In Australia, the changes in the business industry are also visible and many business corporations are now using new tools and techniques for their business growth. ALDI is a big super-shop chain in Australia founded in 1946 (aldi, 2017). It is the fourth largest chain shop which has competitors like IGA, Woolworths etc. The business is doing great but for more annual revenue and profit they need to undergo some improvement. Their mission and vision are to provide the customers with the best quality products in the lowest possible price. For this, lean management practice is a good tool for continuous improvement. This research is conducted to analyse and evaluate the lean management practice to improve the human resource for ALDI (aldi, 2017). The sampling population, data collection, survey and analysis will be helpful to understand the effectiveness of the method.
Lean management practice is a method which helps in decreasing the waste and increasing the service or production and bringing more profit. This method is now used in a wide range in the modern business world and it is very effective. Lean management has a wide area to serve and one of the areas is the human resource management department of a company (STUMPF, et al., 2013). The main aim of this research is to see how lean management practice is useful to improve the overall performance and thus helpful for the overall profit of ALDI.
Lean management is a very useful tool. The main objectives of the research are to see the improvement opportunity of the ALDI by applying the lean method (Bloom, 2016). The objectives are the followings:
i. How effective is lean management?
ii. How can lean management method benefit human resource of ALDI?
iii. Will the production and service of ALDI increase?
iv. Will ALDI reduce waste and cost?
v. Does the potentiality of the employees is improved by the method?
No research is fully errored free. Lean management is a very unique method to bring improvement but there is also some limitations of this research (Chong, 2017). It is necessary to apply lean management to improve the efficiency of ALDI and bring profit. But while researching and gathering the data there are some limitations. The limitations of this research are the followings:
i. It is not possible to find and gather all the related data.
ii. The methodologies that are used to complete the research have limitations.
iii. As the research is based on the secondary data, there is a scope to miss information from huge sources.
The lean management system is a widely used tool in the present business world to bring improvement. It has numerous benefits for a company and our research is on the effectiveness of lean management practice to improve human resource (Emiliani, 2006). The main focus is on implementing lean management practice in ALDI. And through the lean model, the key priority is to assure cost benefit for ALDI. The questions for this research are the following:
i. How far applying lean management can improve the performance of human resource in ALDI?
ii. Will lean management be able to reduce the costing of ALDI?
The idea of lean management was first coined by Toyota Production System, back in the late 1940s. Their aim was “to reduce the process by not harming the value of the end product. And they were successful in gaining improvements in the productivity, efficiency, cycle time and cost efficiency. (Liker, 2004)” In the past 70 years, the lean management system has been changed and improved a lot for the sake of business improvement. This method is hugely appreciated and practised by business organizations to improve their efficiency and capability. Lean management mainly works to reduce the waste of the company and thus bring improvement in different sectors to increase productivity. The structural frame of the company is very important. Lean management tool is applied to improve the structure of the company. It helps in formatting the existing structure with a strong and capable one (Bloom, 2016). Then the management can easily deal with all the internal and external changes and challenges. It will also help in improving the internal political relationships with the stakeholders and gaining their trust. This will ultimately reduce their costing of training again and again.
The human resource department of a company is very much responsible for the growth of the company because they manage all the employees and the employees ultimately work to meet the desires of the customers (Emiliani, 2006). Thus, it is necessary to have a capable human resource department and lean management is a suitable method to improve the employees. According to Dwane Lay, “Lean principles have been used for years in the manufacturing world, and have started to make an impact in the office as well. These tools can provide the foundation for building a systematic approach to improving your HR practice and lowering costs. (Lay, 2013)” This means that lean management tools can be used in improving the HR and the systematic use of it can bring success. Moreover, if the employees are efficient and capable enough, the cost will also low.
Here, the prime reason for the research is to find out the effectiveness of lean management practice within ALDI. ALDI is a huge retail chain shop in Australia. And it has a huge consumer group. As the business industry is moving towards sustainable business by trying to indicate waste, ALDI wants to improve their strategies. And for this, lean management is the most suitable strategy. Lean management is a very simple idea which focuses on improving the production, service, points waste, reduce cost and brings benefit. It is a challenge for ALDI to introduce lean management practice and improve its human resource. So, ALDI management wants to conduct the research to analyse the practice of lean management through the data collection and then make necessary changes.
