Efficiency in Production (AQA GCSE Business)

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Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

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 Tips and Tricks

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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Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.