Lean Production in Banks

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“An investigation of the extent to which the transferability of lean manufacturing is successful in the UK banking industry and the bench marks it is capable of setting”

Introduction
Toyota were able to enter the US market with their production of cars through the successful implementation and development of lean manufacturing, a startling achievement that has continued to be successful with their rivals GM Motors and Ford struggling to maintain any critical success factors.

Lean Manufacturing has become evident in many manufacturing companies around the world bringing lower production costs and higher quality rates with continuous improvement as its main drive. The UK banking industry has in recent years seen the opportunity to use the skills and theories that lean has to offer and replicate them in a service sector environment. However, lean originated through manufacturing productions at Toyota in the 1940’s and 1950’s, Taichi Ohno later developing on this through the Toyota Production System (Liker, 2003). T this investigation shall interpret the transferability of lean to the UK banking industry, in essence a service sector business, and deduce from its transferability the bench marks it is capable of setting.

How lean is adaptable and how it can be transferable to the banking sector

In its essence the banking sector is a service and thus the transferability of lean to a service can be acknowledged in ‘Lean Six Sigma for Services’. In this text George (2003, p11) explains how ‘almost all the applications of Lean and Six Sigma are for services and transactions’. The thinking behind this involves elimination of waste throughout the whole organization, in its simplicity this does not exclusively apply to manufacturing of products but clearly it can be used in a service environment where non value adding steps to a process for example, can be removed. The ‘Quality Training Portal’ website explains the attributes of lean that involves eliminating waste in the entire organization and how lean efforts in certain manufacturing support processes are critical to successful lean manufacturing implementation. Moreover, it , going on to states that ‘The role of purchasing, scheduling, shipping and accounting are all crucial to lean manufacturing success’, so through this it can be argued that lean is not just about production of materials. There is opposition however to the theory that lean can benefit service sector organisations, disputing the idea that lean can be suited to a Banking company for example. Waddle (2006) is against the theory of lean in principle in relation to the treatment of employees. On a service sector level, Seddon (2005) argues that service organisations cannot benefit entirely from lean methods due to ‘greater variety in customer demand affecting service’. This, Waddle (2006) is arguing relating to the fact that flexibility is not an element that lean supports, yet is needed in the view of Seddon (2005) it is needed to ‘absorb that variety, and cannot simply apply to a template of lean tools’. More on Flexibility?? How and what makes lean special

‘Leaning Forward’ offers a notion of what lean theory and implementation achieves;

‘Lean manufacturing techniques identify and eliminate waste from the business process, bringing improvements to quality, cost and delivery’ (‘Leaning forward’, 2008)

This is only a part of what lean is really about and the benefits that derive from using its tools and techniques. From the tools and techniques that are used, in order to achieve the overall targets of costs, quality and delivery, statistical analysis can be utilized to determine important decisions that are backed up with evidence from the process. Management Information Systems (MIS) are effectively what the tools and techniques of lean offer to managers. The ability to run their operations effectively, for example; to identify...
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