Wausau Equipment Company: Lean Journey (A) Harvard Case Solution & Analysis

Introduction:

Wausau equipment, a manufacturing company that is known and famous for its good reputation and image in terms of offering products and services with great quality to the customers. The management of the company focus on command and control management style in which managers were instructed to be authoritarian in style. Moreover, the employees and managers in the company are least bothered about the importance of communication in organizational effectiveness. In this situation, the management decides to go for lean management revolution. For that, the company asked for help and assistance from a management consulting company that is specialized in the lean - implementation. With the help of lean implementation, the company is able to identify and manage the problems and challenges faced by the company. Despite the hard work and dedication, no such improvement has been observed even after the lean management approach.

The company has improved its operating profit just after the implementation of the lean approach. Right now, the management of the company is focusing on making improvements in the overall lean process. In the lean approach, the most common approach used is known as SIMPA, and it stands for specific values, value stream identification, make flowing along with pull strategy and focus on always improvement. The company planned for the implementation of lean process as of thirty-nine weeks, and these thirty-nine weeks were divided into 3 cycles that were based on equipment improvement process. Out of these three cycles, the first one was based on bringing improvements tangibly while the remaining two cycles were based on improvement and sustainability. Although, the company is done with its goal achievement, but the lean approach is not an even, rather, it is a continuous process cycle, and one can always find improvements in the process. Three significant that needs to be analyzed by the company’s management is the culture, low morale and process improvement. The company is in urgent need to make amendments in its culture, specifically in terms of employees who are extremely resistant to change.

Making improvements in Lean System:

As of now, the Wausau Equipment Company is encountering a scarcity in terms of reliable equipment and experienced labor as well. The company is not willing to hire new people because they value their old employees and their experience as well. However, most of the old workers are near to its retirement and thus the company needs to take some action in advance. In addition to this, the culture of the company is resistant to change and thus most of the employees, including senior level executives were not sure about the lean transformation. Moreover, employees’ response was discouraging as they were not willing to accept the lean transformation because of its previous failures. Further, the employee morale was  down because the previous lean approach resulted in significant layoffs and with no positive results. Other issues faced by the company were increasing in equipment downtime, labor issues, increase in inventory, decrease in OEE and poor service in terms of delivery.

Because of the high inventory, the cash flow of the company was continuously increasing along with operations management, space and repair labor. In order to make a reduction in the work in process inventory, the company can opt for the Kanban system that is based on controlling and handling the overall logistics and supply chain of a company as it is not just based on controlling of inventories. Through this approach, Wausau can also achieve just in time inventory approach. The system is easy to understand with easy installation as well. It would help the MSD in terms of achieving a balance between its demand and supply. The company is encountering problems related to the manufacturing process as well. The spreadsheet attached has shown major losses that the company is facing right now.

The data collected has shown that the majority of the losses is driven by three main factors that are idle time, setup time and engineering and qualification losses. However, the setup time loss has reduced from 1.8 hours to 0.5 hours per shift after the implementation of a lean system. Likewise, a significant reduction has been observed in the idle time as well that is a shift from 0.56 to 0.2 hours.......................

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Production company with a solid reputation of high quality services and command and control style of management with little communication across the organization decides to implement lean transformation, working closely with Lean dynamics, management consulting group with a large canopy implementation experience. Problems, the company faces detail as lean implementation process, tools and practices. But little progress has been made by the end of the second cycle of the three process improvement cycle. Students are asked to think about different aspects of the case and describe the alternative solutions and actions that they can take by placing himself in the role of CEO, president, or counselor. "Hide

by Robert D. Landel, Gruia Sorin Source: University of Virginia Darden School Foundation 21 pages. Publication Date: January 30, 2009. Prod. #: UV1079-PDF-ENG

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