3.4.3 Making operational decisions to improve performance: The Benefits and Difficulties of Lean Production.

Question 1

What time-saving and waste-saving techniques does lean production feature?

Answer 1

Just in time management.

Quality circles.

Total Quality management.

Kaizen (continuous improvement).

Cell production.

Question 2

Define lean production.

Answer 2

Production based on the range of time-saving and waste-saving measures inspired by Japanese manufacturing companies.

Question 3

Define time-based management.

Answer 3

An approach that recognises the importance of time and seeks to reduce the level of ‘unproductive’ time time within an organisation.

Question 4

What does time-based management lead to (the benefits).

Answer 4

Quicker response times - faster new product development and reductions in waste, culminating in greater efficiency.

Question 5

Define just in time.

Answer 5

Japanese philosophy - organise operations so that items of stock (inventory) arrive just at the time they are needed for production or sale.

Question 6

What is the ultimate aim for just in time?

Answer 6

To eliminate the need for stock.

Question 7

Define reduced lead times.

Answer 7

A more specific application of time-based management.

Reducing the time taken between an order being received and the final product being delivered to, or provided for, the customer.

Question 8

What can shorter product development times allow for?

Answer 8

Constant changes in customer demand and failure rate of new product - businesses which can produce new products effectively - allows them to stay competitive.

Question 9

What can flexible production methods allow for?

Answer 9

Firms to modify their products quickly in response to the market. IT helps them to modify and adapt their processes very quickly.

Question 10

What is the end result of shorter product development times and flexible production?

Answer 10

New product is brought to the market or the customers order is met more quickly - allows them to beat competitors in the race to provide the newest version of a product or the fastest delivery.

Question 11

What is the main aim of just in time?

Answer 11

Reduce waste by eliminating the need for high levels of inventory - reduce costs by cutting warehouse space and staffing costs linked to the warehouse - lower inventory levels - reduce losses to a firm cause by pilferage, damage during storage, products perishing or becoming obsolete.

Question 12

What is the customer aim for just in time?

Answer 12

To provide flexibility for customers - zero inventory means they’re more willing to respond to changes in customer tastes - won’t suffer from unsold stock if there is a sudden shift to the production of new goods.

Question 13

What is a central business aim of just in time?

Answer 13

To add value. Inventory - doesn’t add value unless it forms part of the finished product. JIT inventory is placed straight on the production line - immediately adding value.

Question 14

What are the features of Just in time production?

Answer 14

‘pull’ system - the product is ‘pulled’ through the production process by the customers desire to have a particular design on a particular date.

Links closely to people management - responsibility placed on individual workers - authority to production line workers to stop the production line if the delivery of new stock is substandard and may endanger the quality of the finished product.

Flexibility - workers must be prepared to complete a job at short notice - react quickly to sudden changes in customer requirements.

Multi skilling and job enrichment - workforce has the ability and authority to meet urgent requests from customers without consulting/involving other staff/managers. Well trained staff - anticipate changes in the market - prepare the business in a proactive manner rather than reacting after the changes.

Question 15

What are the benefits of just in time as a method of lean production?

Answer 15

Increased productivity - better methods identified by staff - prevents bottle necks and idle time on the production line.

More motivated workforce - greater skills and interesting jobs - greater chance of recognition.

Increase worker participation in decision making - better more informed ideas and methods - larger workforce contribution.

Reduced waste and inventory costs - improves firms cash flow position.

Higher quality and greater variety of goods and services that are continuously improved for the customers benefit.

Question 16

What are the difficulties of using just in time as a method of lean production?

Answer 16

Fewer opportunities for bulk buying - supplies arrive frequently but in smaller quantities - increase costs.

Halting of production - supplier fails to deliver one component - production cant go ahead - no inventory to fall back on. JIT relies on very reliable suppliers or the use of a variety of suppliers - less risk with the latter - smaller orders to a number of suppliers - bulk buying opportunities are lost.

Undetected product faults - trusting suppliers for high quality components - business is vulnerable if a component is faulty - no time for the manufacturer to test it beforehand.

Question 17

What are the requirements that must be met for a successful lean production?

Answer 17

Excellent communication, high levels of co-operation and flexibility from suppliers.

Reliable and flexible employees who are prepared to modify their workloads to cope with sudden increases in activity - agree to new contracts and working conditions - rigid job descriptions prevent the success of JIT - include more short-time/part-time workers - cope with sudden increase - may not be favourably viewed by workers.

Flexible approach to managing workers - employees see tangible benefits (financial rewards or time off) from their own greater flexibility.

Suitable equipment - machinery can be quickly adapted to changing needs.