Operational Strategies: Lean Production

Question 1

Benefits of critical path analysis

Answer 1

1. Must consider what activities are involved in a project
2. Work out a release date for customers
3. Identify the critical activities which cannot be delayed
4. Review progress you need to do this by..
5. Implement just in time ordering
6. Identify a competitive advantage

Question 2

Problems with critical path analysis

Answer 2

1. Relies in estimates - should use P.E.R.T *
2. J.I.T depends on reliability of suppliers
3. Shows the quickest way, not necessary the cheapest or best way
4. Must be managed properly

• program evaluation review technique

Question 3

Advantages of JIT

Answer 3

1. It improves cash flow, we only purchase what we need
2. Reduces obsolete (out of date) stock, since we only order what we need
3. Cost of stock holding reduced, no need for a warehouse
4. Links with and control of suppliers improved - we have to develop a closer relationship with suppliers
5. Motivation improved, because there is a greater degree of accountability
6. More scope for computer integration within the firm- automatic reordering is essential

Question 4

Disadvantages of JIT

Answer 4

1. Relies on perfection, what happens if we have stock which is faulty? Production ceases until we receive another order.
2. Supplier - manufacturer - customer all dependant on it working
3. What about disasters - Kobe earthquake, so we should have some surplus stock to cope with disasters
4. Can’t cope with unexpected orders, take time to get a new order in, we might lose business