Lean Production - Report Example

Lean Production Table of Contents Introduction 3 Definition 3 Development of Lean Product 4 Characteristics of Lean Production 5 Impact of Information Technology in Lean Production 6 Conclusion 8 References 9 Introduction Lean manufacturing procedure was formally introduced decades ago in the 1950s. The primary motive of introducing lean production was to eliminate the costs incurred from waste through manufacturing process and other organizational operations. The introduction of such a production system was also intended to meet the basic needs of the market in an efficient manner. In 1990s, the organized lean production was first implemented by Toyota to develop an effective production purpose and thus to satisfy the market needs to a large extent1. Hereby, the objective of the paper is to provide an insight to the notion of lean production, providing a clear definition of the concept. The discussion will further emphasise on describing the development and characteristics of lean production. The impact of IT will also be considered in the paper. Definition Lean production can be defined as the technique used by the manufacturers and other organizations to reduce the costs incurred in relation to wastes and thus to gain cost efficiency subsequently maximizing its profitability2. Lean production also helps organizations to manufacture products attaining the virtues of advanced waste management techniques which in turn assist the organization to reduce extra costs due to wastes in its operational processes. Lean production practices motivate employees and organizations to improve work efficiency and meet the basic needs and demands of the market3. Development of Lean Product Lean production was first established formally in Japan which has phenomenally improved the efficiency of the methods traditionally utilized in manufacturing processes in various industries. It is in this context that in early 1950s, Toyota Motor Company implemented the practicing of lean production processes in manufacturing vehicles. Lean production was later witnessed to help Toyota in resolving a crisis faced in the Japanese market related to its product qualities. The development of lean production techniques in Japan motivated the world manufacturing industries to implement the process of lean production and thus gained a competitive advantage through cost efficiency and waste management. It is in this context that practicing lean production process helped manufacturing companies to maintain the flow of finished products in the market through Just In Time (JIT) delivery and thus to meet the needs of the consumer preserving the quality standards efficiently4. In 1986, the Six Sigma method was introduced in a number of manufacturing industries in order to attain effective output through proper utilization of lean production. For instance, in the year 1987, Motorola was identified to implement Six Sigma polices to improve its production process with efficient and effectual waste management which indicated that improvement of organizations and systematic plan for strategic management depended on innovative ideas and substantial reduction in the errors occurring in the production process5. Balance Scorecard, which is often regarded as another effective lean production technique, was introduced in 1990s with the motive to clarify and update the organizational strategies with due consideration to various aspects including the performances of employees. Later, in the 21st century, the Hybrid Methodology was developed as the combination of lean production techniques and the notion of Six Sigma which came to be known as Lean Six Sigma6. Characteristics of Lean Production The characteristic of lean production simplifies the procedure of manufacturing to eliminate wastes and to maximize the profit ratio through operational efficiency. The characteristic of lean product helps to reduce the cost of production along with the selling price. Lean production also helps to produce exact quality product in the market identifying the customers demand and requirements. Lean production practice further tends to motivate employees to work in a group to minimize the work load and time; thus, rewarding flexibility, coordination and integration amid the workforce as well as within the supply chain of an organization. These benefits, accumulatively, are quite likely to further lead towards enhanced product variety and innovation efficiently preserving the quality of the rendered commodity and largely facilitating effectual demand management along with establishing stability in the production and distribution schedules7. Impact of Information Technology in Lean Production Information Technology (IT) helped organizations to practice lean production methods more sufficiently and accurately. It has often been regarded in this context that introduction of IT gave an enhanced meaning to the basic principles of lean production. It is in this context that with the inclusion of IT, the accuracy levels in the production process also maximized eliminating the chances of incurring wastes and simultaneously attaining supply chain efficiency through JIT. For instance, with due consideration towards the implementation of IT, Toyota has been observed to attain continuous changes or improvements in its production process which was later termed as “Kaizen”, a Japanese word which refers to continuous improvement8. Introduction of IT in the lean production process also led to significant changes which intends to built the customer or market relation more prominently. For instance, IT involvement in production helped Toyota kaizen to reduce the requirement of manpower and minimize extra involvement of costs in the process. This strategy of Toyota also rewarded it with the advantages of time efficiency for JIT delivery of its products, cost efficiency with reduced wastes incurred and better supply chain management which in turn enhanced the profitability of the company by a large extent. Thus, a few major advantages of technology with regards to lean production can be identified as greater innovation opportunities, time as well as cost efficiency in the production process, better demand forecast and supply chain management9. However, lean production system through the involvement of IT can also impose certain disadvantages to the organizational production process. For instance, in case the IT system involved with the lean production in a particular organization lacks in creating coordination with the organizational processes and its structure, the entire process may lead towards a substantial rise in the overall production cost. Furthermore, involvement of IT can influence the process to be a complex one with the increased requirement of employee training and continuous monitoring of their performance. Hence, it is quite likely that even if in the long term, the inclusion of IT may prove to be beneficial with regards to lean production process, the strategy may cause certain cost barriers for the organizations in its short term performances10. Conclusion With reference to the above discussion, it can be stated that lean production fundamentally concentrates on eliminating wastes with the intention to reduce costs of production and thus reward the organization with a time and cost effective manufacturing process. The major features of lean production can thereby be identified as its intense focus on waste management, supply chain efficiency and innovation through cost efficiency with the purpose to attain a maximized customer satisfaction level and higher profitability. However, with the introduction of IT, organizations are likely to attain major benefits through lean production in terms of quality and quantity focusing on JIT as well as facilitating cooperation and integration in the workforce. However, the involvement of IT can also raise noteworthy disadvantages in terms of additional costs and complexity in the production process for the short run. References AL Consulting, ‘The Strong Foundations of Lean Manufacturing - Primary features of Lean Manufacturing,’ Primary Features of Lean Manufacturing [online] (2008) accessed 10 May, 2012. EPA, ‘Lean Manufacturing and the Environment’, Solid Waste and Emergency purpose [online] (2003) , accessed 10 May, 2012. J. Holmström and J. Tetzlaff, ‘Enabling or Inhibiting? Exploring the Impact of Information Technology on Lean Manufacturing’, Journal of Information Technology Management XX/2 (2009), 22- 34. J. P. Saxena, Production & Operations Management,2E. (New Delhi: Tata McGraw-Hill Education, 2009). Lean Production, ‘Lean Production.com’, What is Lean Production? [online] (2012) accessed 10 May, 2012 N. Bhuiyan and A. Bhaghel. ‘An overview of continuous improvement: from the past to the present’, Management Decision, 43/5 (2005), page number 763 to 765. Read More