Lean production is the primary technique of cost

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Lean production is the primary technique of cost reduction that is used in the firm. The organization has a few specialized suppliers who are reliable. The suppliers are capable of delivering the desired inventories in small volumes but more frequently. As such, Apple transfers the costs of inventory control such as capital depreciation, rent, and security to the specialized suppliers. The wastes which are associated with scraps, machine idle time, and unnecessary movement are also eliminated through the continuous improvement process. Apple Company produces its electronic products in bulk. The use of mass production in the organization has several costs benefits. First, due to the economies of scale, the unit costs of the products which are manufactured by mass production are relatively lower than the cost of similar products from other firms.
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STRATEGY APPROACHES 3 Additionally, the production planning and scheduling processes are simplified through the continuous flow production method. There is minimal backtracking of the products, and the special purpose machines are used in the manufacturing process. Line balancing is used to ensure that the work in process inventory is reduced and that the machine load is well balanced. The special purpose machines are easier to operate and do not demand the highly skilled workforce.
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  • Summer '15
  • Apple Company, Production and manufacturing, Jonathan Ive

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