5.3 Lean Production & Quality Management

Features of lean production

a philosophy built into the culture of organisations that focuses on reducing wastage and improving efficiency

What are the 7 sources of muda?

stockpiling, overproduction, unnecessary transportation, over

Waste minimisation methods

total quality management (TQM), cradle to cradle, and just in time (JIT)

Kaizen

a Japanese philosophy of continuous improvement and change for the better

Features of kaizen

small, incremental improvements in efficiency and productivity over time

Advantages of kaizen

can reduce costs later, can improve operations continuously, can motivate workers when people resist change less with small changes

Disadvantages of kaizen

increased workload can cause demotivation, implementation can still be costly and time consuming

Just in time (JIT)

a lean stock control system that removes the need to hold buffer stocks/back

How JIT works

stock deliveries are made only a few hours before they are needed by the purchaser

Advantages of JIT

reduces waste, lowers stock holding costs, improves efficiency

Disadvantages of JIT

risk of not having stock if it is urgently required or if deliveries are delayed

Cradle to cradle (C2C)

a production philosophy based on designing and manufacturing goods so they can be recycled and used to produce the product again

Technical nutrients

products/materials in cradle to cradle that can be recycled or reused with no loss of quality

Biological nutrients

products/materials in cradle to cradle that are consumable or compostable in an eco

Advantages of cradle to cradle

can give a business competitive advantage through differentiation, supports sustainable branding, improves corporate image

Disadvantages of cradle to cradle

time consuming and expensive to implement

Quality circle (QC)

a group of employees who voluntarily meet regularly to identify, examine, and solve problems related to their work

Advantages of quality circles

defects can be prevented at the start rather than found after production, blame is reduced, employees feel involved

Disadvantages of quality circles

members need problem

Benchmarking

the process of comparing a business against competitors using a set of benchmarks or standards

Examples of benchmarking criteria

sales revenue, profit, labour turnover, brand loyalty

Internal benchmarking

comparing business practices within the same organisation

External benchmarking

comparing with firms in the same industry

Benefit of benchmarking

can improve performance and increase competitive advantage

Total quality management (TQM)

a quality management approach involving every employee in organisation

Essential features of TQM

zero defects, commitment by all employees, continuous kaizen, benchmarking, and quality focus across all operations related to the product

Advantages of TQM

motivational effect on employees who feel more involved in decision making, competitive advantage because customer needs are central, cost

Disadvantages of TQM

requires change in attitude and commitment from all staff, staff training and development costs can be high, not all workers are motivated by empowerment and job enrichment, accreditation fees may need to be paid to awarding bodies such as ISO

Quality control (QC)

the traditional approach that checks quality after a product is finished and detects defects instead of preventing them

Features of quality control

firms set an acceptable defect rate, reactive rather than proactive

Quality assurance (QA)

the prevention of mistakes in the production process, such as defects, poor service, and delays, by agreeing to meet quality standards at all stages of production

Features of quality assurance

staff are responsible for quality, encourages job enrichment, improves efficiency, reduces waste, proactive, aims for zero defects

Impact of lean production and TQM on an organisation

can give competitive advantage and help attract and retain customers

Quality standards

national and international benchmarks that businesses use to ensure goods and services meet expected standards of quality

Why quality standards matter

good service must meet a set of predetermined criteria, they allow evaluation and external certification of quality, and support consistency

ISO 9000

the internationally recognised quality standard used to ensure goods and services are consistently produced to quality standards and meet customer needs

Benefits of ISO 9000

internationally recognised, firms can provide evidence of quality

Costs of ISO 9000

cost of certification, licence, and awards/accreditation fees