Unit 5.3 Lean production and quality management (HL)
Forced to improve through crushing reviews!
One year ago!
One year ago, the BBC ran an article on a popular local sandwich maker, ‘Tasty Bites’. They smelled a rat after a stream of devastating reviews were left online.
So, the BBC decided to go undercover and do some taste testing of their own! The results were pretty unsavoury as reporter, Daniel Wong recalls,
“The sandwich looked and tasted like a tragic mess. I have never seen anything as unprofessional and as careless in my life. Through our primary research, the disasters kept coming with most of their different sandwich offerings being similarly bad”!
In a response to this devastating public feedback, Tasty Bites almost went into bankruptcy!
How did they avoid it? The manager (Rob Bakersfield) was forced to examine every aspect of the business and assess where the problems lay. His conclusion was that some serious improvements in quality and production were necessary!
He had read something about lean production in his distant past so decided to do some research to see if this could provide some inspiration on how to save the company! Among other things, he read that the whole focus was to avoid ‘muda’ (which is waste in Japanese)! Waste (in turns out) is anything that, “prevents Tasty Bites from being efficient or lean”!
Thinking about ‘muda’, Rob Bakersfield went to work to see what he could identify as issues at Tasty Bites. He made a list of the following problems!
Firstly, they had tried to offer too many fillings! Worried about missing a particular market segment, they had tried to supply the wants and desires of every customer! They had done this after performing some basic market research. But… they were selling only a few of each filling! This created massive ingredient order lists and a continuous shortage of ingredients and massive admin charges (from repeat orders) to run the business.
Secondly, the poor factory floor set up meant that staff were walking all over the place in the most inefficient ways. A lack of training also meant that staff wasted time where they could have been quicker. When speed became an issue, they would rush to keep up with the conveyor belt! This meant that quality fell! The quality control QC (at the end of the production line) started to pick-up ever-increasing amounts of defects!
Thirdly, there was a high wastage rate with loads of sandwiches being thrown away and remade.
Fourth, the factory building they used was too large and required too much energy to heat it so workers could be warm. It also had a cold dark feel to it. The production of sandwiches was also nowhere near the admin office, which made communication difficult!
The final and most upsetting part of the puzzle was the enormous waste of materials! There were boxes and boxes of ingredients thrown away each week, under supply of certain sandwiches and too many of other types!
Rob knew that to save the company, things had to change! The old ways had to go. He couldn’t face any more piles of defects! He knew that it was now or never! He needed a complete overhaul of the systems to implement quality assurance (QA) , quality management and reduce all forms of muda!
QUESTIONS:
- Define (with reference to Tasty Bites), the term primary research [2]
- Explain (with reference to Tasty Bites) two types of ‘muda‘ [4]
- Explain how quality control (QC) and quality assurance (QA) are different [4]
- Examine how improved quality at Tasty Bites can benefit the business [6]
- Justify which of the problems listed is the most significant for Tasty Bites [5]
- Recommend how the problems at Tasty Bites can be solved with the use of lean production and quality management [10]
Unit 5.3 Lean Production and quality management info
here’s a concise summary of the Lean Production part in Unit 5 of the IB Business Management syllabus, followed by suggestions for implementing Lean Production in a failing sandwich factory:
Lean Production in Unit 5:
Definition:
- Efficient production with minimal waste.
- Originated from the Toyota Production System.
Key Principles:
- Just-in-time production.
- Continuous improvement (Kaizen).
- Respect for people.
Waste Reduction:
- Elimination of overproduction, defects, waiting time, etc.
Inventory Management:
- Minimize stock through JIT.
- Smaller, frequent deliveries.
Employee Involvement:
- Cross-functional teams.
- Empowerment and training.
Customer Focus:
- Meet customer demand precisely.
- Flexibility and responsiveness.
Applying Lean Production to a Failing Sandwich Factory:
Inventory Management:
- Minimize excess ingredients and finished goods.
- Adopt a just-in-time approach to reduce waste.
Streamlined Processes:
- Identify and eliminate bottlenecks.
- Simplify production steps.
Employee Training:
- Train workers for multi-skilling.
- Encourage continuous learning and improvement.
- Implement rigorous quality checks.
- Address and rectify defects promptly.
Flexible Production:
- Adjust production based on customer demand.
- Introduce a flexible production schedule.
Cross-Functional Teams:
- Foster collaboration among different departments.
