1. Production Methods & Kaizen

2. Production Methods & Kaizen

3. Production Methods

4. Productivity = -------------------
Efficiency
Any production method relies on efficiency – this can be viewed in different ways:
Productivity – a measurement of output per unit of the factor used (labour, capital or land)
Total Output
Productivity =
Units of Factor
Technical Efficiency – output produced using the fewest possible inputs
Productive Efficiency – output produced at the lowest possible cost

5. Efficiency
Production decisions involve deciding methods for new production runs and analysis of existing methods.
Decisions may include:
Substitute machinery for labour?
Use of new technology?
Organisation of the production layout?
Change of production method?

6. Production Methods
Agriculture tends to be very land intensive – efficiency could be measured in terms of output per acre/hectare
Whilst all output can be classed as production, different production methods may be more appropriate for different products or services.
Title: Day Labourer Harvest Sugar Canes
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7. Production Methods
As technology and analysis of production methodology has improved, methods have changed dramatically – what used to be labour intensive production methods are now capital intensive
Title: TV Factory 1954
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Title: Electronic Factory
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8. Production Methods
The choice of production method and the factor inputs depends on such things as:
the nature of the product
factor costs
the scale of production
Title: Microsoft Line
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Title: Ducati Motorcycle Compa's Profits Surge
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Title: California Oil is Source of Wealth and Fear
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9. Production Decisions Batch? Market size and Segment One-Off Order?
Which method?
Complexity of design
Type of Product
Mass Market product?
Factor Costs –
Land, Labour and
Capital
Batch?

10. Production Methods
Job Production – One-off production - each item might have particular specifications
Flow Production – suitable for mass market products that are identical
Batch Production – each stage of the production process has an operation completed on it before moving on to the next stage – allows modifications to be made to products that otherwise are the same

11. Production Methods Which is more efficient? This? 2 3 4 5 6 7
Operation 1 2 3 4 5 6 7
Finished Product 11 10 9 8

12. Production Methods Or this? 1a 1b 1c 1d 4 2a 2b 2c 3a 3b 3c 3d
Operation 1 2a 2b 2c
Finished product 3a 3b 3c 3d

13. Production Methods Or this? Cell 1 Cell 2 Cell 3 Finished Product

14. Production Methods Answer – it could be any of them!
The design of the production space can influence:
Output levels
Factor use
Efficiency
Cost levels
Quality assurance procedures

15. Kaizen (Continuous Improvement)

16. Kaizen (Continuous Improvement)
Japanese concept – not made redundant by the decline of the Japanese economy which may be due to other institutional factors!
Focus on gradual and continuous improvement
A whole business philosophy
Importance of EVERYONE buying into the concept and the vision

17. Kaizen
Great attention paid to customer requirements and needs
Efficient stock control methods help reduce costs and improve cash-flow
Flexible working practices and empowerment – help increase efficiency, reduce costs and improve motivation
Leadership seen as vital. Ability to communicate a clear vision, take people along with the vision and to think about where the company needs to be in 5, 10, 15 and 20 years time
Fundamental principles – often characterised as ‘lean production’ – reducing waste, zero defects, high quality control measures at all stages
Punctuality in all aspects – delivery, supply, manufacture, etc.

18. Quality Assurance Six Sigma Methodology
Coined by Motorola Engineer Bill Smith
Now a major influence on production methods and quality assurance
Data and statistical driven approach to eliminate defects in production
Aims to improve processes and reduce variations in quality
Necessitates organisational change, training and planning