5.3 (HL)

Lean Production

Lean Production

A philosophy of streamlining production processes in order to increase efficiency and reduce waste

How to improve efficiency in production?

• Improve motivation

• Improve Technologies

• Provision of training and development for employees

Methods of lean production

• Kaizen

• JIT (Just in time)

Kaizen

Good change or continuous improvement

Adv/Dis Kaizen

Advantages:

• Employees involved in making suggestions to improve - motivating for employees

• Reduce costs for the business due to higher efficiency - potential higher profit margins

Disadvantages:

• Changing the culture to Kaizen is time-consuming and may be resistant to change

• The cost involved - such as training employees

JIT (Just in Time)

A lean method of stock control where material are ordered to arrive only when they are needed.

Adv/Dis JIT

Advantages:

• Reduce storage costs as extra stock is not required in the warehouse as well as overhead costs

• Items may not get damaged as it delivered (JIT)

Disadvantages:

• Reliant on suppliers to deliver on time and deliver good quality - need a good relationship with supplier

• Inflexible to sudden changes in demand and changes in consumer tastes and preferences.

Quality Control

An inspector checks the final product at the end of the production process

Quality Assurance

Training all staff to check their own word throughout the production process.

Adv/Dis Quality Control

Adv

• Inspectors are experts so should prevent poor quality reaching the customer

• May be cheaper than quality assurance

Dis

• Does not prevent mistakes from occurring in the first place

• If items checked at the end than there can be wastage and high cost (not ideal for lean production)

Adv/Dis Quality Assurance

Adv

• Employees are more motivated as given responsibility and training

• Reduces costs of wastage and poor products by identifying issues early

Dis

• Only works if all staff are committed to it and check products

• Expensive and time-consuming to train all workers.

Quality Circles

Small groups of employees from different departments meet regularly to assess quality issues and make recommendations for improvement.

Adv/Dis Quality Cricles

Adv

• Working in a team to solve problems can improve motivation

• Employees may come up with good ideas to improve quality and productivity and feel valued and trusted

Dis

• Could be potentially demotivating if ideas and suggestions are never used, so must be managed carefully

• Employees may need to trained and should be suitably qualified to contribute

Benchmarking

Comparing products and processes of a business against its competitors. Involves learning from them about best practices and adapting for use in the business.

Often focuses on improvements relating to

• Quality

• Time

• Cost

Adv/Dis Benchmarking

Adv

• Can help determine strengths and weaknesses versus your competitor and identify areas of improvements to be implemented

Dis

• TIme consuming and expensive to accurately benchmark competitors / may be difficult to obtain information

Total Quality Management

A zero defect approach where all employees are responsible for maintaining quality standards throughout the production process

Adv/Dis TQM

Adv

• Production costs may fall as zero defects should reduce waste

• May increase brand image for quality - could charge higher prices

• Higher staff motivation - trust, valued, teamwork etc

Dis

• Very expensive to train all staff and maintain standards for all workers

• Takes time to change a culture - only works if everyone is fully committed to it - is it realistic?

Cradle to Crade Manufacturing

A sustainable, waste-free production model in which all material inputs can be recycled and reused.

• Reuse

• Recycle Materials

• Biodegradable

Adv/Dis Cradle to Cradle

Adv

• Help provide better brand image - ethical loyalty

• Can provide USP for the Business - differentiate from competitors

Dis

• Costs involved of only using these - likely cheaper to use other materials

• Potentially time-consuming to source materials - opportunity cost

International Standards

The International Organization for Standardization (ISO) are internationally recognized quality standard.

National Standards

Each country may have different standards for quality for different industries.