Research methodology is an important part of conducting any research. There are various research methodologies in work. In this research, different methods have been used to get the desired result. The qualitative method is used for collecting the necessary data. As for the sources of the data collection, the secondary sources were used (Dave Ulrich, 2009). Sources are the previous research, journals, articles, survey reports, statistics, newspaper, books and magazine reports, websites are used very carefully. After collecting the data, there are several stages of research. When the data collection is completed, the collected data is stored securely and then come the data sorting. The data sorting is necessary to filter the necessary data and survey reports from the less necessary ones. After the data sorting, the data is kept separately so they can be prevented from contamination. After this, all the collected data is analysed and studied and then the result is translated from the analysis (Feld, 2000).
There are mainly two types of data sources for data collection. These sources are the primary sources and the secondary sources. In this research, we have used secondary data for getting a better result. The data that is collected through the previous and stored data from different sources is called the secondary data. There are various ways to gather secondary data. The sources used for gathering the secondary data are the previous reports, journals, articles, the survey report from different websites and government survey, newspaper, books and magazines, and also social media statistics (Peter Hines, 2004). In this research, the secondary data is more important than the primary data. Moreover, secondary data collection requires fewer researchers and the research can be completed in a short time.
There are two different types of data type for data collection. They are the qualitative and the quantitative method. I have preferred the qualitative method for collecting the correct data. Though the quantitative method is mostly used for data collection, ALDI research requires the qualitative type of data collection. Qualitative data will inform ALDI about the current research and at the same time, ALDI can use the past data set to analyse their present condition (J.M. Worley, 2006). The qualitative method of the data collecting is helpful to gather and to find the result of the analysis.
There are three methods of secondary research. They are using a secondary data set in isolation, combining two secondary data sets, and combining secondary and primary data sets. In this research, we have used a secondary data set in isolation. The reason for choosing this method is that here we use the secondary data set with our own research questions. In our research for ALDI, we have our own questions and objectives (Feld, 2000).
There are two common types of secondary data sources. They are labelled as internal and external. We have used external sources for the research work of ALDI. The prime concern of this research is to find out the effectiveness of lean management. And in this comparing the present situation of ALDI with the collected data from external source necessary (Chong, 2017). The external data can be found from government sources, national and international sources, scientific journals, business associations etc.
The case organisation here is ALDI and we have only seven weeks to complete the research work. There were various steps of completing the research from selecting the topic to analysing and finding the result. As the time is too short, we decided to go with secondary data. Collecting the secondary data was a bit challenging because there were copyright issues. And then analysing and sorting data is completed in another one month. And finally the research is completed and the result is ready to present (Freddy Balle, 2011). Case Study Method:- the qualitative research method is followed to complete the case study. The method is used to understand and research all the necessary information for the study. The case studies are mostly past research data, journals, articles and reports related to the subject of the research. These journals, articles and reports give a broad view to the research area and also give direction to complete the research. With the detailed study of the subject, it will become easier to come to a conclusion for the research (Peter Hines, 2004). Here, the previous case study is collected to understand the use of lean management to improve human resource. Another reason for analysing a case study is to see the effectivity of mean management practice. Through the case study, the research group has tried to find the answers to the questions for ALDI. With the help of the case study analysis, we have tried to justify the use of lean management in retail business to achieve cost benefit by reducing the cost and identifying the waste. One renowned case in implementing lean management is Toyota. They introduce lean management for the first time (Rother, 2009). The application of lean management proves beneficial for them. The company gets profit and are able to reduce their cost.
In this research, the qualitative research method is followed to complete the case study. The method is used to understand and research all the necessary information for the study. The case studies are mostly past research data, journals, articles and reports related to the subject of the research. These journals, articles and reports give a broad view to the research area and also give direction to complete the research. With the detailed study of the subject, it will become easier to come to a conclusion for the research (Peter Hines, 2004).
