production methods& kaizen
TRANSCRIPT
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
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?
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
Copyright: iStock.com
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
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
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
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
Which is more efficient?
Operation 1 2 3 4 5
6
7
891011Finished Product
This?
Operation 1
1a 1b 1c 1d
2a 2b 2c
3a 3b 3c 3d
4 Finished product
Or this?
Or this?
Cell 1 Cell 2 Cell 3
Finished Product
Finished ProductFinished Product
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
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
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.
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