1. What is the essence of just-in-time production?

2. Name the variations of JIT production system in Japanese and American companies.

3. Fill in the table below with strengths and weaknesses of jit and explain all pluses and minuses of this system.

Strengths	Weaknesses
1) no idle parts and components needed	1) interdependence of all participants of the production process
2) …	2)…
…	…

4. Why is it important to weigh pros and cons of JIT production before introducing this system into practice?

5. Do you agree with the statements below? Are they true or false? Use the following formulas for discussion: Personally, I think that, in my opinion, from my point of view, I reckon it is true because, true enough, I assume it is false because.

1) In JIT, products are ‘pulled’ through the manufacturing process from the end rather than ‘pushed’ through from the beginning.

2) Under the JIT system, spare parts and components are delivered just when they are required by the next stage of the production process.

3) JIT encourages production workers to exceed their production targets.

4) JIT originated in American manufacturing.

5) All products can be produced with the JIT system.

6) Companies using the JIT system are highly dependent on their subcontractors.

7) In the JIT system, defective components can be replaced from the reserve inventory.

8) JIT depends on harmonious partnerships between a company and its suppliers.

9) Due to the fact that the risks of implementing JIT outweigh its benefits, companies prefer the traditional way of production.

10) Companies still prefer to keep reserve inventories just in case.

READING V

Business philosophies

Before you read

Key terms

1. Choose the Russian equivalents from the right-hand column for the English terms on the left.

1) total quality management	a) кружок качества (группа специалистов, которые регулярно встречаются для обсуждения и решения производственных задач, прежде всего повышения качества продукции)
2) kaizen	b) перенятие опыта (процесс поиска новых и более совершенных приемов работы, осуществляемый путем сравнения собственных приемов с наилучшими из тех, которые используют другие)
3) specifications	c) перестройка (реорганизация) системы ведения бизнеса (осуществляется путем удаления малоэффективных звеньев бизнес-процесса и внедрения современных технологий управления оставшимися звеньями)
4) quality circle	d) продолжающееся (непрерывное, постоянное) улучшение (совершенствование); концепция управления, согласно которой достижение идеала невозможно, но возможно постепенное приближение к нему путем регулярного совершенствования осуществляемых действий
5) brainstorming	e) специальная (целевая) группа (группа специалистов, ориентированная на выполнение какой-л. одной задачи или решение конкретной проблемы)
6) business process reengineering	f) комплексное управление качеством (продукции), (концепция, подразумевающая участие всех работников организации в повышении качества продукции и услуг, оптимизации процессов производства и управления и т. д.)
7) spot check	g) мозговая атака, мозговой штурм (метод генерации идей путем коллективного обсуждения проблем при полной свободе выдвижения вариантов решения)
8) benchmarking	h) выборочная проверка или ревизия, выборочный контроль
9) task group	i) подробное описание, технические условия, инструкция по обращению

2. Match up the words on the left with the definitions on the right.

1) benchmarking	a) a fault or imperfection or deficiency
2) reliability	b) a promise that goods will meet a certain specified quality level, or be repaired or replaced free of charge
3) defect	c) the confidence, enthusiasm, and discipline of a person or group at a particular time
4) feedback	d) the ease of maintenance and repair
5) durability	e) regular performance according to specification
6) serviceability	f) information about reactions to a product, a person’s performance of a task, etc., used as a basis for improvement
7) morale	g) performance over a long period of time
8) warranty	h) going outside the firm to see what excellent competitors are doing and adopting the best practices

Think ahead

1. Do you try to continuously improve you own work? If so, in what ways?

2. In what ways does you company or the place where you study improve its efficiency? What should be done for this purpose?

3. Give examples of high-quality products or services. Explain your choice.

Text 2.5 Skim the text below and suggest headings for each paragraph. Then read the text once more for detailed understanding.

1. ______________________________________

In production and operations management, over the past few decades, there has been emphasis on quality. The specifications or specs of a product are exact instructions about design, including its dimensions (size), how it is to be made, the materials to be used, etc. The objective of quality control is conformity to specifications, the idea that the product should be made exactly as it was intended, with zero defects: no faults at all.

