4.5. Lean production and quality management

Question 1

Define lean production

Answer 1

producing goods and servies with the minimum of waste resources while maintaining high quality

Question 2

7 main sources of waste

Answer 2

• excessive transportation of components and products
• excessive stock holding
• too much movement by working people
• waiting - delays in the production process
• overproduction
• overprocessing - making goods that are too complex
• defects

Question 3

Main methods of lean production (5)

Answer 3

• Simultaneous engineering
• Cell production
• Flexible specialisms
• JIT
• Kaizen

Question 4

Define simultaneous engineering

Answer 4

A method of designing and developing products, in which the different stages run simultaneously, rather than consecutively. It decreases product development time and also the time to market, leading to improved productivity and reduced costs.

Question 5

Define cell production

Answer 5

splitting flow production into self-contained groups that are responsible for whole work units

Question 6

Implications of cell production (3)

Answer 6

• Job rotation within cell
• Teamwork of the complete unit of work
• Job enrichment (Herzberg)

=> increased motivation and productivity

Question 7

How can flexible specialisms be categorised? (3)

Answer 7

• flexible employment contracts
• flexible and adaptable machinery
• flexible and multi-skilled workers

=> quicker response to consumer demand changes, wider ranges of products offered to customers, reduced stock holdings as they can be made to order and higher productivity

Question 8

Define JIT

Answer 8

pull system of production, so actual orders provide a signal for when a product should be manufactured. correct quantity at correct time

Question 9

Advantages of JIT (5)

Answer 9

• Lower stock holding means a reduction in storage space which saves rent and insurance costs
• As stock is only obtained when it is needed, less working capital is tied up in stock
• There is less likelihood of stock perishing, becoming obsolete or out of date
• Avoids the build-up of unsold finished product that can occur with sudden changes in demand
• Less time is spent on checking and re-working the product of others as the emphasis is on getting the work right first time

Question 10

Disadvantages of JIT (3)

Answer 10

• There is little room for mistakes as minimal stock is kept for re-working faulty product
• Production is very reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed
• There is no spare finished product available to meet unexpected orders, because all product is made to meet actual orders – however, JIT is a very responsive method of production

Question 11

Define Kaizen

Answer 11

Japanese term meaning continuous improvement. An approach of constantly introducing small incremental changes in a business in order to improve quality and/or efficiency.

Question 12

Conditions for Kaizen to operate (4)

Answer 12

• management culture must be directed towards involving staff - senior managers must accept that work experience matter as much as theoretical knowledge
• teamworking - collective ideas come together to come up with solutions for problems
• empowerment - power to take decisions will allow speedier introduction of new ideas and motivate staff
• all staff are involved

Question 13

Advantages of kaizen (5)

Answer 13

• Improvements are based on many, small changes rather than the radical changes that might arise from Research and Development => easier to implement and less risks
• As the ideas come from the workers themselves, they are less likely to be radically different, and therefore easier to implement
• Small improvements are less likely to require major capital investment than major process changes
• The ideas come from the talents of the existing workforce, as opposed to using R&D, consultants or equipment – any of which could be very expensive
• It helps encourage workers to take ownership for their work, and can help reinforce team working, thereby improving worker motivation

Question 14

Disadvantages of kaizen (3)

Answer 14

• Some changes cannot be introduced gradually and may need radical and expensive solutions. e.g. kodak had to invest in manufacture of digital cameras rather than paper film based
• Real resistance frim senior managers => inner conflit
• In the short term, tangible costs to the business such as staff training, meetings

Question 15

Advantages of lean production (7)

Answer 15

• Improved Customer Service; delivering exactly what the customer wants when they want it.
• Improved Productivity; Improvements in throughput and value add per person.
• Quality; Reductions in defects and rework.
• Innovation; staff are fully involved so improved morale and participation in the business
• Reduced Waste; Less transport, moving, waiting, space, and physical waste.
• Improved Lead Times; Business able to respond quicker, quicker set ups, fewer delays.
• Improved Stock Turns; Less work in progress and Inventory, so less capital tied up.

Question 16

When is lean production not suitable? (5)

Answer 16

• businesses have difficulty forecasting demand
• production processes are very expensive to start up
• device for making extensive redundancies, job losses - an aspect which help to increase efficiency
• cost of new technology and retraining
• business depend on customer service as their unique selling preposition. In these situations, give more customers more choice of products => less lean since it calls for more flexibility

Question 17

Define quality product

Answer 17

a good or service that meets customers’ expectations and is therefore fit for purpose

Question 18

Define quality standards

Answer 18

the expectations of customers expressed in terms of the minimum acceptable production/service standards

Question 19

List the 3 main ways companies control quality

Answer 19

• Prevention
• Inspection
• Correction and improvement

Question 20

Define quality control

Answer 20

this is based on inspection of the product or a sample of products

Question 21

Advantages of quality control (3)

Answer 21

• With quality control, inspection is intended to prevent faulty products reaching the customer.
• This approach means having specially trained inspectors, rather than every individual being responsible for his or her own work.
• It is thought that inspectors may be better placed to find widespread problems across an organisation.

