5.3 Lean production and quality management

lean production : a philosophy built into the culture of organisations that focus on less wastage and greater efficiency

feature of lean production ( AO1 )

• less waste : streamlining operations in order to reduce all form of waste and to achieve greater efficiency

method of waste minimisation include:

1. total quality management ( TQM )

2. cradle to cradle manufacturing

3. just in time production ( JIT )

• greater efficiency : using resources more effectively to generate output, which is measured by the productivity rate of resources.

greater efficiency can be gained in serval ways :

1. staffs training and development

2. higher level of staff motivation

3. using improved technological advanced capital

method of lead production ( AO2 )

1. Kaizen ( continuous improvement )

- involves all workers committing to improving quality standards

- making small incremental progress to improve productivity and efficient

advantages :

• people are usually resistant to change and worker might be more receptive to small, incremental changes which are less disruptive and risky than larger one-off changes

• involves empowering workers to make their own decision for continuous improvement leading to higher motivation which can help achieve greater effeciency through exploring ways to improve

disadvantages :

• costly and time consuming: require the effort and commitment of all members of the workforce to eliminate waste and to make productivity gains

• serving for continuous improvement usually causes increased workloads, so can lead to demotivation in the workplace

2. Just-in-time ( JIT ) : a lean stock control system that relies on stocks ( inventories ) being delivered only when they are needed in the production process

- deliveries of stocks such as raw materials and component are a few hours prior to their use by the purchaser

advantages :

• foster lean production and productive efficiency

• there is no need for buffer stock = cost of stock management is reduced, no need for stockpiling = improving cash flow and work capital

disadvantages :

• complete reliance on third party hence inability to meet unexpected changes in demand

• administrative and implementation cost of JIT are high

3. Kanban : relies on using a card system to ensure that stock usage is based on actual demand from customers which helps to prevent underproduction or overproduction

4. Andon : relies on using a visual traffic light warning system to achieve greater productive efficiency

- uses visual display to communicate the status of production

- serve as quick warning

AO2: feature of cradle to cradle design and manufacturing

cradle to cradle (C2C): a production philosophy with the view that sustainable production involves designing and manufacturing goods so that they can be recucled to produce the product again

advantages :

• provide competitive advantages by differentiating the brand, thereby attracting and retaining customer

• generate positive corporate image to some specific stakeholders

disadvantages :

• time consuming

• expensive to implement effectively

AO1: features of quality control and quality assurance

quality control : traditional approach to quality management by inspecting a sample of products. it involves quality controllers checking or examine a sample of products in a. systematic way

1. QC is mainly about inspecting and detecting substandard output ( defects ) rather than preventing it --> product-orientated

2. it strives to ensure that products meet the quality standards set by the organisation

quality assurance : an approach to quality management that involves the prevention of mistakes in the production process. It involves agreeing and meeting quality standards at all stages of production to ensure customer satisfaction

1. QA uses workers rather than inspectors to check

2. process-oriented

AO2 : methods of managing quality

1. quality circle : a small group of employees who voluntarily meet regularly to identify, examine and solve problems related to their work in order to improve quality output

- preventing defects from arising in the first place

- employees must receive appropriate training

- Kaizen usually involves implementation of quality circles

disadvantage :

• senior management have a clear target for blame if there are quality issue or problems

2. benchmarking : systematic process of comparing a business or its products to its competitors using a set of standards such as sales, revenue, profits, labour turnover

- the ultimate aim of benchmarking is to improve performance, helps business maintain or develop its competitiveness

- as a strategic management tool, it enable managers to compare the firms's performance, its processes and products with the best of others company within the same industry

- quantifiable

disadvantages :

• subjective comparison ( customer perception and feedback )

3. Total quality management ( TQM ) : a quality management approach that aims to involve every employee in the quality assurance process. It involves organisation-wide approaches to quality improvements in products, processes, people and organisational culture.

- a form of lean production

- commits the organisation to Kaizen and benchmarking of all operations

- quality circle can also be a feature of TQM

advantages:

• brand reputation: emphasis on high quality and consistency which can be a competitive advantage as it puts customers's needs at the centre of the production process

• cost-effective: TQM eliminates the need for inspections and the cost of reworking mistakes and defective output. in the long term, quality is higher while costs should be reduced

disadvantages :

• it requires a change in attitude and commitment from all staff, which can be difficult to achieve. moreover, not all workers are motivated by or are suitable for job enrichment and empowerment

• staff training, including management training and development cost can be high yet must be properly funded

AO3: impact of lean production and TQM on an organisation

quality is important for an organisation for several reason :

1. satisfy the needs and wants of customers

2. raising consumer confidence regarding a business and its products

3. improving the motivation of employees

4. gaining a competitive advantages over its rivals

5. lowering production costs, and hence increasing profitability

poor quality output will result in higher cost for the business due to consumer seeking compensation for substandard products. example includes

1. the product breakdown unexpectedly

2. the product being delivered late

3. a lack of instruction or directions for use

overall

• TQM and lean production gives competitive advantages over rivals

• attracting customers and retaining their loyalty becomes easier as consumers trust reputable business and their brand

AO2: the importance of nation and international quality standards

- when a firm meets the quality standard, they can be certified by the ISO 9000

advantages :

• quality awards can provide firm with marketing advantages as ti can help to differentiate the organisation from its rivals, providing opportunities to build brand loyalty and to charge higher price thus minimising potential competition

• motivational impacts on workers who feel proud

disadvantages :

• cost : on-going costs of obtaining certification, operational cost of meeting the standards ( funding staffs training/ machineries ), inspection cost

• some customers may be put off by the higher prices