Production Cost Reduction Studies In Factory A Based On Lean Production

With the fast globalization of world economy and the coming of knowledge economyera, enterprises have been facing unprecedented challenges. All the enterprises arestruggling to improve their operation efficiency through in-depth cost reduction in time offast economy development. It is especially urgent to find new breakthrough ways to costdown given the fact the raw materials price keeping going up in the past two years and thecontinuous rising of labor cost etc.This thesis used the lean production principles to analyze the factors that affect theproduction costs of Factory A, and the various measures to take to lower down theproduction costs. In the beginning of this thesis, it studied the relevant theories of leanproduction, its characteristics and advantages in the elimination of wastes; then itintroduced the production cost control theory and the composition of productions costs topave the theory foundation for the pursuits of production cost reduction of Factory A. Thisthesis has studied the general status of Factory A, its operations and cost control statususing interviews of key stakeholders and on-site observations and analyzed the problemsthat caused high production costs in the production processes from the customervalue-adding perspectives of lean production principles. Based on the actual status of theFactory A, it has developed targeted improvement measures and implementation plan totackle the existing problems in Factory A in order to lower down the production costs andenhance its market competitiveness.At the end of this thesis, it summarized the cost-down measures in Factory A, andsorted out the various thoughts on the implementation of the improvement measures andproposed to solve quality problems and reduce production cost from the initial source. Italso introduced the achievement after implementation of improvement measures especiallythe improvement of production process design and tooling. Finally it out-looked the furtherstudy of this topic. This thesis is based on the personal experience of the author in Factory A, the casesand data quoted in this thesis are coming from Factory A’s actual production operations;the production processes and tooling design are led by the author personally therefore aregenuine and comprehensive. The thoughts and conclusion in this thesis are beneficial toother enterprises in similar industry in finding effective ways to reduce production cost.