Lean production  Philosophy that aims to produce more using less by eliminating waste.  Minimises key business resources: materials, manpower, capital, floor space and time. Need to know:  Lean people management  Lean approach to quality  Lean design  Lean component supply

What is Just-in-time production?  Just-in-time (JIT) system of manufacturing is the one of the best know elements of lean production.  JIT aims to minimise the costs of holding unnecessary stock of raw materials, components, work in progress and finished products.  The principle that underpins JIT productions is that production should be “pulled through” rather than “pushed through”.

Attributes of JIT  Production is for a specific customer  Production cycle starts when the customer places an order  Stocks only delivered when they are needed  No “buffer stocks” held to guard against production or delivery problems  Zero defects are essential as no stock safety net exists  No spare workers are employed  Staff are multi-skilled and are capable of filling in for absent colleagues

How is JIT achieved?  In order to achieve no “buffer stock” a close working relationship with suppliers is required.  The supplier will be required to make frequent deliveries.  A delivery that arrives too early is as much a cost as a delivery arriving too late.  JIT cannot be achieved overnight – the risk of running out of stock is too high.  Over time the delivery times need to be reduced from monthly deliveries to weekly deliveries, to daily deliveries and then to a number of times a day until there is no “buffer stock”.  At each stage the suppliers need to be monitored to make sure they can meet the demands. If they are not then another supplier may need to be found.

Advantages and Disadvantages of JIT Advantages Customer satisfaction increased as orders are completed quicker Customer satisfaction increased as orders are completed quicker Capital not held in stock Capital not held in stock Cost of storage reduced Cost of storage reduced Storage space can be converted to a more productive use Storage space can be converted to a more productive use Responses to changing demands are sped up Responses to changing demands are sped up Less waste in overproduction Less waste in overproduction Less defect waste as quality of production must be increased as there is no safety net of stock. Less defect waste as quality of production must be increased as there is no safety net of stock.Disadvantages - Any break in supply causes an immediate problem for the purchaser - The costs of processing orders may be increased - JIT can not be achieved overnight – long process of setting up - The purchasers reputation is in the hands of suppliers