The implementation of the lean system at Oak Hills and its impact on employees
The implementation of a lean system at the Oak Hills facility can be viewed as the managers’ response to the necessity of optimizing all production processes, increasing the quality of products, and reducing costs. A lean system is discussed as the most appropriate way to avoid wasting resources, to increase efficiency in manufacturing, and to achieve flexibility in the organization and control of processes (Karim and Arif-Uz-Zaman 170). All steps associated with implementing a lean system are directed to optimizing processes and operations, improving the quality of work, and increasing effectiveness. As a result, changes in operations and the number of employees, as well as their responsibilities, are expected.
Currently, there are many drawbacks in the work of employees which should be addressed while implementing a lean system. For instance, the work of employees is scheduled and organized improperly, and these aspects lead to decreasing the quality of products and the speed of operations when employees work as teams. Also, the quality control conducted by employees is not enough and appropriate to prevent providing customers with damaged products. The employee morale was also affected by the recent changes in the work of the company, and the lack of communication between managers and workers led to spreading rumors and decreasing employees’ motivation to work. To overcome the identified problems and guarantee that all employees will contribute to implementing a lean system, it is necessary to make sure that they are educated and trained regarding new principles of the working process applied at the Oak Hills facility.
As a result, the implementation of a lean system will affect employees in terms of the organization of their work and operation processes, their education and training, scheduling, as well as changes in responsibilities and tasks to complete (Martínez-Jurado and Moyano-Fuentes 135). Furthermore, it is possible to expect the dismissal of those employees whose quality and speed of work do not contribute to increasing efficiency. From this point, such changes can be rather stressful for workers, and it is important to make the transition to a new system smoother.
The first step is the communication of the company’s goals to employees to discuss expected changes, share a new vision, and explain the benefits of changes to employees. At this stage, employees are motivated to participate in the reorganization process and demonstrate their potential. Changes are required for the bonus system applied in the organization to motivate teams and individual employees. Currently, employees are not motivated to demonstrate the ability to work with different teams and on various tasks. The second step is the education and training of employees. The principles of cooperation between team members and overall tasks will change, and they should be properly trained to work as members of multifunctional or cross-functional teams. Thus, the assessment of employees’ work, productivity, and adherence to quality standards is the final step which is important to avoid retaining employees who cannot contribute to the optimization of processes.
The stage in the development of a supply chain in Oak Hills
A well-developed supply chain plays a key role in influencing the interaction of facility management with customers. When a supply chain is developed appropriately, there are no delays in operations and product deliveries (Brandenburg et al. 300). As a result, the level of customer satisfaction increases. Currently, Oak Hills needs to cooperate with Precision Milling to purchase machined cases and with Black Dome to buy sensor boards. The problem is that Black Dome refers to inappropriate delivery records, and delays in delivering required products cause changes in processes at the Oak Hills facility even though it takes only fifteen minutes to drive to Oak Hills from Black Dome. Furthermore, the necessity to address possible delays and problems associated with the lack of cooperation and communication between the Oak Hills and suppliers results in increasing inventory costs as well as lead times for both rush and domestic orders.
It is important to pay attention to the fact that weaknesses in organizing and managing a supply chain are also observed concerning the communication of Oak Hills’s managers with leaders and customers of Triangle Corp. which was acquired by the discussed organization. There are no available contacts and well-developed procedures to work with customers of Triangle Corp. Furthermore, it is important to note that there are no effective plans to control the progress of domestic projects to decide regarding inventory levels and loads related to operations. Such weaknesses in the work of the organization’s supply chain support the idea that it is underdeveloped, and it requires further improvement in the context of a lean system that is planned to be applied at the Oak Hills facility.
To improve the discussed supply chain, it is necessary to focus on creating a strong communication channel and a system of exchanging information between managers of Oak Hills and Triangle Corp., as well as their suppliers. This information should be updated regularly to control the work on different types of projects. The improvement in scheduling is also important to organize the work with suppliers and to guarantee the on-time delivery of components that are required for completing urgent orders (Marodin et al. 418).
The next approach to improving the work of the supply chain is the focus on developing communication with customers who should receive opportunities to place orders in the timeliest manner and inform the managers of Oak Hills regarding their potential demand for products for a certain period (Marodin et al. 418). Even though the organization uses the Materials Requirements Planning (MRP) system to realize the process of ordering components, it should also be improved with the focus on including it in scheduling and the work with Precision Milling to control all areas of operations at the facility. These strategies can be viewed as rather effective to overcome the discussed challenges.
The connection between demand management and the supply chain for Oak Hills
It is important to pay attention to the fact that demand management is essential for the Oak Hills facility because its results influence scheduling and operations for a certain period. Thus, demand management is associated with a set of methods that are used to predict customers’ demands for certain products within a selected time frame (Touboulic and Walker 17). While discussing the connection between specifics of demand management and the Oak Hills’s supply chain from the strategic perspective, it is possible to note that this linkage is direct and important because the supply chain management depends on demand management in such organizations as Oak Hills. Thus, the number of products manufactured by this organization directly depends on forecasting customers’ needs because it is necessary to cooperate with suppliers and plan inventories to address the planned demand (Karim and Arif-Uz-Zaman 171). Furthermore, at the Oak Hills facility, the work of the supply chain depends on both short-term and long-term forecasts regarding the potential demand. Therefore, if demand management is organized appropriately, a supply chain will work effectively to meet the projected customers’ needs (Touboulic and Walker 18).
