Level 2 Certificate in Lean Organisation Management Techniques

Unit 1: Lean organisation techniques in business

Assessment

You should use this file to complete your Assessment.

 The first thing you need to do is save a copy of this document, either onto your computer or a USB
drive
 Then work through your Assessment, remembering to save your work regularly
 When you’ve finished, print out a copy to keep for reference
 Then, go to www.vision2learn.com and send your completed Assessment to your tutor via your My
Study area – make sure it is clearly marked with your name, the course title and the Unit and
Assessment number.

Please note that this Assessment document has 11 pages and is made up of 3
Sections.

Name: Cosmin Iordache

Section 1: A lean environment [LO1]

This section will help you to evidence Learning Outcome 1: Understand the concept of a
lean environment.

Learning objective Place in Assessment

1.1 Explain the principles of lean organisation techniques Question 1 Page 1, 2

1.2 Explain the benefits of a lean environment Question 2 Page 2

1. What are the principles of lean organisation techniques? Name and describe the 5
main principles below. [1.1]

Principle 1: What creates value for customers?

The end customer is the one who provide value to the service. A small fraction of the time
and effort spent working in a business adds value for the customer. By specifying activities in
the work process that add value for the customer, it becomes easier to identify non-value
activities that could be minimised or removed.

Principle 2: Identify steps along the process chain

The process chain contains all the activities and processes that help deliver the product or
service to the end customer. This represents, from start to finish, how value is delivered to
the customer.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

Principle 3: Make processes flow by eliminating waste

Once activities and processes have been identified, the challenge is then to find ways to
remove or minimise non-value waste. You’ll learn about the seven different types of waste
later in this Session.

Principle 4: Respond to customer demand

Check what the customer wants so that the business produces what is wanted exactly when
the customer wants it. This can help to make sure that any changes and attempts to
minimise waste are working.

Principle 5: Strive for perfection by continual improvement

A lean business that doesn’t want to stand still must constantly be on the lookout for ways to
improve. The aim is to introduce lean management techniques throughout the business so
that the employees are always looking for ways to improve efficiency and minimise waste.

2. Explain the benefits of a lean environment. [1.2]

Use your own experience (either of your workplace or an organisation that you know well) to
help you evidence your answer. Alternatively, you can base your answer on the case study
provided. [1.2]

Foods R Us is a local supermarket in AnyTown. It tries to operate to the principles of a lean

environment. Read the case study and explain the benefits of the lean environment in which
Foods R Us operates.

 It is a small chain.
 It is not a 24-hour supermarket. It operates between the hours of 9am and 9pm.
 It has free parking.
 It sources its fruit and vegetables locally from the local fruit and vegetable wholesaler.
The supply chain starts locally.
 Its staff are trained to be multi-skilled in a range of different roles. They can operate
anywhere within the store and are poised to deal with the majority of customer queries
themselves. Staff have a varied working day and are paid decent salaries to reflect the
skills they have.
 It stocks a limited variety of each product. So, for example, it has 3 varieties of tinned
tomatoes, 3 varieties of baked beans etc. All tinned products are available in one size
only. While this limits customer choice, it does mean that Foods R Us can bulk-buy more
effectively.
 It has a scanning system that requires customers to put each scanned item in the trolley,
to be packed away from the checkout.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

 The shop only carries stock that it requires – it does not store surplus stock in a
warehouse. This means that it must buy often but also that it does not tie up any money
in holding stock, or paying for warehouse premises or warehouse staff.
 Food R Us does not have any promotional displays at the tills, or at the ends of aisles.

Type your explanation below.

The benefits of a lean environment are multiple; the main goal is to improve the quality of
service by making processes more efficient, improving employee morale and saving money.
Everybody can feel these benefits, starting from people at the top to employees and
everybody who get in contact or interact with the business.

In the case study there are couple of benefits of lean environment. First of all is the transport
efficiency. The shop is supplied by the local fruit and vegetable wholesaler, so the supply
chain starts locally, small handling costs, less risks of health and safety hazards.

Stock being carried just in the amount that is required is a benefit of lean environment.
That’s mean that there is no need of extra space required for storage or warehousing, so the
space can be used as a parking space for customers.

Not having promotional displays at the tills or at the end of the aisles is reduced the risk of
defects.

The waiting is reduced in the store by having multi-skilled staff in a range of different roles.
This will reduce at minimum the time needed to accomplish tasks that required more than
one operation, as the staff can operate anywhere within the store and are poised to deal with
the majority of customer queries themselves.

