Economics theme 2.3.3 Flashcards
What is lean production
Lean production techniques are working practices derived from Japan that focus on cutting waste whilst maintaining, or improving, quality
What are the 2 lean production methods
Just-In-Time (JIT) management of stock – a technique used to minimise stock holdings at each stage of the production process, helping to minimise costs
Kaizen (continuous improvement) – a technique that concentrates on small, but frequent, improvements in every aspect of the production process
What does quality mean
Quality means the ability of a product or service to meet customers’ expectations
how can quality be measured
Aesthetics i.e. physical appearance
Features i.e. physical attributes
Core aspects i.e. basic abilities/ functionality
Actual aspects i.e. added extras / functionality
Augmented aspects i.e. support feature e.g. warranty
Performance i.e. reliability, durability
Intangible aspects i.e. non physical attributes e.g. brand name, reputation
How can quality be improved
Training and motivating employees
Understanding customers’ expectations
Using technology
Working closely with suppliers
Quality systems:
Quality control
Quality assurance
Quality circles
Total quality management (TQM)
What is quality controll
The checking of a good or service before it is delivered to a customer i.e. at the end of the process
What are the advantages of quality controll
Quality can be monitored
Stops faulty products reaching the customer
Common problems can be identified
Inspector takes responsibility
Often a robust system
What are the disadvantages of quality controll
Quality can be monitored
Stops faulty products reaching the customer
Common problems can be identified
Inspector takes responsibility
Often a robust system
What is quality assurancce
The checking of a product or service at each stage of its production e.g. as it travels along a production line
What are the advantages of quality controll
Spots any faults early saving resources being wasted at the next stage of the production process
Motivates workers who are responsible for ensuring quality standards are met
Aims to achieve an objective of zero defects
Ensures clear systems are in place
Enhances the reputation of the business as less chance of faulty goods reaching the end customer
What are the disadvantages of quality controll
Requires staff training and high levels of staff commitment
Can slow down the production process and labour productivity leading to higher unit costs
May demotivate workers who feel under pressure
Opportunity cost of managers time when initially implementing the systems and procedures
what are quality circles
Quality circles are informal groups of workers who volunteer to meet on a regular basis to discuss issues relating to the workplace
Emphasis is placed on how to improve quality
What is total quality management
TQM sees quality as the responsibility of all employees
Each employee is a link in the chain and treats the next link as if they were an external customer
They will pass the product on only if it is correct
Philosophy of get it right first time
What is kaizen
Kaizen is a system that concentrates on small, but frequent, improvements in every aspect of the production process
All members of the workforce will be involved
What are the benefits of just in time stock
Less costs in holding inventory
Less working capital required
Less obsolete or ruined inventory
Lower associated costs e.g. security and insurance
Avoids having unsold stock
What are the disadvantages of just in time stock
Little room for error
Very reliant on suppliers
Unexpected orders harder to meet
Any delays in deliveries due to unforeseen circumstance can cause production to come to a halt
High initial set up costs
Complex systems have to be put in place and understood
What are the advantages of having good stock controll and what does it lead to
Efficient stock control can reduce waste
Less obsolete or damaged stock
Lower costs of holding stocks
Leading to a competitive advantage
Cost savings can be passed on in the form of lower prices
Better able to meet the needs of customers
what is the competitive advantage from lean production
Can help achieve lower unit cost
Less waste
Positive image to consumer
Reputation
Positive word of mouth
Unique Selling Point
Pricing decisions
Motivated workforce
what are the advantages of improving quality
Achieve operational objectives
Gain a competitive advantage
Reduce unit costs
Enhanced reputation
Motivated workforce striving to achieve common goals
What are the disadvantages of improving quality
Reluctance of employees to adapt to change or take on additional responsibility
Requires finance to invest in training and test and implement new systems
Reliant on good relationships with resource providers including suppliers
Once achieved must be monitored and reviewed regularly to ensure standards are being maintained
