top
priority for ensuring that the value streams are being ascertained and every non productive
aspect that is needed to be considered (Cherrafi et al., 2016). Creation of the flow is required
for being sure that the steps create value could be taking place within the most perfect
sequence for the purpose that the product would reach to the customer easily and promptly.
As soon as the flow is eventually initiated the customers could pull value from the next level
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activities. Finally, when the value is being specified, these value streams would be eradicated
and the pull is instigated. This entire procedure is initiated again in lean management.
The major stakeholders of lean management include customers, employees and
organizations. It is extremely important and significant to ensure that the customers are
highly satisfied and the company could easily eradicate the issues of these customers
(Helleno, de Moraes & Simon, 2017). The employees are referred to as the most valuable
assets of a company and a satisfied employee can easily provide maximum efficiency and
effectiveness within his work and the respective organization or business would get
productivity without much complexity. Moreover, the company could even cover the
procedures, programmes and policies for successful implementation. A properly balanced and
managed company has the capability to fulfil the customers’ need to a high level. Lean
management has the intention of continuous elimination of waste, after consideration of little
improvement (Hartini & Ciptomulyono, 2015). It also improvises quality and also reduces
defects for successful enhancement of the overall manufacturing scalability. It also
encounters subsequent limitations like low production, costly business and prolonged cycle
time.
In the case study of Climate Systems Division, it is being observed that they have
maintained a lean culture on the basis on creativity and flexibility, even for the changing
conditions. Since, the plant had reduced the lead time, it had the ability to respond for
demanding instead of building to inventory (Susilawati et al., 2015). It created the
requirement to flex the work force for covering a specific schedule within the peak season.
The plant even had to assign various on site engineers for few of the key customers to ensure
total development of the newer services or products. They want to reach out all the long term
order agreements with the major customers that would be allowing demand level in
manufacturing (Buer, Strandhagen & Chan, 2018).
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The organization has provided some of the most significant and noteworthy products
and services for their customers. They have maintained a management team for six months to
understand their subsequent roles in a specific value stream environment. This particular
management team comprises of managers for departments within Engineering, quality,
Maintenance, Manufacturing, Quality and finally the lean functionalities (Nallusamy et al.,
2015). In the year of 2012, the respective plant was termed as the 1 of the best ten plants on
the basis of 5 years of high increase of quality, reduction of lead time, better customer
services as well as improvement of profit. The respective employees, which provided distinct
services like engineering, purchasing and quality are responsible for ensuring that lean
culture is prevailed in their business under every circumstance. As a result, the most vital
aspects such as profit improvement, increment in quality and reduction of lead time are being
obtained successful and the respective organization gets maximum advantages.
2a. Brief Background on Two Importance of Visual Management
Visual management is the significant method of visually communicating various
performances, warnings, standards and expectations in such a manner, which needs proper
training for subsequent interpretation (Nallusamy, 2016). There exist six vital and significant
categories of visual management, which enable incrementing management of standards,
quality and performance. It eventually starts out at simpler communication of works and facts
for utilization of visual controls in prevention of errors occurring. The first and the foremost
category of visual management is to share information. It is extremely common for any work
place and the most significant example of such management includes monthly performance
summary, result of the customer survey and major team achievement. The second significant
and important category of visual management is to share standards (Indrawati, &
Ridwansyah, 2015). The most significant idea of such standard sharing is to communicate
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information in similar method of information sharing. However, for sharing standards, it is
required to be done on a regular manner and should fulfil the standard.
The next noteworthy and vital category of visual management is to build in standards.
It is being done for making it extremely difficult to deviate from the respective standards and
to ensure that there are no priorities for getting benefits from the standards. The final
important and significant category of visual management is to warn about abnormalities
(Alefari, Salonitis & Xu, 2017). The shadow boards are referred to as the most popular visual
management tool for warning of the abnormalities. These are extremely simple and visual
method for indicating anything without proper communication. This particular category of
visual management even provides warning when anything is being missed within the
organization. It is also termed as the step for mistake proofing and hence error free solution is
being obtained eventually.
