Lean Production (DP IB Business Management)

Features of Lean Production

• Lean production is a management philosophy that aims to maximise value while minimising waste

• It focuses on maximising efficiency, improving quality and reducing costs

The main principles of lean production

• Right first time approach

  • Aim for zero defects in output

  • Identify and solve problems as they arise

  • Prevent rather than correct errors

• Flexibility

  • Adaptable capital equipment and physical resources

  • Multiskilled staff and team working

  • Flexible management styles

• Waste Minimisation

  • Remove processes that do not contribute to added value

  • Consume as little as is necessary

  • Rework rather than replace

• Effective supply chain management

  • Develop excellent relationships with suppliers

  • Minimal number of suppliers

• Continuous improvement

  • Ongoing, small steps

  • All staff involved in improvement

The seven wastes eliminated in lean production

• Waste refers to anything that prevents a business from being efficient

• First developed in Japan in the 1970s, seven key types of waste are minimised in lean production 

1. Transportation: Unnecessary movement of materials or products

2. Inventory: Excess raw materials, work-in-progress, or finished goods

3. Motion: Unnecessary movement of people or equipment

4. Waiting: Delays or idle time in the production process

5. Overproduction: Producing more than what is required by the customer

6. Overprocessing: Using more resources than necessary to produce a product

7. Defects: Products or services that do not meet customer requirements

Continuous Improvement (Kaizen)

• Kaizen involves a business taking continuous steps to improve work processes and productive efficiency

  • Changes are small and ongoing rather than significant one-off’s and are constantly reviewed to ensure that the desired positive impact on productivity is achieved

Diagram: the Impact of continuous improvements on efficiency

• Elements of Kaizen commonly include

  • Total Quality Management

  • Team Working and quality circles

  • Zero defects  in manufacturing

  • High levels of automation

  • High levels of cooperation between workers and management

• Kaizen requires a long-term management commitment to change 

  • Regular high quality training for all staff

  • Willingness to accept suggestions and delegate control to subordinate workers

  • Skills to implement and manage continual change

• It is unlikely to cause workplace conflict

  • Workers do not face sudden significant change

  • Workers are wholly involved in - and contribute to - continuous improvement

Just-in-time (JIT)

• 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

Cradle to Cradle Design

• The traditional "cradle to grave" approach refers to the one-time use of a product

  • Products are designed with a linear life cycle that ends in disposal

  • This approach has led to an unsustainable increase in waste going to landfill and associated environmental concerns

• The Cradle to Cradle (C2C) model aims to shift towards a circular economy

  • Resources are conserved and waste is minimised

  • It is focused on thoughtful design and responsible manufacturing practices

Key Principles of Cradle to Cradle Design and Manufacturing