Hugg Boots, a premium footwear manufacturer, implemented a series of waste reduction strategies in 2024. The company aims to identify and eliminate seven different types of production waste in their production operations.
State two of the seven wastes in lean production.
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Canadian Construction Materials PLC produces prefabricated housing components. The company's lean production consultant has identified overproduction as their primary source of waste.
Define the term 'overproduction'.
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South African Mining Corporation, a platinum mining company, implemented Kaizen principles in 2023. This change has led to annual output increasing by 45%.
Define the term 'Kaizen'.
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Positano Furniture Ltd manufactures high-end furniture. In 2024, it implemented just-in-time stock management to reduce warehousing costs and improve efficiency.
Define the term 'just-in-time stock management'.
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Rio Pharmaceuticals, a Brazilian manufacturer of generic medicines, implemented just-in-time stock management in 2023. The company has identified several disadvantages during implementation in their production facilities.
State two disadvantages of just-in-time stock management.
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French Luxury Packaging SA produces cosmetics packaging. In 2024, FLP moved away from the traditional cradle to grave approach, implementing cradle-to-cradle design principles.
Define the term 'cradle to grave approach'.
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British Home Furnishings PLC designs and manufactures household furniture. In 2024, BHF adopted cradle to cradle design principles, most particularly responsible material selection.
State two principles of responsible material selection in cradle-to-cradle design.
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Spanish Hotel Group SA, a luxury hotel chain, implemented new quality measures in 2024. The company uses various metrics to measure the quality of their service delivery.
State two quantitative measures of service quality.
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Eastern Construction Ltd, a commercial building contractor, conducted research in 2024 to understand factors influencing customer perceptions of quality in their projects.
State two factors that influence customer perceptions of quality.
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Murcia Fruits, a premium juice producer, implemented quality assurance in 2024. The company has identified several advantages of this approach in their orchards, processing plants and warehouses.
State two advantages of quality assurance over quality control.
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Peruvian Coffee Exporters SA processes premium coffee beans. In 2024, the company established quality circles across the business.
Define the term 'quality circle'.
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Marriott Hotels International, a global hospitality chain, recently implemented principles of Total Quality Management to improve guest service standards.
Define the term 'Total Quality Management'.
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Scandinavian Furniture Design Ltd, a manufacturer of premium furniture, achieved quality accreditation in 2024. The company has identified several benefits from this achievement.
State two benefits of achieving quality standard accreditation.
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GreenHomes, a sustainable building company, follows the cradle-to-cradle (C2C) design approach. It uses recyclable materials and renewable energy in its manufacturing processes.
Describe one feature of cradle-to-cradle (C2C) design.
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PureCure is a pharmaceutical company committed to producing high-quality medicines. It implements total quality management (TQM) principles to ensure every stage of production meets stringent quality standards.
The company recently acquired ISO certification, demonstrating its commitment to international quality standards. PureCure is also exploring Six Sigma methodologies to further reduce defects and improve operational efficiency. However, these quality-focused initiatives come with high implementation costs and require significant employee training.
Explain one advantage and one disadvantage of PureCure acquiring ISO certification.
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PureCure is a pharmaceutical company committed to producing high-quality medicines. It implements total quality management (TQM) principles to ensure every stage of production meets stringent quality standards.
The company recently acquired ISO certification, demonstrating its commitment to international quality standards. PureCure is also exploring Six Sigma methodologies to further reduce defects and improve operational efficiency. However, these quality-focused initiatives come with high implementation costs and require significant employee training.
Describe two benefits of PureCure using TQM principles in its operations.
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Fresh Fleet is a grocery delivery service that specialises in delivering fresh produce directly to customers’ homes. The company prides itself on quick delivery times and maintaining the quality of its produce. Fresh Fleet uses a fleet of refrigerated vehicles to ensure perishable goods are kept fresh during transit.
To improve efficiency, Fresh Fleet has implemented just-in-time (JIT) stock management, ensuring produce is sourced and loaded onto vehicles only as orders come in. While this reduces waste, the company faces challenges in managing unpredictable demand and ensuring supplier reliability. Fresh Fleet also conducts regular quality checks at its distribution centre to maintain high standards, but this adds to operational costs.
Analyse two advantages and one disadvantage of Fresh Fleet using refrigerated vehicles in its operations.
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Fresh Fleet is a grocery delivery service that specialises in delivering fresh produce directly to customers’ homes. The company prides itself on quick delivery times and maintaining the quality of its produce. Fresh Fleet uses a fleet of refrigerated vehicles to ensure perishable goods are kept fresh during transit.
