production methods& kaizen
TRANSCRIPT
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Any production method relies on efficiency – this can be viewed in different ways:
Productivity – a measurement of output per unit of the factor used (labour, capital or land)
Total Output
Productivity = ------------------- Units of Factor
Technical Eff iciency – output produced using the fewest possible inputs
Productive Efficiency – output produced at the lowest possible cost
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Production decisions involve deciding methods for new production runs and analysis of existing methods.
Decisions may include:◦ Substitute machinery for labour? ◦ Use of new technology? ◦ Organisation of the production layout? ◦ Change of production method?
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Copyright: Photolibrary Group
Whilst all output can be classed as production, different production methods may be more appropriate for different products or services.
Agriculture tends to be very land intensive – efficiency could be measured in terms of output per acre/hectare
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As technology and analysis of production methodology has improved, methods have changed dramatically – what used to be labour intensive production methods are now capital intensive
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California Oil is Source of Wealth and FearCopyright: iStock.com
Textile factoryCopyright: Stock.XchngBottle production lineCopyright: Photolibrary Group
The choice of production method and the factor inputs depends on such things as:
• the nature of the product
• factor costs
• the scale of production
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Which method? Type of Product
One-Off Order?
Mass Market product?
Batch?
Market size and Segment
Factor Costs – Land, Labour and
Capital
Complexity of design
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Job Production – One-off production - each item might have particular specifications
Flow Production – suitable for mass market products that are identical
Batch Production – each stage of the production process has an operation completed on it before moving on to the next stage – allows modifications to be made to products that otherwise are the same
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Which is more efficient?
Operation 1 2 3 4 5
6
7
891011Finished Product
This?
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Operation 1
1a 1b 1c 1d
2a 2b 2c
3a 3b 3c 3d
4 Finished product
Or this?
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Or this?
Cell 1 Cell 2 Cell 3
Finished Product
Finished ProductFinished Product
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Answer – it could be any of them! The design of the production space can influence:
◦ Output levels◦ Factor use◦ Efficiency◦ Cost levels◦ Quality assurance procedures
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Japanese concept – not made redundant by the decline of the Japanese economy which may be due to other institutional factors!
Focus on gradual and continuous improvement A whole business philosophy Importance of EVERYONE buying into the
concept and the vision
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Great attention paid to customer requirements and needs
•Efficient stock control methods help reduce costs and improve cash-flow
•Flexible working practices and empowerment – help increase efficiency, reduce costs and improve motivation
•Leadership seen as vital. Ability to communicate a clear vision, take people along with the vision and to think about where the company needs to be in 5, 10, 15 and 20 years time
•Fundamental principles – often characterised as ‘lean production’ – reducing waste, zero defects, high quality control measures at all stages•Punctuality in all aspects – delivery, supply, manufacture, etc.
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Six Sigma Methodology◦ Coined by Motorola Engineer Bill Smith◦ Now a major influence on production methods and
quality assurance ◦ Data and statistical driven approach to eliminate
defects in production◦ Aims to improve processes and reduce variations
in quality◦ Necessitates organisational change, training and
planning