Question 22

Disadvantages of quality control (4)

Answer 22

• Individuals are not necessarily encouraged to take responsibility for the quality of their own work.
• Rejected product is expensive for a firm as it has incurred the full costs of production but cannot be sold as the manufacturer does not want its name associated with substandard product.
• Job of inspection can be tedious and demotivating
• If checking only takes place at specific points in the process then faulty products may pass through several productions process already

Question 23

Define quality assurance

Answer 23

a system of agreeing and meeting quality standards at each stage of production to ensure consumer satisfaction

Question 24

What are the main stages in quality assurance? (5)

Answer 24

1. Product design - will the product meet the expectations of consumers?
2. Quality of inputs - suppliers have to accept and keep strict quality standards
3. Production quality - assured by TQM
4. Delivery systems - customers need goods and services delivered with punctuality => reliability of system must be monitored
5. Customer service including after-sales service

Question 25

Advantages of quality assurance (4)

Answer 25

• Costs are reduced because there is less wastage and re-working of faulty products as the product is checked at every stage
• It can help improve worker motivation as workers have more ownership and recognition for their work (see Herzberg)
• It can help break down ‘us and them’ barriers between workers and managers as it eliminates the feeling of being checked up on
• With all staff responsible for quality, this can help the firm gain marketing advantages arising from its consistent level of quality

Question 26

Differences between quality control and quality assurance

Answer 26

Focus on:

• Quality control: aims to identify (and correct) defects in the finished product. A reactive process
• Quality assurance: aims to prevent defects with a focus on the process used to make the product. A proactive process

Responsibility

• Quality control: Quality control is usually theresponsibility of a specific team that tests the product for defects.
• Quality assurance: Everyone on the team involved in developing the product is responsible for quality assurance.

Tool/orientation

• Quality control: corrective tool. product orientated
• Quality assurance: managerial tool. process orientated

Question 27

Define total quality management

Answer 27

an approach to quality that aims to involve all employees in the quality-improvement process

Question 28

Define internal customers

Answer 28

People within the organisation who depend upon the quality of work being done by others.

Question 29

Define zero defects

Answer 29

The aim of achieving perfect products every time.

Question 30

Advantages of TQM (5)

Answer 30

1) Emphasizing the needs of the market: QM helps in highlighting the needs of the market. Its application is universal and helps the organization to identify and meet the needs the market in a better way.
2) Assures better quality performance in every sphere of activity: TQM stresses on bringing attitudinal changes and improvements in the performance of employees by promoting proper work culture and effective team work
3) Helps in checking non-productive activities and waste: quality improvement teams are constituted to reduce waste and inefficiency of every king by introducing systematic approach.
4) Helpful in meeting the competition: TQM techniques are greatly helpful in understanding the competition and also developing an effective combating strategy.
5) It helps in developing an adequate system of communication: QM techniques bind together members of various related sections, departments and levels of management for effective communication and interaction.

Question 31

Disadvantages of TQM (3)

Answer 31

1) Production Disruption: implementing a Total Quality Management system in a company requires extensive training of employees and these requires them to take some time of their day to day work duties OR stopping production to trace and correct quality problmes
2) Employee Resistance: Total Quality Management requires change in mindset, attitude and methods for performing their jobs. When management does not effectively communicate the team approach of Total Quality Management, workers may become fearful, which leads to employee resistance. When workers resist the program, it can lower employee morale and productivity for the business.
3) Quality is Expensive: Implementation often comes with additional training costs, team-development costs, equipment costs, consultant fees, material costs,

Question 32

Define benchmarking

Answer 32

Involves management identifying the best firms in the industry and then comparing the performance standards of these businesses with those of their own business

Question 33

List the 7 stages of the benchmarking process

Answer 33

1. Identify the aspects of the business to be benchmarked
2. Measure performance in these areas
3. Identify the firms in the industry that are considered to be the best
4. Use comparative data from the best firms to establish the main weaknesses in the business
5. Set standards for improvement
6. Change processes to achieve the standards set
7. Re-measurement

Question 34

Advantages of benchmarking (4)

Answer 34

• faster and cheaper way of solving problems than firms attempting to solve production/quality problems w/o external comparisons
• areas of significance for customers are identified and action can be directed to improving these
• assist firm to increase international competitiveness
• comparisons between firms of different industries encourage useful crossover of ideas

Question 35

Disadvantages of benchmarking (3)

Answer 35

• process depends on obtaining up to date info from other firms in the industry which can be difficult
• copying ideas and practices of other firms discourage original ideas, no USP
• costs of comparison exercise may not be recovered by improvements obtained from benchmarking