A3 thinking is a vital lean manufacturing tool because of the structure, focus, collaboration and consensus it brings to problem solving and decision making. An A3 report tells a continuous improvement story that turns the #PDCA wheel and drives organizational success!
Lead time reduction is something all manufacturers wish to achieve. By identifying work-in-process (WIP), value stream mapping helps to pinpoint which processes in a production sequence drive overall lead time. Finding ways to reduce work-in-process (WIP) helps to reduce lead time.
Imagine applying lean principles to the most common batch-process in most offices; the monthly financial close. Many companies take days or weeks to close their accounting books and prepare financial statements every single month. While it may seem like lean principles could never be meaningfully applied to such a quantitative and seemingly foundational business process that couldn’t be further from the truth. In fact, many lean organizations reduce their month-end closing activities to a single day, while maintaining accuracy and significantly improving the efficiency of their closing process.
Simply put, performance measures are quantified measurements of how well an organization, value stream, or process performs. But not all performance measures are created equal. For lean manufacturers, lean success requires lean performance measures developed to drive high performance.
Cost-plus pricing can be fine when a lean manufacturer offers a standardized product with limited competition. Unfortunately, most manufacturers offer highly unique products or highly commoditized products. For these manufactures, target costing is a vital part of the product development process. Target costing involves understanding the needs and wants of customers, determining how much they are actually willing to pay for the value a product delivers, and defining the organization’s necessary profit before determining product cost.