Lean production looks at reducing all forms of waste throughout the production process.
Types of waste:
- Materials
- Time
- Energy
- Human effort
Cell Production
- Production is organised around teams
- Every team is responsible for one stage in the production process
- This helps improve motivation as it encourages team work
- It can increase quality as employees feel more ownership of the final product
- Teams will self-check their work before it enters the next stage of production
Just In Time (JIT)
- Goods are produced to order so stock levels are minimal
- Keeping low stock levels decreases the costs of storing them helping to increase profits
- This increases the flexibility of a firm
- It helps reduce waste as you only use what you need
For JIT to be effective you need the following:
- Excellent supplier relationships – need the supplies to arrive at exactly the right time
- Reliable employees – or stoppages may occur
- A flexible workforce – need them to be able to work any time and any where
Advantages
Increased focus on quality
Costs are reduced:
- Warehousing
- Security and insurance
- Opportunity
Disadvantages
- May be difficult to meet unexpected major increases in demand
- Can be problems caused by suppliers
- Loss of discounts for buying in bulk
Time-based management
- This is used as a USP for many businesses
- Businesses try and produce items more quickly than competitors or deliver it more quickly to them increasing sales
Simultaneous Engineering
- To decrease new product development times firms use simultaneous engineering
- Simultaneous engineering is where everyone involved in the project works on it at the same time – engineers, designers etc
- This decreases the time taken to get the product to market
Continuous Improvement
- Kaizen – Continuous incremental improvement of an activity to eliminate waste
- This is a Japanese approach to production
- Everyone in the business has to be involved for it to work
- Review all processes and procedures and look at better ways of doing them to increase performance
- Based on the idea of gradual change not radical overhauls
- Need to have well qualified staff who are trained to identify improvements to process or product to improve performance of the organisation
Lean Production & People
- Workers are key to all lean production techniques
- All of the methods demand for employees to have high levels of empowerment and involvement so they constantly try to improve how the business works
- Need to have “people-centred management”
When businesses introduce methods of lean production they need to:
- Use a management style that is more listening in its approach – need employees to feel that they can come forward with their ideas
- Train all employees
- Increase skill levels of employees so they can do more than one job
- Develop good manager-subordinate relations