- Encourage communication and idea-sharing.
Visual Management:
- Use visual tools to track progress.
- Enhance communication through visual aids.
Customer Feedback Integration:
- Incorporate customer feedback into the production process.
- Adapt products based on customer preferences.
By embracing Lean Production principles, the failing sandwich factory can enhance efficiency, reduce waste, and meet customer demands more effectively.
Over processing (adding more features or functions than is necessary)
Time (delays in the process). Often brought about by double moving or inefficient workflows!
Human effort: poorly made or produced items may need to be destroyed and reproduced if not right, first time!
Energy: wasted money from inefficiency. Lights left on, swimming pool too warm, building poorly insulated which requires better insulation to save cost in the long term.
Resources and materials: could be underproduction, waste of actual resources or ingredients (in this case). Overproduction could also be a waste, given you may never sell the produce!
Here’s a brief summary of the Kaizen part in Unit 5, followed by suggestions for implementing Kaizen in a failing sandwich factory:
Kaizen in Unit 5:
Definition:
- Continuous improvement philosophy.
- Originated in Japan.
Concepts:
- Small, incremental changes.
- Involves all employees.
Implementation:
- Employee involvement in decision-making.
- Regular training and feedback.
- Emphasis on teamwork.
Benefits:
- Improved efficiency and quality.
- Enhanced employee morale.
- Sustainable long-term improvements.
Applying Kaizen to a Failing Sandwich Factory:
Employee Engagement:
- Involve workers in identifying issues.
- Encourage suggestions for improvement.
Training Programs:
- Provide training on efficient processes.
- Foster a culture of continuous learning.
Team Collaboration:
- Establish cross-functional teams.
- Encourage communication and idea-sharing.
Regular Feedback Mechanisms:
- Implement systems for constant feedback.
- Address issues promptly and constructively.
Process Streamlining:
- Identify bottlenecks and inefficiencies.
- Implement small, targeted changes.
Quality Improvement:
- Focus on improving the quality of ingredients.
- Implement rigorous quality control measures.
Waste Reduction:
- Identify and eliminate unnecessary steps.
- Minimize resource wastage.
Continuous Monitoring:
- Regularly assess and reassess processes.
- Adjust strategies based on ongoing feedback.
By applying Kaizen principles in these ways, the failing sandwich factory can work towards continuous improvement and revitalization.
JIT Manufacturing in IB Business Management:
Definition:
- Production system that aims to minimize inventory and production time.
- Components are delivered just in time for assembly.
Key Principles:
Minimized Inventory:
- Reduces holding costs and waste.
- Components arrive precisely when needed.
Continuous Flow:
- Smooth and continuous production process.
- Minimizes bottlenecks and delays.
Pull System:
- Production triggered by customer demand.
- Reduces overproduction.
Supplier Relationships:
- Close collaboration with suppliers.
- Relies on reliable and timely deliveries.
Waste Reduction:
- Identifies and eliminates various forms of waste.
- Focus on efficiency and quality.
Application to a Failing Sandwich Making Business:
Inventory Management:
- Reduce excess stock of ingredients and finished products.
- Order ingredients based on customer demand to minimize waste.
Production Streamlining:
- Identify and eliminate bottlenecks in the sandwich-making process.
- Implement a smooth and continuous flow of production.
Demand-Driven Production:
- Adjust production levels based on real-time customer demand.
- Avoid overproduction and food wastage.
Supplier Collaboration:
- Work closely with suppliers to ensure timely and reliable ingredient deliveries.
- Establish strong relationships to support JIT principles.
Employee Training:
- Train employees for multi-skilling to ensure flexibility in production.
- Foster a culture of continuous improvement and efficiency.
Quality Focus:
- Implement rigorous quality control measures.
- Address defects promptly to maintain high-quality standards.
Lean Thinking:
- Embrace a lean approach to minimize waste in all aspects of the business.
- Encourage employees to identify and eliminate waste in their processes.
Implementing JIT principles in a failing sandwich-making business can lead to improved efficiency, reduced costs, and better responsiveness to customer needs, ultimately contributing to the revitalization of the business.
Here’s a summary of the concepts on ‘Cradle to Cradle Design and Manufacturing’ in the context of the IB Business Management syllabus:
Definition:
- A sustainable approach to product design and manufacturing.
- Aims to create products with a life cycle that mimics nature—no waste, only continuous reuse.
