What is lean production?
The central idea of lean production is to maximize benefits using fewer resources. This concept sounds as simple as ‘get more from less’. Lean production centers on eliminating waste in order to decrease the volume of necessary labor, space, resources, materials, equipment, and time necessary for production and distribution. Therefore it focuses on reducing costs. In some cases, eliminated wastes and saved costs are passed to customers in the form of value for money, i.e. superior quality for lower than common market prices.
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List the efficiency concepts that underpin lean production
Such efficiency concepts as continuous improvement, just-in-time production, time based management, and total quality management are the basics of lean production. Continuous improvement refers to establishing the working environment and creating culture motivating workers to constant self-development and building up new skills, which would benefit an organization improving the quality of its products. Just-in-time production implies the delivery of materials and equipment when they are required for production.
That said, the waste is eliminated because there is no need to maintain large stocks as well as only the required amount of resources is used. Time-based management aims at reducing wastes pertaining to time by involving flexible and multi-skilled employees able to carry out several functions preserving the highest quality of work. Finally, total quality management refers to making all employees responsible for the superior quality of products and completing their tasks right from the first attempt.
Explain why having a multi-skilled workforce helps increase Aldi’s efficiency
Having a multi-skilled workforce is one of the determinants of lean production – time based management. It benefits Aldi because it is more efficient to invest in providing the employees with comprehensive training programs and making them flexible and multi-skilled as well as paying them market-leading salaries instead of involving those responsible for numerous different functions. That said, in Aldi, one person can be responsible for cashier operations, then switch to packing products or scanning them. The primary idea is that staff performs tasks needed throughout the working day and open hours instead of waiting for specially trained employees to come and finish the job.
Analyze why lean production is particularly important for Aldi
There are several arguments for proving that lean production is particularly important for Aldi. First of all, lean thinking is the foundation of the company’s business strategy because the reduced costs are passed to its customers in the form of lower prices and the same quality compared to those offered by competitors. Second, Aldi is involved in the grocery industry. Because fresh food products such as fruit and vegetable are among the firm’s assortment, Aldi is interested in finding the ways to reduce the time necessary for distributing and selling them in order to minimize the risks related to products freshness and shelf life expiration.
In addition to it, Aldi’s open hours are not 24 hours. Even though it was a strategic decision aimed at reducing waste related to time deriving from lower customer demand during night hours, the company’s senior management should still be seeking ways for maximizing benefits over shorter periods of operation. Finally, Aldi wants to differentiate it from other businesses operating in the same industry. Achieving the objectives mentioned above is possible only in the case of developing a reliable system of distribution, ordering the volumes of products that is possible to sell, and involving multi-skilled and flexible workforce. That is why lean production principles make sense for Aldi and are efficient for maintaining its positions in the grocery market.