Lean Production

What is lean production?

What is lean production?

Approaches to management that focus on cutting out waste, whilst ensuring quality

What is the summary of lean production?

• Doing the simple things well

• Doing things better

• Involving employees in the continuous process of improvement

• As a result, avoiding waste, thereby reducing costs

What are the examples of waste in business?

• Over-production: Making more than is needed- leads to excess stocks

• Waiting time: Equipment and people standing idle waiting for the production process to be completed or resources to arrive

• Stocks: Often held as an acceptable buffer, but should not be excessive

• Defects: Outpit that does not reach the required quality standard- often a significant cost to an uncompetitive business

What are the main methods of lean production?

• Time-based management

• Simultaneous engineering

• Just-in-time production (JIT)

• Cell production

• Kaizen (Continuous improvement)

What does effective lean production require?

• Good relations with suppliers

• Committed, skilled and motivated employees

• A culture of quality assurance; continuous improvement and willingness to embrace change

• Trust between management and employees

What is time-based management?

A general approach that recognises the importance of time and seeks to reduce the level of wasted time in the production processes of a business

What are the requirements for time-based management?

• Flexible production methods

  • Able to change products quickly

  • Can change production volumes/runs

• Trained employees

  • Multi-skilled staff

  • Trust between workers and managers

What is simultaneous engineering?

An approach to project management that helps firms develop and launch new products more quickly. All parts of the project are planned together. Everything is considered simultaneously (together, in parallel) rather than separately (in series)

What is cell production?

A form of team working where production processes are split into cells. Each cell is responsible for a complete unit of work

What are the potential benefits of cell production?

• The closeness of cell members should improve communication

• Workers become multi-skilled and more adaptable to the needs of the business

• Greater employee motivation, from variety of work, team working and responsibility

• Quality improvements as each cell has ‘ownership’ for quality in its area

What is just-in-time (JIT)?

It aims to ensure that inputs into the production process only arrive when they are needed

How does just-in-time work?

• Based on a ‘pull’ system of production- customer orders determine what is produced

• Requires complex production scheduling- achieved using specialist software to connect production with suppliers

• Supplies are delivered to production only when needed

• Requires close cooperation with reliable suppliers

What are the benefits of JIT?

• Lower stock holding means a reduction in storage space which saves rent and insurance costs

• As stock is only obtained when it is needed, less working capital is tied up in stock

• Less likelihood of stock perishing, becoming obsolete or out-of-date

• Less time is spent on checking and reworking production as the emphasis is on getting the work right the first time

What are the disadvantages of JIT?

• There is little room for mistakes as minimal stock is kept for re-working faulty product

• Production is highly reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed

• There is no spare finished product available to meet unexpected orders because all product is made to meet actual orders

• A need for complex, specialist stock systems

What is Kaizen?

‘Continuous improvement’ is an approach of constantly introducing small incremental changes in a business to improve quality and/or efficiency

How does Kaizen work?

• As ideas come from employees, they are less likely to be radically different and probably easier to implement

• Small improvements are less likely to require major capital investment than major process changes

• The culture- all employees should continually look for ways to improve their performance

• Kaizen encourages employees to take ownership of their work, which can help reinforce teamwork and improve motivation