Lean Management: Eliminating Waste for Improved Efficiency and Quality - Essay Sample

Introduction

Lean management refers to a management approach in manufacturing and support organizations, whereby the concept of continuous improvement is adopted (Martinez & Perez, 2001). Lean management concept seeks to achieve small, incremental changes in processes to improve the efficiency and quality of the organizational process. Lean management seeks to eliminate waste of resources in an organization, i.e., waste of time, money, and effort. Elimination of waste is achieved by identifying each step in a business process and then revising or removing steps which do not create value. According to Martinez-Jurado and Moyano-Fuentes (2014), guiding principles for lean management include; identifying each step in a business process and eliminating the steps that do not create value, defining value from the standpoint of the end customer, making the value-creating steps occur in tight sequence and lastly repeating the first three steps on a continuous basis until any identified wastes are eliminated in the business process. This paper seeks to discuss Amazon.com Inc. lean management techniques as well as identify improvements which can be made in scheduling and controlling the lean techniques.

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Amazon.com Inc. Company

Amazon.com Inc. is an American multinational technology organization which is based in Seattle, Washington. The organization focuses on cloud computing, e-commerce, digital streaming, and artificial intelligence. Amazon is among the top four technology organizations in the world. The company was founded by Jeff Bezos on July 5, 1994, in Washington initially as an online book store but later expanded to provision of other products and services. The organization is well known for its ability to disrupt well-established industries through technological innovation and mass scale. The organization is the world largest cloud computing platform, AI assistant provider, as well as e-commerce marketplace. The organization is also the largest intent company in the world. Amazon was the largest employer in the United States, with over 566,000 employees in 2017. The organization has seventeen subsidiaries which were acquired at different times.

Amazon Lean Strategies

Amazon has implemented a lean management approach since its incorporation. Bezos for many years required managers to work in customer service for at least one day every year. This provides the executive managers a more informed perspective of the challenges faced by front line workers. Bezos understands that customers will not pay for waste and thus, has established customer-centric associates within the organization (Romero, 2015). Bezos mandates that increased efficiency and productivity be applied to lower the prices of products and services offered to the customers. This, in turn, will increase customer loyalty with, in turn, boost the organization's profits. Also, the organization implements the virtual Andon Cord, which is the lean concept. The Andon Cord allows customer service agents to pull any product from the website at any time. This empowers the workers to address defects immediately and effectively while at the same time, helps reduce customer complaints, which might occur in the future (Romero, 2015).

Moreover, the organization's decision makers are asked to act quickly through the "disagree and commit" strategy. This strategy allows for decision makers who have failed to come to a consensus, to commit to one decision and see how the results pan out. This lean concept allows an organizational process to progress despite disagreements between decision makers.

The organization has implemented an information technology system which is built on understanding the demands of the customer. The transport system of the organization is configured, such as once a customer places an order, there are selections for customers to choose. These lean transportation principles include delivery times, lower-cost positions, transportation methods, etc. Also, the organization has introduced lean deliveries whereby customer deliveries as carried out through drone deliveries, dash button, and robotic pickers.

Amazon, according to Romero (2015), has more workers working in fulfillment centers and customer service center compared to other departments. The organization engages its entire workforce on continuous improvement whereby the employee works as a team as opposed to individual workers. Another lean management strategy adopted by the organization is the use of Gemba meetings. Gemba refers to a process improvement meeting whereby departmental leaders engage in discussing challenges faced and formulating change strategies to eliminate the challenges (Romero, 2015). Moreover, the organization promotes continuous improvement by providing its employees with platforms to voice their opinions and participate in decision-making processes. The suggestions boxes improve lean management in the organization.

Lastly, Amazon implements the 'standard of work' to create leaner improvements (Romero, 2015). The 'standard of work' combines elements of the duties and roles of its employees in the most efficient sequence eliminating wastes. This, in turn, ensures that the organization achieves efficiency and quality levels of production. Amazon has effectively incorporated lean techniques in its organizational process, which has, in turn, increase the value of the production processes.

Improving Lean Techniques at Amazon

Amazon.com Inc. is a customer-centric organization that is devoted to ensuring its customer service is lean as possible. The organization has already implemented lean techniques which have resulted in the organization processes to be considered among the leanest in the world. However, there is still room for improvements.

Ontario 6 Fulfillment Center (ONT6) located in Moreno Valley, California, has closed off a small section of the first floor for reactive stowing. Reactive stowing occurs when a product which is on shipment to ONT6 becomes reactive, i.e., has been purchased. The product requires stowing and pick up as fast as possible to reduce customer wait times. ONT6 currently uses bin etiquette whereby there is a team of 30-50 stow workers. The bit etiquette adopted provides that small items are not to be placed in large bins, products are not to be placed behind or in other products, same items should not be placed in adjacent bins, items stowed on top bins should have no overhand, and heavy items are to be stowed at proper body level. Stowing and picking at ONT6 are forced to work in the same environment, which has affected both stow and pick departments.

This challenge of stowing and picking process at ONT6 can be improved by expansion. The facility has undergone through a bin project, some bins from the bins project were left idle, and the expansion process can utilize these bins. These bins can be recycled into the facility and thus lowering the costs. The facility should get rid of few quarter palette bins and replacing a half an aisle filled with bins to create more space. This simple solution will help solve the quarter pallet bin challenge which the organization has been trying to get rid of. Also, this suggestion will create more space whereby reactive products can be stowed, allowing for sufficient space for both stowing and picking. This creates leaner processes by eliminating insufficient time spent in both pick and stow activities. Also, this suggestion reduces the time to process reactive items and thus improving customer service.

Conclusion

Amazon is a customer-centric organization which places the customer at the center of all organizational processes in the organization. Amazon adopts lean management techniques across its organizational processes. The organization engages its entire workforce on continuous improvement whereby the employee works as a team. The workforce teams are always thinking of new innovative ways to implement lean techniques to improve the efficiency and quality of organizational processes.

References

Martinez Sanchez, A., & Perez Perez, M. (2001). Lean indicators and manufacturing strategies. International Journal of Operations & Production Management, 21(11), 1433-1452.

Martinez-Jurado, P. J., & Moyano-Fuentes, J. (2014). Lean management, supply chain management and sustainability: a literature review. Journal of Cleaner Production, 85, 134-150.doi 10.15417/1881

Romero, G. (2015). Lean Innovation at Amazon. Retrieved from Innovation Excellence: http://innovationexcellence.com/blog/2014/09/22/lean-innovation-at-amazon/