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Entrepreneurial ActionMOD005581Action Research ThesisImplementing lean manufacturing as a means of improving the operational efficiency of a foodmanufacturing business.Student ID: Anglia Ruskin UniversityMBA Word count: 10 641Date: 20 May 20201SID Number: MOD005581
CHAPTER 1INTRODUCTION 1.1 Background [ANON] mushrooms ([ANON]) is the biggest mushroom producer in South Africa based in[ANON] Johannesburg ([ANON], 2020). It is one of the Johannesburg stock exchange (JSE) listedgroup [The Parent Company]’s 27 subsidiaries (JSE, 2020). [ANON] has been experiencingprofitability issues that has attracted the attention of the [The Parent Company] executive(Laing, 2018). [ANON] is one of [The Parent Company]’s biggest brands with its revenues makingthe group’s top three however, net profit wise [ANON] is in the bottom five. The main reason forthis is attributed to [ANON]’s high operational costs resulting from operational inefficiencies, forexample, out of a revenue of R493m in 2019, [ANON] only realised a net profit of R10m (2.02%),which is less than the budgeted 10%, signalling the need for change (Coghlan and Brannick,2010, pp.66-67). [ANON] has in the past explored different marketing and pricing strategies, however, thesestrategies proved to be fragile as they did not solve the underlying operational efficiency issuesand once an equilibrium was reached, the profitability issues resurfaced. The researchersuggests lean manufacturing (LM) to solve the operational inefficiencies since they haveidentified many non-value adding activities (NVAs)/waste happening in the business leading tooperational inefficiencies and high operating costs. LM is a system that is designed to eliminateall NVAs within a manufacturing system while at the same time maximizing productivity andcreating value (Gopalakrishnan,2010, p.4). The researcher is a certified six sigma black belt anda certified lean manager and through conducting this research they are presented with a hugeopportunity to not only put into practice this existing knowledge, but also get a hugeopportunity for their learning and personal growth (Coghlan and Brannick, 2010, p.59).Resolution of the profitability issue will also increase their profile within the organisation.2SID Number: MOD005581
1.2 Need for change1.2.1 Internal driving forces According to Gopalakrishnan (2010, pp.11-28), if a business experiences the followingsymptoms then it signals the need to implement LM.

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