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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Lean manufacturing

The following are some quotes provided by a number of managers at Hawkeye Machining Company regarding the company’s planned move toward a lean manufacturing system:

Director of Saki: I'm afraid we'll miss some sales if we don": keep a large stock of items on hand just in case demand increases. It only makes sense to me to keep large inventories in order to ensure product availability for our customers.

Director of Purchasing: I'm very concerned about moving to a lean system for materials. What would happen if one of our suppliers were unable to make a shipment? A supplier could fall behind in production or have a quality problem. Without some safety stock in our materials. our whole plant would shut down.

Director of Manufacturing: If we go to lean manufacturing, I think our factory output will drop We need in process inventory in order to "smooth out* the inevitable problems that occur during manufacturing. For example, if a machine that is used to process a product breaks down, it will starve the next machine if I don't have in-process inventory between the two machines. If I have in-process inventory, then I can keep the next operation busy while I fix the broken machine. Thus the in process inventories give me a safety valve that I can use to keep things running when things go wrong.

How would you respond to these managers?

To determine

Lean Manufacturing

The main objective of lean manufacturing is to yield products with high quality, low cost, and immediate availability. In attempting to achieve this objective many producers have applied lean manufacturing.

To Explain: The way in which the managers would be responded.

Explanation

The Company HM managers are exhibiting typical fears to the lean processing system. Lean manufacturing eliminates the safety delivered by raw materials, work in process, and finished goods inventory balances. Actually, these forms of remarks reveal in conventional manufacturing viewpoint, which sights inventory as an essential defense against astonishment and other annoying happenings. Lean observes focus on eliminating the reasons that necessitate a want for inventory.

In the case of materials inventories, lean practices need all suppliers to deliver high quality materials on a day-to-day basis in just the exact numbers required for a time’s production. If the supplier has erratic production lists or quality, then the sources of irregularity could be essential for immovable earlier touching to just-in-time delivery required by leaning manufacturing. Only when suppliers are dependable can Company HM change to lean manufacturing plan without revealing the company to major risk.

Work in process inventories can be reduced considerably if the underlying manufacturing practices are prepared consistent...

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