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CHAP 30: LEAN PRODUCTION & QUALITY MANAGEMENT - Coggle Diagram
CHAP 30: LEAN PRODUCTION & QUALITY MANAGEMENT
30.1 Features of Lean Prod
Definition:
A
SYSTEMATIC
APPROACH
TO
IDENTIFY
AND ELIMINATE WASTE
AND
INEFFICIENCY
IN PRODUCTION PROCESS**
Goal:
Cutting out anything in the prod process that adds complexity, cost & time, and doesnt add value to the customer
Less waste:
Excessive transport of components/products
Excessive inventory
Wasting time-delays in prod process
Overproduction
Overprocessing
Principles for lean-production
Value
: What customers willing to pay for
Continuous flow
: Flow of production w/ minimal interruptions => efficiency
Value stream mappin
g: analyze
entire
process to identify areas of waste + inefficiencies to improve
Respect
for people: engaging & empowering employee => motivated & productive workforce
Greater efficiency
Measured by
productivity:
outputs/inputs
Can be inc by
Inc
skill levels
Inc
motivation
purchasing
more tech-advanced equipments
more
effective management of labor & other resources
30.2: Methods of lean production
Continuous improvement - KAIZEN
IDEAS:
All workers have something to contribute to improve operations of the biz & production of products
Fostering a culture of ongoing improvement
PEE: Promote, Emphasize, Encourage
Promote:
identification of waste & inefficiencies
Emphasize:
small, incremental improvements
that are easily implemented & Sustained
ENcourage:
participation of all level
in the org,
address root causes rather than symptoms
of problems
Cons:
Some changes cant be introduced gradually & may need a radical & $$$ solution
Resistance from senior managers due to existing culture
Short-term: costs due to retraining schemes -> loss of output as a result of meeting time
Conditions necessary for implementation of Kaizen
Management culture directed towards staff involvement & giving their ideas importance
Teamwork
discussion of new ideas done in groups
meet regularly to identify problems
Empowerment: giving each group power to take decisions regarding workplace improvements => speedier introduction of new ideas & motivates employee
JIT
Definition:
Stock control method
which aims to
avoid holding stocks
by requiring
supplies to arrive just as theyre needed in production
, & finished goods are delivered to customers as soon as theyre completed
*Buffer stocks
:
surplus of inventory stored in a warehouse in case of an emergency, supply chain failure, delays, or unexpected surges in demand
Key aspects of JIT
:
Encourage smaller batch sizes, more frequent deliveries
to reduce inventory levels
=> reduce storage cost, improve cash flows, respond quick to changes in demand
Based on demand rather than forecast
=> minimize overproduction, reduce excessive inventory, avoid unnecessary stock
Minimize lead time
from procurements of raw materials to delivery of finished goods by streamlining process
*lead time:
t
he time between processing of an order until the delivery of the finished product to the consumer
Conditions must be met for JIT
Relationships w suppliers have to be excellent
Supps must b prepared & able to supply at very short notice
Supps aware that being reliable & consistent benefit both parties
Production staff must be multi-skilled & prepared to change jobs at short notice
so no excess supplies are made
Equipment and machinery must be flexible
Accurate demand forecasts
-> JIT a more successful policy
Excellent
employer-employee relationships
Quality
must be everyone's priority
PROS OF JIT
Capital invested in stocks is reduced & opportunity costs of stockholding reduced
Costs of stockhodling reduced => space released for more productive purposes
Greater flexiblity => quicker response times to changes in demand
Less chance of stock being
outdated
Multi-skilled & adaptable staff may gain from improved motivation
CONS
Any
failures to receive supplies
of materials/components in time caused by any problems or delays will lead to
$$$ production delays
Delivery costs rise as
frequent small deliveries
are important in JIT
O
rder-admin costs rise
bc many
small orders need to be processed
Reductions in
bulk discounts offered by supps
bc each order likely very smol
Reputation depends significantly on outside factors
(reliability of supps)
MAY NOT BE SUITABLE FOR ALL FIRMS
Costs of holding buffer stocks of key components => limitation
Small biz:
$$$ IT systems cannot justify potential cost savings
Global inflation:
better to buy large amounts of materials now than small quantities in the future bc costs may rise then
CRADLE-TO-CRADLE (C2C) DESIGN
Definition:
Design & manufacturing model where products are safe, enriching to the environment or user, and leave no waste for future generations
QUALITY
Quality control:
inspection
of the product or samples
Quality assurance: setting
agreed quality standards at each stage of production
to ensure customer satisfaction