2 pages/≈550 words
Business & Marketing
How Can Lot Sizes And Inventories Be Reduced In A Lean Production System (Essay Sample)
How can lot sizes and inventories be reduced in a lean production system? Discuss specific approaches.source..
Lean Production System
Lean Production System
Cutting the lot sizes and reducing inventory is a major goal of the production system. It is important to note that inventory is directly affected by lot sizes. Therefore, the maintenance of small lots plays an immense role towards enhancing quality, reducing inventory, simplifying scheduling, and promoting continuous improvement. As noted by Martin (n.d), businesses lose billions of dollars every year as a result of excess inventory. The author also notes that while the problems of excess inventory may be addressed by organizations, their root causes are not. In this regards, therefore, it is important for lean approaches to be applied in order to reduce lot sizes and inventory. According to Krar (n.d), the lean approaches can help the business meet the expectations of the customer in terms of product availability while at the same time maximizing profits.
Value is the first principle of the approach that can help a firm in reducing lot size and inventory. The specific needs of the customer in relation to the product are what define value. The business has to understand the specific expectations of the customer that will lead to value creation. Specific aspects such as manufacturing and delivery timelines have to be defined. This reduces inventory in that the business produces and delivers exactly what the customer wants. Therefore, in this approach, it is essential for the business to define the value it will get from inventory management.
The second approach relates to the value stream. In this case, all the steps that are involved in the production process are mapped. This is right from raw materials to delivery of the product to the customer. This allows the bu...
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