Now that you have completed Section 1 of your Assessment, remember to save the
work you have done so far – you will need to send your work to your tutor for marking
once you have completed all 3 sections of this Assessment.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

Section 2: Implementing the productivity needs analysis process [LO2]

This section will help you to evidence Learning Outcome 2: Be able to implement the
productivity needs analysis process.

Learning objective Place in Assessment

2.1 Describe the process for conducting a productivity needs Question 1 Page 5, 6
analysis.

2.2 Undertake a productivity needs analysis in a selected Question 2 Page 6, 7, 8

organisation

1. Describe the process for conducting a productivity needs analysis (PNA). Use the
boxes below to complete your answer. [2.1]

What is the purpose of the PNA?

A Productivity Needs Analysis (PNA) measures current productivity so that processes can
be designed and implemented in order to create improvements.

The PNA process helps us to understand ways that businesses can systematically, regularly
improve their own productivity.

There are five steps which form the PNA process.

Look at the five steps on the right to learn more about each of these steps.

What are the steps of the PNA and who is involved in these steps?

Measuring relevant info areas - in order to gauge whether any improvement has been made
it is necessary to begin by measuring the relevant information areas. There are various types
of information which indicate business performance and which can be measured, these will
differ from business to business and across different sectors.

Prioritise measures - once the information areas have been measured these measures are
then prioritised. There are four steps to prioritising measures.

Set objectives - at this stage, objectives will be set in order to make improvements.

Processes to reach objectives (across scales of organisation) - Once productivity objectives

have been set, specific processes will then be established across different scales of the
organisation in order to achieve the set objective(s).

Deliver required outputs to reach desired productivity - the aforementioned processes are
now implemented and the required outputs are delivered to reach the desired levels of
productivity.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

What areas should be covered in the PNA?

Common data – turnover, profits, bonuses

Customers – satisfaction, dissatisfaction, complaints, returned products

Delivery - on time delivery, total shipping cost per product, customer wait time

Overheads - floor space utilisation, contract penalties

Quality - defects per million opportunities, defects per thousand opportunities, types of
defects, source of defects, rework, scrap

People - learning ability, proficiency, satisfaction, absenteeism, staff turnover, qualifications

Safety – accidents, types of accidents, lost time through accidents, risk of repetitive motion

Costs - cost per unit, cost per service hour, days outstanding, supplier payments.

2. Undertake a Productivity Needs Analysis (PNA) for the organisation in the case study
below. [2.2]

You must remember to follow the steps of the PNA:

 Measuring relevant areas
 Prioritise measures
 Set objectives
 Processes to reach objectives (across scales of the organisation)

Case study

A small-scale but rapidly growing cereal manufacturer, Rise Right, is considering adopting
lean organisation techniques to improve its business. Currently, the organisation produces
over five types of different breakfast cereals although they would like to develop the range
further.

Rise Right’s production plant is too small to meet the demands of the business’ growth. In
addition, it struggles to accommodate the frequent deliveries of incoming materials and
outgoing finished goods. The plant itself is inconveniently 30 miles away from the
organisation’s storage depots. Therefore, the transport costs to move produce to storage is
an unwanted financial burden for Rise Right. If this cost and delivery issue isn’t resolved
soon, Rise Right will see a considerable dip in their profits.

The Product Development team at Rise Right is aware of how competitive the cereal market
is. There are plans to trial two new cereal bars. If the campaign is successful and well
received Rise Right will look to permanently produce the bars alongside their traditional
cereal. However, this will depend on customer satisfaction of price, consistency and taste.

Recently, Rise Right has had some safety concerns with the team lifting raw materials in to
production areas. Last month, there were 24 reported incidents of spillages and injuries
through incorrect manual handling. Whilst safety is usually of an incredibly high standard this
minor issue is still an area of the business which needs looked into and amended in the
future.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

Use the sections below to complete each step of your Productivity Needs Analysis.

a. Which areas should be measured to increase Rise Right’s productivity?

Being a growing organization, there is more than one area in which needs measurement of
productivity. The first and the most important is the placement of the two main elements of
the factory: the plant itself and the storage depot. The 30 miles distance between those two
needs to be reviewed in order to continue with further products development and maintaining
a consistency in the profit figures.

The second is the new products – the cereals bars, which need to be measured, using
customers’ satisfaction or dissatisfaction through feedback.

The third is the safety issue in the production area.

b. Now that you’ve identified measures, prioritise the measures from most important to
least important. Give reasons for your answer.

The most important of the three measurements is the safety issue from the production area,
as is the most dangerous for both the company and the employees. Always safety must
come first, so this needs to be measured first.

