Operations strategy and lean production
Lean production
- Lean production makes products with the least waste — of time, materials, space and effort.
- Methods like just-in-time and continuous improvement cut waste, lower cost, raise quality, and tie up less cash in stock.
Practice
Lean production aims to:
Lean production minimises waste of time, materials, space and effort.
Practice
Just-in-time is one method used in lean production.
JIT and continuous improvement are key lean-production methods that cut waste.
Capacity & technology
- Capacity management matches what the firm can produce to demand:
- demand > capacity → add shifts, hire, or outsource,
- demand < capacity → cut output or find new orders.
- New technology (automation, data systems) produces more, to a higher standard, at lower cost.
Practice
If demand is higher than capacity, a firm might:
When demand exceeds capacity, the firm increases output (shifts, hiring, outsourcing).
You've got it
Key idea
- lean production = least waste (JIT, continuous improvement) → lower cost, higher quality
- capacity management matches output to demand (add/cut shifts, outsource)
- technology raises output and quality and lowers cost