Business

Study Notes

Lean Production (Introduction)

Level:
AS, A Level
Board:
AQA, Edexcel, OCR, IB

Lean production is 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.

Lean production aims to cut costs by making the business more efficient and responsive to market needs.

This approach sets out to cut out or minimise activities that do not add value to the production process, such as holding of stock, repairing faulty product and unnecessary movement of people and product around the business.

Lean production originated in the manufacturing plants of Japan, but has now been adopted well beyond large and sophisticated manufacturing activities.

The lean approach to managing operations is really about:

  • Doing the simple things well
  • Doing things better
  • Involving employees in the continuous process of improvement
  • …and as a result, avoiding waste

The concept of lean production is an incredibly powerful one for any business that wants to become and/or remain competitive.

Why? Because waste = cost

Less waste therefore means lower costs, which is an essential part of any business being competitive.

Over-production: making more than is needed – leads to excess stocks

Waiting time: equipment and people standing idle waiting for a production process to be completed or resources to arrive

Transport: moving resources (people, materials) around unnecessarily

Stocks: often held as an acceptable buffer, but should not be excessive

Motion: a worker who appears busy but is not actually adding any value

Defects: output that does not reach the required quality standard – often a significant cost to an uncompetitive business

The pioneering work of Toyota (a leader in lean production) identified different kinds of waste which can be applied to any business operation. These are:The key aspects of lean production that you should be aware of are:

  • Time based management
  • Simultaneous engineering
  • Just in time production (JIT)
  • Cell production
  • Kaizen (Continuous improvement)
  • Quality improvement and management
Lean Production Explained

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