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IB Syllabus 5.3
IB Syllabus 5.3
The learning outcomes (or assessment objectives) for this section of the IB Business Management syllabus are:
The following features of lean production (AO1):
Less waste
Greater efficiency
The following methods of lean production (AO2):
Continuous improvement (kaizen)
Just-in-time (JIT)
Features of cradle to cradle design and manufacturing (AO2)
Features of quality control and quality assurance (AO2)
The following methods of managing quality (AO2):
Quality circle
Benchmarking
Total quality management (TQM)
The impact of lean production and TQM on an organization (AO3)
The importance of national and international quality standards (AO2)
Classroom Activities:
Classroom Activities:
Day 1: Lean Production Case Study
Questions A, B, C + Optional D
Entrance or Exit Slip (10 min.)
Define Lean Production
Define Kaizen
What are 4 examples of Waste?
Explain two features of cradle to cradle design and manufacturing
Day 2: Quality Management Case Study
Questions: A, B, C, D, E + Optional F
Day 3: Total Quality Management + Cradle to Cradle Case Study
Questions: A, B, D + Optional
What you should know
By the end of this subtopic, you should be able to:
define the following terms: (AO1)
lean production
waste
efficiency
continuous improvement (kaizen)
just-in-time (JIT)
cradle-to-cradle design/manufacturing
quality circle
benchmarking
total quality management (TQM)
Gantt chart
critical path analysis
describe the following features of lean production: (AO1)
less waste
greater efficiency
explain the following features of lean production: (AO2)
continuous improvement (kaizen)
just-in-time (JIT)
explain the features of cradle-to-cradle design and manufacturing (AO2)
distinguish between quality control and quality assurance (AO2)
explain the following methods of managing quality: (AO2)
quality circle
benchmarking
total quality management (TQM)
discuss the impact of lean production and total quality management (TQM) on an organisation (AO3)
explain the importance of national and international quality standards (AO2)
apply a Gantt chart in a given context (AO2) (HL)
prepare and analyse a critical path (network) diagram in a given context (AO4, AO2) (HL)
https://www.gimkit.com/view/650afd1972c422002b076ffb
Benchmarking
The routine process of an organization comparing its products, processes (operations) and performance to that of its competitors or its own historical standards or measures.
Cradle to cradle (C2C)
This lean approach to waste management involves design and manufacturing that is sustainable and waste-free. All material inputs can be recycled or reused or are consumable or compostable.
Efficiency
This means using resources more productively, in order to generate more output.
ISO 9000
This is the world’s most widely recognized quality standard. It is endorsed by the ISO to firms that use quality management systems to meet the needs of customers.
Just-in-case (JIC)
This is a stock control system that requires businesses to have large quantities of stock, in the event that it is needed for an unexpected order or in case there is a problem with the supply chain.
Just-in-time (JIT)
This is a lean method of stock control whereby materials and components are scheduled to arrive precisely when they are needed in the production process.
Kaizen
The Japanese process and philosophy of lean production that involves making continuous improvements in small, incremental steps to in order to achieve greater efficiency.
Lean production
This is a philosophy, approach, or organizational culture about streamlining production processes in order to increase efficiency and reduce waste.
Quality
This means that a product is fit for purpose, i.e., the good or service meets or exceeds the needs of its customers.
Quality assurance (QA)
This is a lean approach to quality management as it involves all employees in the quality process.
Quality circles
Small groups of employees who meet on a regular basis to discuss quality issues and make recommendations to improve quality standards.
Quality control (QC)
The most traditional form of quality management in which a supervisor or inspector periodically checks and examines output for possible defects, usually at the end of the production process.
Quality standards
These are national and international benchmarks use for certifying quality assurance, verifying that the product has met certain minimum standards to meet the needs of customers.
Substandard output
This refers to the production of goods or provision of services that do not meet national or international quality standards.
Total quality management (TQM)
An approach to quality management that involves all workers having responsibility for maintaining quality standards throughout the production process.
Waste
Anything that prevents an organization from being efficient or lean, such as defected products, stockpiling, and overproduction.
Zero defects
An aspect of lean production that focuses on preventing mistakes being made by getting things done right, first time round.
