5.3 Lean production (HL)

Question 1

lean production

Answer 1

means efficiency and the elimination of waste. It is an approach to production that was introduced by Arthur Deming to Japan and perfected in Japan.

Question 2

manufacturers who apply lean production methods

Answer 2

use less of everything that is involved in production, from labour, machines, space, time, suppliers and especially inventory.

Question 3

the main features of lean production

Answer 3

less waste and greater efficiency need a more specific approach.

Question 4

concept of having less waste

Answer 4

implies that when applied to material; less of the materials used in production are discarded. Overall waste does not add value but instead raises costs and if possible should always be reduced or eliminated.

Question 5

waste can come in many forms, such as

Answer 5

Labour that is useless and not productive
Capital that is useless and not productive
Material that is discarded
Activities that cause Labour and capital to be less productive

Question 6

concept of greater efficiency

Answer 6

Efficiency means less costs are incurred. Efficiency in simple words, involves controlling your costs, which is just as important as increasing your sales revenue.
To achieve greater efficiency, costs must be understood and their sources controlled. With greater efficiency the organization’s resources will be better used.

Question 7

factors of greater efficiency

Answer 7

• Physical resources – for example less space for storage or no storage (keep less stock!)
• Human resources – for example reducing travel times between venues
• Financial resources - not holding that much stock will cost the firm less

Question 8

2 most important methods of lean production

Answer 8

a) continuous improving (Kaizen)
b) just-in-time (JIT)

Question 9

continuous improvement (Kaizen)

Answer 9

Kaizen is a Japanese business philosophy that focuses on gradually improving productivity and making a work environment more efficient.
Kaizen supports change from any employee at any time.
Kaizen translates to change for the better or continuous improvement.
Kaizen’s small changes can involve quality control, just-in-time delivery, standardized work, the use of efficient equipment, and the elimination of waste.
The Kaizen methodology underscores that small changes now can have big future impacts.

Question 10

what does Kaizen require in order to work

Answer 10

it must be inclusive to all levels of hierarchy, “no blame” is attached to the problems or issues, systematic thinking is needed and the focus should be in the process NOT in the product.

Question 11

what does Kaizen’s approach imply?

Answer 11

umbrella concept that implies continuously seeking to improve upon all the elements that affect a business and not a one-time fix. This approach to continuously addressing and improving upon any imbalances, results in more worker productivity.

Question 12

just-in-time (JIT)

Answer 12

the delivery of raw materials just when it is needed. The thinking behind JIT is the elimination of inventory (stock) build-up. In other words, if a business has to stock-up on raw material, only when the raw material is sold does it add any value. Therefore, raw material used in production is useless resource and it’s costly for the firm.
Getting rid of this cost entirely is impossible, because costs for raw materials must be incurred in the manufacturing process, however, accumulated costs can be reduced to when they are needed, which is the thinking behind JIT.( i.e. a business may order very large volumes of inventory that ties up cash, the sitting stock will also require storage space, workers, and could also be subject to deterioration)

Question 13

cradle to cradle design

Answer 13

suggests that products, once thye have been used, should be entirely recycled to create new prodcuts that are either the same or different
a means of protecting the ecosystem and nature through a system that is in principle waste free. This is a mimic of nature whereby the metabolism of the planet is self-sustaining and complete. Another term used to refer to the Cradle to Cradle design is regenerative design.
Even though the Cradle to Cradle concept is still “newish” a C2C certification helps the company towards the goals of Sustainability and CSR

Question 14

quality control

Answer 14

If a business has a good image and reputation for quality, the likelihood that consumers will be loyal and repeat their purchases is very high (i.e. your favourite fast food restaurant. At some point you will expect the same level of quality to be matched at every outlet/restaurant).
Businesses take the concept of quality control and Total Quality Management very seriously. And nowadays, thanks to a quality revolution the concept has been moved to quality assurance, which refers to “assure” the customer the product is still the best!