The most significant reason to deploy visual management would be driving focused
improvement and problem solving aspect with the subsequent objective to reduce response
time and also provide the teams with the most relevant information, required by them for
elimination of waste and any other issue, like poorer quality (Zahraee, 2016). It is also
referred to as a basic fundamental part of ownership and empowerment. After providing the
teams with subsequent feedback, visual management provides the team with proper
accountability and responsibility for the actions. It even leads the drive in making the
respective operation much more efficient as well as transparent. A significant principle of
visual management is lean and it is needed to directly observe their works as proper flows,
connections and activities.
Another vital and significant importance of visual management is its decentralized
planning and real time updates. It is extremely difficult to create any specific plan without
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visual management and hence it allows decentralized planning within the business. Most of
the planning tools are highly inflexible and complicated (Godinho Filho, Ganga &
Gunasekaran, 2016). However, visual management is quite easier in utilization as well as
flexible enough to enable changes, which inevitably take place and even enables the teams in
creation of the plans collaboratively as these are quite accurate and should be considered on
top priority. Moreover, they provide real time updates for making easier updates in the plan.
The tasks could be updated accordingly by the team members.
2b. Explanation of Four Benefits of Visual Management in Lean Operations for the
Case Study and Supporting Literature
Visual management comprises of some of the most significant and important benefits
and these are responsible for providing maximum effectiveness and efficiency to a high level.
In the case study of Climate Systems Division, the organization has got few of the most vital
benefits in lean operations for their manufacturing system. Four of these noteworthy benefits
of visual management in lean operations are provided in the following paragraphs:
i) Provides a Chance to Check and Correct Issues: As per Borges Lopes, Freitas and
Sousa (2015), the first and the foremost benefit of visual management that is being gained by
the respective organization in their lean operations is that it provides a significant chance to
check as well as identify and correct the issues, even these become major problems for the
manufacturing system. It is quite important for the manufacturing system to ensure that the
errors are being corrected on time, so that other issues do not take place (Cirjaliu & Draghici,
2016). The specific organization has got the chance to check and then correct these issues in
lean operations with relevant steps for ensuring that better effectiveness and efficiency is
gained in the processes without much complexity.
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ii) Provides a Chance to Check Non Compliance for Standards: The second
important and significant benefit of visual management that is being gained by the respective
organization in their lean operations is that it provides a proper chance for the purpose of
checking subsequent noncompliance for several standards (Choomlucksana, Ongsaranakorn
& Suksabai, 2015). As a result, the organization is able to ensure major compliance in the
business without much complexity and every aspect of compliance and law is being
maintained eventually. It is required since they want to maintain creativity and flexibility
majorly during changing of different conditions. This type of aspect includes the behaviour,
which does not conform to or follow the rules, advice or regulations for others (Sajan, Shalij
& Ramesh, 2017). Maintenance of compliance in extremely important for each and every
standard of lean operation. Hence, it helps in correcting the priorities in the work place.
iii) Provides Safe and Secured Working Environment: According to Ghobakhloo
and Azar (2018), another vital and significant benefit of visual management that is being
gained by the respective organization in their lean operations is that it provides a proper
chance for safe as well as secured working environment. A safe environment is required to
check if it fulfils the set of 6S tools that could provide a proper working environment, in
which every individual could face safe and facilitated (Cirjaliu & Draghici, 2016). It also
avoids any type of injury in the work place, which is quite common for manufacturing
system.
iv) Visible and Accurate Critical Path: With the help of visual management, the
organization is able to get creativity and flexibility in the changing conditions (Zahraee,
2016). It is possible only when the respective critical path is accurate and visible. It is
required as the tasks over the critical path are those, which cause major delays as soon as they
slide in the lean operations. Due to such accurate critical path, they have got growth from
supply of the assemblies over a just in time basis and not only supplying the components by
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their weekly truckload (Nallusamy, 2016). The major delays in completion of the most
critical tasks comprise of a major impact on the project schedules.
