CIMA E1 Syllabus E1. Operations management - Lean Manufacturing - Notes 18 / 21
Lean Production
is a manufacturing methodology developed for Toyota.
Its goal is 'to get right things to the right place at the right time, the first time, while minimising waste and being open to change'
Integrating the value chain through supplier partnerships integration and relationships are key to lean production.
Lean Production or lean process improvement involves the systematic elimination of waste, such as:
Overproduction and early production
Waiting - time delays, idle time
Transportation - multiple handling, delay in materials handling
Inventory - holding or purchasing unnecessary raw materials, work in process and finished goods
Motion - actions of people or equipment that do not add value to the product
Over-processing - unnecessary steps or work elements/procedures
Defective units - production or a part that is scrapped or requires rework
Lean manufacturing has many characteristics, some of which are:
Economies of scope - making it economical to produce small batches of a variety of products with the same machines. This is in stark contrast with traditional manufacturing and its emphasis on economies of scale.
Zero inventory - just in time purchase eliminates waste.
Improved production scheduling - production is initiated by customer demand rather than the ability and capacity to produce
A multi-skilled work force - this is a part of continuous improvement
Zero waiting time - JIT production means that work done at each stage is driven by demand for materials for the next stage, this reduces lead time
Limitations of lean manufacturing:
High initial expenditure
Requires changes in organisational culture
Cost may exceed benefit