DP D&T 10.1 & 10.2

Lean Production and JIC/ JIT

JIC (Just in Case)

Creating products in anticipation of market demand. Their goal is to reduce costs by taking advantage of economies of scale.

JIT (Just in Time)

Manufacturers respond to market needs as the need arises. In this model, goods are made to order when requested.

Advantages of JIC

* Timely distribution of parts is always available.
* Higher reliability as parts in inventory are ready to be sent
* Buffer of items in stock in case there is a production delay, quality control issue, or sudden increase in demand
* Ability to respond to market demand as the manufacturer can always meet need.
* Lower capital cost as less dependency on complex ICT systems (compared to JIT)

Disadvantages of JIC

* Large inventory must be managed
* Higher capital costs for space to store inventory
* Higher wastage due to spoilage (products going bad or expiring such as food or some chemicals)
* Risk of changing market demand could mean the manufacturer is left with large quantities of unsold goods.

Advantages of JIT

* Highly flexible manufacturing ideal for short runs
* Low waste as there is no over-production, little idle time, and material uses is optimised
* Lower costs as there is little to no inventory to manage - raw materials are used almost immediately and products are shipped very soon after manufacture.

Disadvantages of JIT

* Greater risk of manufacturing delays: production problems and quality control issues in one area can delay the whole system;
* Delay between ordering and delivery: Customer must wait longer (compared to JIC) to receive item
* Manufacturers cannot benefit from economies of scale to the same degree because they purchase smaller quantities of raw materials.

Lean Production

A long-term production strategy that considers product and process design as an ongoing activity. It focuses on continual feedback and incremental improvement.

Characteristics of Lean Production

* JIT supplies - getting the right amount of material to the production line just in time
* highly trained multi-skilled workforce - having experts to ensure that no time is wasted
* quality control and continuous improvement - checks are made at every stage of production to quickly identify and fix any problems that arise. Improvements to the system are actively sought.
* zero defects - ensure time, material and energy are not wasting producing a substandard product.
* zero inventory - products are made Just in time to be sold.

Principles of Lean Production

1. eliminating waste;
2. minimizing inventory;
3. maximizing flow;
4. pulling production from customer demand;
5. meeting customer requirements
6. doing it right first time;
7. empowering workers;
8. designing for rapid changeover;
9. partnering with suppliers;
10. creating a culture of continuous improvement (kaizen)

Value Stream Mapping

Is a lean production management tool also know as *end to end* system mapping.

It is used to analyse current and future processes for the production of a product.

Workflow Analysis

Refers to the process by which a company takes a close look at itself and identifies its strengths and weaknesses.

Product Family

A group of products and their variants that pass through similar processing steps and common equipment. Allows companies to create a competitive advantage - allows the manufacture the ability to produce customised or alternative designs through addition, subtraction or substitution of parts.

Role of the workforce in Lean Production

Supports the commitment every employee to drive its agenda of constant improvement. Devolution of power in respectful and equitable environment empowers every employee to be an agent of change.

Kaizen

Kaizen is a culture of continuous improvement originating in Japan. Everyone in the organisation is encouraged to come up with small improvement suggestions on a regular basis. \n It is considered an important aspect of an organisation's long-term strategy.

Lead time

\n Refers to the time quoted to customers (usually in days or weeks) between the date of purchase and the date of delivery.

What are the 5S's?

sort, set in order, shine, standardise, sustain

7 Wastes

Transportation, Inventory, Motion, Waiting, Overprocessing, Overproduction, Defects

Advantages of Lean Production

* Increased productivity because of focus on continuous improvement and waste reduction
* Increased quality of product because of focus on improvement and reduction of defects
* Cost reduction because manufacturer is able to pass on cost savings to the customer
* Increased profits through cost reduction and increased customer satisfaction
* Improved working conditions for employees
* Competitive advantage because of focus on cost reduction and productivity
* Reduced environmental impact due to reduction of waste of materials and resources

Disadvantages of Lean Production

* High capital costs due to the need to invest in JIT systems and IT systems.
* Difficult to introduce to existing workforce as some workers and managers may resist the change in manufacturing approach (change can be scary!)
* Dependent on a highly integrated system. If there is a breakdown in communication, deliveries, or production, the whole manufacturing system can come to a halt.
* No inventory can make it difficult to respond to sudden increases in demand or create a buffer in case of a production slowdown.