Key Principles:
Closed-Loop System:
- Products designed for recycling and reuse.
- Materials can be continuously cycled without loss of quality.
Eco-Effectiveness:
- Focuses on creating a positive impact on the environment.
- A contrast to the traditional “eco-efficiency” approach, which aims to reduce negative impacts.
Implementation:
- Collaborative efforts between designers, manufacturers, and recyclers.
- Materials selected for their environmental impact and recyclability.
Benefits:
- Minimizes waste and environmental impact.
- Encourages a circular economy.
- Fosters innovation in sustainable design and manufacturing.
Connection to IB Business Management:
Sustainability Focus:
- Aligns with the growing emphasis on sustainable business practices.
- Addresses environmental concerns and social responsibility.
Innovation and Competitive Advantage:
- Companies adopting Cradle to Cradle principles can gain a competitive edge through innovative, sustainable products.
- Appeals to environmentally conscious consumers.
Supply Chain Considerations:
- Requires collaboration and coordination across the supply chain.
- Emphasizes responsible sourcing and recycling practices.
Understanding Cradle to Cradle design and manufacturing is crucial for businesses aiming to integrate sustainability into their operations and meet the evolving expectations of consumers and regulatory bodies.
Cradle to grave refers to the one time use of something (be it a product or packaging). This is a very common type of manufacturing. MacDonald’s is often cited as an example of this in which large quantities of packaging are created and used for just a few minutes of the products lifecycle!
Environmental Damage Aspects:
Resource Depletion:
- Extraction of raw materials for production contributes to resource depletion.
- Continuous demand for new resources can harm ecosystems.
Waste Generation:
- The disposal phase often leads to significant waste generation.
- Landfills and incineration contribute to pollution and environmental degradation.
Energy Consumption:
- High energy consumption during the production and disposal phases.
- Contributes to greenhouse gas emissions and global warming.
Connection to Environmental Damage:
Linear Consumption Model:
- Cradle-to-grave follows a linear consumption model with a significant focus on disposal.
- This linear approach can lead to resource depletion and environmental harm.
Lack of Circular Economy Principles:
- Cradle-to-grave doesn’t inherently promote the circular economy.
- Recycling and reusing materials are often not prioritized in this model.
Environmental Impact Oversight:
- In some cases, businesses may prioritize economic considerations over environmental concerns.
- Lack of emphasis on sustainable practices may lead to long-term environmental damage.
Here’s a summary of the ideas of Quality Control (QC) and Quality Assurance (QA) in the context of the IB Business Management syllabus, followed by a short evaluation highlighting why QA is often considered the more effective method of controlling quality:
Quality Control (QC):
Definition:
- Process-oriented approach.
- Focuses on identifying and rectifying defects during or after production.
Key Aspects:
Inspection and Testing:
- Involves checking and testing products for defects.
- Reactive approach to quality management.
Corrective Actions:
- Rectifies defects found during the inspection.
- Aims to ensure that only products meeting quality standards are released.
Quality Assurance (QA):
Definition:
- Systematic, proactive approach.
- Focuses on preventing defects by implementing processes and systems.
Key Aspects:
Process Improvement:
- Emphasizes continuous improvement of processes.
- Prevents defects at the source.
Standards and Procedures:
- Establishes clear quality standards and procedures.
- Aims to ensure consistent quality throughout production.
Evaluation – Why QA is More Effective:
Prevention vs. Detection:
Cost Efficiency:
- QA minimizes the need for extensive inspection and rework.
- QC may involve significant resources in identifying and correcting defects.
Consistency in Quality:
- QA establishes consistent processes, leading to consistent product quality.
- QC may result in variations due to the identification and correction of defects.
Customer Satisfaction:
- QA ensures that products meet or exceed customer expectations consistently.
- QC, relying on defect detection, might lead to customer dissatisfaction.
Continuous Improvement:
- QA is inherently linked to continuous improvement.
- QC may not contribute as effectively to process enhancement.
While both QC and QA have their roles in quality management, QA is often considered more effective for businesses seeking long-term quality improvement, cost efficiency, and customer satisfaction through proactive prevention of defects.
Here’s a summary of the ideas of ‘Quality Circles‘ in the context of the IB Business Management syllabus, followed by how they could be used at a failing sandwich factory:
Quality Circles:
Definition:
- Small groups of employees who voluntarily come together to identify, analyze, and solve work-related problems.
