Excerpts from a converation between two managers about their companies\' managem
ID: 2492359 • Letter: E
Question
Excerpts from a converation between two managers about their companies' management systems follow. Identify the manager who works for a company that emphasizes ABM and the one who works for a company that emphasizes a lean operating system.
Manager 1: We try to manage our resources effectively by monitoring operating activites. We analyze all major operating activities, and we focus on reducing or eliminating the ones that don't add value to out products
Manager 2: We are very concerned with eliminating waste. We have designed our operations to reduce the time it takes to move, store, queue, and inspect materials. We have also reduced our inventories by buying and using materials only when we need them
Explanation / Answer
Manager 1 works in ABM. Activity-Based Management (ABM) is a management system based on controlling and monitoring activities to identify the value-creating activities and eliminating those which are non-value adding.
Manager 2 works with Lean operating system. A lean system minimizes inventory holding and materials are purchased and used only when they are needed for production. Just-in-Time (JIT) is an essential component of lean system.
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