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Lean production of technique (Kaizen(Continuous improvement) (An approach…
Lean production of technique
Just in time production( producing in order )
A business only makes an item when there is a customer for it.
The factors cause JIT production succeed
reliable suppliers
Good quality control procedures
Access to a supply of skilled workers
Advantages
Stock exactly matches production
Improves cash flow (less tied up) which is beneficial in the competition with other businesses
Savings on purchase and storage costs
Less stock wastage, good for environment
Production delays will be prevented
Can respond to changes in demand, produce rationally
Close ties with suppliers established
Disadvantages
High dependency on suppliers to meet delivery and quality standards, the suppliers may raise the price for this reason
Suppliers must be willing to participate Increase in order processing costs, the unwillingness of suppliers will cause deficiency in production
Danger of lost sales, causing financial loss
Less time for quality control on arrival of materials, easily to make mistake which will affect the production
Increased ordering and administration costs, the profits will decrease
May lose bulk-buying discounts, the costs of raw materials will be higher than other businesses
Increase in suppliers’ transport costs, increase social costs
Increased chance of transport failures, increase social costs
Increased volume of traffic on road, increase social costs
Kaizen(Continuous improvement)
An approach to production that aims to achieve change from a series of small steps.
Advantages
Workers operate in teams cheaper than investing in new resources and motivates, which will decrease the costs and increase profits
Uses business knowledge to improve production which is a more rational way in production process.
Disadvantages
In order to run on the business, the managers may put more pressure on staff than other businesses to keep coming up with improvements, which will cause unsatisfactory of staff.
All workers are encouraged to think continually about ways to improve the product and the process of making it.
The production used to minimize wastes which are Overproduction，unnecessary transportation ，Inventory， motion，defects，over-processing waiting
What are the impacts on a business of using lean production technique
JIT
Negative
The profits will be affacted
Danger of lost sales, causing financial loss
Increased ordering and administration costs, the profits will decrease
May lose bulk-buying discounts, the costs of raw materials will be higher than other businesses
The production of a business that relies on suppliers much may be influenced if the suppliers are not reliable.
Positive
Improve in cash flow can make the business more competitive
It will cause less stock ehich will cause less overproduction waste and storage costs since the stock exactly matches production
Since the production is proceeded step by step, it will be more efficient in production, waiting and unnecessary transportation will be prevented
Kaizen
Positive
Since hiring a team of workers is cheaper than investing new resoureces and motivates, there will be more profits. And the inventory waste will be prevented
Negative
The managers maay put on more pressure on the employees and cause their unsatisfactory