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Uniform Production Levels in Lean Production

Uniform Production Levels in Lean Production
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  • 0:04 Lean Production
  • 1:17 Uniform Production
  • 2:18 Why Use Lean Uniform…
  • 3:29 Lesson Summary
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Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

Lean businesses want to produce product only when absolutely necessary. But producing your products on demand can result in uneven production levels, which can cost money. In this lesson, we'll examine uniform production levels in lean production.

Lean Production

Kai owns a pencil company and wants to reduce costs, so he's decided that he doesn't want to keep a lot of inventory. His warehouse costs money and it would save him a lot if he could get rid of it or at least get a much smaller warehouse. One thing that might help Kai is to use lean production, which is a method that aims to reduce business costs by not holding inventory. In the most extreme lean production, a company makes products as they're ordered. For example, when Kai gets an order for pencils, only then will he fire up his factory machines and make those pencils. This could save Kai's business money because they won't have to pay for a warehouse and he just makes pencils. Imagine how much money could be saved by companies that make big products, like cars. That's a lot of warehouse space!

Lean production sounds good to Kai, but he can already see a problem. If he manufactures pencils as they're ordered, what happens if customers order 1,000 pencils one day and 10,000 pencils the next? He'll either have workers sitting around on the day he only needs 1,000 or he'll have to pay overtime for his workers on the day he needs 10,000. What should he do? To help Kai out, let's take a look at uniform production levels in lean production.

Uniform Production

Kai doesn't want to spend a lot of money for his warehouse, but he also doesn't want to run into production problems when his orders vary. What to do? One option for Kai is to use uniform production levels, which involve producing the same amount of product at regular intervals. For example, if Kai knows that his company has orders that average 25,000 pencils per week, he might choose to produce 5,000 pencils each day instead of making 1,000 one day and 10,000 the next. Traditionally, uniform production levels are frowned upon in lean production because a company will end up with inventory. For example, on the day that Kai's company only has 1,000 pencils to ship, he'll have to store the other 4,000 pencils. However, uniform production can be used in lean production. The key is to keep the production time relatively short. Instead of taking the forecasted orders for the next year and dividing it by 52 weeks, take the forecast for the next four weeks and divide the production up. This way, Kai will not have as many extra pencils lying around.

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