Lean Production

2877 Words12 Pages
Lean production is widely understood to be production based upon a range of waste saving measures inspired by Japanese manufacturing companies, particularly the Kaizen and Just in time techniques. Metov’s plastics have taken the decision upon themselves to incorporate some of the characteristics of lean production namely time management and critical path analysis into their manufacturing process and I will examine these. One method used by Metov’s is critical path analysis (CPA). CPA is the process of planning the sequence of activities in a project in order to discover the most efficient and quickest way of completing it. Metov’s have recently been able to incorporate this technique due to recent advancement in the companies ICT system…show more content…
The marketing budget was expanded by Pavlo so more research could be undertaken compared to smaller companies. This led to a series of highly successful advertising campaigns which produced major increases in sales revenue, and as the business expanded Metov’s was able to afford to use a wider range of media that enabled more customers to be reached in a more persuasive way. This led to an increase in the effectiveness of advertising and reduced its effect upon unit cost. As research and development spending was increased Metov’s were also able to benefit from research and development economies of scale. By increasing spending in this area a number of new products were patented by Metov’s, in addition to increasing sales volume, having patents upon its products gave them a USP and competitive advantage so a higher profit margin was able to be obtained, whilst also leading to increased sales. Similarly Metov’s also upgraded their ICT system so more advanced software could be utilised. This enabled the company to plan projects more affectively using network analysis and also went some way to improving communication in the business. In conclusion I believe that the only true measure of whether or not the economies of scale outweighed the diseconomies of scale would be profit, and as that figure is not given I am not able to reach a judgement. If Metov’s were more profitable because the increased their levels of production
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