Here, the previous case study is collected to understand the use of lean management to improve human resource. Another reason for analysing a case study is to see the effectivity of mean management practice. Through the case study, the research group has tried to find the answers to the questions for ALDI. With the help of the case study analysis, we have tried to justify the use of lean management in retail business to achieve cost benefit by reducing the cost and identifying the waste. One renowned case in implementing lean management is Toyota. They introduce lean management for the first time (Rother, 2009). The application of lean management proves beneficial for them. The company gets profit and are able to reduce their cost.
In this research, the secondary sources are used to collect the data (Dave Ulrich, 2012). The secondary data used for this research are the previous data and statistics from different sources. Some of the secondary data are collected by buying them to use is legally to avoid any accusations.
The past data is collected through the research of another company (Mann, 2014). In many business organisation, lean management is applied and they have experienced benefit. One such organisation that implemented the lean management of Toyota in solving their issue is Henry Technologies. It is given below:
Henry Technologies is a leading manufacturer of industrial refrigeration components in Taizhou, China. Its sales grew from 50,000 units in 2012 to 360,000 in 2013. In the following few years, the sales were expected to increase to 750,000 units per year. It was a significant challenge for Henry Technologies to meet this large increase in volume. they operated on a traditional big batch and queue approach with large amounts of WIP between processes. Though the plant had good quality control, it leads to poor visibility of the status of production, unbalanced processes and constant expediting of raw materials and sub-assemblies. The connection of the supply chain from the Chinese suppliers through to the customers in Europe and the US was also challenging and on-time delivery was poor (txm, 2014). So, TXM thought of introducing lean management and simply arranged some workshops to coach Henry team with basic principles of lean production and lean tools. TXM worked alongside a cross-functional team at Henry Technologies, using “Manufacturing Agility Process®” to redesign and map the end-to-end process for sealed filters line to reduce lead times and eliminate waste. A VSM future state and action plans were developed to achieve it. TXM also helped Henry Technologies to improve the layout, relocated finished goods storage and production of the first floor to improve product flow, capacity and use of space for the full range of products manufactured on the first-floor production area. TXM worked with Henry Technologies to complete the detailed implementation of the action plan for the future state. The key elements of the Henry Technologies lean production system included:
i. Using “Continuous flow” and “line balancing” to enable product flow through various production processes with minimal work in progress, wastes and handling.
ii. Kanban systems to deliver components just in time for Assembly.
iii. Quick changeover processes to enable smaller batch sizes. iv. Establishment of KPI and visual controls to ensure the visible status of production and quick response of problems.
Through the implementation of the lean system, Henry Technologies achieved significant improvements (txm, 2014). This has given them new hope and new opportunity to grow their business. The results are the followings:
i. Daily output was increased by 49%;
ii. Lead time was reduced by 24%;
iii. ‘OTD (On Time Delivery) was improved by 40%.
In this research, the secondary data are collected for better analysis. The reason for choosing the secondary data over the primary data is the shortage of time. And collecting secondary data is easier than the primary data.
Then there are various secondary sources of data. Different journals, articles, books, newspaper, statistics are analysed. While analysing the secondary data, some irrelevant information and data are found. Those documents are separated from the others. The analysis of the secondary sources shows how different organisations have used lean management in their operating system to improve their work and activities. It also shows that continuous improvement will also increase the productivity of the company and bring profit (Stone, 2012).
Books are one of the important sources to collect secondary data. There are several bools but very few that meet the purpose of the research of ALDI. To understand the necessity and effectiveness of lean management practice, we have analysed two books. The analysis of the two books are given below:
Tools to Sustain Lean Conversions: This book is written by David Mann. This book shows how adopting the lean culture can be beneficial for a company and implement a sustainable, successful transformation by developing a culture that has your stakeholders throughout the organizational chart involved and invested in the outcome. It teaches you how to successfully navigate the politics in cross-functional process improvement projects and to engage executives in ways that are personally meaningful to them (Mann, 2014).
