Lean Production Philosophy

Lean Production Philosophy

Abstract

Motorola Company is one of the leading handset designers and producers in the world. Being in the telecommunication industry, Motorola offers products such as tablet computers, mobile phones, smart phones, two way radio, cable television systems, wireless broadband networks, and many more. The company has opted to apply the lean production philosophy to enable it stay ahead of its competitors and reduce production costs. Through this philosophy the company has been able to withstand the test of time and continue providing quality products at a lower cost even in such hard economic times.

Introduction

Motorola Company started in Chicago, Illinois in 1928 as Galvin Manufacturing Corporation with the battery eliminator being its first product. In 1928, the company introduced the Motorola radio, which was a success. Over the years, it has ventured into production of different products, for example, cellular phones. The company has always been divided into three divisions. One offers communication services to the government and public and is known as the Enterprise Mobility Solution. The second one produces end-to-end systems that ensure that access to digital entertainment is uninterrupted, and it is known as Home & Networks Mobility. The last division called Mobile Devices deals with designing wireless handsets. Following financial wrangles within the company after it lost $4.3 billion from 2007 to 2009, the company was divided into two independent public companies, namely Motorola Mobility and Motorola Solutions. On May 22nd 2012, Google Inc. acquired Motorola Mobility Holdings, Inc., thus leaving Motorola Company with Motorola Solutions, which has been reorganized and restructured.

Lean Production Philosophy

The lean production philosophy originated in the automotive industry of Japan. Toyota Company wanted to find an alternative to the traditional mass production concept. The philosophy combines the use of numerous tools to enhance production methods and services management with Japanese life philosophy elements. It is based on the belief that production is always associated with all forms of losses and wastes in terms of energy, time, raw materials, work, and production resources. Therefore, its aim is to try and minimise losses and waste as much as possible by enforcing justification for any expenditure on a resource and setting up new values. In the early years of the 21st century, western economies realized the great benefits that were associated with this Japanese philosophy. This led to lean philosophy’s propagation and expansion. Although it began in the automotive industry, with improvements and modification, it has grown today to be regarded as a great production process technique that can be used in all production branches and even in the service offering sector.

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According to The Machine that Changed the World, Lean production philosophy is based on five principles.. It states that an organization should specify value by specific product, identify a value stream for each product, engineer a value flow without interruptions, let the customer pull value from producers, and, lastly, pursue perfection. With this information it is possible to conclude that lean production philosophy attempts to combine the craftsmanship principles with mass production. Thus, it focuses on customer needs while reducing production costs, ensuring no production is carried out prior to the actual order. When the order is received, all employees of such organization work with the commitment of satisfying the needs of the customer. To be implemented, lean production philosophy requires an organization to transform its culture and implement the changes across all value chains of that organization.

Lean Production Philosophy versus Typical Production

Typical production methods are all based on the principles of mass production that state that a machine should not stay idle or it will be wasting valuable time and money. Thus, the machine is kept running all the time. We cannot say that this production method pursues customer satisfaction through having large inventories of goods in order to ensure that they can respond to customers’ demands anytime. However, the lean production philosophy is based on reduction of waste in order to produce exactly what customers want, when they want it, thus delivering the product in a timely manner.

Typical production involves manufacturing in batches and moving them into a queue where they wait for the next stage. In such a process, the time might be wasted should  a batch be defective. Such mistake would only be noticed during the next stage of operation, thus resulting in a substantial rate of remodelling, which ties up valuable resources and is certainly costly. However, in accordance with lean production philosophy, all activities during the production process are identified and classified as either value adding or non-value adding. This enables the organization to note which activity to eliminate, alter, or combine before production process kicks off, thus saving on time and cost of rework.

Typical production involves maintaining large inventories. Therefore, if organization anticipates a change in production (new models, for instance), it becomes hard for it to adapt to new customer wants. This is because it is costly, and the organization is prone to suffer losses. In contrast, lean production companies conduct production of small product quantities in accordance with customers’ demands. In such case, these organizations are able to be more flexible and adaptive to market and consumer taste changes. Additionally, with lean production philosophy, production process creates smaller product quantities. Thus, companies get to keep fewer inventories, diminishing the costs of storage. Then the firm can be able to provide frequent deliveries to its customers.

Application of Lean Production Philosophy

Motorola has applied lean production philosophy in its production processes. This is evident in its mobile phone designs, which are based on customers’ wishes and are produced on demand. Such a lean production philosophy concept is known as just-in-time. In 2007, Motorola acquired Symbol Technologies, Inc. in order to ensure that delivery of products and systems (rugged mobile computing, radio frequency identification, and advanced data capture for enterprise mobility solutions) is not interrupted. Such a move was done to enable Motorola apply the lean production philosophy efficiently. With the supplier of the required raw materials being always available, the firm could be able to produce on demand without fear of lacking any raw materials. The Motorola Company produces different types of products ranging from radios to mobile phone handsets. Therefore, the company is able to achieve flexibility and utilize the principle of one-piece flow, where each product line produces small batch sizes that satisfy customers’ demands. The lean production philosophy requires a company to enhance technological and personnel capabilities. This is exactly what Motorola Company is doing to stay efficient in its production processes.

The Effects of Lean Production Philosophy

Great advantages and benefits come with an introduction of lean production philosophy. It has not been any different with Motorola Company. First, Motorola Company has had to incorporate the lean philosophy with its growth strategies in order to ensure that no non-value adding decisions are made. In its growth strategy, Motorola Company has embarked on improvement in the mobile phone handset production, ensuring that as the new product is being produced, it is of the best quality and has all the necessary applications t consumers demand for. Therefore, lean production philosophy has helped the company formulate strategies that assist in cost reduction and quality improvement.

Utilizing the lean production philosophy has helped the company stay ahead of its competitors. This is because it is now able to serve customers with quality products at the right time and at a reduced cost. The flexibility that is brought about by the lean production philosophy also allows the firm to quickly react to customers’ needs and orders without any problem since production is no longer done in bulk. Offering great services to customers has seen them become loyal to the company.

Lean production philosophy is based on inventory-related cost reductions and quality improvement through proper training of a company’s personnel. Therefore, with lean production philosophy, Motorola Company is able to operate at a low cost and thus generate high revenues.  At the same time it can stay ahead of competition thanks to superior product quality and responsiveness to customers’ wishes.

Conclusion

Lean production philosophy is very beneficial, and not only to firms that are in the automotive industry but to any production process. Therefore, there is a need for organizations’ management to see the importance of utilizing the philosophy so as to minimize cost in such difficult economic times, which have thrown many companies out of business. This is because high quality and low costs are what enables an organization triumph in hard times because it mastered a technique of reducing the impact of low sales Inventory-associated losses are avoided because companies applying the philosophy only produce what is demanded.

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