Lean Production System Peculiarities - Case Study Example

Operations Management OPS 6310 NAME: UNIVERSITY: ARTICLE TITLE: SUMMARY Lean production system employed by the various firm have shown dominance in the production stage of most organizations. However, the rules of competition within the sector have changed. Change has also been experienced with the changing ways of industrial production in the sector. The article to studies the part played by the lean manufacture and the importance derived within the setting of the existing economic and industrial situation in Japan. The study focuses on the pressure exerted on the Japan corporations and their reaction to the changing industrial, economic and competitive situation. It focuses on the empirical evidence from the current experiences derived from some manufacturing organizations in the country. They include; a major manufacturing plant, telecommunication Equipment Company’s electronic plant, firms producing Refrigerators and also producing air-conditioners. Era of change The key features of lean production are characterized by scarce raw material inputs requisition by the system of production. Similarly, there exist an urge for the production advanced product performance in the market. It would thereby lead to an advanced and better customer satisfaction resulting further in the provision of a chance for the lean firms to exercise supremacy in the market. In the automobile industry, Toyota has portrayed the significances of establishing a lean system of production. A lot of concern has been raised concerning the robustness of the lean production system to cope with the future market and economic conditions despite its superiority in the current market. The factors that shaped the ostensible dominance of lean manufacture include the fact that the survey a conducted in 1980s where the demand for produced products by the customers were high. Thereby, the output from Japan’s industries also remained high. Also, there exist a slow purchase of second-hand cars thereby enabling the automobile manufacturers in Japan to rely heavily on the local market[Hir]. Main objective of companies is to expand the market share, they are doing it through price competition. It has thereby reduced profits, thereby calling for increased revenue and cost reduction. Fig. Japanese manufacturing past trends[Hir] Internal and external environmental influences One of the effects experienced in the external environment in Japan is the increased road traffic resulting due to the pressure for smaller, recurrent supplies of raw materials to manufacturers in the country. It has led to both long queues of input delivery vehicles in major highways and urban congestions including, Osaka, Tokyo and Hiroshima. Other external effect has been persons’ reaction to the excess new variants and products appearing in an ever-rising rate. Once, it attracted the customers but lately, it has created confusion since new products become outdated the sooner they are out of the warehouse. Furthermore, other external factors include, high value of yen globally, and establishment of Japan-based manufacturing companies abroad. The major internal environmental factor relates to the workforce. The aging population means reduced labor force to work in the companies due to fewer younger workers employed. Furthermore, the staffs from Japan are further estimated to reduce in the coming years. Older workers are versatile, less productive and increases wage costs. Case studies Auto plant A It comprises the concluding assemblage plant of a chief automotive manufacturer in Japan. Its domestic production has decreased by 6% owing to recession supply of its foreign market by oversea plants. The plant produced medium-sized saloon cars with 50% being exported. It has 5000 employees each assembling an average 100 to 120 cars pearly. Operates under two shifts which changes weekly. Has no current temporary workers [Hir]. Auto plant A therefore is a perfect sample of the lean manufacture system. It does not have a warehouse for its good. Machines are delivered in a section about 15minutes from the assembling point and transported in minor lots by small trucks. Also, bodies are manufactured in the plant. PCP plant B The company manufactures Printed Circuit Boards for automated telecommunication usage. Two floors are occupied by the main production. It employees 2,200 workers. About 50,000 boards are made monthly. 60% of the manufactured products are sold to Nippon Telegraph and Telephone in less than 100 varieties. The other 40% of the products are sold to other customers in about 2,000 to 3,000 varieties[Hir]. The boards are assembled in two lines; a flexible assembly system (FAS) and a mass production line. FAS employs Automated Guided Vehicles in the transportation of the panels amid all phases of production. A satellite ID systems identifies the boxes and determines the routing of the AGVs. The features of PCB plant operations include: The necessity for high-tech resolution to the process of manually manufacturing the minor panels. Flexibility of FAS Batching of similar boards together. Refrigerator plant C It is a division in the chief industrial company dealing in electrical appliances formed in 1954. It has 2,000 employees and it manufactures domestic appliances. Its