Lean production and quality management

📚The business management

Lean production

Lean production, developed in Japanese manufacturing (notably Toyota), aims to minimize all forms of waste: overproduction, waiting, unnecessary transport and movement, excess stock, over-processing and defects. The results are greater efficiency, lower costs, faster production and often better quality.

Continuous improvement (kaizen)

Kaizen means making many small, ongoing improvements, suggested by all employees, rather than relying on occasional big changes. Workers closest to the process spot problems and fix them.

Benefits: cheap, motivating (empowerment), gains accumulate. Limitations: needs a supportive culture and trust; small steps may not be enough when the market needs radical change; staff may run out of ideas or feel pressured.

Just-in-time (JIT)

JIT means receiving materials and producing goods only when they are needed, so stock of materials, work in progress and finished goods is minimal. Benefits: less money tied up in stock, less storage space and waste, problems exposed quickly. Limitations: needs reliable suppliers, excellent communication and predictable demand; any disruption stops production (as many car makers found in the 2021 semiconductor shortage); frequent small deliveries can cost more and lose bulk discounts. Compare with just-in-case (5.6).

Cradle-to-cradle design

Cradle-to-cradle design and manufacturing plans products so that, at the end of their life, all materials are either returned safely to nature (biodegradable) or fully reused as inputs for new products, with no waste. It contrasts with “cradle to grave”, where products end in landfill. Features: safe, non-toxic materials; designed for disassembly; renewable energy; water stewardship. It fits circular business models (toolkit) but requires redesign and new supply chains.

Quality control and quality assurance

Methods of managing quality

• Quality circles: small groups of workers who meet regularly to identify and solve quality problems in their area. Uses workers’ knowledge and motivates; needs time and management support.
• Benchmarking: comparing the business’s processes and performance with the best in the industry (or other industries) and adopting best practice. Sets clear targets; data may be hard to obtain; copying may not fit.
• Total quality management (TQM): an organization-wide culture in which every employee is responsible for quality at every stage, aiming for zero defects and continuous customer satisfaction; “internal customers” (the next process) also matter.

Impact of lean production and TQM

Quality standards

National and international quality standards certify that a business meets agreed standards: the ISO 9000 family (quality management), ISO 14001 (environmental management), Indonesia’s SNI national standard, halal certification, food safety standards. Importance: customer and business-customer confidence; often required to sell to large firms, governments or export markets; reduces risk; marketing value. Drawbacks: costly and bureaucratic to obtain and maintain; certify the process, not necessarily the product’s excellence.