(Abstract) 100 Great Business philosophy: concept 8: eliminating waste (Muda)

Concept 8 eliminating waste (Muda)

Many enterprises are busy paying attention to revenue and forget the importance of business processes and the consequences of waste. In other words, organizations that strive to simplify the structure, improve efficiency, and organize the Organization have more significant advantages than those that lack efficiency.

Concept

Over the past few decades, leading Japanese companies have switched their cost management efforts to eradicate waste. Western companies follow the example of the "miracle of Japan" in 1970s and 1980s to follow their successful practices. The concept of timely response strategy (JIT) and elimination of waste means that some new terms, such as business process analysis, flowcharts, and process reengineering, are entered into the business professional vocabulary. The concept of process analysis is to consider business activities as a series of events, perhaps from the beginning to the end of the production process, and to distribute a series of activities into individual unrelated activities, but can recognize the task.

After a difficult period in 1970s, senior management of Harley-David son visited the Honda Motorcycle factory in marrisville, Ohio. In terms of production configuration, production process, production efficiency, and inventory management, Honda and Harley-Davidson are quite different. These senior managers decided to adopt a timely production response strategy within the company's business scope, known as man, introduced by Harley-Davidson. According to this strategy, they integrate all production and operation processes to reduce the resources required for raw material processing. In this way, Harley-Davidson reduces both raw material supply and product inventory for premature production. This reduces the workshop area required for production and creates additional space for increased production.

Caterpillar, a leading agricultural and construction machinery manufacturer, has similar experiences. In 1980s, its cost structure was much higher than the Komatsu plant, Japan's main competitor. In summary, Caterpillar found that the "flow" Process of Komatsu is much more efficient than the flow of components and semi-finished products in their production process. They took the lead in launching a significant factory restructuring activity called pwaf (a decisive future plant. The new production process shortens various production processes, reducing the gap between raw material processing costs, inventory levels, and the cycle of each product. In some cases, the production cycle has been shortened by 80%.

Practical application highlights

§ Analyze the inefficiency and waste factors in your production process. Consult the personnel responsible for the production process for improvement. In addition to the production and processing industries, this principle also applies to the service industry.

§ Make clear and practical plans to reduce the scope of inefficient operations and replace them with improved methods.

§ Find out what success is, how to measure it, and when to succeed.

§ Exercise caution when introducing new plans. Any changes to the program may have unpredictable consequences-be prepared for adjustment and compensation, taking into account these potential problems.

(Abstract) 100 Great Business philosophy: concept 8: eliminating waste (Muda)