5.3 Extra Notes
5.3 Extra Notes
Lean Production
Lean Production
Definition: Lean production refers to a set of strategies to increase efficiency and reduce waste in the production process. The objective of lean production is to produce a high-quality product using minimal resources.
The benefits of efficiency
Types of Waste
transportation – moving components between workstations or from suppliers
inventory (stock) – building up excessive stocks, resulting in storage costs
motion – staff risking injury while making the product
waiting – delays in the production process
over-processing – adding features to a product that are not required by the customer and therefore do not add value
over-production – producing an inventory of finished goods before they are needed
defects – finished goods that do not meet quality control standards
Types of Waste Example: Hairdressing Salon
Optional Video (30min38): Lean Summit 2011 - Takashi Tanaka - Learning from Toyota's Management System
Just-In-Time Production (JIT)
Just-In-Time Production (JIT)
Definition: An operations management strategy where raw materials or other inputs are ordered and delivered immediately before their use, so that stock (inventory) can be minimised.
Benefits and Limitations of Just-in-time Production
Benefits of Just-In-Time Production
Improved cash flow and reduces costs. Businesses can reduce costs by reducing the stock (inventory) they hold. They can then use the money saved for other operations (Subtopic 3.7).
Improved operations. Employees know they need to be careful in operations, because there is no spare stock (inventory) to rely on.
Increased capacity. With less storage space needed for stock (inventory), more space can be allocated to production.
Limitations of Just-In-Time Production
Reduced economies of scale. Businesses will make smaller orders, possibly reducing purchasing economies of scale (Section 1.5.2).
High risk. Production may halt if a small part of the supply chain breaks down. Any delay in delivery becomes critical for production.
Reduced resilience. Businesses may be unable to adapt to changes in the internal or external environment (related to risk). JIT may not be suitable for businesses with seasonal demand.
Cradle-to-cradle design and manufacturing
Cradle-to-cradle design and manufacturing
Definition: A design and production process that aims to work more like nature, by designing systems that feed back outputs as inputs, and by designing out waste from the start; akin to circular business models and production. It is a model that focuses on sustainability.
Cradle-to-cradle design and manufacturing aims to reduce waste.
Exam tip
Using cradle-to-cradle strategies may increase costs of production for a business in the short term. However, businesses can see reduced costs in the long term if they do not have to buy as many resources to produce their products, or if they already have production processes that future environmental laws will likely require.
It is also important to realise that, though some businesses may see higher costs, these are not new costs. They are costs that the broader society and environment have been experiencing through waste and pollution from business activity. So, moving to cradle-to-cradle or circular strategies makes businesses more responsible for the full costs of the waste they produce.
The business may also see an increase in revenues, as conscientious consumers move more and more to purchasing ethical products, designed with a circular strategy. This can be a unique selling point (USP) for a business.
When discussing cradle-to-cradle production or circular business strategies, make sure you are aware of these different ways to discuss costs and revenues related to the practices.
Quality Management
Quality Management
Quality
Quality
Definition: The characteristics of a product or service that meet customer needs and expectations.
Quality Control
Quality Control
Definition: The inspection of a product to find defects and remove them before they are delivered to retailers or customers.
Quality Assurance
Quality Assurance
Definition: Strategies to prevent defects and improve products. Quality assurance is a form of empowerment which requires employees to check their own work, take responsibility for their own mistakes and identify defects that are not their own fault. Every employee – not just a final inspector – has a responsibility to ensure the quality of the product.
Methods of Quality Management
Methods of Quality Management
Quality Circles
Benchmarking
Total Quality Management (TQM)
Quality Circles
Quality Circles
Definition: A quality circle is a group of employees who meet regularly to discuss potential improvements to product quality
Key features of quality circles include:
Voluntary participation: Quality circles are typically composed of volunteers who are motivated to contribute to the improvement of their work processes and the overall quality of the organisation's products or services.
Cross-functional representation: While quality circles often comprise members from the same department or work area, they can also include representatives from different functional areas, providing diverse perspectives and expertise.
Regular meetings: Quality circle members usually meet regularly (e.g., weekly or monthly) to discuss and analyse quality-related issues, identify potential solutions, and monitor the progress of implemented improvements.
