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.
Inventory management is vital to lean manufacturing success. On that note, before we can improve our inventory management processes it’s vital that we grasp a few basics. First, there are ultimately 3 different categories of inventory. Inventory accounts for all raw materials (RM), work in process (WIP), and finished goods (FG). Second, all inventory must be accounted for the manufacturer’s balance sheet, while all inventory changes must be accounted for on its income statement. Third…
Kaizen events are team efforts requiring participants to perform certain roles. Thus, a key part of kaizen event planning is assigning roles for the kaizen event. In this article we introduce a a few common key kaizen event roles and requirements necessary to ensure a successful kaizen event.
Kaizen events can be used to swiftly improve almost any process that can be observed, measured and changed. Because teams in kaizen events are cross-functional and focused, it is much easier to make changes quickly and optimally at minimal costs to the company.
Sorting is a powerful part of the lean 5S process. Sorting is also one of the most misunderstood of the 5S steps. Sorting empowers continuous improvement by eliminating items from work areas lacking use or value. Sorting can improve safety, workflow, and throughput.