Throughput (business) in the context of "Lean manufacturing"

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⭐ Core Definition: Throughput (business)

Throughput in business is the rate at which a product is moved through a production process and onward to being consumed by an end-user, usually measured in the form of sales or usage statistics. The goal of most organizations is to minimize the investment in inputs as well as operating expenses while increasing throughput of its production systems. Successful organizations which seek to gain market share strive to match throughput to the rate of market demand of its products. The measurement of throughput is central to the concept of throughput accounting.

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👉 Throughput (business) in the context of Lean manufacturing

Lean manufacturing is an American invented method of manufacturing goods aimed primarily at improving efficiency within the production system as well as response times from suppliers and customers. Its earliest applications can be traced back to German manufacturing principles, first implemented during the Industrial Revolution in agricultural production and small factories. However, the term "Lean" was not used to describe these and other manufacturing efficiency methods and philosophies until the 1980s.

Before WWII, Dr. William Edwards Deming began to formalize the first true "Lean" philosophy for modern manufacturing while working for the US Bureau of Statistics. Later, Deming invented the first "Lean" manufacturing method and management philosophy, known as Total Quality Management, which continues to be used as the foundational teachings of Lean today. From there, the Just-in-time manufacturing (JIT manufacturing) process grew, first in Japan and then around the world. Just-in-time manufacturing tries to match production to demand by only supplying goods that have been ordered and focuses on efficiency, productivity (with a commitment to continuous improvement), and reduction of "wastes" for the producer and supplier of goods. Lean manufacturing adopts the just-in-time approach and additionally focuses on reducing cycle, flow, and throughput times by further eliminating activities that do not add any value for the customer. Lean manufacturing also involves people who work outside of the manufacturing process, such as in marketing and customer service.

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