To improve efficiency, Fresh Fleet has implemented just-in-time (JIT) stock management, ensuring produce is sourced and loaded onto vehicles only as orders come in. While this reduces waste, the company faces challenges in managing unpredictable demand and ensuring supplier reliability. Fresh Fleet also conducts regular quality checks at its distribution centre to maintain high standards, but this adds to operational costs.
Explain one advantage and one disadvantage of Fresh Fleet conducting regular quality checks at its distribution centre.
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Green Grow is a sustainable farming company that produces vegetables using hydroponics, a soil-free farming method where plants are grown in nutrient-rich water. This method reduces the need for large land areas and allows for efficient use of resources like water and nutrients.
Green Grow is committed to minimising waste and improving efficiency, making lean production a core focus. The company uses just-in-time (JIT) stock management to avoid overstocking and reduce waste. However, it faces challenges with unreliable suppliers, which can disrupt production schedules. To ensure continuous improvement, Green Grow involves employees in Kaizen initiatives, where small, ongoing improvements are made to its farming processes.
Analyse two advantages and one disadvantage of Green Grow involving employees in Kaizen initiatives.
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Green Grow is a sustainable farming company that produces vegetables using hydroponics, a soil-free farming method where plants are grown in nutrient-rich water. This method reduces the need for large land areas and allows for efficient use of resources like water and nutrients.
Green Grow is committed to minimising waste and improving efficiency, making lean production a core focus. The company uses just-in-time (JIT) stock management to avoid overstocking and reduce waste. However, it faces challenges with unreliable suppliers, which can disrupt production schedules. To ensure continuous improvement, Green Grow involves employees in Kaizen initiatives, where small, ongoing improvements are made to its farming processes.
Describe two ways Green Grow could minimise waste in its farming operations.
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Green Grow is a sustainable farming company that grows vegetables using hydroponics, a modern method in which plants grow in nutrient-rich water instead of soil. This process reduces the need for large amounts of land and uses water more efficiently than traditional farming methods. The company’s mission is “to grow food sustainably while protecting the planet”
Green Grow supplies fresh produce to supermarkets, restaurants and online grocery services. Customers like the company’s eco-friendly and locally sourced vegetables. Green Grow uses a just-in-time (JIT) stock management system to avoid waste and ensure vegetables are harvested and delivered fresh to customers. However, relying on JIT can cause problems when suppliers deliver seeds or nutrients late. These delays sometimes stop production, which means customer orders are not always delivered on time
Lean production is an important part of Green Grow’s operations. The company uses Kaizen, a system where employees regularly suggest small changes to improve processes. For example, a recent suggestion helped the company reduce packaging waste by 10%. To monitor efficiency, Green Grow tracks key performance indicators such as stock turnover, wastage rates and delivery times. While the company’s stock turnover ratio has remained stable, the average delivery delay has increased slightly due to supplier issues
Employee motivation is essential for Green Grow to achieve its goals. The company offers flexible working hours, training opportunities and performance-based bonuses. Many employees say they are motivated by Green Grow’s mission to protect the environment. However, a staff survey found that some workers feel stressed by the tight schedules required by JIT and others feel that their contributions are not recognised. The company also faces challenges such as a rising absenteeism rate and increased labour turnover, which management is working to address
To improve its operations, Green Grow is considering investing in automation. This would make production more reliable by reducing delays caused by supplier problems. The investment would cost $500,000 and could improve efficiency by 20%. However, the company would need to fund this project, possibly through a loan, which could increase its gearing ratio and financial risks, and we do not know whether shareholders would be keen to take this on
Table 1: Key financial data (2023 and 2022)
Metric | 2023 | 2022 |
|---|---|---|
Revenue ($) | 5.2m | 4.5m |
Cost of goods sold ($) | 3.1m | 2.7m |
Profit margin (%) | 15 | 14 |
Share price ($) | 12.10 | 10.40 |
Table 2: Employee metrics (2023 and 2022)
Metric | 2023 | 2022 |
|---|---|---|
Labour turnover rate (%) | 18 | 15 |
Absenteeism rate (%) | 6 | 5 |
Days lost to illness | 400 | 350 |
Number of grievances | 10 | 8 |
Employee satisfaction (%) | 70 | 75 |
Table 3: Operational efficiency metrics (2023 and 2022)
Metric | 2023 | 2022 |
|---|---|---|
Stock turnover ratio | 6 | 6 |
Debtor days | 29 | 28 |
Creditor days | 36 | 34 |
Gearing ratio (%) | 37.5 | 39.7 |
Recommend two improvements to Green Grow’s existing lean production system to improve efficiency.
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17 marksResources 1–5 and Tables 1–2 are required to answer this question.
Using the resources provided, recommend a course of action for Lux'Avenir to improve the quality of its products over the next five years. Justify your recommendation.
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