Efficiency in Production (AQA GCSE Business)

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An Introduction to 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

      • Little space is required for production and storage

      • small number of trusted suppliers work closely with the business

  • Efficiency gains through the use of lean production are likely to lead to a competitive advantage 

    • Lower  unit costs  are achieved due to minimal waste, 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

  • However, lean production requires very careful coordination

    • Suppliers must be capable of responding very quickly to stock requests

    • Workers need to be motivated and flexible, capable of switching between a variety of tasks and constantly alert to changes they can make to improve efficiency

    • Managers need to maintain excellent relationships with workers to avoid disruptions to production

    • Equipment and machinery need to be well-maintained

    • Quality issues need to be identified and corrected swiftly, requiring effective quality assurance processes to be implemented and monitored constantly

      • All workers have a responsibility for quality, so ongoing training is vital

Elements of Lean Production

  • Lean production uses strategies such as just in time production and Kaizen 

Just in time production

  • Just in time production means that the business only manufactures products when a customer confirms an order for them

    • This reduces the need for storage, as stock is only ordered to arrive when needed and products only made when there is demand

Kaizen

  • Kaizen involves taking continuous steps to improve productivity

    • Changes are small and ongoing, rather than significant one-off changes

    • It requires a long-term management commitment to change as well as flexible workers fully engaged in continuous improvement

Diagram: How Kaizen Works

Diagram to illustrate Kaizen (continuous improvement) 

Kaizen Versus One-off Improvements

  • Elements of Kaizen commonly include:

    • Zero defects  in manufacturing

    • Capital-intensive methods using advanced machinery

    • High levels of cooperation between workers and management

Examiner Tip

A common misconception is that lean production is an alternative to job or flow production. Lean production is not a production method, but rather a whole-business philosophy that is absolutely focused on minimising waste at every level.

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