Lean Production

By eliminating unnecessary steps, aligning all steps in the production process in a continuous flow, and recombining people into cross-functional teams dedicated to the supply of products, companies can develop, produce, and distribute products with the minimum assets.

(a) A standardised set of operations, carried out intermittently, as each batch moves from one operation to the next.

(b) Batches are produced forwarded direct to the customer, as in the production of sub-components for stock.

(c) General purpose machinery and plant, but grouped in batteries of the same type.

(d) Heavy shop-floor stores required.

(e) Narrow range of skills required.

(f) Emphasis on production planning and progressing.

(g) Relatively short production runs.

These characteristics lead to stock building and time-delay caused by queuing effect of individual units waiting for the batch to be completed before moving on to the next operation. These problems can be overcome by changing to cellular manufacturing or lean production, as it is commonly called.

Lean (Just In Time) production system took place originally at Toyota Motor Co., Ltd., being initiated by Mr. Taiichi Ohno in the 1950's and 1960's. With a considerable amount of trial and error over 30 years, Toyota accumulated know-how of realizing the system step by step and perfected the system in its present form by 1962. When Japan entered into the era of the stable growth with limited resources after the 1st oil crisis, many manufacturing companies suffering from low economic growth and drastic increases of various costs started to pay much attention to this new system and found the system definitely worth studying. Since then a number of Lean production systems with various names were developed. The principles of these versions are much alike, but there can be differences, depending on the company and the product, in the methods for seeking cellular manufacturing. The cellular manufacturing concept has now been widely accepted among various industries as the very concept that overcomes various manufacturing problems caused by diversified customers' needs, increasing difficulty of forecasting customers' demands and shorter product life cycles. The examples of such industries included manufacturers of machine tools, measuring equipment, audio equipment, electric communication equipment, wireless telephones, air compressors, belts, aluminium products, plastic products, rubber products, steel cabinets, pre-fabricated house, slate boards, plywood and furniture and even restaurants, clothes makers and printing companies.

During the late 1980s to early 1990s, the American Government:

1) Asked aerospace and defense companies to share in Research and Development costs of new military equipment

2) Cut back on progress payments over time

3) Reduced defence spending

4) Focus on value.

5) Asked companies to meet shorter delivery schedule with quality products.

In civil aerospace, we also see the emergence of two dominating companies, namely Airbus and Boeing. Airbus consortium members are also involved in a number of other operations, in various groupings, covering smaller commercial aircraft and defence programmes. In addition there is the predominately defence based US company Lockheed Martin.

For these reasons, aerospace and defence companies needed to look at ways to improve their business process. Lean production was the way to do that. But lean production is in one sense inflexible. Since it carries no spare inventory, it cannot respond quickly to surges in demand. Worries about this seem to have surface first in the defence industry, which needs to step up production fast in the event of conflict. Hence, the idea of Value Based Management (Agile Manufacturing)

By Paul Simon           Enterprise Change Consultant

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