Lean production, as the name suggests involves producing goods and services while stripping out waste. As a result there is no 'fat' involved in production. Lean production is efficient and hence likely to be profitable.
At the Jaguar car production plant in Castle Bromwich near Birmingham the production line has been designed using the principles of lean production. In the 'old days' Jaguar production took up much more factory space because a lot of stocks and supplies were kept on the factory floor. Nowadays all stocks are kept in a separate storage area where they are delivered just-in-time to feed the production process.
On the production line operative's work with the minimum required quantity of stocks. When more are needed, production line workers use a 'kanban' signalling system to inform the stores that they need more supplies.
'Kanban' is the Japanese word for card or signal. The Kanban is used in a factory to show that a customer (the next stage in a production process) requires more parts, components or materials. In its simplest form, it is a card used by the customer stage to instruct its supplier stage to send more materials. Kanbans can also take other forms. In some Japanese companies they are solid plastic markers or even coloured ping-pong balls, the different colours representing different parts.
The advantages of lean production are that:
- waste is substantially reduced or eliminated
- costs fall leading to higher profits
- the work area is cleaner, less cluttered, and easier to operate in
- there is less damage to equipment, and stocks
- there are fewer accidents at work.