The producer might work on several jobs at the same time for different groups of customers. Firms operating in this way need to make sure they keep having orders for new jobs to replace the ones that are nearly completed.
This is where a number of identical or similar items are produced in a set or batch. The items need not be for any specific customer but are made at regular intervals in specific quantities. Batch production involves work being passed from one stage to another. Each stage of production is highly planned.
A simple example would be the production of loaves of bread in a bakery. Every day, 200 brown loaves, 100 white loaves and 500 small buns are produced. First, the dough is made for the brown loaves. While this rises, the dough is made for the white loaves. While this is rising, the dough for the brown loaves is kneaded and so on.
A key feature of batch production is that, every now and then you have to stop the production process and reset it for a different product. Most manufacturing companies work in this way, as do most service organizations.
This involves products or services passing down a line of production. The production process is a repeating one, with identical products going through the same sequence of operations. Car assembly lines are a classic example of line production. The work comes down the line to the worker, who carries out a set operation. Nowadays, humans have been replaced by robots on many production lines. Examples of line production can also be found in fast-food outlets.
Line production produces identical products. The disadvantage of this is that many customers (e.g. car buyers) want their purchase to be made different or distinctive in some way.
Continuous flow production takes line production one step further. Today, it is an advantage to be able to mass produce standard items such as Mars bars and cans of beer. Continuous flow involves producing for 24 hours a day, using automatic equipment in a standardised way.
In continuous flow, the whole operation is handled by machinery controlled by computers. Human labour does not touch the product. Continuous flow, therefore, does not apply in the service industries, which depend more on human labour.
Just-in-time production became an increasingly popular part of the British industrial scene in the last decade of the twentieth century, and is one that is likely to continue this century. Just-in-time (JJT) manufacturing is one of the strengths of the Japanese production system and is one that has enabled Japan to have a highly productive economy.
Just-in-time production is a very simple idea:
- Finished goods are produced just in time for them to be sold, rather than weeks or months ahead.
- The parts that go into a finished product arrive just in time to be put together to make the final product, rather than being stored (at some cost) in a warehouse.
The idea is to run a company with the smallest possible levels of stock and workin-progress. Clearly, this needs careful planning:
- All sources of uncertainty must be removed from the manufacturing process. There must be absolute reliability of production targets, supplies and levels of output achieved.
- The time to set up machines must be reduced to a minimum so that components and finished products can be produced in small batches as and when required.
- Bottlenecks must be eliminated.
Using a JIT system requires a complete reorganisation of the traditional factory. Factories have usually been organised into shops’, each working on a particular stage in producing a final product. With a JIT system the factory is reorganised so people are grouped together around the products they produce.
The first decade of the twenty-first century is likely to see the most rapid development in production capacity ever witnessed, fuelled by the breakthroughs that took place at the end of the last century. In the USA and Western Europe, there was a considerable investment in ICT software and hardware dating from the economic recovery of 1992.
The microchip and its more recent variants lie everywhere in modern production systems, and this has led to a massive fall in production costs.
Mechanisation involves the use of machinery. The machine is, however, controlled directly by the operator.
Automation, on the other hand, involves the creation of a unit to control the machine. Instructions are fed into the control unit, which then controls operations.
Machines are at work in our homes. Examples of machines controlled directly by the operator include food mixers, hair driers and vacuum cleaners. Automatic machines, however, are under automatic control. These machines are able to control themselves once they have been fed instructions. Examples include washing machines, central heating systems, burglar alarms and video recorders
An automatic machine needs to have some method of controlling itself. It must be able to sense and measure when and when not to take action. An example of the way this operates is the central heating system of a house. Generally, this system will be triggered by one of two mechanisms — the timer or the thermostat. The system can be programmed to switch on and off at set times, or to come on whenever the temperature in the house falls below a certain level.
Today, many industrial and commercial processes are automated and, clearly, this facilitates high levels of production at low on unit costs. Organisations that fail to automate their processes will be at substantial cost disadvantages.
The word ‘control’ means the ability to direct or restrain. A controller carries out a function automatically. For example, in a washing machine, once a program has been set the controller takes over, switching the heater on and off, regulating the water supply and outlet, and switching the motor that rotates the drum.
Robots are really an application of automatic control. They are of special benefit for jobs that are repetitive and where human manipulative skills are not required. Another application is in dangerous or unpleasant work areas.
Robots vary in the method of programming. Some are programmed by keying in instructions, but this is laborious and liable to error. In other cases the robot can learn to copy movements carried out by a human operator.
The benefits of using robots are, therefore, as follows:
- People can be replaced by robots in mundane jobs where human intelligence is not required (e.g. routine assembly work).
- Robots can be used where working conditions are difficult or dangerous (materials may be heavy, hot or radioactive, or deep underground or under water).
The disadvantages of using robots are as follows:
- Further erosion of craft skills may result.
- Greater levels of capital investment increase the pressure for shift working.
- A new physical danger is introduced into the workplace. Fatalities have already occurred as a result of using robots at work.
- Computer-aided design (CAD):
Forty years ago, designers spent a great deal of time at drawing boards. The skills brought to the job included:
- Creativity (thinking up ideas, styling, etc.)
