Lean manufacturing

1. 1. Lean manufacturing
2. Business environment of
production sector enterprises

2. • The main component of lean methodology is the concept of the
process of creating value for consumers. Value comes from activities
that are important to the customer, such as the actual production,
processing, and improvement of the product.
• All actions that are not directly related to the production process and
are important only for the manufacturer (elimination of defects,
storage and transportation of products, etc.) are classified as losses.

3. • The main goal of lean production is to minimize time, labour
and material losses at all stages of creating value for
consumers.

4. According to the lean concept, there are 8 types of
losses:
• Overproduction. It is considered the most serious cause of wastage of resources,
as it requires costs for production, transportation and storage of unsold products.
At the same time, it does not guarantee profit in the future, since the product
may not be in demand.
• Excess inventory. Materials for production, purchased or manufactured for future
use, are the frozen finances of the enterprise. Unlike real money, inventories
must be properly stored and accounted for, which incurs additional costs.
• Work in progress and waiting. Products and parts awaiting processing incur
additional costs, as does excess inventory.
• Wrong logistics. Transportation costs consume company resources and are
included in the cost of finished products, but do not provide any value to
consumers. In addition, moving goods involves the risk of damage, possible
accidents and increased overhead costs.

5. • Defective products. Costs of re-production and disposal of defective
products.
• Extra stages of production processes. This group includes personnel
actions, the implementation of which can be reduced in time or completely
excluded from the technological chain without harming production.
• Imperfect technology. Lack of production capacity and technological
capabilities to satisfy all consumer requests for the product.
• Poor personnel management. Resource losses associated with staff
overload or incorrect distribution of functions between employees. This
also includes the unrealized creative potential of employees.

6. The basis of the lean manufacturing concept:
• Produce exactly as much product as consumers need.
• Achieve the highest quality of products/services with zero percentage
of manufacturing defects.
• Guarantee the customer fast and safe delivery of products.
• Reduce storage space to the required minimum.
• Use material, time and labour resources as efficiently as possible
using modern technologies.
• To involve every employee of the enterprise in the process of creating
a valuable product, to unleash the creative potential of employees.

7. Principles of Lean production
• Determining the value of a product/service from the consumer's
point of view
• Determining the optimal course of action to create a valuable
product.
• Formation of a continuous flow of actions to create a valuable
product.
• “Pulling” of the product by consumers
• Continuous improvement of the production process

8. Lean Manufacturing Tools
• Kaizen system
• Kanban method (ways for not to store excess stocks)
• Just in Time system (or “Pulling” production)
• 5S method (from Japanese – improvement, cleanliness, sorting,
standardization, convenient arrangement of tools.)
• A system of total equipment maintenance (TEM)helps reduce
material and time losses.
• poka yoke, a system of measures aimed at modelling possible errors
in production associated with the human factor

9. To watch and make notes
• https://youtu.be/gixa9MHNPaM

10. Business environment of production
sector enterprises

11. Business environment of manufacturing enterprises includes:
• Resource dependence of the enterprise.
• Consumers of products and services.
• Infrastructure - banks, stock exchanges, recruitment agencies,
insurance companies, auditing and consulting firms, various transport
organizations, etc.
• State and municipal organizations, as well as authorities.
• International sector of the business environment.

12. • any enterprise with a high share depends on suppliers of material,
energy and other resources. Late delivery, supply of low-quality
resources, replacement of some types of resources with others,
inflated prices for resources, etc. - all this makes the enterprise
completely dependent on suppliers.

13. • Consumers of products and services occupy a special place in the business
environment of an enterprise.
• It is worth noting that these are not only individual buyers and clients, but
also wholesale and retail stores, sales agents, and official distributors.
• The composition of consumers of products and services largely depends on
several factors: the specifications of the enterprise’s products and services,
the scale of production and provision of services, sales markets, etc.
• Among consumers of products and services, an increasing role is being
given to various consumer protection societies, regulatory organizations,
environmental societies protection, etc. They are in direct contact with
product manufacturers and organizations that provide services regarding
the quality of products produced and services provided, compliance with
environmental requirements, integrity of advertising, etc.

14. • Another layer of the business environment of an enterprise is
occupied by infrastructure, which is represented by banks, stock
exchanges, recruitment agencies, insurance companies, auditing and
consulting companies, various transport organizations, etc., which
provide the enterprise with a wide range of services.
• It is worth noting here that financial organizations provide the
enterprise with the financial resources necessary for its activities,
recruitment agencies and employment services, as well as
educational institutions - labour resources for which the enterprise is
in need.

15. • The influence of government authorities, regional and local
administrations, and the tax inspectorate on enterprises is quite large
and has a varied impact, which is manifested in the adoption of laws
and other regulations, which, in turn, determine the legal framework
of entrepreneurship; licensing of enterprise activities; collection of
taxes and control over their payment, etc.

16. • The international sector of the business environment occurs when
creating joint ventures, implementing joint projects, as well as when
making deliveries from abroad and enterprises entering foreign
markets, etc.

17. Qs
• What is lean manufacturing?
• Goals and principles of lean manufacturing
• What understood as the losses by lean manufacturing and what are
the ways to avoid them?
• Lean production tools: Kaizen, Kanban, JIT, 5S, TEM, poke yoke.
• What are the advantages and disadvantages of lean production
• What includes external (business) environment of manufacturing
companies