Learning Objective Analyze Evaluate the main methods of

Learning Objective: • Analyze & Evaluate the main methods of lean production used by businesses. Lean production is the term given to a range of measures traditionally used by Japanese businesses in an attempt to reduce waste and costs in production.

Ø Ø Ø This is a method of manufacturing products which aims to minimize: the production time the production costs the amount of stock held in the factory. Raw materials and supplies arrive at the factory as they are required, and consequently there is very little stock sitting idle at any one time. Each stage of the production process finishes just before the next stage is due to commence and therefore the lead -time is significantly reduced. With a just-in-time production system, the level of production is related to the demand for the output (i. e. the number of orders) rather than simply producing finished goods and waiting for orders. This means that raw materials and stock only needs to be ordered from suppliers as required - this reduces the amount of money tied up in stocks, and leaves more money available for investment elsewhere.

Cashflow is improved, as less money is tied up in raw materials, work-in-progress and finished goods. Less need for storage space for raw materials and finished goods. The business builds up strong relationships with its suppliers. Communication and co-operation between the marketing and the production departments are improved.

The business may struggle to meet orders if their suppliers fail to deliver the raw materials on time. The business is unlikely to 'bulk-buy' its raw materials and, therefore, it may lose the benefit of achieving economies of scale. Buffer stocks are minimal and this may lead to the business having to reject customer orders requiring delivery immediately.

This method of manufacturing an item organises workers into 'cells' within the factory, with each cell comprising several workers who each possess different skills. Each cell is independent of the other cells and will usually produce a complete item, and each cell will usually have an output target to achieve for a given period of time. It is often argued that if the group of workers in each cell can see the completion of the finished product, then their work will have more meaning and therefore their levels of motivation and job satisfaction will be greatly enhanced. This method of production is often combined with the just-in-time approach.

Improved job satisfaction and motivation. Improved quality as the group of workers takes responsibility for the output. Multi-skilling of workers means that job rotation can occur. Stockholdings are reduced (leaving less money tied up in stocks). The factory space can be used more efficiently. Lead-times are reduced.

Output may not be as high as a 'flow' production system. Different 'cells' may work at different speeds (leading to conflict and tension). The business may need to invest heavily in new machinery and equipment, as each cell will require the same capital items

This refers to a business finding the best methods and processes that are used by other businesses, and then trying to emulate these in order to become more efficient in its operations. Benchmarking can be used in all areas and processes in a business, not just for production. For example, it can be used to improve customer service, advertising campaigns, Human Resource Management, and budgeting procedures. Data for benchmarking is collected and used with the full co-operation of the other businesses, and often the results will help both businesses to improve their systems and procedures.

Time is a very valuable resource and time-based management is concerned with reducing both the length of time taken to produce the product and also, therefore, reducing the lead-time (the time lag between the customer placing an order and the business delivering the finished product). In order for a business to successfully operate a time-based management system, it is important that machinery is flexible and production runs can be shortened or lengthened at short notice, in order to produce more of an existing product or to start the production of an alternative product.

It is also essential that staff are multi-skilled and can rotate between different tasks, as they may be required to perform a number of different jobs in a short space of time. Time-based management makes it easier for a business to implement other lean production techniques (such as justin-time and cell production), and since these techniques require less time and fewer stocks of raw materials than more traditional mass production techniques, then the business will save money. However, it is often argued that the move away from mass production and lengthy production-lines will reduce the chance of the business benefiting from economies of scale in its manufacturing techniques. It is also likely that a business will be able to implement the time-based management philosophy to its R&D processes, as well as to the production-line.

Kaizen Japanese for "improvement" or "change for the best” refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, and business management. It has been applied in healthcare, psychotherapy, life-coaching, government, banking, and other industries. When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics that cross organizational boundaries into the supply chain. By improving standardized activities and processes, kaizen aims to eliminate waste.

Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. In all, the process suggests a humanized approach to workers and to increasing productivity: "The idea is to nurture the company's human resources as much as it is to praise and encourage participation in kaizen activities. ”Successful implementation requires "the participation of workers in the improvement. ” People at all levels of an organization participate in kaizen, from the CEO down to janitorial staff, as well as external stakeholders when applicable. The format for kaizen can be individual, suggestion system, small group, or large group. At Toyota, it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. This group is often guided through the kaizen process by a line supervisor; sometimes this is the line supervisor's key role. Kaizen on a broad, cross-departmental scale in companies, generates total quality management, and frees human efforts through improving productivity using machines and computing power.

Kanban is a scheduling system for lean and just-intime (JIT) production. Kanban is a system to control the logistical chain from a production point of view, and is not an inventory control system. Kanban was developed at Toyota, to find a system to improve and maintain a high level of production. Kanban is one method through which JIT is achieved. Kanban became an effective tool in support of running a production system as a whole, and it proved to be an excellent way for promoting improvement. Problem areas were highlighted by reducing the number of kanban in circulation. One of the main benefits of Kanban is to establish an upper limit to the work in progress inventory, avoiding overloading of the manufacturing system.