- Analysis (calculating strengths, quantities, etc.)
- Mechanical drawing (putting the ideas on paper).
Although the central role of the designer was to carry out creative and analytical work, much of the time was spent on drawing and redrawing. Today, with the development of sophisticated computers, it is possible to use a computer screen instead of a drawing board. This saves considerable time.
A designer using a CAD program keyboard (or mouse), a screen and graphics pad. The designer is able program the computer to perform many quick calculations of angles, volumes, dimensions, etc.
Having drafted the design, the designer can view the item on the screen as if from different positions, and view it as a solid object instead of just a series of lines. The computer can then be asked to calculate all the important features of the design, and to show how these change when, for example, one dimension is altered.
CAD has revolutionised almost every area of industrial design, from wedding dresses to supertankers.
- Computer-aided manufacturing (CAN):
In addition to CAD, developments have also taken place in the use of machine tools. Many are now controlled numerically by a computer (computer numerical control —CNC).
Other developments have taken place in robotics. With CAD/CAM (computer-aided design/computer-aided manufacturing), data from the CAD system is used to drive machines, making the CAD system part of the manufacturing process. With CAM, computers play a key role in organising and supervising the manufacturing process, making sure that production is carried out according to specified standards.
Computers may be able to check standards, alter production runs and processes and carry out other operations far more quickly and with a much greater degree of accuracy than human operators. Computer-aided manufacturing has been one of the driving forces behind just-in-time manufacturing because of its high level of quality control.
- Combining inputs to create a service:
It is in the service industries that we have seen some of the greatest increases in value added in recent years. Here are some examples:
- Digital television, where the viewer can select from a much wider range of choice of entertainment than ever before.
- Multiplex cinemas, where the cinema goer has a choice of screens and can drive in and out of the cinema area, with films showing for several viewings a day.
- Personalised banking, where the customer can carry out financial transactions over the telephone.
- Internet and television shopping, where the customer can order groceries over his or her TV or computer keypad.
In service industries the customer is king or queen, and service organisations are continually jumping to provide additional services to meet customer requirements. For example, in supermarket retailing we are not only seeing the supermarket chains lowering prices to offer us better value for money but they are also creating much more value in the shopping experience — greeters to welcome us into the shops, a much wider selection of items to choose from, shorter queues, in-house banking facilities, etc.
Today, the service sector dominates the economy and, therefore, there is often intense competition between rival suppliers. The only way they can gain competitive edge is by offering the customer more than rival offerings.
The two major inputs of service industries are:
- Information and communications technology.
Service industries generally involve a great deal of face-to-face interaction between customers and the front-line employees of the organisation. These-front line employees are the people who operate the telephone switchboard, who deal with customer complaints, who serve customers and so on. Thus it is through people that service organisations add much of their value. This is why these organisations have to spend a great deal of time and money training employees in customer service and customer relations.
Moreover, these front-line troops need to be motivated to work for the organisation. When an Asda official greeter greets you when you enter the supermarket you want to feel the greeting is sincere (if the greeter is pleased to work for Asda, this is likely to be the case).
There are three major reasons service businesses usually cite when investing in information and communications technology. To:
- Achieve improvements in productivity.
- Achieve a competitive advantage.
- Improve the flexibility of the organisation so it that can respond more readily to changes in the marketplace.
Today we are seeing many large organisations increase their investments in information and communications technology in order to speed up operations, to cut out waste and to improve accuracy and quality control while reducing costs. Particular examples are banking and retailing operations. Of course, an organisation’s ability to raise productivity depends on the careful application of information and communications technology to create effective solutions. One of the reasons why the giant US supermarket chain, which took over Asda in late 1999, has been so successful is because of the sophistication and extent of its ICT system, which enables it to drive down unit costs much lower than rivals.
Information technology can be used by an organisation to give it a competitive advantage by using improved systems to carry out existing operations. For example, airlines can adopt an electronic booking system that is accessible to all travel agents. Of course, the reality is that all its rivals will purchase and operate similar systems. However, the point is that the business that stays still while all its rivals are moving forward will quickly encounter problems.
Finally, organisations can become more responsive to customers by adopting an ICT system. For example, the financial services industry has been revolutionised by ICT. In particular, we have seen the rise of telephone banking, which has slashed the cost of personal banking and has forced all the major banks to develop personal banking systems whereby consumers can be provided with online information about the current state of their accounts, the availability and cost of new financial services, etc.
- Meeting customer requirements:
The customer is an active participant in this process of change. Across the world, customers have become more demanding. In part this reflects the rise in disposable incomes fuelled by economic growth. Customers are also responding with a will to the increase in the quantity, sources and variety of supply. Rising affluence and education have bred a race of highly active consumers. Today, therefore, production must be tied in closely with what consumers want.
- Adding value through quality:
In the context of quality, consumers judge a good or service in terms of what they actually get, not by what the producer hopes to provide.
- Quality control is an old idea. It is concerned with detecting and cutting out components or products that fall below set standards. This process takes place after these products have been produced. It may involve considerable waste as defective products are scrapped. Quality control is carried out by quality control inspectors. Inspection and testing are the most common methods of carrying out quality control.
