LEAN PRODUCTION &

QUALITY
MANAGEMENT
INTRODUCING THE Page 385
TOPIC
LEAN PRODUCTION
“Producing goods and services with the minimum of wasted resources
while maintaining high quality”

Getting it right the first time

Less waste, less duplication, elimination of non-added-value activities
Cutting out anything that adds complexity, cost and time, does not add
value to the customer
7 MAIN SOURCES OF WASTE
IN INDUSTRY
I. Excessive transportation of components and products
II. Excessive inventory holding
III. Too much movement by working people (e.g. to get supplies of
components)
IV. Waiting days (delays in production process)
V. Overproduction (producing ahead of demand)
VI. Over-processing (making good too complex when can be simple)
VII.Defects
HOW TO REDUCE
WASTES
SIMULTANEOUS
ENGINEERING
“Product development is organized so that different stages are done at the
same time instead of in sequence”

Benefit → product can be in market months or years earlier

Opposite: sequential engineering (Fig 26.1)

Developing new designs could take longer and longer; competitors may
step in
CELL PRODUCTION
“Splitting flow production into self-contained groups that are responsible
for whole work units”

A team leader looks after a cell (Fig 26.2)

Performance of cell measured again pre-set targets i.e. output levels,
lead time, quality
This has led to
 Worker commitment and motivation
 Job rotation within cell
 Increased productivity
FLEXIBLE SPECIALISMS
Technological advances and changing customer demands leads
to short production runs
Most relevant example: cell phones, games consoles
Changing from one design to another requires flexibility in 3
ways:
i. Flexible employment contracts
ii. Flexible and adaptable machinery
iii. Flexible and multi-skilled workers
ACTIVITY 26.2
 KAIZEN
“Continuous improvement” (Japanese word)
Philosophy → all workers have something to contribute, not just trained
managers (Fig 26.4)

Following conditions necessary for Kaizan:

 Management culture directed towards staff input
 Team work
 Empowerment
 All employees involved

Tip for good analysis: link kaizen principle to Herzberg’s job enrichment
KAIZEN – LIMITATIONS
Some changes cannot be introduced gradually and need a radical,
expensive solution
Resistance from senior managers
Costs i.e. training time to organize meetings, lost output due to meetings
ARE LEAN & JIT APPROPRIATE
IN ALL?
Finance
Management of change
QUALITY
QUALITY PRODUCT
Activity 26.5
“A good or service that meets customers’ expectations and is therefore ‘fit for
purpose’”
What passes for being “fit for purpose”?
What about these products? Do they have quality? At what point do they become
not fit for purpose?
 Bread
 Medicine
 Cars
QUALITY STANDARDS
“The expectations of customers expressed in terms of the minimum
acceptable production or service standards’”
Use this to understand the expectations of customers in terms of quality
What factors determine the quality of services? (i.e. a bank)

TOP TIP
Quality is a relative/subjective concept. You need to look at resources, needs
of the target market and quality standards of competitors.
HOW CAN QUALITY BE
ACHIEVED?
QUALITY CONTROL
“This is based on inspection of the product or a sample of products.”

Done at the end of production

3 stages to effective quality control

 Prevention: quality should be ‘designed into’ the product
 Inspection
 Correction and improvement
Quality inspection is expensive – needs experts; sometimes need to damage
product (e.g. drop laptop to see if it still works)
Sampling methods needs to be used → not all products are tested
Fig 26.5 (bread weight)
WEAKNESS OF QC
You are looking for problems → negative culture; you are successful when
you find faults
Tedious job
Checking only done at specific points → faulty products may pass through
different stages
Inspectors are the only ones checking for quality, not the workers
QUALITY ASSURANCE
“A system of agreeing and meeting quality standards at each stage of
production to ensure consumer satisfaction.”

Self-checking by workers
Puts more emphasis on designing products for easy fault-free manufacture
Checks components, materials, and services bought into the business at the
point of arrival or delivery, not at the end of the production process
Need to have agreed standards for all stages. The stages are:
 Product design: does it meet expectations?
 Quality of inputs
 Production quality
 Delivery systems
 Customer service, including after-sale service
Advantages:
 Everyone is responsible for quality

 Self-checking increases motivation

 This system can be used to trace-back quality problems

 Reduces need for expensive final inspection

HOMEWORK
Read and notes
Activity 26.6 → Q1-3
ISO 9000
“An internationally recognized certificate that acknowledges the existence of
a quality procedure that meets certain conditions”

To obtain this, need to demonstrate:

 Staff training and appraisal methods
 Methods for checking on suppliers
 Quality standards in all areas of the business
 Procedures for dealing with defective products and quality failures
 After-sales service

Drawback: costs of preparing for inspection, form-filling

TOTAL QUALITY
MANAGEMENT
“An approach to quality that aims to involve all employees in quality improvement”
Everyone is an internal customer of the business
 Examples – pg 396

Aim: make all workers at all levels accept that the quality of the work they perform
is important
Fits in well with Herzberg’s principles of job enrichment
Also aims to achieve zero defects
TQM only works if all are committed to it
HOW WOULD YOU LINK
THESE WITH TQM?
Workforce planning
Motivation
Organizational structure
Communication
Training
Marketing
COSTS & BENEFITS OF
QUALITY SYSTEMS
Do have incurring costs
HOWEVER, if effectively managed, the costs are covered by expected revenue
gains

Table 26.1
COMPETITIVENESS AND
QUALITY
Achieving consistent quality is more effective than pricing in both domestic and
international markets
Consistent quality = USP = higher prices justified
As consumer incomes rise, average consumer decisions are more influenced by
quality and fitness for purpose
BENCHMARKING
“Involves management identifying the best firms in the industry and then comparing the
performance standards – including quality – of these businesses with those of their own
business.”
1. Identify the aspects of the business to be benchmarked
2. Measure performance in these areas
3. Identify the firms in the industry that are considered to be the best
4. Use comparative data from the best firms to establish the main weaknesses in the business
5. Set standards for improvement
6. Change processes to achieve the standards set
7. Re-measurement
BENCHMARKING – AN
EVALUATION
Benefits Limitations
Faster and cheaper way to solve problems Need relevant and up-to-date
Areas of great significance for customers
information
identified Merely copying ideas may discourage
Assists firm to increase international initiative and original ideas
competitiveness Costs of comparison may not be
Comparisons between firms can encourage recovered by improvements obtained
useful crossover
Participation of workforce can lead to
better ideas and motivation
QUALITY CIRCLES
Japanese-originated approach to quality
Based on staff involvement in improving quality
Can result in quality improvements and increased worker participation
Small groups of workers discuss quality issues and present solutions
 KEY CONCEPT
Creating value is not just about cheaper inputs.

If a business can establish a reputation for quality products and brand its products
successfully, then customers will often be prepared to pay higher prices than for
competitors’ products.

This also creates value.

HOMEWORK
Read and notes
Page 401-402, Case Study 1
OR
Research Task