Lean Production and Resource Allocation

The main factors of production for any business are land, , enterprise and capital equipment.

Firms have to choose the optimal mix of resources as, for example, high wages increase fixed or variable making the firm less competitive

In order to be efficient a firm may employ lean production techniques. This involves any system that can reduce from the manufacturing process.

A system where work is organised into separate units with each team taking responsibility for their area

• Capital Intensive

• Just in Time

• Kaizen

• Cell production

• Time Based Management

A staff suggestion scheme programme where staff are encouraged to regularly contribute ideas to management

• Captial intensive

• Just in time operations

• Kaizen

• Cell production

• Time Based Management

Improving efficiency by cutting out wasted time in design and manufacturing

• Capital intensive

• Just in time operations

• Kaizen

• Cell production

• Time Based Management

Where inventory is only brought in when required to fulfil consumer orders such that no buffer stock is held

• Capital intensive

• Just in time operations

• Kaizen

• Cell production

• Time Based Management

A system that relies more on machinery and equipment rather than labour force

• A system that relies more on machinery and equipment rather than labour force

• Capital intensive

• Just in time operations

• Cell production

• Time Based Management

True or False

Lean production may involve a change in culture and could be heavily resisted by workers

• True

• False

True or false

Cash flow may initially deteriorate with a move to capital intensive manufacturing

• True

• False