Lean Production
- Lean production involves the minimisation of the resources used in production
- Less time is required as the production process is organised in the most efficient way
- Fewer materials are used as there is a focus on waste reduction
- Less labour is used as lean production is typically capital intensive
- The space required for production is reduced as a result of just in time stock management
- A small number of trusted suppliers work closely with the business
- The use of lean production is likely to lead to a competitive advantage
- Lower unit costs are achieved due to minimal wastage so prices may be lower than those offered by competitors
- Better quality of output is likely as a result of supplier reliability and carefully managed production processes
- Lean production uses strategies such as Just in Time stock control and Kaizen
Just in Time Stock Control
- Just in Time (JIT) stock management is a process in which raw materials are not stored onsite but ordered as required and delivered by suppliers 'just in time' for production
- Careful coordination is required to ensure that raw materials and components are delivered by suppliers at the moment that they are to be used
- Close relationships with suppliers need to be developed
- Suppliers may need to be in close proximity
The Advantages and Disadvantages of Just in Time Stock Management
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Continuous Improvement (Kaizen)
- Kaizen involves taking continuous steps to improve productivity through the elimination of all types of waste in the production process
- Changes are small and ongoing rather than significant one-off’s
- They are constantly reviewed to ensure that they achieve the desired positive impact on productivity
- Kaizen requires a long-term management commitment to change
Diagram to Show Kaizen (Continuous Improvement)
Kaizen Versus One-off Improvements
- Elements of Kaizen commonly include
- Zero defects in manufacturing
- High levels of automation
- High levels of cooperation between workers and management
- Staff training and computer inventory management systems may also reduce wastage as fewer errors are likely to be made