Operational strategies Lean production

The adoption of techniques that help to reduce waste

Lean production techniques Just-in-time (JIT) Kaizen Time-based management

Just-in-time A philosophy that aims to reduce waste by limiting the stock holding at each stage of the production process.

Kaizen An approach to improving the efficiency and performance of a business through continual improvement.

Time-based management Aims to reduce waste. The focus is on reducing the time wasted or or unproductive time to improve efficiency.

Critical path analysis (CPA) The use of network diagrams to help plan a complete projects in the shortest time possible by identifying those activities that can be carried out simultaneously.

Possible uses of CPA Marketing campaign Launch of a new product Opening a new store relocating a business Automating the production process

Building a house A house-building project involves the following tasks: Designing the house Building the walls Digging the foundations Designing the interiors Connecting to the utilities Clearing the land Fitting the windows Plastering Installing lighting and electrical sockets Internal decoration Putting the roof on Purchasing construction materials Fitting the plumbing & central heating

Task 1.Sort these activities into a rough sequence 2.Determine which activities cannot start until others have finished

Building a house network diagram Design Clear Foundation Purchasing Design Interiors Walls Roof Windows Connect Utilities Lighting Plumbing Plastering Decoration

Features of CPA Nodes – Signify the end of the activity and the start of the next activity EST – earliest start time an activity can start LFT – latest finish time of the previous activityNumber of the node

Activities – the events or tasks that consume time and are shown as lines that link the nodes onto the network diagram. A letter is placed above the line to show that activity. A 4 Duration – the length of time that it takes to complete an activity

Completing the timings When you have completed the critical path diagram you need to add the time it takes each activity, so you can see how long the project will take. Add the duration of the activity below the line of the corresponding activity. Design 6

EST and LFT Earliest Start Time – Work forward ( from left to right) to calculate the EST’s. The EST in the first node is shown as zero. For subsequent activities the EST is found by adding the sum of the durations of the activities on the path that leads upto the node that represents the start time for that activity. If there is more than one path to a node, the highest total is taken as the EST.

Completing the latest finish times Latest Finish Time – Once the EST’s have been finished, work backwards from right to left to calculate the LFT’s. The LFT in the final node must equal the EST because a final activity must be on the critical path. Moving from right to left deduct the duration of the activity in order to calculate the LFT of the previous activity. If there is more than one path working backwards to a node, the lowest total is taken as the LFT.

Adding the figures to the diagram These figures are written into the nodes. LFT – latest finish time of the previous activity EST – Earliest start time of the next activity Node number

Plotting the critical path The critical path is the sequence of activities that can not be delayed without delaying the overall completion of the projects. It is represented by those activities that: Have LFT’s identical to their EST’s Represent the longest path between the nodes Non critical activities are those that can be delayed without extending the completion time of the project.

Business implications of CPA Efficiency benefits If a business can reduce the time taken to complete a project, it can translate these savings in time into cost savings. The process lets a business know precisely when activities are going to take place – Assists the business in the resource planning. The business can use CPA to investigate changes in resources or sequencing that would improve efficiency. eg. Resources can be transferred from a non critical activity to one on the critical path. CPA can be used to help control and review

Problems of using CPA It can encourage rigidity As every activity in a network is strictly timetabled, it can lead to greater inefficiency if a crucial activity is delayed. Complex activities may be difficult to represent accurately on a network. May be a tendency to believe hard work is done when the CPA has been completed. CPA relies on estimates of the expected duration of activities. CPA encourages businesses to focus on speed of completion of a project.