This concept is called Total Quality Management (TQM), according to which management should ensure that quality extends in all features of products and services that are important to the customer. The company should aim at the highest quality level possible, because a lack of quality can be more expensive than achieving high quality. It means that there are many costs that result from not 100% perfect production: inspecting, testing, identifying the causes of defects, implementing corrective action, training personnel, redesigning a product, scrapping, repairing defective products, replacing products in accordance with a warranty, dealing with complaints, losing customers and so on. It appears that prevention is usually much cheaper than failures. Everyone in the entire supplier-producer-customer chain should be responsible for quality. Every worker is a quality inspector for his/her own results aiming at zero defects and attaining high quality. Things should be made right from the first time in order not to correct mistakes later in the process of reworking. This approach is often described as ‘quality at the source’. It removes the need for ‘over the shoulder’ inspection. This often requires training and motivation of the staff.

2. ___________________________________

A quality circle (QC) is a task voluntary groups of six to twelve employees in the same work area who meet on a regular basis to study quality control and productivity improvement techniques, and discuss the problems their department encounters. If there are problems with quality, the group will try to indentify their sources, find solutions to eliminate them and improvements to management. Managers review the proposed solution and make a decision on whether or not to implement it. Then the solution is implemented and evaluated for the success by the quality circle and the organisation. Some specific features of quality circles are the following:

1) Small groups range in size from 4 to 15 members. Eight or nine is the most popular size

2) A work area supervisor is usually, though not always, the leader of the circle.

3) Meetings are held once every week during paid hours.

4) Members are usually given training in the techniques of problem-solving, analysis and reporting methods (e.g., brainstorming).

5) Circles exist as long as the members wish to meet.

3. ____________________________________

Continuous improvement process (CIP or CI) is an ongoing effort to improve products, services or processes. It is always making small improvements and is often referred to by its Japanese name – kaizen. It is a Japanese philosophy that underlies total quality management and just-in-time business techniques. By the 1980s the Japanese had achieved manufacturing greatness by practicing continuous improvement; firms were constantly working to improve all aspects of a business. To do this a firm must always increase quality, look for innovative ways to solve problems and focus on the quality of its suppliers. All of these are cornerstones of a modern JIT system. The stress is made on feedback (reflection of process), efficiency (identification, reduction and elimination of excess processes) and evolution (continuous steps rather than giant leaps).

4.____________________________________

Companies should always be engaged in the process of comparing their business performance to best practices from other industries, analysing the performance of their competitors in terms of quality, time and cost, seeing how the best companies operate and trying to copy it. In the process of benchmarking, management identifies the best firm in their industry or in another industry and compare the results trying to understand and explain why these firms are successful. There are different types of benchmarking: process, financial, performance, product, functional, operational, etc.

5. ___________________________________

Business process reengineering, or BRP, is the analysis and design of workflows and processes within the organisation aiming at the gains in productivity. Re-engineering is the basis for many recent developments in management. Four major business areas are subjected to change in BRP – organisation, technology, strategy and people. It applies both in service industries and in manufacturing. For example, if companies do not want to change existing things in small ways, they can completely redesign all their processes in management, administration and customer service, e.g., eliminate some levels of management or install a completely new computer system.

Concept check

1. Give the summary of the text in English. Pay attention to the terminology explained in the text.

2. Which term from the headings above can define each of these situations? One of the expressions is used twice.

1. The police service reduces the number of forms to fill in when a crime is reported, first form fifteen to twelve, then to ten, then to seven, then to three.

2. The travel company closes all its high street shops, lays off middle managers and half of its assistants and retains the others to sell on the phone. It also starts an Internet service.

3. The telephone company looks at other companies to see which one issues bills with fewest mistakes to customers. It then copies this company’s methods to reduce mistakes in its own bills.

4. Most parcel delivery companies deliver 70 percent of parcels by 10 a.m. the next day, but one company has an advanced computer system that enables it to achieve an 80 percent delivery rate.

5. An Internet banking service starts by allowing customers to see how much money they have in their accounts, and the latest transactions in the order they took place. Six months later, they can make payments using the Internet service, which they couldn’t do before.

Key learning points

• The main question of any economy is the issue of production: what to produce, how to produce, for whom to produce and how much to produce. It can not take place without resources – factors of production.

• Production and operations process involves three basic phases: inputs, transformation process and outputs. Production and operations management(P/OM) is applied to achieve the production objectives.

• The major issues to be sorted out when organizing a manufacturing process are production facilities (location and capacity), inventory management and business philosophy with reference to quality used in your production process.