1. Lean Production – cutting costs
Objectives;
To understand the principles and techniques of lean production

2. Lean Production
A question to ponder, what is the objective of MOST businesses?
How do you maximise this?
Lean Production – A technique developed in Japan, lean production aims to minimise all waste in terms of time, physical and material resources.

3. Causes of waste Sources Overproduction Defects Stocks Waiting
– supply exceeding demand
Defects
– Addressing and using resources to correct errors
Sources
Solution: Kaizen
Stocks
– opportunity cost of storing, securing and maintaining stock
Waiting
– at any stage at any time, from concept to delivery
Solution: JIT production

4. Lean Production Five techniques; Cell production Time-based management
Benchmarking
JIT (see previous notes)
Kaizen (see previous notes)

5. Flow Production Methods
Operation 1 2 3 4 5 6 7
Finished Product 11 10 9 8

6. Cell Production Methods
Finished Product
Finished Product
Finished Product

7. Cell Production
Production takes place in a series of teams, who have some responsibility for organising the flow of tasks and the production process
Features;
Team spirit (more care, job right for ‘internal customer’)
Involvement in whole process (ownership)
Motivation (through responsibility and more diverse range of tasks)
Self-checking

8. Time-based management
Which companies are going to perform better?
Speed of delivery;
The delivery company who offer 20 delivery, or the one who offer 30 minute delivery?
Speed of service;
The photo shop who can develop in one hour, or the shop that offers next day service?
Development time;
The car company who developed an alternative fuel car in two months or six months

9. Time-based management
Speed of delivery;
Implication of serious costs both financially and competitively for a company.
Speed of service;
This is increasingly important, due to the increasing time pressure consumers are under.
Development time;
Simultaneous Engineering takes place when the development of new products is undertaken by teams (incorporating all functions of the business) rather than a more traditional process which will see each functional area developing the concept in turn.
This is possible as IT now allows communication and information sharing to take place
Ultimately the quicker an organisation can react to the market the better their market position will be (links back to JIT)

10. Benchmarking
The continual process of implementing the industry best practice in production (links to Kaizen)
By comparing products with competitors a business will be able to assess;
Reliability
Delivery accuracy and lead times to customers
Production time (from order to completion)

11. Benchmarking; labour productivity
Motoring Example

12. Benchmarking Process
Plan (what to benchmark, who to benchmark against, how to collect data)
Collect data (either through visits or less specific published information)
Analyse (What do we do, what do they do – identify the areas that could be improved)
Adapt (all businesses have a unique culture and mix of resources, so some modification will be required
Implement (put into process and monitor)

13. Benchmarking Advantages;
Better market, competitor and customer knowledge and understanding
Reduced waste
Better quality
Fewer complaints and so improved competitiveness

14. Benchmarking Disadvantages;
This approach alone is ‘reactive’ rather than ‘proactive’
Competitors are unlikely to want to disclose information, making comparison hard
May necessitate comparison with businesses in other industries therefore, reducing the quality of findings
Adapting methods may not be possible, or may negate benefits

15. Summary Requires a democratic / participative leadership style
Ultimately aims to reduce costs, not increasing revenue
Can be introduced in any business
Lean production is vital to competitiveness
Is it more important with increasing focus on carbon footprints and dwindling world resources?