Management Production Approaches

This next section will take a slight detour from the IT concepts to discuss management approaches to production. When a company produces goods, it must choose its primary objective. Is the main goal to create the least amount of waste possible, which would align with lean manufacturing, or is the main goal to create the best quality product possible, aligning with total quality management? Let’s delve into each one of these terms and explore what they mean.

The first production quality management topic is called the Just-in-Time approach to inventory. This approach assumes that inventory doesn’t add any value to our company, meaning we don’t want to store inventory until we actually need it. Because of this, we only order inventory when needed at the last minute – when a customer places an order. This system requires us to rely on our suppliers to consistently deliver the goods.

The next term is called Demand Flow, which is essentially identical to the Just-in-Time approach. We base the resources we order on customer demand. We forecast our sales and determine how much inventory to order based on these forecasts.

The next approach for managing our production process is called lean manufacturing. This approach doesn’t concern when we order inventory, but how we manage our manufacturing process. As a lean company, we aim to use only the exact resources required for a product. Our primary goal is to reduce waste. This approach focuses on continuous improvement, also known as kaizen, a Japanese term for a business philosophy of continuous improvement.

The next management approach is Total Quality Management. Under this approach, our main focus is the customer. Unlike lean manufacturing, where the main goal is waste reduction, here, our primary objective is customer satisfaction. We emphasize the quality of our products and continue to focus on continuous improvement.

The next management approach is the Theory of Constraints. The premise here is that in our production process, there are likely one or more constraints where our production process is getting congested. If you visualize a bottleneck, there could be a certain point in our production process that is making us less efficient. We focus on that specific constraint and try to alleviate it. These constraints could be either external constraints or internal constraints.

The final management approach is Six Sigma, which places significant emphasis on the quality of the product. With Six Sigma, we use quality control tools to eliminate defects and improve processes. Six Sigma is a certification that a company can obtain. If a company achieves this certification, it indicates that out of 1 million items that the company produced, only 3.4 had defects.