1. Learning Objective - Understand the aims of lean production Learning Outcomes - Describe the significance of lean production – E Explain how real businesses use lean production and why - C Evaluate the advantages and disadvantages of lean production Lean Production

2. Starter activity Business Quiz – www.tutor2u.netwww.tutor2u.net

3. 06 June 2016© easilyinteractive.com 20083 Japanese Production Methods ‘Traditional’ manufacturing was based on ‘pushing’ production through the production process to meet sales targets and forecasts – This can result in large stocks of work in progress and finished goods if demand is lower than forecast Japanese techniques use the concept of ‘pull production’ – a production process is only performed when it is demanded by the next stage in the line *

4. What is lean production? 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.

5. Lean production in a nutshell Doing the simple things well Doing things better Involving employees in the continuous process of improvement (Kaizen) …and as a result, eliminating waste (muda in Japanese)

6. 06 June 2016© easilyinteractive.com 20086 Lean production Lean production: Involves raising productivity by using less of everything – less raw materials, labour, energy, floor-space, time etc. JIT is a key component of lean production *

7. Task Draw up a list of benefits of lean production

8. 06 June 2016© easilyinteractive.com 20088 Lean production Advantages: – Cost savings – Shorter research and development times (react faster to market needs) – Quality improvements – aim to prevent problems rather than have to correct them later *

9. Why cut out waste? Waste = Cost

10. The Waste Hierarchy Task – Give examples of waste in business

11. Examples of waste in business Type of wasteDescription Over- production Making more than is needed – leads to excess stocks Waiting timeEquipment and people standing idle waiting for a production process to be completed or resources to arrive TransportMoving resources (people, materials) around unnecessarily StocksOften held as an acceptable buffer, but should not be excessive MotionA worker who appears busy but is not actually adding any value DefectsOutput that does not reach the required quality standard – often a significant cost to an uncompetitive business

12. Kaizen Kaizen (or ‘continuous improvement’) is an approach of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency

13. How Kaizen works Leaner production is based on making many small changes As the ideas come from employees, they are less likely to be radically different, and therefore easier to implement Small improvements are less likely to require major capital investment than major process changes Ideas come from the talents of the existing workforce, as opposed to using R&D, consultants or equipment – any of which could be very expensive The culture - all employees should continually look for ways to improve their own performance Kaizen encourages employees to take ownership for their work, can help reinforce team working and improve motivation

14. The Kaizen Umbrella Just in time production (JIT) Zero defects Co-operative staff-management relations Kanban Quality improvement and management (covered in BUSS2) Productivity improvement Small group activities New product development Six sigma SMED 5S Customer orientation TQM Quality control circles Suggestion system Robotics automation Discipline in the workplace TPM (Total Productive Maintenance)

15. Implementing continuous improvement Workers are encouraged to: Plan – identify where improvement is needed and develop a plan which will result in improvement Do – implement the plan Check – check whether or not the expected improvement has materialised Action – if the plan has succeeded, introduce it throughout the business

16. Just-in-time Just-in-time (“JIT”) aims to ensure that inputs into the production process only arrive when they are needed

17. 06 June 2016© easilyinteractive.com 200817 Just-in-time JIT: A strategy involving coordinating the delivery of raw materials and components to arrive at the factory just in time for production – e.g. At Skoda in the Czech Republic, Skoda notify the car seat suppliers of the production schedule via integrated computer systems and the companies work together – Seats are delivered to Skoda on the production line exactly when they are required – Skoda only take ownership of the seats when they arrive on the production line – minimising stocks of work in progress *

18. How does JIT work? Based on a "pull" system of production - customer orders determine what is produced Requires complex production scheduling - achieved using specialist software to connect production dept with suppliers Supplies delivered to production line only when needed Requires close cooperation with high-quality suppliers

19. Activity Video activity - http://www.tutor2u.net/blog/index.php/busine ss-studies/comments/brilliant-video-for-just- in-time-and-kaizen http://www.tutor2u.net/blog/index.php/busine ss-studies/comments/brilliant-video-for-just- in-time-and-kaizen Task – Analyse the advantages of Toyota’s manufacturing system

