Lean Production
Information about lean production including all 5 methods, benefits and difficulties that may arise.
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- Created by: GeorgeB16
- Created on: 08-03-16 10:53
Lean Production
Lean production is an approach to management which focuses on cutting out waste while ensuring quality levels are still met. It can be applied to all aspects of a business.
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In A Nutshell
- Doing simple things well
- Doing things better
- Involving employees in the continuous process of improvement
- Avoiding waste so therefore reducing costs - greater efficiency
- Waste = costs
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Examples Of Waste In A Business
- Over production - Making more than needed leading to excess inventories which could become unsaleable.
- Waiting time - Equipment and people standing idle waiting for a production process to be completed or resources to arrive.
- Transport - Moving resources around unnecessarily.
- Stocks - Usually held as an acceptable buffer but should not be excessive.
- Motion - Worker who appears busy but is not actually adding any value.
- Defects - Output that doesn't reach the required quality standard which can be a significant cost to an uncompetitive business.
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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
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Time-Based Management
Recognises the importance of time and seeks to reduce the level of wasted time in the production process of a business.
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Benefits of Time-Based Management
- Faster response times to meet changing market and customer needs
- Faster new product development
- Reduction in waste which enables greater efficiency
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Requirements for Time-Based Management
- Flexible production methods:
- Ability to change products quickly
- Ability to change production volumes / runs
- Trained employees:
- Mulit-skilled staff
- Trust between workers and managers
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Simultaneous Engineering
Helps firms develop and launch new products more quickly. All parts of the project are planned together with everything considered simultaneously.
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Benefits of Simultaneous Engineering
- New products are brought to the market much more quickly
- Businesses could charge a premium price leading to a higher profit margin and help recoup research and development costs
- A better sense of involvement across business functions improves staff commitment to the project
- Competitive advantage if it can bring a reliable new product onto the market with brand loyalty before its competitors
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Cell Production
Form of team working where production processes are split into cells with each cell responsible for a complete unit of work.
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Benefits of Cell Production
- Closeness of cell members should improve communication
- Workers will become more multi-skilled and adapted to business needs
- Greater motivation from responsiblity
- Quality improvements as each cell has "ownership" for quality in its particular area
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Drawbacks of Cell Production
- Culture needs to embrace trust and participation or workers may feel they are being pushed for more output with no respite
- May need to invest in new materials handling and ordering systems suitable for cell production
- May not allow a firm to use machinery as intensively as in traditional flow production
- Small scale production lines may not yield enough savings to make a switch to cell production worthwhile
- Allocation of work needs to be efficient so they have enough work but not so much to make them unable to cope
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Just-In-Time
Aims to ensure inputs in the production process only arrive when needed.
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How JIT Works
- Uses a "pull" system of production - customer orders determine what is produced and so what supplies are ordered.
- Uses complex production scheduling using specialist software to connect the production department with suppliers.
- Supplies delivered to production line only when needed.
- Needs close cooperation with high quality and reliable suppliers.
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Benefits of JIT
- Lower stock holding means reduction in storage spaces which means less rent and insurance costs
- Stock only obtained when needed so less wasted capital tied up in unused stock
- Less likihood of stock perishing, becoming obsolete or out of date
- Less time spent checking and re-working production as emphasis spent getting it right first time
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Drawbacks of JIT
- Little room for mistakes as little stock kept for re-working faulty products
- Highly reliant on suppliers and whole production schedule can be delayed due to late deliveries
- No spare finished product available to meet unexpected orders as all products are made to meet actual orders
- Requires complex, specialist stock systems
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Kaizen
- Continuous improvement - Involved employees at all levels working together to efficiently improve areas of the company.
- Often used in healthcare and banking sectors.
- Worker-led method.
- Workers know best about the production process so know what is best for the company.
- Diminished returns likely - As time progresses, may run out of things to improve.
- Marginal gains - Tiny improvements over time create a big improvement overall.
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