- Quality assurance (QA) occurs both during and after the event, and is concerned with trying to stop faults from happening in the first place. Quality assurance is concerned to make sure products are produced to predetermined standards. The aim is to produce with ‘zero defects
Quality assurance is the responsibility of the workforce, working in cells or teams, rather than an inspector (although inspection will take place). Quality standards should be maintained by following steps set out in a QA system.
- (Total quality management TQM) goes beyond quality assurance. ft is concerned with creating a quality culture so that every employee will seek to delight customers.
The customer is at the centre of the production process.
Companies such as Marks & Spencer and McDonalds have been following this policy for a long time. It involves providing customers with what they want, when they want it and how they want it. It involves moving with changing customer requirements and fashions to design products and services that meet and exceed their requirements. Delighted customers will pass the message on to their friends and so on.
Customer preferences will constantly change. The organization, therefore, has to provide new ways of responding to changing tastes, needs and wants.
- Total quality management:
Total quality management (TQM) is the most complete form of operations management. It is concerned with encouraging everyone in the workplace to think about quality in everything he or she does. Every employee sets out to satisfy customers, placing them at the heart of the production process.
Quality circles (QCs) are an important way of increasing participation in organisational activities. A quality circle is a study group of volunteers (5—15 people) who meet regularly to work on a variety of operational and employee problems. The quality circle will be made up of ordinary working employees and their immediate supervisors and managers. One supervisor or manager will usually operate as the circle’s leader.
Quality circles do not deal with theoretical problems. They are concerned with putting ideas into action. This involves in-depth analysis, proposals for action and presentations to management on what could be or ought to be done. There are four main components of a quality circle framework:
- A steering committee (one per organisation), staffed by senior managers, will make general policy and set up the framework and resources for the circles to operate within.
- The facilitator is there to support the process in each of the circles, as well as to provide an operational framework and guidance, if required.
- The circles’ leaders will often be the unit supervisors, and they will stimulate discussion within their circle without dominating it. Leaders need to be familiar with problem-solving techniques and group dynamics.
- The members of the circle.
The circles meet during company time, perhaps for one hour a week. Problem-solving techniques employed will include brainstorming graphs showing the frequency of problems, randomised sampling of product units produced, and cause-and-effect diagrams.
- Self-checking or inspection:
Quality should be a continual process in which employees monitor and check their own performance and that of the processes they are working on against given standards.
By developing a quality culture there should be no need to inspect. In schools, colleges and universities, for example, national standards have been created, and some people argue that educational institutions should be able to inspect themselves. They know what the standards are and thus can develop the systems to ensure quality is effectively guaranteed. There are is a lot to be said for this. If people (lecturers, teachers, etc.) understand the required quality standards, they can make sure they are met. Failure to ensure quality would be the responsibility of the managers of schools and colleges, because they create the quality systems. It is then up to individual staff to implement these systems.
The staff are the best people to implement the systems because they know what is going well and what is going badly at grass-roots level.
Involving ground-level staff in ensuring quality means they are more motivated —because they are involved in decision-making and because they have a better understanding of the objectives of the organisations they work for.
Another major advantage of self-checking is that it is cheaper to carry out. Improvement is a continuous process, and you do not have to wait for the problems to come to light at the end of the process.
Of course, inspection is also important to check standards are being met. However, perhaps the inspection should be just to check quality standards have been implemented effectively.
Reliable quality is a prime concern when deciding which supplier of a good or service to use. Retail organisations such as Marks & Spencer have, for many years, extended their own quality control procedures into their suppliers’ organisation to ensure reliability. A reputation for quality is important, but it can be established only over time. This presents problems for organisations tendering for orders from new customers. The International Standard ISO 9000 certificate indicates to potential customers that the quality procedures of the certificate holders are reliable and, by implication, they are capable of delivering consistently the promised quality product or service.
Best practice benchmarking (BPB) is a method many organisations use to help them to discover the ‘best’ methods of carrying out processes available and then using them in their own organisations. An organisation can benchmark internally to find out best practice within the organisation, or externally by looking at other organisations. Many organisations will set themselves the objective of becoming ‘the benchmark for the industry’.
BPB involves:
- What customers consider ‘excellent practice to be.
- Setting standards for business processes based on best practice.
- Finding out how the best companies create best practice.
- Creating standards within an organisation that meet or exceed the best currently available.
Benchmarking can be seen as a stepped process, as shown in Figure 6.12. Recent research has shown that over two-thirds of major companies in the UK use benchmarking, and that 90% of these use benchmarking regularly.
Benchmarking has been defined as ‘the continuous process of measuring products, services and practices against the toughest competitors of those companies recognised as industry leaders’.
- Training and development:
Because quality is all about continuous improvement in an organisation, it necessarily involves ongoing training and development for all staff. Employees of modern organisations need to be trained in approaches to quality such as total quality management and benchmarking.
If individuals are going to be best able to contribute to helping the organisation continually to improve, they need to be fully in tune with the organization’s objectives. At the same time, the organisation needs to understand the development objectives of the people who work for it.
