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Surveys indicate that 60~80% of the cost of meeting customer requirements are attributed to poor, inefficient administrative functions in the non-manufacturing areas. We are aware that Lean Manufacturing practices and tools facilitate free flow and as a result, non-value adding activities are minimized. While much focus is paid on manufacturing processes to minimize wastes, It is quite common that organizations ignore the wastes that happen in non-manufacturing processes. Identifying the non-value adding activities in an administrative process is difficult unlike those in the manufacturing process as they are not too obvious. It is quite essential to have a high performing, waste-free offices just as we need waste-free manufacturing processes. The tools are same how ever, right practices fetch the right benefits.

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Inventories consume cash and show up as ‘Interest on working capital’ to damage the balance sheets of most manufacturing organizations! In addition, inventories cost more money to store, move, track & insure! The paradox is that high inventories co-exist with two universal problems – overstocking & stock-outs!

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