Page 537 - Business Principles and Management

Unit 6

IMPROVING PRODUCTION PROCESSES
Improving quality and productivity has been one of the most important chal-
lenges facing businesses in the last decade. Increasing global competition has
resulted in a larger number of products from which customers can choose.
Businesses have found that customers buy the best product available for the
price they can afford, resulting in increased pressure to improve quality while
holding down costs and prices.
As you learned in Chapter 1, for many years companies were more interested
in production efficiency than in quality. As early as the 1950s, Dr. W. Edwards
Deming was encouraging businesses to focus on quality as the most important
company goal, but his ideas were largely ignored in the United States. Today,
however, because of the success of companies that have adopted Deming’s ideas,
most manufacturers use principles of quality management. Quality management is
the process of assuring product quality by developing standards for all operations
and products and measuring results against those standards. For quality manage-
ment to succeed, the company must believe that no defects are acceptable and that
all employees are responsible for quality. Everyone must be able to identify prob-
lems and take responsibility for correcting them. Rewards must be based on
achieving the quality standards rather than meeting a certain level of production.
To encourage American companies to improve quality, Congress created the
Malcolm Baldrige National Quality Award in 1987. To win the award, a com-
pany must demonstrate that it has implemented a program to develop and main-
tain quality in all of its products and activities. Companies compete for the award
because customers are more likely to buy from companies that can prove their
commitment to quality by winning this honor.
Technology has contributed to the improvement of manufacturing for many
Technology has greatly con- years. Computers have dramatically improved the quality and speed of production
tributed to the improvement and have reduced costs. Robots now perform many of the routine and repetitive
of manufacturing. What effect tasks previously done by low-skilled employees. Fewer people are now needed to
have computers had on the accomplish the same level of production. However, those people must be skilled in
employees of such companies? computer operations and modern production processes.
In addition to routine tasks, computer technology can also
accomplish more difficult and challenging tasks. Using a com-
puter application known as computer-aided design (CAD),
engineers can design and test products before they are even
built. They can view a design from various angles, study pos-
sible modifications, and test the products for strength and
durability.
The most extensive use of computers in manufacturing
is a system known as computer-integrated manufacturing.
In this process, all manufacturing systems are designed and
managed with computers. Design work, planning and sched-
uling, resource management, and control are all tied together
through computers. When someone makes a change in one
PHOTO: © GETTY IMAGES/PHOTODISC. units.
area, computers determine the impact of the change on other
areas and communicate that information to the affected work
The Internet has become a powerful resource in improv-
ing the speed and quality of manufacturing. Some of the uses
of the Internet are very basic but have an amazing impact on
how a business operates. As an example, it used to be a very
expensive and time-consuming process for companies to get

524 approval from the Food and Drug Administration when they