2.4

• Just-in-time production:

  This involves minimising or eliminating the amount of stock held by a business
• Just-in-time management of stock:

  JIT manufacturing is an important part of lean production and the kaizen approach.

  it reduces the need for high levels of working capital and improved the financial performance of the business. JIT was extended to every stage of production.
• Advantages of JIT:

  1. it improves cash flow since money is not tied up in stocks
  2. the system reduces waste, obsolete and damaged stock
  3. more factory space is made available for productive use
  4. the costs of stockholding are reduced significantly
  5. links with and the control of suppliers are improved
  6. the supplier base is reduced significantly
  7. more scope for integration within the factories computer system
  8. the motivation of workers is improved
• Disadvantages of JIT:

  1. a lot of faith is placed in the reliability and flexibility of suppliers
  2. increased ordering and administration costs
  3. advantages of bulk buying may be lost
  4. vulnerable to a break in supply and machinery breakdowns
  5. difficult to cope with sharp increases in demand
  6. possible loss of reputation if customers are let down by late deliveries
• Lean production is an approach developed to aim to use fewer resources in production. Lean producers use less of everything including factory space, materials, stocks, suppliers, labour, capital and time.
• Kaizen is the word that means continuous improvement. This means that workers are always coming up with ideas to improve quality, reduce waste, or increase efficiency.
• Job production:

  a method of production that involves employing all factors to complete one unit of output at a time.
• Lean production:

  an approach to operations that focuses on the reduction of resource use
• Cell production:

  involves producing a family of products in a small self-contained unit within a factory.
• Batch production:

  a method that involves completing one operation at a time on all units before performing the next.
• Flow production:

  large-scale production of a standard product, where each operation on a unit is performed continuously one after the other, usually on a production line.
• Outsourcing - giving work to sub-contractors to reduce costs