However, in the context of Oak Hills, the problem is that demand management is not realized properly. It is important to focus on the point that the demand for testing instruments produced at the Oak Hills facility usually fluctuates, and changes in orders of international or domestic customers depend on a variety of factors. Thus, the surveys which were completed to predict the demand for testing instruments are based on rather questionable data. Also, managers and employees at the Oak Hills facility lack information regarding Exploration and Extraction unit projects and orders for Triangle Corp. One more point is that customers’ rush orders seem to be unlimited. Therefore, if demands increase significantly, Oak Hills has only a few resources to rearrange the manufacturing process, and there are often changes in schedules and operations when employees need to work on scheduled orders along with rush ones.
From this perspective, it is important to state that weaknesses in demand management and overall capacities of managers to predict and control orders and lead times are associated with problems in the work of the organization’s supply chain (Karim and Arif-Uz-Zaman 171; Touboulic and Walker 18). When there many rush orders, the work of the chain should be adapted to the situation, and regular procedures to manage this process seem to be underdeveloped concerning weaknesses in demand management. Furthermore, it is important to note that the connection between demand management and the work of the supply chain is obvious, and any problems with predicting the demand can result in increasing manufacturing, inventory, labor, and delivery costs. Therefore, a new system for demand management should be used at the Oak Hills facility, and this system needs to be implemented in connection with the system that regulates the work of the organization’s supply chain.
The implementation of recommendations, possible problems and their solutions
To overcome a range of identified weaknesses in the organization of employees’ work, scheduling, cooperation with suppliers, and communication with customers and partners, Oak Hills needs to focus on some recommendations which are oriented to preparing the organization for implementing a lean system. The first recommendation to follow is the reorganization of communication with employees and the improvement of teamwork and the proposed system of bonuses. This step is important to help employees adapt to a new lean system (Wang et al. 686). The second recommendation is associated with the improvement of the supply chain with the focus on developing contacts with suppliers and customers concerning the work of the MRP system. The third recommendation is the improvement of processes and operations, as well as the quality control system, with the help of applying the principles of a lean system.
However, the process of implementing a lean system and related organizational changes can be associated with the appearance of significant challenges for the management team of Oak Hills. Possible problems can include further negative changes in the morale of employees as well as their opposition to the observed changes and increased requirements for the speed and quality of operations according to the principles of optimization (Martínez-Jurado and Moyano-Fuentes 136). Currently, employees demonstrate the unwillingness to improve the performance of teams, and the inappropriate organization of their work along with the lack of communication can be viewed as key issues that require effective solutions. Another controversial question is the necessity of firing employees after completing the final stage of a merger. Thus, risks or threats of being fired can cause decreases in employees’ motivation. To avoid this problem or minimize negative outcomes, it is necessary to share the vision of benefits caused by the change with employees and motivate them to participate in the process while improving communication and teamwork and providing rewards (Martínez-Jurado and Moyano-Fuentes 136).
More problems can be associated with expenses related to the implementation of a lean system. Even though the integration of the lean system principles is expected to result in decreasing costs and optimizing processes, the realization of the project requires the reorganization of the followed system, and this situation is almost often associated with high expenses. To prevent these problems, the management team of the Oak Hills facility needs to forecast and analyze all possible expenses and create a budget for implementing a lean system most efficiently. This budget plan should include the analysis of all operations associated with changes in the supply chain management to improve the cooperation of managers, employees, suppliers, and customers (Marodin et al. 418). As a result, it will be possible to avoid considerable high costs which are associated with the implementation of the change in the organization. Furthermore, these steps are essential to help employees adapt to a new situation and improve their performance.
Works Cited
Brandenburg, Marcus, et al. “Quantitative Models for Sustainable Supply Chain Management: Developments and Directions.” European Journal of Operational Research, vol. 233, no. 2, 2014, pp. 299-312.
Karim, Azharul, and Kazi Arif-Uz-Zaman. “A Methodology for Effective Implementation of Lean Strategies and Its Performance Evaluation in Manufacturing Organizations.” Business Process Management Journal, vol. 19, no. 1, 2013, pp. 169-196.
Marodin, Giuliano Almeida, et al. “Contextual Factors and Lean Production Implementation in the Brazilian Automotive Supply Chain.” Supply Chain Management: An International Journal, vol. 21, no. 4, 2016, pp. 417-432.
Martínez-Jurado, Pedro José, and José Moyano-Fuentes. “Lean Management, Supply Chain Management and Sustainability: A Literature Review.” Journal of Cleaner Production, vol. 85, no. 1, 2014, pp. 134-150.
Touboulic, Anne, and Helen Walker. “Theories in Sustainable Supply Chain Management: A Structured Literature Review.” International Journal of Physical Distribution and Logistics Management, vol. 45, no. 1, 2015, pp. 16-42.
Wang, Yulan, et al. “Service Supply Chain Management: A Review of Operational Models.” European Journal of Operational Research, vol. 247, no. 3, 2015, pp. 685-698.