3a. Brief Background of the Creation of Value Stream Culture centred on Autonomy,
Entrepreneurialism and Lean Continuous Improvement
Value stream mapping is the technique for lean manufacturing for the purpose of
analysis, designing and management of the flow of materials as well as information that are
needed to bring out any particular product to the clients (Nallusamy et al., 2015). This
particular technique could be utilized for improving a specific procedure, in which there are
certain repeating steps and can provide maximum advantages to the business without much
complexity. It even utilizes a proper system of standardized symbols for depicting several
work streams or flows of information. The items are being mapped as the adding value can
easily root out those items, which could add value at any cost. For manufacturing, the
handoffs are considered as quite simple for visualization as they include the handoff of a
specific tangible deliverable through various stations (Indrawati & Ridwansyah, 2015). The
process of information flow is being checked regularly to ensure better team collaboration
and proper communication within the respective organization.
The organization has been following value stream culture in their business, so that it
becomes easier for them in reduction of waste for improvement of the organizational bottom
line related to manufacturing system. The wasteful handoffs are being identified as the major
part of value stream mapping visualizers for better analysis of understanding the customers’
perspectives (Alefari, Salonitis & Xu, 2017). Three vital aspects are being considered on top
priority, which are autonomy, entrepreneurialism and lean continuous improvement with the
help of value stream culture. Timbila, being an important part of the organizational
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management, had ensured that they are involving the culture of value stream in their business
and also sustaining momentum.
The process of annual objective setting starts with their offsite meetings, in which the
managers could recognize the objectives, which support proper strategy that is over the basis
of different safety measures and principles, quality and cost effective delivery of their
products (Borges Lopes, Freitas & Sousa, 2015). The value stream managers eventually plan
their projects for fulfilling the high level objectives like high productivity as well as
improvements in cost analysis. Since, the managers of value stream can make their
personalized performance plans with the respective team member on the basis of value
stream projects and goals; they also encourage entrepreneurialism to a high level.
3b. Discussion of Four Benefits gained through the Creation of Value Stream Culture
There are some of the most significant and noteworthy benefits of value stream
culture that are being gained by the organization. Four subsequent benefits of this particular
culture are provided in the following paragraphs:
i) Alignment of Cross Functional Teams: The first and the most significant and
noteworthy benefit that the organization has got from value stream culture is proper
alignment of the cross functional teams (Cirjaliu & Draghici, 2016). It is quite vital for any
business to ensure that the managers and teams from different parts of the organization work
together as a team when it is being led by the supervisor trained in lean tools and techniques
and also checking if every area of the process is getting mapped properly. After successful
involvement of the cross functional teams, these managers are able to provide maximum
productivity without much complexity and the customers are benefitted to a high level
(Ghobakhloo & Azar, 2018). The customers are also satisfied and a proper value stream
culture is prevailed.
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ii) Ensuring Process Improvement: The second vital and significant benefit that the
organization has got from value stream culture is ensuring improvement in the processes
(Sajan, Shalij & Ramesh, 2017). It is possible only when the work force in value stream
mapping is being involved. Proper creation of a specific map of value stream can easily open
up a forum for the customers for sharing their views and it becomes a centralized piece for
holding conversation around (Rohani & Zahraee, 2015). Lean is for elimination of waste and
also driving higher efficiency. It is for building a subsequent culture of continuous
improvement for checking if value stream mapping is effective in nature.
iii) Inexpensive and Fairly Easier in Utilization: Another significant and important
benefit that the organization has got from value stream culture is that it is inexpensive and
fairly easy to use (Tortorella & Fettermann, 2018). A proper value stream map could be
created easily within the working environment. Experience and knowledge of the work force
would be leveraged for being sure that value stream map is accurately described for the
current process. It is the most powerful technique to visualize process and also to identify
areas for better improvement. A process could be improvised for better visualization in the
business (Yang et al., 2015). The most efficient and quality improved product and service for
the customers is being gained in the process without any type of complexity.
iv) Identification of the Bottlenecks: The fourth vital and noteworthy benefit that the
organization has got from value stream culture is that it provides proper identification of the
bottlenecks (Cherrafi et al., 2016). It even looks at the flow of information and then take up
the employees’ side into the account after checking the responsibilities at certain points of the
process of managerial inputs. When the company did several subsequent things for checking
their difficulty in occurrence of constraints or bottlenecks. In such situation, it is needed to
create a value stream mapping for helping them to bring back to the business and understand
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the most vital aspects (Hartini & Ciptomulyono, 2015). As a result, the value stream mapping
helps to improve the process after error proofing in the most effective manner.
