Knowt
Lean Production
What is lean production?
Approaches to management that focus on cutting out waste, whilst ensuring quality
Lean production in summary:
Doing the simple things well
Doing things better
Involving employees in the continuous process of improvement
As a result, avoiding waste, thereby reducing costs
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
Main methods of lean production:
Time-based management
Simultaneous engineering
Just-in-time production (JIT)
Cell production
Kaizen (Continuous improvement)
Effective lean production requires:
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
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
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
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)
Cell production:
A form of team working where production processes are split into cells. Each cell is responsible for a complete unit of work
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
Just-in-time (JIT):
Just-in-time (JIT) aims to ensure that inputs into the production process only arrive when they are needed
How JIT 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
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
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
Kaizen:
Kaizen (or ‘Continuous improvement’) is an approach of constantly introducing small incremental changes in a business to improve quality and/or efficiency
How Kaizen works:
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
Lean Production
What is lean production?
Approaches to management that focus on cutting out waste, whilst ensuring quality
Lean production in summary:
Doing the simple things well
Doing things better
Involving employees in the continuous process of improvement
As a result, avoiding waste, thereby reducing costs
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
Main methods of lean production:
Time-based management
Simultaneous engineering
Just-in-time production (JIT)
Cell production
Kaizen (Continuous improvement)
Effective lean production requires:
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
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
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
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)
Cell production:
A form of team working where production processes are split into cells. Each cell is responsible for a complete unit of work
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
Just-in-time (JIT):
Just-in-time (JIT) aims to ensure that inputs into the production process only arrive when they are needed
How JIT 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
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
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
Kaizen:
Kaizen (or ‘Continuous improvement’) is an approach of constantly introducing small incremental changes in a business to improve quality and/or efficiency
How Kaizen works:
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