20. Benefits and drawbacks of JIT AdvantagesDisadvantages Lower stock holding means a reduction in storage space which saves rent and insurance costs There is little room for mistakes as minimal stock is kept for re-working faulty product As stock is only obtained when it is needed, less working capital is tied up in stock Production is highly reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed Less likelihood of stock perishing, becoming obsolete or out of date There is no spare finished product available to meet unexpected orders, because all product is made to meet actual orders Less time spent on checking and re- working production as the emphasis is on getting the work right first time

21. Activity Read the article “Just-in-time” by Lisa Harris (Phillip Allen) answer the questions below – 1.Why is JIT a more efficient system than a)Just-in-case (JIC)? b)Material requirements planning (MRP)? 2. How does a company’s use of JIT affect its suppliers?

22. Learning Objective - Understand the aims of lean production Learning Outcomes - Describe the significance of lean production – E Explain how real businesses use lean production and why - C Evaluate the advantages and disadvantages of lean production Lean Production

23. 06 June 2016© easilyinteractive.com 200823 Japanese Production Methods Kanban  Kanban is not in the specification but may be of interest to students

24. 06 June 2016© easilyinteractive.com 200824 Kanban The ‘pull production’ system used by JIT and Lean uses a simple system of signals (called Kanban) to pull the next product through the production system *

25. Kanban system Japanese for signboards or cards Method used to control the transfer of materials between stages of production The kanban is a plastic marker or coloured ping pong ball Used to trigger the movement or production of resources

26. Types of Kanban Conveyance kanbans - Inform employees that a stock part must be sent to a specific destination Production kanbans – inform workers that they can begin production Vendor kanbans – instruct external suppliers to send parts to a specific destination

27. Kanban in a Toyota factory Because the assembly factory only orders the number of parts it is using, no space is wasted in storing parts. And because the parts factory only makes the required number of parts, no materials or energy are wasted on making too many parts

28. 06 June 2016© easilyinteractive.com 200828 Kanban kanban in practice “After days of not having windshield washer fluid, I decided to employ a trick from lean manufacturing. I made a little kanban (visual aid) pull tag with a Post-It flag and stuck it on my key fob I'll have to find a spot in the car to stash it until the next time the road salt exhausts my supply. Perhaps behind the sun visor…” * Image and text by John Hritz. Used with permission

29. 06 June 2016© easilyinteractive.com 200829 A trick for never leaving the car lights on... Clip a clothes peg onto the headlights switch. When you turn on the headlights, you clip the pin to your car keys. When you turn off the ignition, the clip on your key ring reminds you to turn off the lights. Then clip it back on to the switch. Kanban In Practice task Task What do you keep forgetting to do? Try to think up a Kanban (visual aid) system to prevent this from happening again *

30. Activity Read the case study – Toyota’s Way (Phillip Allen) answer the questions below – How do the following features of Toyota’s manufacturing processes help to increase the company’s efficiency? a)Jidoka b)JIT c)The Kanban System d)Takt Time e)Kaizen Ext – Why have many UK manufacturers not implemented all of the production techniques utilised by Toyota?

31. Time-based management A general approach that recognises the importance of time and seeks to reduce the level of wasted time in the production processes of a business

32. Benefits of effective time management Quicker response times (reduced lead times) to meet changing market and customer needs Faster new product development Reduction in waste, therefore greater efficiency

33. Requirements for time-based management Flexible production methods – Able to change products quickly – Can change production volumes / runs – Machinery must be versatile Trained employees – Multi-skilled staff – Trust between workers and managers

34. Activity Read the article “Time waits for no firm” by Nigel Watson (Phillip Allen) answer the questions below – 1.Analyse the benefits for a manufacturer in the car industry of the two objectives of time- based management described in the opening paragraph. Ext - Consider how the introduction of the three principles of time-based management will increase the profitability of a car producer.