The second place should be the distance problem between the plant and storage depot. Not
being able to maintain a reasonable profit, can be very difficult for the company to grow and
be able to improve quality and upgrade equipment or manage crisis scenario that may occur.

The third is the production of the new cereals bar, which can be delayed or minimized at any
time.

c. Set objectives to close the productivity gap by suggesting what the company could
do to close the productivity gap in these areas.

Train the staff in manual handling, and correct the way of handling the materials in the
production area.

To calculate the profit evolution given the distance issue, try to approximate and consider a
relocation of the storage depot, in order to reduce the cost of transportation and time gap.

Develop a market research plan in order to receive a client’s feedback regarding the new
products.

d. What processes could be implemented to meet objectives? Think about scales of

organisation (individuals, teams, departments, and organisation). State the objectives
you have already mentioned (in 2c) in the left-hand column. In the right-hand column,
describe processes that could be implemented to close the productivity gap and
conclude the PNA.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

Objectives Processes

Objective 1: Training provided to staff

Safety

Objective 2: Evaluate the distance issue in order to correct the delivery

Increase profit and overheads

Objective 3: Customer review – satisfaction / dissatisfaction.

Market research

Objective 4:

Now that you have completed Section 2 of your Assessment, remember to save the
work you have done so far – you will need to send your work to your tutor for marking
once you have completed all 3 sections of this Assessment.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

Section 3: Producing a process map

This section will help you to evidence Learning Outcome 3: Be able to produce a process
map.

Learning objective Place in Assessment

3.1 Produce a process map using appropriate symbols and Question 1 Page 10, 11
terminology for an identified process

1. Using one of the two scenarios provided, produce a process map. Make sure it
includes the appropriate symbols and terminology. You can find commonly used
symbols below to copy and paste into your process map. On your process map, give
consideration to value added and non-value added steps in the process and any
waste which occurs. [3.1]

Scenario A
At a call centre, there is a set process for the disposal of confidential documents. Files are
first sorted and separated depending on whether they contain confidential information or not.
If the files are confidential, they are passed on to a nominated employee who is tasked with
making sure the files are properly shredded and disposed of. Once shredded, the waste is
placed in confidential waste bags and the confidential waste disposal team are contacted.
Bags are stored in a locked cupboard until the waste disposal team arrive to securely
remove the waste. When creating your process map you might consider:

 Passing files on
 Deciding which files should be shredded
 Documenting which files have been shredded and disposed of
 How waste is disposed.

Scenario B
A large supermarket takes customer concerns very seriously and has implemented a
customer complaints procedure so that they are dealt with properly. At the moment,
customer complaints must be recorded in writing by a member of staff and then passed on to
their line manager. Depending on the severity of the complaint, the line manager will either
act upon the complaint or pass it on to a senior manager. Once a complaint has been dealt
with it is then physically stored as well as documented in an electronic database. When
creating your process map you might consider:

 Who complaints should be passed on to

 Whether complaints should be acted upon
 How severe the complaint is
 How complaints are reported, documented and stored.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

Start/end flow Process/Activity

Document Decision – yes or no

Storage Database

Flow line

Now summarise your conclusions about the process. Include your consideration on value-
added and non-value-added steps in the process and any waste which occurs.

Receive the Is the complaint Send it to Line

complaint severe? Manager

Send it to Senior Complaint

Manager resolved

Physically
stored Electronically
stored

In my opinion the process is simple enough to work. Someone needs to record the
complaint, and by the severity of it needs to be sorted hierarchically in order to get resolved.
The main issue is that at the beginning of the paragraph is said “a large supermarket” so this
means that there will be plenty of complaints. This will imply that some member of staff will
be permanently dealing with those complaints, and in some cases, there will be delays in the
resolution – this can represent non-value-added to business.

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Level 2 Certificate in Lean Organisation Management Techniques
Unit 1: Lean organisation techniques in business

My consideration is that will be better to have an additional department which will deal with
all the complaints issues. The staff will be trained to be able to resolve any of the complaint.
In this manner the process will be much faster and effective, as the managers will not be
disturbed all the time, the complaints will be centralized in one place, and dealt effective and
professionally. The percentage of satisfied clients will be much higher and the process will
be done correctly in the first place – value-added.

The storage of the complaints can be done also by the same department as they will need to
have a database with all complaints – like: status, date, type of issues, resolution etc.

Now that you have completed all 3 sections of this Assessment, go to

www.vision2learn.com. Log in to the platform and send your Assessment to your
tutor via your My Study page for marking. Good luck!

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