5.3 Lean Production & Quality Management (HL) Flashcards
5.3 Lean Production & Quality Management (HL)
5.3.1 - Features of Lean Production (A01)
Define Lean Production and state its two main examples in the IB syllabus
State and explain the ‘Two Features of Lean Production’
Lean Production Definition:
The philosophy, approach, or organisational culture centered around production processes to increase efficiency and reduce waste.
There are two main types of lean production:
1. Continuous improvement (Kaizen)
2. Just-in-time (JIT)
It focuses on eliminating waste, with the aim of minimizing costs (thereby making it more efficient) without compromising quality.
THERE ARE TWO FEATURES OF LEAN PRODUCTION:
- Less Waste:
There are 8 sources of waste which can be remembered by the acronym DOWNTIME…
Defects - substandard output
Overproduction - producing more than needed
Waiting Times -delays in production process
Non-utilised talents or Resources
Transportation - Unnecessary and excessive
Inventory - stockpiling (having too much stock)
Motion - excess worker movements between roles
Excess Processing - adding too many features - Greater Efficiency: This can be achieved through …
- Improved level of motivation in the workplace
- Improved technologies and capital equipment
- Improved provision of training
5.3.2 Methods of Lean Production (A02)
Define ‘Continuous Improvement (Kaizen)’
State two ADVANTAGES and DISADVANTAGES of Kaizen
Definition:
The Japanese process of lean production that involves developing an organizational culture of small continuous improvement in incremental steps to achieve greater efficiency.
ADVANTAGES:
1. Employee Empowerment as Kaizen relies on senior management delegating decision-making to staff
2. Less Resistance to Change - employees are more receptive to small, incremental changes, rather than highly disruptive or unsettling changes.
3. Staff motivation/Labour Productivity - workers feel respected and valued by the employer
DISADVANTAGES:
1. Time-consuming and Expensive - e.g cost of staff training and upskilling, scheduling meetings to involve staff in the decision-making process
2. Staff have to be fully committed for Kaizen to work
5.3.2 Methods of Lean Production (A02) &
5.6.2 The difference between JIT and JIC
Define ‘Just-in-time (JIT)’
State AND Explain an example
State two ADVANTAGES and DISADVANTAGES of Just-in-time (JIT)
Define ‘Just-in-Case (JIC)’
State AND Explain an example
State two ADVANTAGES and DISADVANTAGES of Just-in-time (JIC)
Definition:
A lean production method of stock control whereby materials and components are scheduled to arrive precisely when they are needed in the production process. It thereby removes the costs of holding buffer stock and thus the need for storage and insurance costs associated with holding large volumes of inventory.
Example:
Many of the world’s largest supermarkets use fully automated JIT delivery systems. They depend on computerized systems such as scanners at the checkouts that link to their stock control and ordering systems, which automatically place orders with suppliers.
ADVANTAGES:
1. Costs of stock management and waste are reduce, BECAUSE, buffer stocks aren’t needed
2. Avoids opportunity cost of stockpiling (prevents overproduction) such as costs of storage
3. Minimises wait time and transport costs
DISADVANTAGES:
1. Requires a very good relationship with the supplier to ensure that there is a guarantee that goods arrive on time in the right quantity
2. Risk of Underproducing by running out of stock is demand is higher than expected
3. Economies of Scale can’t be benefitted from as there is no bulk buying.
- JUST IN CASE (JIC):
Definition:
A stock control system that requires producers to have large quantities of stock i.e relies on the use of reserve/buffer stock to meet changing levels of demand. It is appropriate for firms use durable, rather than perishable, stocks.
THIS IS NOT LEAN, because waste can be produced if stocks are damaged or go out of date.
ADVANTAGES:
1. Flexible BECAUSE it uses buffer stocks to accommodate unexpected increases in demand
2. Less Reliance on Suppliers, BECAUSE of buffer stock meaning production can continue if supplier doesn’t deliver stock on time
3. Economies of Scale, due to large quantities of stock purchased
DISADVANTAGES:
1. Insurance, maintenance and security costs of holding stock
2. Stockfilling can harm the cash flow and working capital of the firm
3. Unsuitable towards perishable products
5.3.3 Cradle to cradle design & manufacturing (C2C)
Define ‘Cradle-to-cradle design & manufacturing (C2C)’
State AND Explain an example
State the 5 Rs that this Lean Production Approach focuses on
State two ADVANTAGES and DISADVANTAGES of Cradle-to-cradle design & manufacturing (C2C)
Definition:
A lean production approach that involves sustainable, waste-free production model in which all material inputs can be recycled or reused, or are consumable or compostable. It helps to minimise the negative impacts of production on the NATURAL ENVIRONMENT.
