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Lean production

Involves minimising the use of key business resources (ie materials, labour, capital, factory floor space, time), and eliminating waste without reducing customer value. If it adds to costs but not to value then logically it can and should be eliminated to reduce costs but without reducing customer value. Lean production was pioneered by the Japanese during the 1960s as a response to the domination of world car markets by American companies. They did so by examining their method of production with a view to making it leaner and fitter. This resulted in massive productivity gains that still allow them to compete with the mass markets of America, without having the obvious benefit (experienced by the Americans) of economies of scale (due to the size of the market). Lean production techniques include cell production, just in time production, the establishment of kaizen groups, and time based management techniques and tools, such as simultaneous engineering and critical path analysis. In general, lean production techniques can help to ensure costs are low and product / service quality is high as they use less time, labour, stock, factory space, and capital equipment, and result in far fewer defects, thus quality and reliability to the customer is improved. Many lean production (time based management) techniques also aim to reduce the hours required to develop and to produce a new product (with computer aided design and manufacture), providing companies with a further competitive advantage as products are available to customers more quickly.

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