what is lean management


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What is lean management?
Lean management is based around the idea of doing more with less, in other words minimising
It was originally developed by Toyota, and consists of:
Reducing lead times
Just in time stock management
Total quality management
Reducing lead times
Reducing lead times can produce benefits in two areas:
New product development
Means new products can be developed more quickly
Giving a competitive advantage if product is "first-to-market"
Can respond to changes in customer tastes quickly
Giving consumers a greater choice of products
Reduces the wait that customers have between ordering and receiving products
Which increases customer satisfaction
Reduces the need to hold stocks
Since the business can respond to market changes more quickly
Just in time stock management
Just in time can be described as: "A method of managing production that involves holding minimum
stock in order to maximise efficiency"
Components are delivered just as they are required
So the costs of holding stock are removed
It is particularly popular in industries where large numbers of components are needed
E.g. the automotive industry
Advantages and disadvantages
Improved cash flow because money is not tied up in stock
Less risk of wastage, shrinkage and obsolescence
More production space available
Better relationship with suppliers
Improves staff motivation because they can be given more responsibility
Become very dependent on suppliers
Increased admin costs as more orders are made
Might lose discounts from bulk buying
Breakdowns cause major problems
Firm will be less responsive to changes in market conditions


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