Modelling the efficiency evaluation in production enterprise applying lean management system

Abstract

The author investigated the application of lean management system in production enterprises and highlighted the main differences between traditional management and lean management systems. Many classical qualitative methods are used for benchmarking both systems. However, classic techniques consider costs accumulation but do not include time aspect. The author applies more advanced approach to assess efficiency. The study presents cash-flow model for economic valuation of investments into lean system. According to case study, savings for production enterprise applying lean management system are higher than the size of investments required to implement system. These numbers are highly dependent on company size. The study consists of three parts. The first part describes how actively production enterprises are investing in lean management system. In the second part new cash-flow model is presented to evaluate efficiency. The third part presents practical application. It compares the activity of manufacturing company with and without lean management system.