Lean Production & Quality

Management. (5.3)
 15 45
5.1 Introduction to operations
management
5.2 Operations methods
5.3 Lean production and quality
management (HL only)
5.4 Location
5.5 Break-even analysis
5.6 Production planning (HL only)
5.7 Crisis management and
contingency planning (HL only)
5.8 Research and development (HL
only)
5.9 Management information systems
(HL only)
 Key Questions to be answered
1. What is lean production?

1. Explain the 2 most popular lean production

methods?

1. What is quality and why is it important? (for

Customers and Producers) This links with
product of Marketing Mix and Stakeholders (i.e
satisfying the need and wants of customers)

1. What is the difference between quality control

and quality assurance?
 Key Questions to be answered

5. Distinguish cradle 2 cradle design and

manufacturing and cradle to grave?

6. What are National and International Quality

Standards and why are they relevant for producers?

7. Evaluate the importance of TQM and Lean

Production for a business
Note - This unit has a large connection with 5.2
Operations Methods.
 What is ‘Lean Production’?
• Lean production is a philosophy built
into the culture of organizations that
focus on;

• Less Waste – It is about ensuring that

the business gets things right “first
time” in the production process and
using fewer resources. (less defects,
no overproduction)
1. What is organizational
culture?
• Greater efficiency – It emphasises
using the resources more effectively to 2. How does this
achieve an output. philosophy connect to
the factors of
production?
Organizational Culture- Metaphor
 2 Lean Production Methods

❑ Kaizen – This is all about everyone in the

business trying to improve productivity
and efficiency. When applied to the
workplace, Kaizen activities can
improve every function of a business,
from manufacturing to marketing and
from the CEO to the assembly-line
workers.
It is about small changes starting from
the lower levels of hierarchy.
(Empowerment?)
 2 Lean Production Methods

❑ Just in Time is a lean stock control system

which relies on stocks being delivered only
when they are needed in the production
process. This is connected to the demand of
the product. This reduces the costs as stock is
not needed to held in storage areas which
can be expensive.

❑ (Think of the opposite strategy, Just in Case)

 2 Lean Production Methods

Task

Summarise the 2 lean production methods.

Outline any issues lean production might cause, especially

if a company begins to initiate these strategies

Share your ideas with the rest of the class. Disagreements

are allowed so please give constructive feedback :-)
 Cradle 2 Cradle
• This is a sustainable model of production
based on natural processes. The technique is
waste free and products which are made can
be efficiently recycled to be used again.
It connects with circular business models (BM
tool)

• Austria is very effective at this as

recycling/re-using is prevalent in this country.

• Cradle 2 Cradle is either technical

(recycle/re-use) or biological (compostable in
an ecologically friendly way).

Links with the Ethics and Sustainability.

Cradle 2 Cradle vs Cradle to Grave
 What is Quality? (Links with
Product of 4Ps)
1. What is quality?

1. Select 3 stakeholders and explain

why quality is important to them?

1. Using Apple as an example, is there

ever a danger that quality could be
too high?

4.To what extent do Samsung succeed

when Apple makes a profit?
 What is Quality? (Links with
Product of 4Ps)
• Quality means that a product fulfills its
purpose and meets the expectations of
the consumer.

For businesses, quality is essential to

show they are using resources correctly
and for customers it helps to create
customer loyalty/allows them to
potentially pay a higher price. It means
that quality suppliers are chosen and
shareholders can be rewarded.
 What is Quality? (Links with
Product of 4Ps)
A businesses may have to be
careful that the product is not too
high a quality because;

• It could be too expensive to

produce.

• Would prevent customers from

buying upgrade (IPhones etc.)

• Massively increase Research and

Development costs for the
business who would need to
undertake product development
to improve.
Think of quality control being like summatives and quality
assurance like formatives.
Compare and contrast the effectiveness of quality control vs
quality assurance. Justify your response
Methods of Managing
Other method we used? Quality
• These are the most Task
popular methods of
Make notes about the following
Managing Quality
methods then discuss which
you feel is the most effective
• Quality Circles and why?

• Total Quality Group Task - Split yourselves

Management into 3 groups and persuade the
• Benchmarking rest why your method is the
most effective.
 Quality Circles
• This is where small groups of
employees voluntarily meet:
• In normal working time
• Under the leadership of their
supervisor
• To identify, analyse and solve
"work-related" problems
• To recommend solutions to
management
• These groups are usually formed using
members of different departments
• These ideas are then taking to
management of the company

Introduction to Quality Circle and Its Importance Today - Shiksha Online.

Real life Situation

Google creates opportunities for employees to

● Discuss working practice
● Quality Issues
● Matters concerning them
 Total Qualitywe
Other method Management
used?
• Where quality is a priority at every stage
of the business – recruitment, finance,
design, production, retail and so on

• This is about quality being an ‘ethos’

rather than just having systems in place
(Could this tie in with a firm’s mission
statement?)

