Evaluate whether the introduction of lean production techniques would be enough to improve ADP's operational efficiency.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

1. Knowledge: Lean production – using resources more efficiently so less are used; less wastage; less time.
2. Knowledge: Techniques include: JIT; Kaizen; TQM; simultaneous engineering; quality circles; zero defects; ERP may be used to aid JIT.
3. Knowledge: Operational efficiency: Productivity, inputs into outputs, costs.
4. Application: ADP has high inventories partly due to poor communication between Ops and Marketing.
5. Application: ADP has little employee involvement.
6. Application: Investment in employees is not a priority.
7. Application: Wastage at Factory Q has increased etc.
8. Application: Poor relationship with suppliers.
9. Analysis: JIT would cut inventories by focussing the business on material etc. arriving at the time they are required.
10. Analysis: Reduce number of suppliers and/or develop a better long term relationship that offers support to suppliers so that needs of ADP more effectively met. This may involve including suppliers at early stage in development of new products.
11. Analysis: Employee involvement could help this business improve labour performance/motivation and provide 'shop floor' ideas for improving efficiency - evidence from case that both are required.
12. Evaluation: Lean production works most effectively with efficient and flexible machines and employees e.g. to switch from one product to another. There is evidence that these features do not exist in ADP (e.g. Factory X) so lean production techniques cannot be easily employed within ADP unless there is also investment in equipment and training – investment in equipment possible with low gearing but investment in employees seems not to be an ADP priority.
13. Evaluation: JIT requires better communication to forecast demand and plan output levels AND needs well motivated suppliers SO lean production will not be effective until these are sorted.
14. Evaluation: Kaizen will need a complete change in leadership style and approach to employees and until these occur ADP will not introduce Kaizen effectively so lean production is insufficient.