- Originated in Japan as part of Total Quality Management (TQM) philosophy.
Key Aspects:
Employee Involvement:
- Frontline workers participate in decision-making and problem-solving.
- Emphasis on utilizing the collective knowledge and expertise of employees.
Continuous Improvement:
- Focuses on identifying and addressing issues to improve processes.
- Encourages a culture of continuous learning and enhancement.
Problem-Solving:
- Addresses specific work-related problems.
- Utilizes brainstorming and collaborative problem-solving techniques.
Application to a Failing Sandwich Factory:
Employee Engagement:
- Form Quality Circles with employees from different departments.
- Encourage open communication and active participation in problem-solving.
Identifying Production Issues:
- Task Quality Circles with identifying bottlenecks and inefficiencies in the sandwich-making process.
- Collect input from employees on challenges they face.
Process Improvement:
- Empower Quality Circles to propose and implement process improvements.
- Prioritize areas that contribute to the overall efficiency and quality.
Training and Skill Development:
- Use Quality Circles as a platform for discussing training needs.
- Identify areas where employees can acquire new skills to enhance their roles.
Quality Assurance Focus:
- Integrate Quality Circles into the quality assurance process.
- Utilize their insights to prevent defects and maintain high product quality.
Feedback Mechanism:
- Establish a regular feedback mechanism between Quality Circles and management.
- Ensure that implemented changes are monitored and assessed for effectiveness.
Morale and Team Building:
- Enhance employee morale by recognizing and implementing suggestions from Quality Circles.
- Foster a sense of teamwork and shared responsibility for the factory’s success.
Implementing Quality Circles at a failing sandwich factory can empower employees, improve communication, and contribute to a culture of continuous improvement. By leveraging the collective intelligence of the workforce, the factory can address specific challenges, enhance efficiency, and work towards revitalization.
Here’s a summary of the ideas of ‘benchmarking’ in the context of the IB Business Management syllabus, followed by how it could be used at a failing sandwich factory:
Benchmarking:
Definition:
- Continuous improvement tool that involves comparing performance, processes, or outcomes against industry best practices or competitors.
- Aims to identify areas for improvement and implement changes to achieve superior performance.
Key Aspects:
Comparison with Best Practices:
- Involves evaluating and measuring performance against recognized best practices.
- Identifies performance gaps and opportunities for improvement.
Continuous Learning:
- Emphasizes a culture of continuous learning and adaptation.
- Encourages organizations to stay informed about industry trends and innovations.
External and Internal Benchmarking:
- External benchmarking involves comparing with external organizations.
- Internal benchmarking compares performance within different units or departments within the same organization.
Application to a Failing Sandwich Factory:
Identifying Inefficiencies:
- Benchmark the sandwich factory’s processes against industry best practices.
- Identify areas where the factory’s performance lags behind competitors.
Operational Efficiency:
- Assess the efficiency of each stage in the sandwich-making process.
- Benchmark against successful sandwich factories to identify opportunities for streamlining operations.
Cost Comparison:
- Compare production costs with industry benchmarks.
- Identify cost-saving measures without compromising product quality.
Quality Standards:
- Benchmark the quality of sandwiches produced against industry quality standards.
- Implement improvements to align with or exceed industry benchmarks.
Supplier Relationships:
- Evaluate relationships with suppliers in comparison to industry standards.
- Benchmark supplier agreements for cost-effectiveness and reliability.
Employee Productivity:
- Assess employee productivity and satisfaction.
- Benchmark against industry norms to identify areas for improvement and motivation.
Market Trends and Customer Preferences:
- Stay informed about market trends and customer preferences.
- Benchmark product offerings and marketing strategies against successful competitors.
Strategic Planning:
- Benchmark the overall strategic approach against industry leaders.
- Identify opportunities for innovation and differentiation.
By incorporating benchmarking practices, the failing sandwich factory can gain valuable insights, set performance improvement targets, and develop a roadmap for revitalization. This approach enables the factory to learn from successful competitors and implement changes that align with industry best practices.
SUGGESTED ANSWERS TO
1 Define (with reference to Tasty Bites), the term primary research [2]
Primary research refers to the process of gathering firsthand, original data directly from the source. In the case of Tasty Bites, primary research involved the BBC conducting taste testing and directly experiencing the quality of the sandwiches to gather firsthand information about the issues the business was facing.
