Implementation of Lean Production for Achieving Low-cost Product: A Case Study of ABC Company

Abstract

In today's highly competitive industry, achieving highest Process Cycle Efficiency (PCE) is a must for any company to gain competitive advantage including ABC company. This company has implemented Lean Production throughout the company's manufacturing facilities. In this initiative, a research is conducted using Value Stream Mapping (VSM) to follow all processes used by producing product A as one of the company's line of products. Through this tool, waste was able to be carefully identified and eliminated to gain low-cost product. By doing this, PCE of the company experienced an 56% increase from 15.60% to 29.60% and 44% pricing index. Thus, the implementation of this initiative has given insight that low-cost product can also be gained by improving PCE.