9.3.

4 Lean production:
The overall objective of lean production is to produce quality
output with fewer resources. This means less waste, less duplication
and elimination of unnecessary non-added-value activities. Lean
means cutting out anything in the production process that adds
complexity, cost and time, and that does not add value to the
customer.
Lean production:
Prerequisites Components
• Flow production • Value adding
Economies of scale
• JIT management
• Wastage reduction
• Must not be in • Quality increase
service industry • Remove all those
process/attributes
that does not adds
value to final
product
Operational
strategy
1. kaizen: continuous improvement
The key objectives of the kaizen philosophy
include quality control, just-in-time
delivery, standardized work, the use of
efficient equipment, and the elimination
of waste. The overall goal of kaizen is to make
small changes over a period of time to create
improvements within a company.
kaizen: continuous
improvement
Conditions
necessary for Limitations:
Kaizen to operate:  Some changes cannot be
 All staff should be involved introduced gradually and may
------ bottleneck should be need a radical and expensive
avoided. solution
 Management style -----  It will only work effectively if
democratic style of there’s genuine empowerment,
which is not part of the
leadership .
existing corporate cultures
 Team working ----
mostly.
suggesting and discussing  High cost of training the staff
new ideas to improve and lost output due to
quality or productivity is meetings.
best done in groups  Updates should be adopted as
 Empowerment ---- this will soon as they are available
generate speedier ideas and otherwise later changes can be
motivated staff. less significant and only
‘diminishing returns’ can be
obtained
 Operational
2. Quality circle: strategy
Quality circles are small groups of workers of different levels in the firm
who come together to discuss and solve problems in production.
Managers, assembly line workers and engineers mix together and
everyone's opinion is valued and respected. Membership of quality
circles is voluntary.
Benefits:
• Workers have hands-on experience
of work problems and they often
suggest the best solutions. Limitations:
• The most successful ideas are • Meetings could be time-
often adopted, not just in that consuming and reduce the time
location, but across the whole available for production.
organisation. •Most of the employees are least
•Improved communication. interested.
•Improved motivation. • Empowerment is needed as it
•They fit in well with Herzberg’s has no management power to
ideas of workers accepting implement.
responsibility and being offered
challenging task.
 Operational
3. Simultaneous engineering: strategy
This is a method of developing new products which saves
time. The stages of design, market research, costing and
engineering tasks are all done at the same time as each
other (simultaneously), not one after the other
(sequentially). This process speeds up the development and
launch of new products. Allowing the business to gain
competitive advantage.
 in a restaurant, production and consumption of the
service are taking place at the same time.
Engineers, designers, and suppliers work together to
create a new car. This includes designing the body,
chassis, engine, electrical systems, and other
components. All of these elements must be integrated
into a single product that meets the customer's needs.
4. Cell production: Operational
Cell production is a form of flow production. The production line is
strategy
split into several self-contained mini-production units known as cells.
Each individual cell produces a complete unit of work e.g. a car engine.

Each cell has a team leader and below that a single level of hierarchy
made up of multi-skilled workers. The performance of each cell is
measured against pre-set targets. These targets include output levels,
quality and lead times. Cells are responsible for the quality of their
own complete units of work.
This links in with total quality management (TQM).
The cell production system has led to:
• significant improvements in worker commitment and motivation
• increased teamwork and a sense of ownership of the complete unit of work
• job rotation within the cell
• increased productivity.
The success of cell production depends on a well-trained, multi-skilled workforce
prepared and able to be flexible enough to accept a more responsible style of
working.
 Operational
strategy
5. Flexible specialism:
Changing from one product to making another
requires flexible working in three main areas:
1. Flexible employment contracts e.g. 12 hours
a day or 4 hrs from worker are given instead
of 8 when ever needed by the business.
2. flexible and adaptable machinery e.g. more
than one different products can be made
using the same machinery.
3. Flexible and multi-skilled workers.
 Operational
strategy

6. Just-in-time inventory-control
principle:
The idea of not holding any buffer stock is also
a part of lean production concept. JIT helps to
cut stockholding costs.
7. Waste management:
The entire lean production approach is about reducing the
causes of waste in business organisation.
waste of physical resources, resulting from damage in
inventory or defective products that have to be rejected,
Can be reduced by:
JIT to reduce inventory holdings and the risk of
damage before materials and components are
needed in production.
Adopting TQM and zero-defect principles. These
reduce the cost of resources which must be rejected
for failure to reach quality assurance standards.
The use of production methods that allow for the use
of recycled materials. This will also improve the
sustainability of the operations of theOperational
business.
strategy
Main advantages of lean production
1. Waste of time and resources is reduced or
eliminated
2. Efficiency is increased and average costs are
reduced
3. Work area is less crowded
4. Less risk of damage to inventories
5. Products are launched
6. Improved quality.
7. Job enrichment
8. Flexible working improves capacity
management
9. Processes with spare capacity
Conditions for successfully adapting an
existing business towards lean production:
 Small production runs
 Fast switch-over times are essential to reduce the waste and
stock
 Technology has to be employed
 Retraining of the staff
If lean production is introduced in a traditional
business, then management of change is needed due
to:
 Changes in working conditions
 Changes in levels of empowerment
 Need for much more worker involvement
 Flexible and cooperative staff required