annual production is 600,000 refrigerators and only exports 10%. Japanese market has eight refrigerator manufacturers; therefore, the market is extremely competitive. The models of refrigerators made are seven, with a total production of about 2,400 daily. Two lines are involved in the making of the insulation and the shell which thereafter feeds two assemblage ranks. One of the rank manufactures four small replicas while the other rank manufactures three large replicas[Hir]. The particular features includes: Balancing assembly lines Reducing set-up time Air-conditioner plant D It manufactures domestic air conditioners. It belongs to a major Japanese corporation, home electrical division. Most of its outputs is for domestic usage and it produces about 40 copies of the air conditioners with the model being split-type. Has other plants in Malaysia, Taiwan and China. 50% of its parts are manufactured by the firm but the remaining parts are provided by foreign contractors. Produces an average of 60,000 air conditioners monthly. It employs mass production. Heat exchangers production is automated. Continuously moving conveyors allows for assembling of the parts[Hir]. Need for new approach Each firm has established an exclusive tactic to the use of technologies and manufacture designs. A common problem established from the case studies is the need to adapt a more flexible production system that meets the uncertainty and the changing demand. In the case of PCP plant B, it is caused majorly by the production of specific produces in small numbers. For auto plant A, it caused by falling demand in domestic market while the seasonality of sales affect air-conditioner plant D. therefore, there is a need for a more versatile production system design which would allow for adaptable production. Fig: It displays the comparative expenses of both adaptable and lean manufacture techniques [Hir]. Fig: Effects of non-linear costs[Hir] LEARNING POINTS The adaptable manufacture and production technique provides a provision for corporations to counter the emerging and dynamic situations. The situations are changing due to the increased competition on the market and the need to satisfy the customers appropriately. The characteristics of the adaptable production technique which ought to be known during its application includes: More sensitive production costs Adjustable systems to accommodate demand changes System software supporting changes in product mix and production rate Use of workers as flexible resource Prevalence of mechanisms supporting manual work Lower fixed costs entailing acquisition of new equipment and development activities Production systems supporting job rotation and enlargement Grouping products and parts thereby shortening set-up times CRITICAL ANALYSIS There is a need for firms and companies to adapt a new technique in the production sector. The techniques ought to make provisions for the many changes experienced both in the market of the produces and the technological innovations. The changes should not affect the effective running of the organization whatsoever thereby enabling the company to continue enjoying its market share as it strive to improve to a larger share in the market. That provisions is established with the application of the adaptable mode of production. The chosen production technique ought to be versatile and in line with the production regulations and culture of the company in reference. The adaption of the system maximizes the profit accrued by the company and reduces the costs incurred in the production and generation of the profits realized. But at the case of dominance, ineffective competing firms, and unchanging market situations, the company could prefer the use lean production technique. The technique offers dominance in both the production technique and commands a larger market share. Furthermore, its product should adequately satisfy the customers’ needs. Practical Implications The implication of the report is the adoption of the of the Adaptive production design by the companies. Companies like Toyota could adopt in order to reduce their costs and maximize their produce. Toyota company produces many varieties of cars thereby a new model gets obsolete the moment it leaves the store. It thereby influences the customers’ establishment negatively. OTHER COMMENTS The lean production system has proven to dominate the Japanese economy. However, with recessions, changing demands and uncertain market conditions the production system is undermined. It has raised doubt on its viability in the current market. A standout flaw of the fabrication system its incapability to effectively house the reductions and disparities in the demand for outputs in the market. A few small changes cause adverse effects on the market. Therefore, the new competitive and economic situations calls for a change in the system of production design which can produce outputs profitably across all demand phases. The adaptable production proposals an alternate design mode. It suggests the accommodation of characteristics that empowers the company function through a lesser static cost thus benefiting from sophisticated and costly components. It improves the production of a number of varieties and a mix of products. References Hir: , (Katayama & Bennett, Nov 2005), Read More