Lean production is a Japanese method of production that focuses on cutting out waste and costs whilst ensuring quality. This method helps the business to be more efficient and responsive to the market needs. It also cuts out all activities that do not add value to the production process, such as holding of stock, repairing faulty product and unnecessary movement of people and product around the plant. Other aspects of a business – from design, through production to distribution can also use this type of method. In this case, Gateshead Holdings is a metal component manufacturer.

Geoff Cartwright spoke face to face with all 146 workers individually explaining all about his three-year plan. One of the first features of Lean production used by him in order to transform Gateshead Holdings into profitable company was the Cell production. It is a form of team working which helps ensure worker commitment as each cell is responsible for a complete unit of work. Each cell is responsible for a significant part of the finished article and rather than each person only carrying out only one very specific task, team members are skilled at a number of roles providing a means of job rotation and more adaptable to the future needs of a business. This way the workers also improve communication, avoiding confusion arising from misunderstandings. The workers will have greater motivation due to multiplicity of work, teamwork, and greater responsibilities.
The workforce of 146 was reduced by 25 through voluntary redundancies, helping to cut any unnecessary costs. All the supervisory and middle management posts were eliminated introducing a flat structure of the workforce. Workers were given multi- skill training so they could work on any machine and do any job in their cell. They were also taught how to maintain machines and repair minor breakdowns. They were also trained in customer service so all the staff could deal with questions asked by customers. The training was also designed to empower staff so they could solve their own problems. More than half i.e. 76 percent of the workforce was untrained until then. To make the staffs feel important Geoff arranged snooker, badminton, swimming, on site nursery and dance sessions. To keep the staffs motivated to come to work, an attendance bonus scheme was also introduced; £300 bonus for three months without being absent and £1,000 for a whole year without absent.
The Kaizen method of continuous incremental improvements is an originally Japanese management concept for gradual, continuous improvement. To make the staffs feel like the part of the team, they were encouraged to express their ideas. £5 each once a month was given to visit the pub together and talk about new ideas to keep improving. Geoff also gave various vouchers for leisurely activities, if the staffs came up with new ideas by themselves as a team. A system of annualised hours introduced and overtime eliminated. Pay rise increased from statutory minimum wage in 2007 to £10 an hour in 2010. He also increased the paid holiday from four weeks to five weeks in a year. All of these key elements helped the staffs to keep motivated towards Geoff’s plan. Motivation is the key to high production thus resulting to efficiency, which is lean production all about.
Geoff also introduced 5S in the company. First S stands for Sort – organise the area leaving only the tools and materials necessary to perform daily activities. Second, Set in Order – the orderly arrangement of needed items so they are easy to use and accessible for anyone to find. Third, Shine – keeping everything clean and swept to make the work place safer. Fourth, Standardise – involves creating a consistent approach for carrying out tasks and procedures. Lastly, Sustain – is the discipline and commitment of all the other stages.
Just in Time and six sigma are other important features of Lean production that helped in cutting down the waste in the factory. Just in time is a ‘pull’ system of production, where the manufacturers order the parts of the products only at the time of producing to increase efficiency. Geoff negotiated with their supplier to adapt this technique and improve supplier management. As a result, they improved their product availability to wholesalers and responded more effectively to demand.

http://www.lmsi.ca/5s.htm#sort