Problem-solving techniques: Quality circles employ various problem-solving techniques, such as brainstorming, root cause analysis, Pareto analysis, and statistical process control, to systematically identify and address quality issues.
Employee empowerment: Quality circles empower employees by involving them in the decision-making process and giving them the opportunity to influence the improvement of their work processes. This can lead to increased job satisfaction, motivation, and commitment to the organisation's quality objectives.
Management support: For quality circles to be effective, they require the support and commitment of top management. This includes providing resources (such as time, training, and tools), encouraging employee participation, and acting on the recommendations of the quality circles.
Continuous improvement: Quality circles foster a culture of continuous improvement by promoting employee involvement in identifying and addressing quality issues, learning from successes and failures, and striving for ongoing enhancement of processes and products.
Benefits and limitations of Quality Circles
Benefits of Quality Circles
Motivation. Empowering employees to make changes to product quality increases their engagement with the business, improving employee satisfaction.
Improved quality. Making everyone responsible for product quality is likely to reduce mistakes.
Reduced costs. Quality inspectors may not be needed; better quality and reduced waste can also reduce costs.
Limitations of Quality Circles
Reduced productivity. Participating in quality circles takes time away from production and can lower output per worker.
Training costs. Employees may need training to participate in quality circles, which costs money.
Not suited to every organisation. Quality circles work best when the organisational culture already has democratic or laissez-faire leadership in place, or where the organisational structure is flatter.
Benchmarking
Benchmarking
Definition: Benchmarking is the process by which a business compares itself – on certain criteria – with the industry leaders to see what it can learn from others’ techniques as well as from its own historical performance.
Inter-firm Benchmarking
involves comparing the performance and key metrics of one company with those of other similar companies in the same industry
Two steps of Benchmarking:
Identifying which companies have the best processes or results in a certain area.
Finding out how those companies do things and learning from those processes.
Historical Benchmarking
involves comparing a company's current performance with its past performance or with industry standards from previous years
Benefits and limitations of Benchmarking
Total Quality Management (TQM)
Total Quality Management (TQM)
Definition: In total quality management (TQM) systems, every employee is jointly responsible for maintaining the overall quality of the final product. There are two fundamental principles behind TQM: empowerment – which gives employees the authority to change or improve part of their role – and internal customers.
Company wide approach and commitment from all staff.
Team approach to quality, which helps with motivation.
Big initial investment in staff training with a long term focus of growth.
Won’t see benefits until later.
Focus on finding quality problems before production (preventative).
Ensures product shipments to customers defect-free.
TQM helps improve communication flows (formal and informal).
Benefits and Limitations of Total Quality Management (TQM)
National and international quality standards
National and international quality standards
Definition: an inspection and evaluation of their products’ quality and quality assurance processes by independent quality standards organisations
ISO certification (International Organization for Standardization) is an indication of quality for external stakeholders.
Monitored operations and processes that ensure quality goods
Check products for defects before distribution, carrying out corrective measures when necessary
Regularly review operations and processes to sustain or improve its efficiency.
Proper record keeping
Benefits of Quality Certifications:
Promote quality awareness
Improve organizational performance
Recognize quality achievements
Motivate the workforce
Help attract high caliber employees
Strengthen competitiveness
Improved brand image.
Once accredited, companies can display the ISO 9000 logo on their promotional materials. This reassures potential customers that they are purchasing a high-quality product, potentially allowing a higher price to be charged.
Widening the target market.
Some companies will only use suppliers that have been awarded ISO 9000; by achieving the ISO 9000 standard, a business can then access this exclusive market.
https://drive.google.com/file/d/1vyRS0m5s3PO2iduTwmxt_yT3eoudhgMH/view?usp=sharing
https://drive.google.com/file/d/14f4IHVKXHnsAZidRBJ4fW4JRQ1tDWkpU/view?usp=sharing
5.3 Case Study Questions (Kognity, InThinking)
https://docs.google.com/document/d/1nK_GDhRKueN280R81pL9Zmd4vAJOoef4QvxVPWQdmAQ/edit?usp=sharing
5.3 Cases 2024 IB Biz.pdfPage updated
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