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Lean Production Techniques (Just In Time Production(JIT) ((Disadvantages…
Lean Production Techniques
Just In Time Production(JIT)
Advantages
Improves cash flow (less tied up)
Savings on purchase and storage costs
Stock exactly matches production
Production delays prevented
Can respond to changes in demand
Less stock wastage
Close ties with suppliers established
Disadvantages
High dependency on suppliers to meet delivery and quality standards
Less time for quality control on arrival of materials
Danger of lost sales
Suppliers must be willing to participate Increase in order processing costs
Increased ordering and administration costs
May lose bulk-buying discounts
Increased chance of transport failures
Increase in suppliers’ transport costs
Increased volume of traffic on road
Factors of JIT success
Good quality control procedures
Access to a supply of skilled workers
reliable suppliers
JIT means producing to order - a business only makes an item when there is a customer for it.
Characters
Stocks arrive just in time to be used in production.
Goods are not produced unless the firm has an order from a customer.
Kaizen
This means CONTINUOUS IMPROVEMENT.
Advantages
Workers operate in teams cheaper than investing in new resources and motivates
Uses business knowledge to improve production.
Disadvantages
Unwelcome pressure on staff to keep coming up with improvements
It is an approach to production that aims to achieve change from a series of small steps.
All workers are encouraged to think continually about ways to improve the product and the process of making it.
The impacts on a business of using lean
production techniques.
negative
The managers maay put on more pressure on the employees
and cause their unsatisfactory.
The production will be affected.
The business has less time for quality control on arrival of materials
The production of a business that relies on suppliers too much and it will be influenced if the suppliers are not reliable.
The profits will be affects
Danger of lost sales, resulting in an economic loss
Increased ordering and administration costs
May lose bulk-buying discount, the cost of raw material will be higher
Positive
Make a business more efficient and has higher productivity
Eliminating wastes which are overproduction, waiting, transporting, unnecessary inventory, motion, over-processing, defects.
Reduce labor costs and make more profits
Improve the business and make it more competitive