Initially though, Tasty Bites used primary research to see what fillings customers wanted.
2 Explain (with reference to Tasty Bites) two types of ‘muda’ [4]
Two types of ‘muda’ (waste) at Tasty Bites are:
- Overproduction: Tasty Bites tried to offer too many fillings, resulting in a continuous shortage of ingredients and high admin charges. This overproduction led to inefficiency and waste of resources.
- Transportation: The poor factory floor setup and the production area being far from the admin office created inefficient movement of staff, wasting time and contributing to unnecessary transportation of materials.
There are lots of details below. However, they key difference is that one seeks to identify defects (after the fact)! The other seeks to make sure that defects do not arise in the first place!
- Definition: Quality control (QC) refers to the process of inspecting, testing, and checking products or services at various stages of production to ensure that they meet specified quality standards.
- Focus: QC is product-oriented and is concerned with identifying and rectifying defects or deviations from standards after the production process.
- Timing: It takes place during or after the production process.
- Purpose: The primary goal of quality control is to detect and correct defects to ensure that the final output meets the predetermined quality criteria.
- Responsibility: Quality control is often the responsibility of a dedicated quality control department or personnel.
- Definition: Quality assurance (QA) is a proactive and systematic approach that focuses on preventing defects and ensuring that the entire production process is capable of consistently meeting quality standards.
- Focus: QA is process-oriented and involves implementing systems, processes, and procedures to prevent errors from occurring in the first place.
- Timing: It takes place before or during the production process, emphasizing preventive measures.
- Purpose: The main purpose of quality assurance is to establish and maintain processes that contribute to the production of high-quality products or services consistently.
- Responsibility: Quality assurance involves the entire organization, with every employee contributing to maintaining and improving the overall quality of products or services.
Key Differences:
- Timing: QC is reactive and occurs after production, while QA is proactive and focuses on prevention.
- Orientation: QC is product-oriented, dealing with the final output, while QA is process-oriented, dealing with the entire production process.
- Responsibility: QC is often the responsibility of a specific department, whereas QA involves the entire organization and is a collective effort.
In summary, quality control aims to identify and correct defects in the final product, whereas quality assurance focuses on preventing defects by establishing and maintaining effective processes throughout the production cycle.
4 Examine how improved quality at Tasty Bites can benefit the business [6]
Improved quality at Tasty Bites can benefit the business in several ways:
- Customer Satisfaction: Higher quality sandwiches will lead to increased customer satisfaction, potentially attracting more customers and retaining existing ones.
- Brand Reputation: Enhanced quality contributes to a positive brand image, recovering from the negative reviews and potentially gaining a competitive edge.
- Reduced Wastage: Better quality may result in fewer sandwiches being thrown away and remade, reducing wastage and cutting costs.
Plenty of scope remains for other answers. For example, improving quality basically has nothing but positivity flowing from it! The potential downsides are that often there are implicit or explicit costs associated with improving quality! However, once quality improves, everything onwards can also improve.
In this respect, you can create a long list and explain a selected few points which you deem to be the most important or relevant to Tasty Bites
5 Justify which of the problems listed is the most significant for Tasty Bites [5]
The most significant problem for Tasty Bites is likely the issue of Overproduction. Offering too many fillings resulted in massive ingredient order lists, continuous shortages, and high admin charges. This not only led to financial strain but also contributed significantly to other problems such as wastage and inefficiency.
Identify and explain, but with a clear purpose for good marks on this question.
6 Recommend how the problems at Tasty Bites can be solved with the use of lean production and quality management [10]
To address the problems at Tasty Bites, a combination of lean production and quality management strategies is recommended:
- Lean Production: Focus on value-added activities, streamline production processes, and implement a demand-driven approach to avoid overproduction.
- Quality Management: Implement rigorous quality control measures to ensure each sandwich meets high standards, reducing the chances of wastage and customer dissatisfaction.
- Staff Training: Provide training to enhance efficiency on the factory floor, reducing the inefficiencies associated with poor setup and lack of training.
- Facility Optimization: Evaluate the size and layout of the factory building, optimizing it for efficient communication and minimizing unnecessary heating costs.
- Supply Chain Management: Improve ingredient ordering processes to prevent shortages and reduce admin charges, aligning with lean principles.
These recommendations, if implemented effectively, can contribute to Tasty Bites’ recovery and long-term success.