4a. Brief Background of the Lean Culture of the Case Study Organization
The organization has maintained a lean culture after elimination of waste. It is quite
vital that the lean culture could see a major commitment from the organizational
management. The lean culture in the organization is being successfully maintained after
getting proper guidance from the management like Timbila. To ensure that this specific
culture is prevailing in the organization, the employees and managers require to be aware of
waste in the business and also become prepared completely. These managers are prepared to
eliminate the waste from the lean manufacturing process (Helleno, de Moraes & Simon,
2017). They have involved a lean culture for ensuring that major creativity and flexibility is
prevailed in the changing conditions.
It even created the requirement for flexing the work force to cover their 7 days
schedule during the peak season. Moreover, they have also checked that the product mix has
grown up extra complicated and the major growth has come from supplying various
assemblies for just in time basis and not only on supplying their components by the weekly
truck loading. Such distinct changes have incremented the part numbers to be managed and
have reduced order sizes. They have even assigned on site engineers for few of the important
customers and a move, which has led to the subsequent development of several new orders
and new products.
As a result, the combination of the business growth and seasonality for work life has
increasingly become hectic and have also led to regular firefighting (Susilawati et al., 2015).
A proper lean culture is being maintained for determining the inventory for any specific
procedure an also to continuously reduce the inventory whenever required, however only
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after reducing downstream variations in demand as well as incrementing the upstream
procedural stability and capability. It even provides some of the most important and
significant benefits to the organization for checking the inventory in a proper manner.
4b. Discussion of Four Ways the Leadership of the Company was capable to cause huge
Change for leading to an Effective Restructuring and Reorganization with the Case
Study and Current Literature
Leadership in any organization eventually enables the organizational members in
providing maximum profit and effectiveness to the business. It is a significant procedure,
through which the executive could easily direct, influence as well as guide the behaviour or
working procedure of others towards subsequent attainment of the specified objectives in a
specific situation (Andrés-López, González-Requena & Sanz-Lobera, 2015). It is the core
capability of the manager in inducing the respective subordinates for working with higher
zeal and confidence. The leaders are needed to develop all types of futuristic visions and also
to motivate the organizational members in achieving the visions. It is an inter-personal
procedure, where the manager is involved in influencing and guiding the workers towards
successful achievement of goals. It even denotes few of the most distinct qualities, such as
personality, maturity and intelligence.
In the case study of Climate Systems Division plant, the organization has obtained
success and efficiency in their work for causing huge change in the effectiveness of
restructuring and reorganization, after they included proper efficiency in leadership within the
business. Four ways, by which leadership was used in this particular organization for
organizational restructuring and reorganization are as follows:
i) The first and the foremost method that leadership was followed by Timbila in the
organization was during picking up of the valve operation at their first value stream mapping
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(Tortorella & Fettermann, 2018). It was required as value stream mapping can easily and
promptly identify the requirements in the business and major profit is gained in the process.
As a result, organizational restructuring was done successfully (Sanders, Elangeswaran &
Wulfsberg, 2016).
ii) The second way by which leadership in the case studied organization was during
building of culture and sustaining momentum (Cherrafi et al., 2016). The functional leaders
had to act within leadership and also support role after regularly meeting with the staff for
reviewing their key metrics and also checking improvement efforts for organizational
restructuring (Hartini & Ciptomulyono, 2015).
iii) According to Buer, Strandhagen and Chan (2018), the functional leaders have
remained connected to the value stream after ensuring a series of meetings to be provided for
planning, doing, checking and acting cycles, required for keeping track of the performances
and projects and also enable for adjustments and planning in the entire year. As a result,
restructuring is possible (Nallusamy, 2016).
iv) The organization has a value stream team leader with broader responsibility as
well as leadership for total operations of the value stream (Indrawati & Ridwansyah, 2015).
As a result, the organization is able to ensure a safer working environment, maximization of
profitable growth, driving quality improvements, providing premier customer services,
development of a technically qualified working force, reduction of operational costs and
inventories as well as lead time via constant improvement (Indrawati & Ridwansyah, 2015).
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Sajan, M. P., Shalij, P. R., & Ramesh, A. (2017). Lean manufacturing practices in Indian
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