5.3 Lean production and quality management Flashcards
Lean production
A philosophy or organizational culture about streamlining production process in order to increase efficiency and reduce waste.
Features of lean production
- less waste
- greater efficiency
Less waste
Requires getting things done correctly the first time around, and using fewer resources or using them more effectively to achieve the same output.
Sources of waste
- Waiting times
- Overproduction
- Motion
- Defects
- Over-processing
- Transportation
- Stockpiling
Greater efficiency
Using resources more productively in order to generate output, if an organization can produce more goods and/or services by using the same or fewer resources.
Greater efficiency can be achieved by:
- improved level of motivation
- improved technologies and capital equipment
- improved provision of training and development for all employees
Methods of lean production
- continuous improvement (kaizen)
- just-in-time (JIT)
- kanban
- andon
Continuous improvement (Kaizen)
The process of making continuous small, incremental improvements to various production processes in order to achieve greater efficiency.
Conditions necessary for kaizen to operate
- Management culture must be directed towards involving staff and giving their views and ideas importance
- Team-working
- Empowerment
- All employees must be involved
Limitations to kaizen
- some changes cannot be introduced gradually and may need an expensive and radical solution
- resistance from senior management
Just-In-Time (JIT)
Lean method of stock control whereby materials and components re scheduled to arrive precisely when they are needed in the process of production.
Advantages of JIT
- buffer stocks are not required, so this reduces the cost of stock management and waste
- it avoids the opportunity costs of stockpiling
- can improve firm’s cash position
Disadvantages of JIT
- administrative and implementation costs of JIT can be relatively high
- stock control does not enable firms to use economies of scale
- risk of running out of stock if demand is higher than expected
- total reliance on third party suppliers to deliver the right products, at the right time
Kanban
A method of lean production used to ensure that inventory is based on actual customer orders using a card system with an inventory number attached to each component in the production process.
Advantages of kanban
- Reduce wastage
- Flexibility in production
- Improves flow
Disadvantages of kanban
- No room for error - no buffer stock means quality problems/defects will be harder to address
- Large variations in demand can cause problems
Andon
A lean production method that uses visual control systems to indicate the status of an aspect of the production process, e.g. machinery, production line or work process.
Advantages of Andon
- Allows for quick communication in production floor
- Problems can be resolved faster
- Employees are more involved
- Production status can be observed easily
Disadvantages of Andon
- Relies on operators to be responsible
Cradle to cradle
A sustainable model of production based on natural processes. The underlying principle ofC2C is that there is no waste in nature, making production sustainable for future generations.
Quality control
The traditional way of quality management that involves checking and reviewing work processes. This is usually carried out by quality controllers and inspectors.
Advantages of quality control
- Defects do not reach customers
- Saves reputation
- Cheaper specialized QC inspectors can find several issues
Disadvantages of quality control
- Does not prevent mistakes made
- Individuals are not accountable for quality of work
Quality assurance
The methods used by a business to reassure customers that its products meet certain quality standards.
Advantages of quality assurance
- Involves employee participation (more ownership and recognition)
- Break down certain cultures (them vs. us)
- Less wastage and production costs
Disadvantages of quality assurance
- Time-consuming
- Requires training
Methods of quality management
- quality circle
- benchmarking
- total quality management (TQM)
Quality circle
Small groups of employees who meet on a regular basis to asses quality issues and make recommendations to improve quality standards.
Advantages of quality circles
- promote team working
- almost any organization can use it
Disadvantages of quality circles
- not necessary cost-effective
- staff must be supported by senior management
- some staff members may be uncomfortable or unable to take on such responsibility
Benchmarking
A routine process of an organization comparing its products, processes and performance to that of its competitors or its own historical standards.
Advantages of bench marking
- almost any aspect of an organization’s operations can be benchmarked, as long as it’s measurable
- encourages organizations to continually learn from their competitors
- enables an organization to determine its strengths and weaknesses in comparison to its competitors
- can improve an organizations performance and competitiveness
Disadvantages of benchmarking
- Costs and time implications
- Can discourage innovation
- Time and finance must be used to implement change
Total quality management (TQM)
Involves all workers having responsibility for maintaining quality standards throughout the production process, it applies to all aspects of an organization’s operations.
Advantages of TQM
- aims to reduce the reject rate to zero, thereby reducing reworking costs by doing everything right the first time
- corporate image is likely to improve, as organization has ‘right first time’ approach
- staff morale improves as they are more valued and empowered by being a part of total quality process and culture
Disadvantages of TQM
- Added costs (such as market research)
- Costs to improve quality
- Requires all members to be committed
- Somewhat bureaucratic
- Time lag before benefits are seen
The importance of national and international quality standards:
National and international quality awards are given to businesses that show their products meet certain quality standards.
Purpose of international quality awards
- Promote quality awareness within organization
- Recognize quality achievements
- Attract high calibre employees
- Strengthen firm’s competitiveness
International Standards Organization (ISO)
- One of the most powerful NGOs in the world by providing a single set of quality standards
- ISO Standard for Quality Management: ISO 9000
- Endorses businesses that have done quality management