This book is written by Mike Rother. This book shows how Toyota has managed to keep improving their performance and gaining profit by applying and adopting lean management in the structural, symbolic, political and human resource frame (Rother, 2009). There are several tools to analyse these data. Statistics calculation app, hand notes, tables, graphs, chats etc. are used to analyse the data correctly. Thus, the data analysis thus helps in finding the result of the research.
In this research, we have used the secondary data to get the best result. One of the benefits of using secondary data is the data is prepared, and it just needs proper analysis. For this research, we have collected the data of Henry Technologies which is a manufacturer of a refrigerator and had applied a lean management system in their production system. After analysing the collected data of we have come with the following analysis:
i. At the very first level, they have introduced a lean management system with the help of an experienced organisation and created a team which can further introduce the tools and techniques to others (txm, 2014). On the other hand, in our case company ALDI there is no such team which can introduce lean management and train others for improvement. So, ALDI needs to build up a strong new team. The present training and development program of ALDI is focused on the three points (aldi, 2017). They are - expanding the training department to the regional level, developing a sustainable management training program, increasing the new product sales by implementing a "AAA" approach. And to do this lean management can help a lot.
ii. Next, the analysis shows that Henry Technologies has redesigned and structured a new layout of their operating system and implemented it in the company. their goal is to improve the work environment. They have used “Continuous flow” and “line balancing”. Behind this, their intention was to minimise work and waste. Data shows that daily output is increased to 49%. ALDI can also restructure their production and distribution system. By doing this they can improve a lot. If the structure is redesigned and then the wastes can be reduced. ALDI is a large super shop and their initiative can change a lot. ALDI is thinking of taking a waste management program to reduce the waste. And they also want to use that cutting cost and giving the customer good service. ALDI supermarket wants to introduce clear, plastic recyclable trays for selected fresh produce ranges. ALDI is expecting it will save an estimated 265 tonnes of packaging in a year. And lean management can help in completing the target.
iii. From the analysis, we have found that Kanban systems have helped them to improve their service and increased customer satisfaction. They are now able to deliver components just in time for assembly (txm, 2014). Data shows that their lead time was reduced by 24%. Moreover, on-time delivery was improved by 40%. ALDI is a large chain shop in Australia. They have a huge workload. But in all this, customer satisfaction is very important. If the delivery is not on time, then the service rating gets down. In the present situation of ALDI, if lean management is implemented in the company, they will be able to manage the huge workload and also they will be able to meet the customers demand on time.
iv. The analysis shows that the organisation in collected data has applied KPI and visual controls. This has ensured the visible status of production and quick response of problems. The department managers and front line supervisors at Henry Technologies became “lean leaders”. A culture of continuous improvement had been established. In the case of ALDI, the big chain shop has to handle so many customers and employees. They should have a strong management team which can observe all the operation. And for that, they have to train their employees and improve their leadership skills (Gary Romano, 2017). If lean management is implemented in ALDI, it is possible to ensure the continuous improvement and construct a strong team.
After all this discussion and analysis, there is no doubt that lean management practice is very good for the improvement of the human resource. In this research proposal, we have analysed the idea of lean management practice that can bring improvement in the performance ALDI. To prove the fact, first of all, I have gone through all the necessary information and analysed the collected data (Chong, 2017). The research shows that there are various tools of lean management that can be used to improve the human resource. This research is more dependent on the secondary data. And with the help of the secondary data, we have found the desired result for the research. While conducting the research, my prime fear was the data collection because secondary data is not easy to collect. But after all the analysis, there is no doubt about the fact that the lean management tools are very good to improve not only the human resource but also the structural, symbolic and political frame of ALDI. At the present time, the business world is too competitive and to stick in the competition, the business organization must come up with good ideas. According to the research analysis, ALDI will surely gain more profit and reduce cost if the company management is improved by using lean. To conclude, it can be said that the research will surely help the business corporations in the future to understand the necessity of lean management practice. In addition, ALDI can use this research and the collected secondary data for future advanced research.
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