• The business make ongoing adjustments

and refinements in response to constant
feedback
It has two main objectives:
• Zero Defects
• 100% customer satisfaction

https://www.investopedia.com/terms/t
/total-quality-management-tqm.asp
Advantages/Disadvantages of TQM
Advantages Disadvantages
• Employees are ● Productivity may fall
responsible for ● Training costs
checking their own ● Could discourage
work creativity as everyone
• Employees feel conforms too much
important and have
ownership of their work
• Employees feel trusted
• No inspectors are used,
saving costs
Benchmarking
This is when businesses
compare its products,
operations and processes
with others in the same
industry (especially the
market leaders)

The purpose is to improve

performance and to
emulate best practice.
For example, Falkensteiner
Schlosshotel being rated a
5 star hotel.
Benchmarking
Benchmarking in Business:
What It Is & It's Importance
| Paychex.
 Impact of Lean production and TQM to an
organization (AO3)
The objective of lean production
and TQM is to improve the quality
of a firm’s goods and services.

Task.
Please conduct independent
research and outline the pros and
cons of this impact to an
organization.
 Impact of Lean production and TQM to an
organization
The objective of lean production
and TQM is to improve the quality
of a firm’s goods and services.
A business wanting to improve
quality/be more efficient can have a
positive impact on the culture of
the organization. It means
customers will trust their brand
more and could result in more
innovation too.
However, some workers may be
reluctant to change their working
practices (which can also affect
culture too). Some businesses
might not have the capability to
initiate these changes.
 Importance of National and International Quality
Standards
This is a part of benchmarking
where a good or service must meet
a set of predetermined criteria of
quality in order to be awarded a
certification of quality standards.
This shows to customers that a
certain product has been externally
tested and they know it is of
sufficient quality and is fit for
purpose.
Products such as Iphones need to
pass certain international quality
standards.
What has this to do with International
Quality Standards and quality?
100 Infant Deaths Linked to
Recalled Fisher-Price Sleeper - The
New York Times.
5.3 Question. b) Explain two benefits of JP using quality circles (4)

JP produces electric guitars. It is a cooperative owned by a committed workforce who share in

the management and success (or failure) of the company and its profits. Workers enjoy having
control over the workplace and are productive. However, JP’s continued success is threatened
by insufficient finance, which prevents them from spending more on traditional promotional
methods.
JP’s guitars are expensive relative to the competition but are known for their quality. Its
customers are very brand loyal. The use of social media marketing by many famous musicians
influences JP’s brand loyalty and awareness. Unfortunately for JP, one especially famous
musician using a JP guitar on social media recently received negative publicity about his private
life.
JP follows strict quality procedures that include quality circles. JP’s management believe that
teams of workers employed on the production line know the production process best and are in
the best position to make any necessary improvements. Staff turnover at JP is very low.
XYZ, a large company known for its kitchen appliances, is considering moving into the musical
instrument market as part of a growth strategy – they want the high gross profit margins on
guitars (compared to the low profit margins on kitchen appliances). XYZ wants to take over JP.
XYZ has a strong balance sheet and large cash reserves and is an expert at marketing.
B) Candidates can refer to marketing, operation or Human Resource Management issues.
It is expected that the candidates demonstrate explicit understanding of the term/ practice of using
quality circles.
The benefits to JP of using quality circles revolve around the
motivational/productivity/teamwork/cooperation/possible empowerment benefits gained from
participation. The fact that JP is a cooperative also implies that quality circles will align with the
culture of the organization (supportive, common goals).
Meeting together to find better methods of production/ practices creates high quality products/
guitars. JP established a Unique Selling Point based on quality which creates brand loyalty.
Empowered staff are more motivated and therefore staff turnover is also very low which reduces
recruitment costs and training as well as increased efficiency when the higher levels of needs/ the
motivators of employees are met. There is evidence in the case study that JP workers are productive
and take pride in their work.
Accept any other relevant benefit.
Mark as 2 + 2.
● For an identification or a description of one benefit with or without application [1].
● For explanation of one benefit with no application [1].
● For explanation of one benefit and application [2].

Application must refer to the benefits to JP of using quality circles.

 Post Assessment

Confidence Prove it - Discuss this topic Check your notes - What have
Levels Justification with a partner you missed?

Lean production and quality

management (HL only)
The following features of lean production:
• less waste
• greater efficiency
The following methods of lean production:
• continuous improvement (kaizen)
• just-in-time (JIT)
Features of cradle to cradle design and manufacturing
Features of quality control and quality assurance
The following methods of managing quality:
• quality circle
• benchmarking
• total quality management (TQM)
The impact of lean production and TQM on an
organization (AO3)
The importance of national and international quality
standards