THE DIFFERENCE BETWEEN LEAN & FLEXIBLE MANUFACTURING
Lean manufacturing is all about making as much money as possible and streamlining the manufacturing process. In many cases, this means limiting customer options. Conversely, flexible manufacturing is all about meeting customer needs, regardless of how much more doing so may cost. In many businesses, the manufacturing process is a blend of these two forms, as combining them allows companies to reap the benefits of both.
In flexible manufacturing, customers are given numerous options when selecting their goods, allowing them to create customized versions of products to meet their specifications. By allowing customers to custom-order their goods, companies create a situation in which they must be responsive to these needs. In lean manufacturing, on the other hand, companies offer one or two versions of a product but largely do not allow for customization. When companies do not allow for special orders as readily, they can keep fewer goods, and often less specialized staff, on hand.
Giving customers options costs money. To allow customers to customize their ordered goods, companies must purchase a larger variety of components and pay staff to customize these items. It is for this reason that customized goods are often more expensive than non-customized ones. While raising the price is one way to recoup the extra costs associated with flexible manufacturing, this method alone often is not sufficient to make up the cost difference.
Both manufacturing methods can lead to customer satisfaction. Because goods often cost less when companies employ lean manufacturing methods, customers will likely be more pleased with the prices they are asked to pay for these items. Conversely, if customers seek highly specialized products, they will likely be more satisfied with the results of flexible manufacturing, as this type of manufacturing allows for greater customization.
Making the Choice
When companies seek to select the manufacturing methods appropriate for them, they must allow customer needs to guide their choices. Companies that offer high-end goods are often better served by employing flexible manufacturing methods, as buyers of these goods are often willing to pay more for this customization. Alternately, companies that specialize in affordable products may be best served by lean manufacturing, as this type of manufacturing allows them to keep their costs down.
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Copyright © Daniel Cullinane CPA.
Daniel Cullinane CPA
25 Plaza 5 25th fl Jersey City NJ phone 732-516-1648 fax 732-516-9778