MODULE 1: TOPIC 8

LEAN PRODUCTION AND QUALITY MANAGEMENT

*Lean production was covered in the previous topic

A quality product is one that is fit for the purpose and meets the specifications that the business
has set that are based on consumers’ needs and expectations. This does not assume that the
product must be expensive, but it must perform up to standards expected by customers.

ASSIGNMENT:
Assess 2 goods or services of your choice and determine which better meets the
dimensions of quality

Dimensions Good/service 1: Good/service 2:

Performance

Features

Reliability

Durability

Conformance

Serviceability

Aesthestics

Perceived quality
 PERFORMANCE
primary operating characteristics

PERCEIVED QUALITY FEATURES

judgement on product by firm’s characteristics and “add-ons” to a
brand image, reputation and product’s basic function
advertising

AESTHETICS DIMENSIONS RELIABILITY

subjective measure chances of a product
look, feel, taste or smell of OF malfunctioning or failing during a
product; varies by consumer certain time period
QUALITY e.g. average length of time before a
product fails/average failure rate
per item

SERVICEABILITY DURABILITY
speed, courtesy, effectiveness and measure of a products life in
ease of repair economic and technical terms, i.e.
amount of use a consumer receives
from product before it deteriorates
or use from product before
replacement is more economic than
repair

CONFORMANCE
degree to which products design &
performance meet established
standards
i.e. defect rates in factory, number
of service calls by consumers
RESEARCH AND DEVELOPMENT QUALITY CIRCLES
- helps develop products of quality demanded by - originated in Japan
consumers - voluntary groups of workers who meet regularly to
- new product development means discuss work related problems and issues
1. developing new/distinctive products - informal meetings
2. adapting/updating existing products - believed that best solutions will be developed since
3. “me too” products – copies of competitors workers have “hands on” experience
products - results presented to management and ideas implemented
- workers paid for attending, circles get a team prize
R&D of new
product Product Market
opportunities Testing Testing
BENCHMARKING/OUTSOURCING
Cost of Consumer panels - management identifies best firms in industry and
Market production Focus groups
research compares performance standards of these businesses with
Performance Test markets
Reliability their own business
- should be a continuous process:
R&D Strategies
1. follow the leader: no R&D; license other businesses’ Identify business aspects to be benchmarked
ideas, adapt existing products into “me too” lookalikes
2. offensive: lead the industry with innovative products;
market dominance, e.g. Microsoft Measure performance in areas
3. Defensive: learn from innovator’s
mistakes& weaknesses; improve original IMPROVING
products, adapt products to other market
segments QUALITY Identify best business

Assignment – Think of companies that adopt these R&D Use data to establish weaknesses in own business
strategies
R&D may be a risky investment that is costly
- Gov’t may provide legal security by developing Set standards for improvement
“patents” to inventors & designers
- Gov’t may provide financial assistance by tax
reduction incentives, grants to firms Change process to achieve standards
KAIZEN/CONTINUOUS
IMPROVEMENT
Measure performance again
- Japanese term
- Philosophy is that all workers have something to
Assignment – Brainstorm benefits and limitations of
contribute to improving business operations, and product.
benchmarking
Workers know more than managers
- Objective is to keep production up to mark and look for
Outsourcing – using an outside firm to carry out part of
one off improvements, e.g. inventions, investment.
the production process; to obtain a quality
Belief is that a series of small improvements over time
/specialist component that the business
can amount to large improvements in efficiency
cannot produce
- For Kaizen to be successful, there must be teamwork,
- quality of outsources product must be
empowerment, total staff involvement and a facilitating
ensured
management culture
 QUALITY CONTROL: Checking to ensure that goods and services come up to an agreed
standard.

3 STAGES:

CORRECTION &
PREVENTION INSPECTION
IMPROVEMENT

- ensure design meets -expensive to conduct - correcting processes

customer requirements
- quality “designed
into” product
- statistical techniques are used to that caused the fault
record & respond to result
- negative culture as problems are
sought
- resentment among workers
towards inspector, mistrust
- inspection is tedious &
demotivating
- faulty products may pass
through several stages before
being picked up
- workers do not see quality as
their responsibility

QUALITY ASSURANCE

- setting & agreeing to standards throughout the organization and making sure they are complied
with so that customer satisfaction is achieved.

- all areas examined including:

- product design - delivery systems
- quality of inputs - customer service
- production quality including after sales service

- many firms use a quality control framework: e.g. ISO (International Organization for
Standards) which is an organization that issues certificates after inspectors assess the firm’s
quality standards.

- firms can use this certification as a marketing tool, to attract customers and also get government
contracts
 INTERNAL PARTIES

Managers
- TQM has to be introduced and led
by senior management
- commitment and personal
involvement from top managers
Workers
- “internal customer”
- each team is responsible for
quality work before passing on to
next group
- motivated, well trained staff
- responsibility for quality
- communication with managers
- innovative
- must have reward & recognition
systems
Trade Unions
- view that quality responsibility
puts stress on workforce through
closer monitoring & staff
inspection
- trade unions should be actively
involved in promoting quality &
participation

TOTAL QUALITY MANAGEMENT

- culture that aims to provide customers with
products that satisfy their needs
- quality in all aspects of firms operations:
“quality is everyone’s responsibility”
- things are done right the first time
- defects and waste reduced & ultimately
eliminated (zero defect policy)
- customer driven quality standards: top
management & leadership commitment;
continuous improvement of work process; fast
response to problems; employee participation

Consultants
Suppliers - specialist external business
- good relationship with suppliers consultants who advise on how to
- to ensure inputs (materials, parts, adopt TQM
services) are of good quality, - create quality systems &
timely delivery processes
- staff training
Customers
- give feedback on good/services so
that their needs for quality be met

EXTERNAL PARTIES