Assignment format:

In Word break the paper into the following sections:

• Introduction – describe the company in general and what it does

• Using the three principles as section headings, analyze the company along each principle and discuss the recommendations in terms of cost and quality

• Conclusion – is the company balancing cost and quality? Why or why not?

This paper is to be written in APA format.

General Formatting Requirements:

• Ensure professional presentation with proper spelling, grammar, etc.
• Must have proper in-text citations and References page
• Include supporting resources from sources other than what is in the course
• Include page numbers
• Include a cover page or paper header

Week 7 Assignment Notes and Hints

This week’s assignment is very clear, but there are a few things you should not lose sight of. The lean principles of eliminate waste, remove variability, and improve throughput must be discussed in terms of the sub-concepts of Just-In-Time and Continuous Improvement among others. The text book does a great job of identifying ways in which lean principles will manifest themselves in various areas. In other words, if you are examining transportation elements at the company as a way to eliminating waste you will probably need to address how the company is looking at supplier relationships, layout, etc…. Similarly, when looking at removing variability you might be discussing changing customer demands and how inventory and scheduling impact meeting the customer’s needs. So, consider working through the assignment where applicable as shown below in bullet 3. It will probably help you organize your thoughts.

Furthermore, when you make your recommendations to enable the facility to develop a lean operation make sure you discuss how the company can ensure the lean operations by discussing continuous improvement techniques, employee empowerment, standard processes/workflows.

1. Paper total length should be a minimum of 8 pages
2. Your company introduction should be at least one page and should highlight in detail what the process is that you are looking at during your lean operations investigation and recommendation
3. Analysis of each of the principles at least two pages for a total of 6 pages
   • I suggest discussing and presenting each of the concepts per principle as one section. Below are some key elements to consider when evaluating Waste, Variability, Throughput. These elements are more appropriate to some of the Lean principles than others. NOTE: this is not an exhaustive list and these are simply elements that should be applied to the real world situation you are investigating. There are other elements that can be discussed.

• Just In Time tools
• Suppliers
• Lean layout
• Lean Inventory
• Scheduling
• Quality
• Continuous Improvement
• Ohno’s seven wastes
• Supplier relationships
• Process Management/Continuous Improvement
• Customer Demands
• Worker issues
• Inspect workflow
• Identify bottlenecks
• Reduce equipment downtime
• Reduce rejected parts
• Training
• Manage labor efficiently
• Use automation

1. Balancing cost/quality should be a one-two page discussion on how you believe the company is managing the balance across all three principles.
2. You don’t need to visit the company. You can use your experience or research, but you’ll be graded on how well you describe the existing operation in the Introduction

You should probably be focusing on one process at the company to examine lean principles of operations. However, if you decide to focus on more than one process it is imperative that you provide a baseline for me in order to evaluate it. In other words, don’t just assume I know that the remove variability analysis is different from the eliminate waste analysis and discussion.

See the below example of a rental car company and how the author defines various elements of waste and how the author wraps up the lean operation in terms of benefits to the company

Eliminate Waste

One way rental companies can eliminate waste is by properly managing their fleets. Now this is not in the sense of waste as something that is thrown away, but in the sense that of an asset sitting idle and not helping the business be profitable. A key component in managing a rental car fleet is through achieving high utilization. A fleet of cars is a huge expense for the business and having cars sitting around and not on the road on rentals can prove costly. For example, a location that has a total of 100 cars in its fleet were to have 30 cars idle, that means that there are only 70 cars on rent making the business money and 30 cars on the lot not making any money. That is a utilization of 70%. The goal was to get between 85-90% utilization. One reason a location may be sitting heavy with idle cars is due to poor planning and forecasting, other times it could be because frontline employees are afraid of not having enough cars for the reservations plus any potential walk-ups. How can this issue be fixed? There are several ways that this can be done using lean principles.

When it came to idle cars, if one location had more cars than it needed, the first step would be to contact another location to see if they needed any vehicles. If necessary, the cars will be moved to the locations where they are needed most. This falls under the principle of lean layout, which places material directly in the location where needed (Heizer et. al, 2014). Another cause of cars being idle is due to being out of service (OOS). OOS cars could require maintenance, have an administrative hold on it or suffered body damage. A good practice is to have these cars serviced, if possible, if they were not serviceable they were moved as soon as possible to the area distribution center. We worked closely with various partners such as Firestone, our internal maintenance partners or network of body shops to quickly fix the cars so they can get back on the road. We worked closely with trusted partners in order to get these problem cars turned around quickly so we can get them back on the road. Another benefit of working closely with supplier partners is that our cars were prioritized and we were given a discount on parts and labor due to the volume of work we gave them. This was a benefit to us as well, as payments were often batched and streamlined and most of the partners were local so we did not have to travel far to get the cars serviced, shortens the time the vehicle is out of service.

Another concept that was put into practice to eliminate waste that proves effective – lean scheduling. In the rental car world this is called forecasting. Forecasting is done by determining how many rentals were scheduled for a set number of days, usually 5-7 days out, how many returns were expected, determining if any specialty vehicles were needed, such as minivans, pick-up trucks, cargo vans, etc., confirming reservations by calling customers, and also by planning for a small number of walk-up business. Additionally, the list would include cars that are idle and OOS and would include the location’s utilization percentage for that day. Lean scheduling is imperative for the effective use of capital. The tool used to gather and communicate all this information was a car count, called the Daily Scoop. The Daily Scoop was prepared each night by every location and shared with all other locations and our local distribution center. Effective schedules, communicated to those within the organization as well as to outside suppliers, support Lean (Heizer et. al, 2014). This point of communication also made it easier for locations to identify how many and what types of vehicles another location may have that they could use and possibly swap out for. The goal here is to get as many cars on rent as possible.

These initiatives, if done on a consistent basis, will drive the mentality to eliminate waste and drive utilization. One thing that drove this initiative is that there was a component of each location manager’s monthly bonuses that were tied to achievement of a utilization score of 85% or higher. This encouraged instilling this practice into their employees as well as collaboration with other managers to drive the utilization for the entire market area. Also, when practiced this allowed each location to always be able to provide the customers with the clean, safe car exactly when they needed it.