Lean Principles of Management, Mc Donald Affiliation Princples of management Introduction Lean Management is a strategic business approach that envisions provision of quality products to their consumers while reducing wastage. It was developed by Toyota business in 1980s after research conducted by Dan Jones and Womack. In their finding, they recognized that it is possible to achieve greater quality of products with fewer resources at zero wastage. The concept is a fundamental strategy that seeks cost reduction through conducting a thorough study of activities and departmental duties to create an integral activity linkage that seal any organizational loopholes.
Mac Donald fast food business has applied lean management principles, and the impact has been incredible. Lean Principles of Management Keah (2000) states that there are three major concepts that define a successful application of lean management techniques by the managers.
Firstly is the fact that lean management is customer centered. In recognizing, the critical role of lean management focuses on the customers problems. With customers, problems, the business managers focus on how best the business solves the identified concerns from the consumers in a way that the business benefits. In order to achieve this, the business ensures that they expand their internal abilities to meet the rising needs within the existing resources.
Any increment in the cost of production should be avoided or transferred to the consumers. Secondly, an integral principle is streamlining business operations into smaller, capable, valuable and flexible departments or units. Under this principle, each unit of the business should employ an optimum number of employees supplied with the necessary resources and appropriate knowledge and skills. It identifies the importance of departmental and organizational efficiencies that contributes immensely to cost reduction. As a priority of any business, the focus should be cost reduction and profits maximization (Tan 2000). In addition, each step of business operation should be cost effective, valuable and able to meet consumers needs.
The third principle is the allocation of skilled personnel to each process. It focuses on the appropriateness of human resource available for every labor. In addition, there should be a continuous supply of very skill to ensure sustainability and continuity of business operations (Tan 2000). Moreover, the emphasis on removal of unproductive workforce and streamline the employees activities to achieve maximum productivity within the limited available resources. As described by Womack and Jones, they view lean management just like a carpenter would pick what is important for every furniture.
Lean management has a goal of recognizing what is important before embarking on a business step. However, it should not be taken for a cost reduction strategy, but a way of enhancing business cost reduction. The Impact of Lean Management Principles in Mc Donald Moreover, it is based on tracking the number of work processes and eliminating possible errors.
The principle of empowering people operating the processes and utilizing employees skills and knowledge is a critical pillar in successful business operations. Mc Donald fast food firm has increased the holding costs for beef, cheese and buns in order to avoid losses since these raw materials easily go bad. Besides, the company has streamlined its operations through partnership with numerous number of retail outlets in order to facilitate wider and faster delivery of its product at the right quality to the consumers.
Once cooked, the spoilage rate of these products shoots through the roof resulting in an increase of, as a result, the holding costs per week increases by 20-100% (Tan 2000). The fast channels of distribution operate within minimum costs possible. In recognition of high costs of storage and transportation of its burgers, Mc Donald has embarked on service principle that seeks to study processes and remove the wastage. The long queues at their outlets have been eliminated through integrating three integral principles of lean management.
Firstly, they have a vibrant online ordering. Secondly, they have integrated their outlets that allow the quality to be controlled, and thirdly they have achieved a significant elimination of long processes. The online platform that allows consumers to place orders has seen the sales increase by 14.7% as per 2012. In addition, it has eliminated the food materials spoilage rate by over 30% and the speed of customer services has been greatly accelerated (Tan 2000). The JIT burger assembly is a clear manifestation of the management commitment to study the business activity in each step and restructure the operations.
A centralized burger assembly has created valuable, quality and customer-centered service center that can respond to any orders or inquiries made by the consumers. A special order does not send the company into panic because they have incorporated necessary infrastructure that can produce a quality burger in a record of 15 minutes. The business values its consumers time and so; they are tactical in executing urgent orders. Besides, the managers have employed a wide array of skilled personnel each with full responsibility and authority to perform their duties diligently.
Thus, creating a consistent cost reduction at levels. Conclusion A number benefits drives the fundamental goal of employing the principles of lean management to the Mc Donald fast food business.
The concept of lean management is crucial in establishing a successful business. Under the framework of this theory, a successful business can create maximum resources using limited resources with zero waste. The waste may be defective raw materials or inefficient labor force. Contrary to many beliefs, the principles of lean management are not limited to manufacturing businesses alone. The concepts can be applied across goods and service industries. References Tan, K. C. (2000). Supply chain management: an analytical framework for critical literature review. European Journal of Purchasing & Supply Management, 6(1), 39-46.