5.3 Lean Production

Efficiency

How well a business transforms physical, human and financial inputs into outputs

How a business can achieve efficiency

• Improved level of motivation

• Improved tech and capital equipment

• Improved provision of training and development

Benefits of efficiency/lean production

• Increased quality

• Increased speed

• Increased results

• Decreased costs

TIM WOOD

• Transportation

• Inventory

• Motion

• Waiting

• Over-processing

• Over-production

• Defects

Lean Production

Streamlining production processes in order to increase efficiency and reduce waste

Kaizen

“Change for better” in Japanese

• Benefits

  • Diversity of ideas

  • Better ideas

  • Employee motivation

• Limitations

  • Higher labour costs

Just-in-time production

Method of stock control whereby materials are scheduled to arrive precisely when needed

• Benefits

  • Improved cash flow and reduces costs

  • Improved operations

  • Increased capacity

• Limitations

  • Reduced economies of scale

  • High risk

  • Reduced resilience

Andon

• Audio-visual control and warning systems

  • E.g.: Shopping centre and lights on the tills

    • Green → everything is going well

    • Amber/yellow → Potential bottlenecks

    • Red → Closed/non-functional

Cradle-to-cradle design and manufacturing

Acts like nature, by designing systems that feedback outputs and inputs

Quality

The means that a products FITS for its purpose

Quality control

Inspection of a product to find defects and remove them before delivered

Quality assurance

Involves all employees in the quality process

Quality circles

Group of employees who meet regularly to discuss potential improvements to product quality

• Benefits

  • Motivation

  • Improved quality

  • Reduced costs

• Limitations

  • Reduced productivity

  • Training costs

  • Not suited for every organisation

Benchmarking

Process of comparing processes, production and performance to competitors

• Benefits

  • Improved quality

  • Understand competitors and consumers

  • Customer satisfaction

• Limitations

  • Lack of transferability

  • Lack of information

  • Selecting the right benchmark

Steps involved in benchmarking

1. Identifying which companies have best processes/results

2. Finding how those companies do things

Total Quality Management

An approach to quality management that involves all workers having responsibility in maintaining quality standard

ISO 9000

An international accreditation, which is awarded to businesses for their quality assurance systems