35. Learning Objective - Understand the aims of lean production Learning Outcomes - Describe the significance of lean production – E Explain how real businesses use lean production and why - C Evaluate the advantages and disadvantages of lean production Lean Production

36. Starter activity Zara case study page 181-2 of Surridge and Gillespie and complete the questions on page 182

37. Empowerment Empowering employees to make decisions Gives workers more control over their own work conditions Lessens conflict between management and workers Workers better motivated, business gains from creativity of ideas generated Workers become more adaptable / flexible Requires trust between both parties BUT some workers may abuse this trust, some managers may resent giving up authority, some workers may not be up to making decisions http://www.toyota.co.jp/en/kids/car/assembly.html

38. Teamworking Workforce is divided into small groups focusing on a particular area of production Team members share common aims Works best where there is no hierarchical structure Requires co-operation between workers, training for staff and decision making responsibility for workers Teams may plan own work schedules, task allocation, methods of work and solve own problems Leads to quicker decision making and generation of more ideas BUT may be conflict between team members, can lead to loss of specialisation among workers

39. Cellular manufacturing / cell production Divides the workforce into cells Each cell focuses on the production of a product ‘family’ Machines are grouped within the cell The cell team sees the production of a good from start to finish

40. Task Draw a table of the advantages and disadvantages of cell production - AdvantagesDisadvantages Example – Better communicationExample – small scale production lines may not yield enough savings to warrant it.

41. Potential benefits of cell production Closeness of cell members should improve communication Workers become multi-skilled and more adaptable to the needs of the business Greater employee motivation, from variety of work, team working and responsibility Quality improvements as each cell has ‘ownership’ for quality on its area

42. Potential drawbacks of cell production Culture has to embrace trust & participation or workers can feel they are being pushed for greater output with no respite Business may have to invest in new materials handling and ordering systems suitable for cell production Cell production may not allow a firm to use its machinery as intensively as in traditional flow production Some small scale production lines may not yield enough savings to make a switch cell production worthwhile Allocation of work to cells has to be efficient so that employees have enough work, but not so much that they are unable to cope Recruitment and training of staff must support this approach to production

43. Benchmarking Best practice benchmarking (BPB) involves: Establishing what makes a difference to a customer between an ‘ordinary’ supplier and an ‘excellent’ supplier Setting standards based on best practice Identifying how the best companies meet those standards Meeting and exceeding those standards See p358

44. Six sigma Developed by Motorola From the letter sigma meaning standard deviation Statistical approached designed to eliminate defects A process must not produce more than 3.4 defects per million A Six Sigma defect is anything that fails to meet customer specifications

45. Simultaneous engineering An approach to project management that helps firms develop and launch new products more quickly. All parts of the project are planned together. Everything is considered simultaneously (together, in parallel) rather than separately (in series) An approach to project management that helps firms develop and launch new products more quickly. All parts of the project are planned together. Everything is considered simultaneously (together, in parallel) rather than separately (in series)

46. Simultaneous engineering What are the benefits of simultaneous engineering?

47. Benefits of simultaneous engineering New product is brought to the market much more quickly Business may be able to charge a premium price that will give a better profit margin and help recoup R&D costs Less likelihood of a need to modify the product later due to unforeseen problems A greater sense of involvement across business functions improves staff commitment to the project Can be a source of competitive advantage (‘first mover advantage’) for the firm if it can get a reliable new product into the market and build brand loyalty before its competitors

48. SMED (single minute exchange of dies) Reduces changeover times between manufacturing batches of different products Converts operations done whilst machinery stopped into ones which can be done when the machine is running Simplifies fittings and tightenings Work together Suppress adjustments and trials Creates a ‘pit-stop’ mentality in workers approaching changeovers

49. 5S (sort, set, shine, standardise and sustain) Sort – get rid of any clutter, only keep what’s essential Set in order – organise the work area so that it’s easy to find things Shine – keep the work area clean Standardise – make the most effective ways of doing things the standard way across the factory Sustain – ensure standards are recognised and used by everyone

50. http://reliabilityweb.com/index.php/articles/the_5s_method_of_improvement_enhancing_safety_productivity_and_culture/

51. Lean Production – Revision Quiz http://www.tutor2u.net/business/quiz/lea nproduction/quiz.html

52. Ext Activity / Homework Case study – FTL Company Ltd p360 Hall and Jones