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5
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Lean production should lead to improved quality and reduced costs
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Different examples of waste that exists:
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Materials and resources
Time
Energy
Human effort

In adopting lean production, several principles are followed:
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Waste minimisation - requires the business to remove any operation or process that does
not add value to the product
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‘right first time’ approach - Businesses aim for zero defects by identifying and resolving all
problems at source
Flexibility - Resources must be adaptable to the changing needs of the business
Continuous movement – required the continual strive to improve quality and efficiency,
thereby reducing average costs of production
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The following methods of lean production (AO2)
Methods of lean production
Kaizen (continuous improvement)
Kaizen = Japanese word for philosophy of continuous improvement (comes about by changing for
the better)
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Aim = to establish a steady flow of small improvements rather than one - off or radical
change and eliminate waster

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Reason = people tend to be resistant to change (especially changes that are large and
disruptive)
Make change easier to manage
Philosophy behind = Anyone in the organization can contribute

Advantage:
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motivating staff as they are able to use their initiative and have some input in the decisionmaking process

Disadvantage:
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Does not focus on cost cutting but on continual improvements of quality

Just- in – time (JIT)
JIT = Japanese philosophy based on inventory management system based on stocks being delivered
as and when they are needed in the production process
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There is no need to have a stock control system as
buffer stocks ae not required
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Example:
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Car manufacturing – customer places a specific order before the vehicle is made, each
component is ordered to be available when needed for production
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Developed by Taiichi Ohno (Toyota executive)
Lean production method used to control logistical (supply) chain

A way to achieve JIT production:
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Inventory is based on actual customer orders rather than sales forecasts
Uses a card system with an inventory number attached to each component in the
production process

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The system starts when a customer places an order - a part (component) is only used (or
ordered) if there is a kanban card for it
Must accompany each item or component at all times in the production process and no item
is used or moved on without a Kanban card
Any defects are identified to prevent it being moved on to the next process
Typical kanban card shows operatives…

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What is to be produced
How much of that item is to be produced
By when it needs to be made

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Although orders can be placed using computers in modern restaurants, the process
is still based on a kanban system
As a visual tool to monitor and manage workflow, kanban boards are created using
named columns to show where each task is in the production process
Makes it easier for operatives to see…

What tasks have been completed
Which ones are works in progress (WIP)
Which ones are yet to be started

Each stage in the workflow process has a limited (or maximum) number of tasks that can be worked on
at any point in time (shown in brackets)
Having these WIP limits helps to ensure that:
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Production keeps flowing at a steady pace
Workers complete tasks before they take on any more work
Reduce waste as workers do not have to spend too much time switching between tasks

Advantages:
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The visual nature of the kanban board makes it easier for operatives to see what tasks have
been completed, which ones are works in progress (WIP) and which ones are yet to be
started
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Andons are typically colour – coded using a traffic light system:
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Green – normal operations in progress
Yellow – attention will be needed soon
Red – immediate attention is required

Provide visual feedback to workers and supervisor on the production floor
Andon is an important method of lean production due to its benefits:
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Bringing instant attention to production problems as they arise in the manufacturing process
Providing a consistent and simple communication tool for all factory floor workers and
supervisors
Encouraging workers and supervisors to take immediate action to deal with production,
quality and safety problems
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Underlying principle = there is not waste in nature (making is sustainable)
Implies that C2C manufacturing is designed in such a way that product is efficient and generates
minimal to no waste (sustainable for future generations)
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Advantage:
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Business who adopt this philosophy design are more ecologically and environmentally
friendly
Positive brand recognition

Disadvantage:
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Cost

Features of quality control and quality reassurance (AO1)
Quality control and quality assurance
Quality = product fulfils its purpose and meets the expectations of the consumer
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Customers perceive quality by observing and comparing several interrelated factors, including:
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Physical appearance and design
Image and reputation of manufacturer or seller
Reliability
Durability
Fit for purpose
Safety features
Customer service
After – sales service

Quality of product is important for two main reasons:
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Its reputation
Ability to control cost

Quality management = function concerned with controlling business activities to ensure that
products are fit for their purpose
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Edwards Deming (1900-1993) argued that QC methods are ineffective and costly
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Deming’s philosophy for quality improvement is based around four key phrases:
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Plan – improve quality be designing or revising operations and processes
Do – execute the plan
Check – monitor performance
Act – decide on necessary changes that are needed to further improve the process

Quality assurance – ongoing process of total quality management (to maintain image)
Given the importance that organizations attach to achieving a desired level of quality, it is essential
to understand how businesses can measure quality
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Purpose = encourage communication and teamwork in order to solve problem that have a negative
effect on quality
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However this requires all
employees to be properly trained to check and correct their own work;
A total quality culture (TQC) is a philosophy that embeds quality in every business operation and
process
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Purpose = zero defects in the organization
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If achieved, this will eliminate waste and the need to rectify mistakes
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Benefits:
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Staff motivation is likely to improve since workers are empowered and involved in decision
making
Reduces wastage
Position corporate image
Customer needs are a central focus
Improves change of business survival (poor quality is not sustainable)

Limitations:
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Cost in establishing and maintain a TGM
Quite bureaucratic due to procedures
Need for sufficient training of staff
Time lag before the benefits of TGM and felt

The importance of national and international quality standards (AO2)
National and international quality standards
National and international quality awards are used to show that certain quality standards have been
met (can include these as promotional campaigns)
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Only if and when a business has proved that its products meet or exceed these standards is it given
the quality award in recognition of its achievements
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The ISO is one of the most
powerful non-governmental organizations (NGO)
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Modern business strategy focuses on quality management being an ongoing process that
involves the continual updating and improvement of an organization's products, functions
and processes
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Businesses can do this through motivational methods, developing multiskilled workers, and
using flexible working structures
A business with a highly trained, flexible and motivated workforce is more likely to achieve
total quality management
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Quality used to come at a high price
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Strategies:
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Many businesses pursue a six sigma lean production strategy to increase quality by striving
to limit defects to no more than 3
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Although the costs of
meeting quality management might be very high, perhaps the costs of not meeting these
standards are even greater to a business, particularly in the long run
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The slogan of Italian luxury brand Gucci sums
this up very well: "Quality is remembered long after the price is forgotten

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