A short synopsis on Lean Production along with the LP nutshell.

1. Lean Production

2. What is Lean Production ?
An approach to management that focus on cutting out
waste, whilst ensuring quality.
This approach can be applied to all aspects of a business – form
design, through production to distribution

3. Lean production in a nutshell
• Doing the simple things well
• Doing things better
• Involving employees in the continuous process of improvement
• Avoiding waste

4. Why cut out waste ?
Waste
=
Cost

5. The waste Hierarchy
Avoidance and Minimization
Reuse
Recycling
Recovery
Disposal
Maximum
Conservation of
Resources

6. Example of Waste in Business
Type of Waste Description
Over – Production Making more than is needed - (Lead to excess stock)
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 not actually adding
any value
Defects
Output that does not reach the required quality
standard – often a significant cost to an
uncompetitive business

7. Key Topics in Lean Production
• Time based management
• Simultaneous engineering
• Cell Production
• Just in time production (JIT)
• Kaizen (Continuous Improvement)

8. Time-based management
An general approach that recognizes the
importance of time and seek to reduce the
level of wasted time in the production
processes of a business

9. Benefits of effective time management
• Quicker response time (reduce lead times)
to meet changing market and customers
need
• Faster new product development
• Reduction of waste, therefore greater
efficiency

10. Requirements for times-based management
• Flexible production method
 Able to change products quickly
 Can change production
volume/runs
• Trained employees
 Multi-skilled staff
 Trust between workers &
manager

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

12. Benefits of simultaneous engineering
• New product is brought to 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 cost.
• 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.

13. Cell Production
A form of team working where
production processes are split into cells.
Each cell is responsible for a complete
unit of work

14. 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.

15. 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
 Recruitment and training of staff must support this
approach to production

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

17. 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

18. Merit and demerits of JIT
Merit Demerit
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 entire
production schedule can be delayed.
Less likelihood of stock perishing, become
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.
A need for complex, specialist stock systems.

19. Kaizen (改善)
Kaizen (“Continuous Improvement”) is an approach of constantly
introducing small incremental changes in a business in order to improve
quality and efficiency.

20. How Kaizen works ?
• As the ideas comes from the employees, they are less likely to be
radically different and probably easier to implement.
• Small improvements are less likely to require major capital
investment than major process changes.
• The culture – all employees to take ownership for their work, that
helps reinforce team building and improve motivation.

21. Effective lean Production requires….
• Good relations with suppliers
• Committed, skilled and motivated
employees
• A culture of quality assurance;
continuous improvement &
willingness to embrace change
• Trust between management and
employees