Saturday, July 27, 2019
Applying Lean To E-Commerce Business Essay Example | Topics and Well Written Essays - 500 words
Applying Lean To E-Commerce Business - Essay Example The typical example of such well-known e-commerce business with production problem is Disney Shop.Disney Store uses e-commerce as a mainstream approach to the sale of the variety of products through online stores. Users of the online store login, create the account, select preferred items, go through a payment system, and have the products shipped to them within an identified time. Financial records from the business, however, shows production related problems whereby the companies are recording increases in revenues but still have declining profits (Disney Stores, 2014). Hines (2008) noted that a typical cause of such a situation is the high level of waste in the production system, reducing the productivity and efficiency levels of the company significantly. With such reduced productivity and efficiency, the company will be making more revenue but due to high expenditure, the income does not balance the expenditure and so there are losses. The overall aim of lean thinking is to ensure that there are high benefit and value from production through the elimination of waste (Womack, Jones & Ross, 1990). The reason lean is seen as useful in solving the problem is that it will ensure that all forms of waste that have created unwarranted expenditure will be done away with. In any typical organization such as Disney Store, when lean is adopted, there are seven major types of wastes that are targeted for elimination. These include production defects, overproduction, unnecessary transportation, long waiting, unnecessary inventory, unnecessary motion, and over-processing (Hines, 2008). For most companies, once these forms of wastes are available, they would be seen to be making a lot of sales but in reality, they lack profitability. The reason for lacking profitability is because the wastes bring about the huge cost of production that consumes the sales.