PRODUCTION AND QUALITY
Production and Quality is an important function in any business, it is the basis for meeting customer needs. Scott Bader is an international company, which operates in 90 countries worldwide there, are manufacturing sites and networks of agents and distributives all around the world.
There are some lean production methods, which companies use to reduce waste and cost of production for a business like Scott Bader to be successful, and efficient they must have a good production and quality control system.
They could have use Just-In-Time this method is used to mainly reduce production times and costs it also reduces the amount of unused stock left in the business.
Supplies and raw materials turn up at the factory as they are needed, resulting in very little unused/unneeded stock sitting doing nothing this means cash flow is improves as the money is not tied up in stock and can be used somewhere else in the business, this could backfire if new customers are not taken into account and the business may struggle to meet orders if their suppliers do not deliver on time. As the business is very unlikely to buy stock in bulk because of wastage then it will not benefit from economies of scale which could in fact save them time and money in the long-run. Each stage of the production process finishes just before the next stage is due to commence and therefore the lead-time is significantly reduced. The business can build strong relationships with suppliers because they are used so often and communication and cooperation between functions in the company are improves for example between marketing and production departments.
With a just-in-time production system, the level of production is related to the demand for the product (i.e. the number of orders) rather than producing goods and waiting for other orders. This means that raw materials and stock only needs to be ordered from suppliers as it is needed this reducing the amount of money tied up in stocks, and means more money is available for investment elsewhere in the business.
Scott Bader does not use the Just in time method as it is more appropriate for industry, Scott Bader’s variety is quite low, demand for their products is stable and the volume they produce is high. In Scott Bader they use more of an MRP system.