Japanese Production Methods ‘Traditional’ manufacturing was based on ‘pushing’ production through the production process to meet sales targets and forecasts This can result in large stocks of work in progress and finished goods if demand is lower than forecast Japanese techniques use the concept of ‘pull production’ – a production process is only performed when it is demanded by the next stage in the line * 29 November 2018 © easilyinteractive.com 2008

What is lean production? An approach to management that focuses on cutting out waste, whilst ensuring quality. This approach can be applied to all aspects of a business – from design, through production to distribution. 2

Lean production in a nutshell Doing the simple things well Doing things better Involving employees in the continuous process of improvement (Kaizen) …and as a result, eliminating waste (muda in Japanese) 3

© easilyinteractive.com 2008 Lean production Lean production: Involves raising productivity by using less of everything – less raw materials, labour, energy, floor-space, time etc. JIT is a key component of lean production * 29 November 2018 © easilyinteractive.com 2008

Examples of waste in business Type of waste Description Over- production Making more than is needed – leads to excess stocks Waiting time Equipment and people standing idle waiting for a production process to be completed or resources to arrive Transport Moving resources (people, materials) around unnecessarily Stocks Often held as an acceptable buffer, but should not be excessive Motion A worker who appears busy but is not actually adding any value Defects Output that does not reach the required quality standard – often a significant cost to an uncompetitive business 5

Kaizen Kaizen (or ‘continuous improvement’) is an approach of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency 6

How Kaizen works Leaner production is based on making many small changes As the ideas come from employees, they are less likely to be radically different, and therefore easier to implement Small improvements are less likely to require major capital investment than major process changes Ideas come from the talents of the existing workforce, as opposed to using R&D, consultants or equipment – any of which could be very expensive The culture - all employees should continually look for ways to improve their own performance Kaizen encourages employees to take ownership for their work, can help reinforce team working and improve motivation 7

The kaizen umbrella Just in time production (JIT) Zero defects Co-operative staff-management relations Kanban Quality improvement and management (covered in BUSS2) Productivity improvement Small group activities New product development Six sigma SMED 5S Customer orientation TQM Quality control circles Suggestion system Robotics automation Discipline in the workplace TPM (Total Productive Maintenance) 8

Implementing continuous improvement Workers are encouraged to: Plan – identify where improvement is needed and develop a plan which will result in improvement Do – implement the plan Check – check whether or not the expected improvement has materialised Action – if the plan has succeeded, introduce it throughout the business

Just-in-time Just-in-time (“JIT”) aims to ensure that inputs into the production process only arrive when they are needed 10

© easilyinteractive.com 2008 Just in Time JIT: A strategy involving coordinating the delivery of raw materials and components to arrive at the factory just in time for production e.g. At Skoda in the Czech Republic, Skoda notify the car seat suppliers of the production schedule via integrated computer systems and the companies work together Seats are delivered to Skoda on the production line exactly when they are required Skoda only take ownership of the seats when they arrive on the production line – minimising stocks of work in progress * 29 November 2018 © easilyinteractive.com 2008

How does JIT work? Based on a "pull" system of production - customer orders determine what is produced Requires complex production scheduling - achieved using specialist software to connect production dept with suppliers Supplies delivered to production line only when needed Requires close cooperation with high-quality suppliers 12