Example of using a C2C Manufacturing Process:
- Manufacturers of recyclable glass bottles for water and wine. The glass is totally recyclable, so can be reused, thereby minimising the impact on the environmental
Cradle to Cradle focuses on the 5 Rs:
- Refuse
- Reduce
- Reuse
- Recycle
- Rot (biodegradable)
ADVANTAGES:
1. Improved Corporate Image - consumers are more likely to want to associate themselves with ethical organisations
2. Unique Selling Point - allow them to gain a competitive advantage, and differentiate themselves from competitors
DISADVANTAGES:
1. High Cost - due to extra production processes and measures to ensure consideration of the environment, this may lead to higher prices
2. Dependence on viewers’ subjective view on ethics
5.3.4 Quality Control and Quality Assurance
Define ‘Quality’
For BOTH 1. ‘Quality Control (QC)’ and ‘Quality Assurance (QA)’ provide:
Definition
Two ADVANTAGES and DISADVANTAGES
Extra:
State the aim of Quality Inspectors in Quality Control
Quality:
The extent to which a product is fit for its purpose i.e a good or service meets or exceeds the needs of its customers
QUALITY CONTROL (QC):
Definition:
An approach to quality management that involves quality inspectors periodically checking and examining output for possible defects, typically at the end of the production process.
Quality inspectors aim to ensure that products comply with quality standards. The less standardized the product and more expensive it is, the more frequently QC is conducted.
ADVANTAGES:
1. Improves Customer Satisfaction, BY prevented substandard output from being sold
2. Cheaper than quality assurance BECAUSE fewer workers need to be trained to check for quality.
3. Specialist inspectors are used, meaning less mistakes
DISADVANTAGES:
1. QC is a reactive rather than proactive method of quality management, so does not prevent mistakes
2. Large Volume of Substandard Products BECAUSE products are only checked at the end of the production process
3. There is an accepted reject rate
QUALITY ASSURANCE (QA):
A lean approach to quality management, involving all employees in the quality process that focusses on empowering all staff to check their own work throughout the production process.
ADVANTAGES:
1. Motivation in the Workplace - employees are given responsibility so they feel respected and valued by their employer
2. QA is proactive and preventative, unlike QC which is reactive (to faults and defects), and prevents products being fully produced before they are identified.
3. Generate better Ideas regarding quality process due to employee participation
DISADVANTAGES:
1. Expensive compared to quality control, as all workers are involved and need to be trained or upskilled
2. The philosophy only works if each staff member is committed to quality assurance.
3. Not feasible or suitable for all organisations ( for every product to be checked or inspected).
5.3.5 Methods of Managing Quality (A02)
There are three methods of managing quality in Business Organisations:
1. Quality Circles
2. Benchmarking
3. Total Quality Management (TQM)
For all of the three above provide the…
Definition
Two ADVANTAGES and DISADVANTAGES
- QUALITY CIRCLES
Definition:
Small groups of employees who meet regularly to assess quality issues and make recommendations to improve quality standards. These employees are usually from different departments in the firm to provide disparate perspectives.
ADVANTAGES;
1. Motivating the workforce by promoting team working (a form of non-financial motivator) as staff feel more valued, boosts team cohesiveness
2. Applicable to almost all organisations to improve quality standards
DISADVANTAGES:
1. Not necessarily cost-effective BECAUSE members have to be suitably qualified to identify and provide solutions to problems
2. Reliant on the support of senior management for recommendations to be implemented/funded otherwise members will lose motivation to continue
3. Increased workload for members
- BENCHMARKING:
Definition:
The routine process of an organization comparing its products, processes (operations) and performance to that of its competitors or its own historical standards.
ADVANTAGES:
1. Enables a firm to determine its strengths and weaknesses in comparison to the market
2. Allows a firm to improve its performance and competitiveness (SWOT Analysis)
3. Applicable to any aspect of a firms operations (largely applicable), flexible.
DISADVANTAGES:
1. It only identifies areas of improvement and not how a business should solve its performance/quality issues
2. Can be expensive - time and money is needed to ensure effective comparison (market research)
3. Not always objective, e.g perceptions of customer feedback
- Total Quality Management (TQM):
Definition:
All workers have responsibility for maintaining quality standards throughout the production process. It aims to achieve zero defects by preventing mistakes from being made.
ADVANTAGES:
1. Lower Production Costs was wastage declines or disappears due to the aim of zero reject rate.
2. Higher Customer Satisfaction due to minimal defects if at all existent
3. Improved Staff Morale - fell more valued and empowered by being part of the total quality process
DISADVANTAGES:
1. Highly Expensive - significant costs required to train staff.
2. Time Lag between when the TQM approach is implemented and when its benefits are experienced.
3. TQM only works if every employee is fully committed to the approach.
5.4.6 The Importance of National and International Quality Standards (A02)
Define ‘National and International Quality Standards’
State an example
State TWO ADVANTAGES and DISADVANTAGES of meeting quality standards
National and International Quality Standards are those that provide certification or recognisable mark of quality assurance that the product has met certain minimum standards to meet the needs of customers. These quality standards provide a framework or benchmark for organizations
EXAMPLE:
International Organisation for Standardisation (ISO)
IMPORTANT:
Quality standards can vary between different countries. Even if an organization meets the national quality standards, it could fail these in overseas markets.
ADVANTAGES (of meeting quality standards):
1. Access to New Markets (national and international) - through gaining certification
2. Legal Compliance - Helps the business adhere to laws and regulations
3. Competitive Advantage - differentiate
DISADVANTAGE (of meeting quality standards):
1. Costs - obtaining certification and ongoing compliance costs can be expensive and training expenses
2. Resistance to Change - Employees may resist change and not be receptive to new work processes and standards
3. Limited Innovation - Strict adherence to quality standards could hinder innovation and flexibility
