Lean Production
Lean production is an approach to management that focuses on cutting out waste,
whilst ensuring quality. This approach can be applied to all aspects of a business – from design,
through production to distribution.
Lean production aims to cut costs by making the business more efficient an d responsive to
market needs.
This approach sets out to cut out or minimise activities that do not add value to the production
process, such as holding of stock, repairing faulty product and unnecessary movement of
people and product around the business.
Lean production originated in the manufacturing plants of Japan, but has now been adopted
well beyond large and sophisticated manufacturing activities.
The lean approach to managing operations is really about:
Doing the simple things well
Doing things better
Involving employees in the continuous process of improvement
…and as a result, avoiding waste
The concept of lean production is an incredibly powerful one for any business that wants to
become and/or remain competitive.
Why? Because waste = cost
Less waste therefore means lower costs, which is an essential part of any business being
competitive.
Over-production: making more than is needed – leads to excess stocks
Waiting time: equipment and people standing idle waiting for a production process to
be completed or resources to arrive
Transport: moving resources (people, materials) around unnecessarily
Stocks: often held as an acceptable buffer, but should not be excessive
Motion: a worker who appears busy but is not actually adding any value
Defects: output that does not reach the required quality standard – often a significant
cost to an uncompetitive business
The pioneering work of Toyota (a leader in lean production) identified different kinds of waste
which can be applied to any business operation. These are:The key aspects of lean production
that you should be aware of are:
Just in time production (JIT)
Cell production
Kaizen (Continuous improvement)
Cell production
In traditional production, products were manufactured in separate areas (each with a
responsibility for a different part of the manufacturing process) and many workers would work
on their own, as on a production line. In cell production, workers are organised into multi-
skilled teams. Each team is responsible for a particular part of the production process including
quality control and health and safety. Each cell is made up of several teams who deliver finished
items on to the next cell in the production process.
Cell production can lead to efficiency improvements due to increased motivation (team spirit
and added responsibility given to cells) and workers sharing their skills and expertise. The
production line is divided into separate, self-contained units each making a part of the finished
good. This works because it improves worker morale when they are put into teams and
concentrate on one part alone.
Kaizen
Kaizen is a Japanese word for an approach to work where workers are told they have two jobs
to do:
Firstly to carry out their existing task; and
Secondly to come up with ways of improving the task
The concept known as "continuous improvement" therefore implies a process where the
overall progress and gains in productivity within a firm, come from small improvements by
workers being made all the time.
For example, an employee may simply re-organise the lay out of his work area, which saves 2
minutes looking for and filing paperwork each day. When added up the course of a week, 10
minutes extra productive time is gained, which over a year equates to an extra days work. If
other workers also adopt this, then a firm can benefit from a significant increase in output per
worker (productivity) over a year.
It aims to increase efficiency and reduce wastage by getting workers to get together in small
groups and discuss problems and suggest solutions. Since they’re the ones directly involved in
production they will know best to identify issues. When kaizen is implemented, the factory
floor, for example, is rearranged by re-positioning machinery and equipment so that
production can flow smoothly through the factory in the least possible time.
Benefits:
increased productivity
reduced amount of space needed for production
improved factory layout may allow some jobs to be combined, so freeing up employees
to do other jobs in the factory
Just in time
JIT means that stock arrives on the production line just as it is needed. This minimises the
amount of stock that has to be stored (reducing storage costs).
JIT has many benefits and may appear an obvious way to organizes production but it is a
complicated process which requires efficient handling. For example, JIT relies on sophisticated
computer systems to ensure that the quantities of stock ordered and delivered are correct. This
process needs to be carried out very accurately or production could come to a standstill.
this techniques eliminates the need to hold any kind of inventory by ensuring that supplies
arrive just in time they are needed for production. The making of any parts is done just in time
to be used in the next stage of production and finished goods are made just in time they are
needed for delivery to the customer/shop. The firm will need very reliable suppliers and an
efficient system for reordering supplies.
Benefits:
Reduces cost of holding inventory
Warehouse space is not needed any more, so more space is available for other uses
Finished goods are immediately sold off, so cash flows in quickly