Question 15

the term “quality” specifically suggests that the product is

Answer 15

• reliable
• safe
• durable
• innovative
• value for money

Question 16

three methods of managing quality

Answer 16

a) quality circles
b) benchmarking
c) total quality management

Question 17

quality circles

Answer 17

formal group of employees (from diff dpartments and levels) who meet regalraly to discuss and suggest ways of improving quality
the meetings are facilitated by a team leader (trained in leadership and group facilitation)

Question 18

what does a quality circle involve

Answer 18

The Quality circle involves a group of workers who come together in teams and make decision on how to address the issues and problems they have identified.
Management, if supportive of the Quality circle, will not only motivate the staff involved but also secure the benefits of the model. Quality control can be costly however the benefits far outweigh the costs.

Question 19

benchmarking

Answer 19

benchmarking is about comparing the firm with the competitors.
By determining what the industry standard is, who the industry leader is and using this information to target performance, business is able to attract consumers who expect this as a minimum level of quality.
ex: hotel starring system

Question 20

different stages of bench marking

Answer 20

Benchmarking is part of the competitive nature of the market and is very specific.
The first stage is in determining what the business want to benchmark. This could be within any function of the business, for example in Human Resources Management: salaries, wages, benefits, or dress codes among others. Or in Operations and Management: Quality, timeliness, equipment and inventory among others.
The second stage is determining who your benchmark should be and collecting as much information that is available. By identifying the industry leaders this information becomes easy for any business to access.
The third stage is to apply the information gathered and try to not only match the industry leader but to in turn become the benchmark standard itself

Question 21

total quality management (TQM)

Answer 21

is a process that looks at quality management from the pre-purchase stage to the post-purchase stage.
The management of quality at the pre-purchase stage involves image, reputation and the consumer’s perception of the product prior to purchase. The brand name and reputation play a very important role in TQM.
The post-purchase stage of TQM is in the effort to determine if the quality of the product will draw loyalty from the consumer and thereby generate repeat consumption.

Question 22

what is the approach of total quality management

Answer 22

TQM is an all-inclusive (holistic) approach. It organizes awide scale of efforts of all individuals, departments and activities to put in place and make permanent a system in which the business continuously improves on the deliver of high-quality products and services to consumers.
TQM is costumer focused from start to end with customer relations conducting post sale surveys and service; employee involved through empowerment and process centred.

Question 23

So, what is the impact of lean production and TQM on an organization?

Answer 23

With competition in business being increasingly global, businesses that fail to implement lean production and TQM policies are at a distinct disadvantage.
The competitive costs of not implementing these processes exceed those of implementation.
However,occupational injuries, job strain and stress, are increasingly linked to lean production work pace and demand. In a well balanced business environment the benefits of applying of lean and TQM policies are clear.

Question 24

national and international quality standards

Answer 24

The best way for a business to assure the customer the quality of their products is by getting certification from recognized quality standards. Hence, quality standards in national and international settings serve to guide consumers and producers alike.

Question 25

which organisations serve to ensure compliance with set standards through certification that recognises guidance in quality management

Answer 25

International Organization for Standardization, theEuropean Foundation for Quality Management,theAlliance for Performance Excellenceand theCanadian National Quality Institute

Question 26

Certification can be favourable for the business since it can help with:

Answer 26

Develop market abroad (enable exports)
Give a competitive edge
Save on costs of withdrawing products
Act as an insurance
Bring better profit margins

Question 27

stock control is based on a balance between

Answer 27

JIC (just in case): holding reserves of both raw materials and finished products in case of a sudden increase in demand (or of a problem in the production supply chain)

JIT (just in time): avoiding holding stock by getting supplies only when necessary, and producing only when ordered

Question 28

what does JIT mean

Answer 28

that the company will not hold buffer stock, which contributes to the two pillars of less waste (0 waste of space in storage facilities) and greater efficiency (not having money tied up in stock)

Question 29

what costs may holding stock incur

Answer 29

not only storage costs, but also insurance costs and even the payroll costs of staff who look after the stock

Question 30

“waste” can also include

Answer 30

time, transportation, products, space stock, energy, talents

Question 31

to receive the official “cradle-to-cradle” C2C certification, products need to fulfil several criteria, for example regarding

Answer 31

• the reutilisation of the material itself (recycling)
• the amount of energy necessary for the recycling process (ideally renewable energy)
• the amount of water needed as part of the recycling process
• the corporate social responsibility (CSR) of the company, for instance with regard to fair labour practices