To: Prof.

William Thurston
From:
Date: February 29, 2020

Introduction:
Autoliv is known for its safety parts they manufacture for automobiles around the world but they
are best known for lean manufacturing which is referred to as “Autoliv Production System” APS
was copied from Toyota (Krajewski, 2016). The company struggled for many years trying to
improve on production, after a few try and error, they decided on lean manufacturing because of
its focus on the constant improvement process by removing unwanted waste like surplus
inventory, transportation, waiting, overproduction, and defects (Krajewski, 2016). Even though
they copy the Toyota process, they went an extra step by including their staff in decision making.
The company considers its employees to be an important part of the new lean manufacturing
because change this big will affect them. The company needed the staffs’ participation to help
endorse the transformation strategies of a lean manufacturing system. Autoliv also had to factor
the supplier into this new system to have cost-effective and reliable parts because the is no room
for error.
Analysis:
The suppliers were unable to meet the company’s demand due to their ever-changing and
unstable processes and for this reason, the company starting using problem-solving techniques
while shifting from their normal processes. Another problem they were facing was the split
between the employees and management. This created a lot of waste within the company and
lead to poor performance in the industry. Automobiles have a competitive business environment;
every company has to do its very best to strive. With all the achievements Autoliv had received,
in order to survive in an industry of high competition, they must focus on driving systemic
improvement (Krajewski, 2016). The lean inventory and workflow method are APS’s principles.
This process allows them to take full advantage of added value to each activity by the delay from
them. APS employees’ involvement in all processes which is different from other companies
with lean manufacturing systems, has improved the work environment, deliver results and also
empowered the employees.
Recommendation:
Lean manufacturing's main idea is to help businesses remove waste activities from within the
manufacturing process. Autoliv must review all of its current processes from top to bottom and
make to streamline it for the company to achieve its full potential by creating an efficient
process. The lean system enables businesses to concentration on different types of waste and
identifies possible opportunities to eliminate this waste. The recommendation for Autoliv is to
continue to perfect their deployment policy by continuously supporting their staff, seeking for
improvement, and avoid self-satisfaction, this will help the success to continue. APS current
implementation is one of the kind worldwide with the suggested recommendation, they will
continue to succeed in their process. Autoliv learned that “product defects have been
dramatically reduced, inventory levels are lower and inventory turnover ratio is approaching
world-class levels of 50 times” (Krajewski, 2016).
Reference
Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2016). Operations management: processes
and supply chains. Harlow: Pearson.

Appendix A

What exactly is the problem…

Autoliv wanted to reduce unwanted waste and improve on its operations so

implemented lean manufacturing due to its poor performances within the
competitive automobile industry. With all the achievements Autoliv had received, in order
to survive in an industry of high competition, they must focus on driving systemic improvement
and they also wanted to include their staff in the decision for a better outcome in
the future.

The problem is this …

The company must improve efficiency on its operations in order to compete in

this ever-changing automobile industry.

This is an important problem because…

Unwanted waste can be costly and staff like to feel a part of a company to really
work the hardest leading to better end results. Improving operations will not only
enhance healthy revenue but also remove waste.

The key question(s) that needs to be answered to solve this problem is…

1. Can unwanted waste be identified?

2. Is the current process efficient?
3. Are they utilizing the full benefit of the lean system?

 
Step 2: Obtain information.

The following information is needed to answer this question…

Data must be analyzed from their inventory, supplies with defects, transportation,
processing, finished product with defects, and what they can do to improve their
process.

Some important assumptions I am using in my thinking are…

My assumption was mostly based on the fact that employees' output was the
same. Motivating them will require the same level to improve efficiency, also
even with the best system, there always room for improvement.

The points of view relevant to this problem belong to…

Changes this big always have multiple outcomes, were some are for change and
others just like the old way. Autoliv had to include its stakeholders like their
employees and suppliers because these changes will affect them.

Step 3: Make predictions about the future.

If this problem gets solved, some important implications are…

The company unwanted waste will be reduced, increase efficiency and it will help
to support their culture of continuous improvement in returns boosting
productivity and generating more revenue.

If this problem does not get solved, some important implications are…

Autoliv will not stand the chance to compete with others in a competitive
industry and will start to lose revenue.

 
The potential alternative solutions to solve the problem are…

Improving the current APS will be the best solution because it already considers
the greatest.

Step 4: Make decisions by choosing among alternatives.

What is the best solution and why…

The recommendation for Autoliv is to continue to perfect their deployment policy by

continuously supporting their staff, seeking for improvement, and avoid self-satisfaction, this
will help the success to continue. APS current implementation is one of the kind worldwide with
the suggested recommendation, they will continue to succeed in their process.