Lean

Production

This an approach to production aimed at reducing the quantity of resources used. Lean
production is a production methodology focused on eliminating waste, where waste is defined
as anything that does not add value for the customer.

Lean production:

1. Raises productivity
2. Reduces costs and cuts lead times
3. Reduces the number of defective products
4. Improves reliability and speeds up product design

Just-in-time production
Just-in-time production minimizes the time, labor, and materials in a manufacturing process.
It does so by only producing goods as they are needed. The desired outcome is a streamlined
production system that maintains a minimal amount of on-site raw materials, minimal wait
times in the production process, and small batch sizes. Several characteristics of a just-in-
time production process are:

• Daily or hourly deliveries of small quantities of parts from suppliers

• Certification of supplier quality

Some of the advantages of JIT:

1. JIT aims at keeping the stock holding to bare minimum leading to much lower inventory
cost and much lower storage and warehouse cost.
2. Minimum inventory at all stages of the supply chain means lesser expiry and lesser
wastage for the organization
3. Lower inventory means lower investment for the same level of production. This reduces
working capital investment to a greater extent. This in turn leads to better ROI and
profitability for the organization
4. JIT manufacturing aims at producing items based on demand. Hence all items produced
will be sold. So no obsolete items in the finished goods section. It helps the organization
to adapt well to any changes in product specification from the market without the fear of
having any kind of waste and obsolete stocks.
5. To achieve JIT production, there is a need for very close communication between all the
parties involved in the entire supply chain. This communication technique is often
referred as “Kanban”.
6. In JIT, immense focus is on quality of the final product and companies work to achieve
“first time right” for all goods.

Disadvantages of JIT:

1. JIT production can be very sensitive to any kind of error. Since bare minimum inventory
levels are maintained, there is no room for any kind of error.
2. JIT production will not be able to adapt well to sudden increase in volume of demand
from the market, since the inventory levels are maintained at much lower level.
3. Just-in-time manufacturing is a philosophy which is achieved only when all the parties
involved in the whole supply chain will work in great tandem and coordination. JIT may
fail sometime if any of the suppliers will fail to fulfil their obligations and respond to the
requirements in a timely manner.
 4. JIT focuses on lean inventory; hence there is not much buffer in stock levels. For any
reason, if there is any kind of failure that happens in the supply chain, that can lead to
sudden downtime in production leading to huge losses for the organization.

Kaizen
Kaizen is a strategy where employees at all levels of a company work together proactively
to achieve regular, incremental improvements to the manufacturing process. In a sense,
it combines the collective talents within a company to create a powerful engine for
improvement. Kaizen is also referred to as Continuous Improvement.

Training plays a key role in kaizen because kaizen is derived from the Japanese Philosophy.
Hence, when introducing the philosophy to organisations in the West, training needs to
be given to employees.

A clean and well-organized work environment is necessary for continuous improvement

to flourish. The Japanese use a system called the 5S system to achieve this.
Once Kaizen is adopted, it is likely to adopted by a wide range of techniques:

Standardization Standardization means carrying out every business activity

according to established formulae. A proper standard must be
established, if the standards are not maintained, the managers
must intervene.
Team working Workers must develop a “team spirit”. Which can enhance the
level of motivation and the communication between employees
Empowerment Empowering employees means to give more control and
freedom to employees when taking decisions.
Suggestion Schemes These schemes encourage workers to suggest ideas to improve
production or reduce cost.
Quality Circles These are small groups of workers in the same area of
production who meet on a regular basis to solve production
problems
Multi-skilling When workers are trained in variety of skills, it is said the
workers are multi skilled.

The importance of using resources effectively

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