Achieving quality production

Businesses use different methods to produce goods and services, depending on the product and the market. The three main methods are job, batch, and flow production.

Job Production: This is used to make one-off, unique items tailored to a customer's specific requirements. It is usually labour-intensive, requiring skilled workers. Think of a tailored suit, a custom-built house, or a specific piece of machinery. Because each product is unique, the costs per unit are high, and the production process is slow.

Batch Production: This involves making a set quantity (a 'batch') of identical products. Once one batch is finished, the machinery can be cleaned and reset to produce a different batch. For example, a bakery might produce a batch of 500 white loaves, then a batch of 300 wholemeal rolls. It allows for more variety than flow production but is less efficient.

Flow Production: Also known as mass production, this method is used to produce huge quantities of identical, standardised products on a continuous production line. It is highly automated, using lots of machinery and relatively few workers. Examples include cars, smartphones, and soft drinks. The setup costs are extremely high, but the cost per unit is very low.

Choosing the wrong production method can lead to high costs, inefficiency, and an inability to meet customer needs. A business must carefully consider several factors before making this crucial decision. The main factors are:

1. The nature of the product: Is the product unique and customised (e.g., a painting) or standardised (e.g., a pencil)? Unique products require job production, while standardised products can use batch or flow.
2. The size of the market: Is the business selling to a small local market, a niche market, or a large international market? A large market is needed to justify the huge investment required for flow production.
3. The nature of demand: Is demand consistent and high all year round (e.g., for bread), or is it infrequent and unpredictable (e.g., for a replacement conservatory roof)? Flow production requires stable, high demand.
4. The productive capacity of the business: Does the business have the space, money, and technology to produce on a large scale? A small start-up business will not have the financial resources to set up a flow production line, making job or batch production more realistic.

Lean production is a modern business philosophy focused on 'doing more with less'. Its main goal is to eliminate waste in the production process, which makes the business more efficient, reduces costs, and improves quality. There are seven main types of waste that lean production seeks to remove:

1. Transportation: Unnecessary movement of materials or finished goods.
2. Inventory (Stocks): Holding too much stock, which ties up cash and requires storage space.
3. Motion: People or equipment moving more than is necessary to perform a task.
4. Waiting: Time wasted when one stage of production has to wait for the previous stage to finish.
5. Overproduction: Producing more than customers have ordered.
6. Over-processing: Doing more work on a product than is necessary (e.g., using overly complex machinery for a simple task).
7. Defects: Products that are made incorrectly, requiring rework or being scrapped, which wastes time and materials.

A core part of lean production is Kaizen, a Japanese term for 'continuous improvement'. This isn't about making one big change; it's a mindset where every employee, from the CEO to the cleaner, is encouraged to constantly look for small, incremental ways to improve processes and reduce waste.

Just-in-Time (JIT) is a key technique of lean production. It is a stock management and production system where materials, components, and parts are delivered from suppliers only when they are needed for the production process. This is sometimes called 'stockless production'. Instead of storing huge amounts of raw materials in a warehouse, a business using JIT will receive smaller, more frequent deliveries that go straight to the factory floor.

Benefits of JIT:

• Reduced storage costs: Less need for large warehouses saves money on rent, insurance, and security.
• Improved cash flow: Money is not tied up in stock that is just sitting there.
• Less waste: Outdated or damaged stock is less likely, as materials are used quickly after arrival.

Requirements and Risks of JIT:

• Excellent supplier relationships: Suppliers must be extremely reliable and deliver high-quality components exactly on time. A delay from one supplier can halt the entire production line.
• High quality materials: There are no spare parts in a warehouse, so everything delivered must be free from defects.
• Flexible and skilled workforce: Workers must be able to handle potential issues quickly to avoid production stoppages.

Quality doesn't just mean a product is 'luxurious' or 'expensive'. In business, quality means a product or service is fit for purpose and meets or exceeds customer expectations. A 50p pen has good quality if it writes smoothly and doesn't leak. A £500 pen has good quality if it meets the luxury expectations of its buyer. Achieving the right level of quality is vital for any business.

Why is good quality so important?

• Improves brand image and reputation: A reputation for quality is a powerful marketing tool.
• Increases customer loyalty and repeat purchases: Happy customers come back and recommend the business to others.
• Allows for premium pricing: Businesses with a reputation for high quality (like Apple or Rolex) can charge higher prices.
• Reduces costs: Getting it right the first time means less money is wasted on scrap materials, rework, and handling customer complaints and refunds. This is a key principle of lean production.

What are the costs of poor quality?

• Lost customers and damaged reputation: A single bad experience can lose a customer for life.
• High wastage and rework costs: Fixing or throwing away faulty products is expensive.
• Product recall costs: If a dangerous defect is found, a company may have to recall thousands or millions of products, which is hugely expensive and damaging to its brand.

Businesses use different systems to manage and achieve quality. The main approaches are Quality Control, Quality Assurance, and Total Quality Management.

Quality Control (QC): This is the traditional method. It focuses on detection. It involves checking products for defects at the *end* of the production process (or at key inspection points). For example, a supervisor might test every 100th car tyre to see if it meets the required standard. The problem with QC is that it finds defects after the business has already spent time and money making the faulty product.

Quality Assurance (QA): This is a more modern approach that focuses on prevention. It aims to build quality into the process at *every stage*, from product design to final delivery. It's about setting standards and procedures to ensure the product is made 'right first time'. Examples include training staff, only using certified suppliers, and designing processes to be error-proof. QA aims to stop defects from happening in the first place.

Total Quality Management (TQM): This is a whole-business philosophy that goes even further than QA. TQM makes quality the responsibility of *every single employee* in the business. It is a culture of continuous improvement (Kaizen) where everyone is focused on satisfying customers and achieving zero defects. TQM is not a separate department; it's the way the business is run.