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Lean Production

Lean production aims to reduce waste during manufacturing through just-in-time inventory control and continuous improvement efforts like kaizen. The main wastes lean reduces are overproduction, waiting, transporting, over-processing, and defects. This leads to advantages like less storage costs, improved quality and efficiency, and easier management. Just-in-time inventory delivers materials right before they run out to eliminate buffer stock, while kaizen involves regular worker meetings to discuss problems and solutions.

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Syed Zayan Andrabi
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17 views

Lean Production

Lean production aims to reduce waste during manufacturing through just-in-time inventory control and continuous improvement efforts like kaizen. The main wastes lean reduces are overproduction, waiting, transporting, over-processing, and defects. This leads to advantages like less storage costs, improved quality and efficiency, and easier management. Just-in-time inventory delivers materials right before they run out to eliminate buffer stock, while kaizen involves regular worker meetings to discuss problems and solutions.

Uploaded by

Syed Zayan Andrabi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Lean Production

Just-in-time stock - JIT/Inventory control)


● Kaizen - The continuous improvement and the importance of using resources
efficiently (waste minimisation).
Lean production - is a set of measures that aim to reduce waste during production.

Wastes that lean production reduces are:


● Overproduction – Producing too many products which then costs the business money to
keep the product in storage. (and may get damaged/expires etc..)
● Waiting – Goods not being processed
● Transporting – Materials being moved around the factory inefficiently
● Over-processing – e.g. using advanced machines to do simple tasks
● Defects- production of faulty products which can’t be sold.

Advantages of Lean Production:


Less storage of raw materials (e..g no need for refrigeration costs, warehouse etc…)

● Less defects in production (broken products don’t get produced)


● Better use of equipment
● Speeding up production by cutting out unnecessary tasks
● Less money tied up in stock
● Improved quality - A lot of the activity in a lean environment is geared towards improving quality.
● Increased efficiency – Line balancing will ensure each person in the process is working in the most
efficient manner.
● Easier to manage – The work instructions and standardized work let people know what they have
to do and when.
● Reduced Space – As part of the waste reduction process, space will be created.

Kaizen
Workers meet regularly to discuss problems and possible solutions

In this way, wastage is reduced and efficiency is improved


Factory floors are usually rearranged so that the flow of production from one activity to the
next is improved.

Lean production is about trying to produce the highest quality product for the lowest
average total cost so that the business can take advantage of increased profit margins.

VERY GOOD FOR EVALUATIVE POINT


>JIT is a stock control method where the business doesn’t store any raw materials.
>Instead it delivers the necessary raw materials before they run out beforehand
>This means that buffer stock is not required

>It's effective if the business has a good relationship with its suppliers
>It's best if the suppliers are located locally
>This would reduce delivery costs and lead times

Advantages of JIT
● Remove any buffer stock space they had, which would previously have been used for
storage meaning more space can be used for production.
● Smaller but more frequent deliveries mean that the products will be fresher.
● The business will no longer have large amounts of capital tied up in stock
● Reduce waste
● Reduces production costs, allowing the business to price its products to give it a
more competitive advantage.

Disadvantages of JIT
It can be hard for businesses to react to unexpected changes in demand, for example, a
heatwave causing an increase in the demand for ice cream.

● Businesses are unable to use bulk-buy discounts if they only buy in small
quantities.
● Customers could receive a poor service if the business misjudges the amount of
stock it needs and allows products to go out of stock.

Why businesses hold inventory


What holding on to too much stock leads to:
• Money wasted on storage cost/ warehouse costs
• Product life (items may reach best before date before being sold)
• Opportunity cost - Money could’ve been used on something else
• Insurance costs
• Handling costs

What holding on to too little stock leads to:


● Unsatisfied customers and loss of loyal customers
● Missed sales
● Loss of profit
● Providing Opportunity for competitors to take over the market

>Buffer Stock: Safety stock – inventory to deal with sudden customer demands for a
product or in case supplies don’t get delivered on time.

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