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- re-arrangement of the production process into production cells
- reducing set-up times
- increased emphasis on total quality management
- production cell workers are trained to multi-task

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1) A supplier that does not deliver goods to the company exactly on time
2) A natural disaster could interfere
3)An investment should be made in information technology
4) A company may not be able to immediately meet the requirements of a massive and unexpected order,

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Sets out to cut costs by reducing the amount of goods and materials a firm holds in stock.

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- An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

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1)Improved Organizational Efficiency
2)Reduced Costs
3)Better Supply Chain Management
4)Better Customer Satisfaction
5)Less Waste

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1. Develop a healthy relationship with the suppliers
2. Explain the relevance of quality to the employees.
3. Company should ensure the quality and compliance information.
4. Make use of technological developments to be a better quality tools and production processes.

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1. Preventive Cost
2. Appraisal Cost
3. Internal Failure Cost
4. External Failure Cost

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It is cost beneficial in an organization because it can save time and money by avoiding mistakes.

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- To find out how the activity can be improved.
- Ensure that the improvements are implemented.

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- It involves creating and delivering a product that meets the expectations of a customer.

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- Methodology that allows organization to determine the extent to which its resources are used for activities that prevent poor quality.

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Comparing key activities with the best practices found within and outside the organizations

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- To analyze the profitabiity of new product
- To open an office in a second location

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1. Refocus company values.
2. Redesign core processes
3. Reorganize a business into cross-functional teams.
4. Rethink basic organizational.
5. Improve business processes.

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- It provides cost information about any area of operations.

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- Involves redesign of how work is done through activities such as material handling.

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- it is a system for determining the profitability of every aspect in a business

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- Can be defined as examining or recreating the core business process to achieve improvements in productivity etc.

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- Activity-based Management (ABM) is a management tools in managing operational activities to improve the performance of an organization.

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Throughput = Sales revenue - Variable costs

To throughput, must either increase sales OR decrease variable costs.

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- Tool that helps management to take care of limitations and constraints to delay production.

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- A technique to maximize throughput while simultaneously maintaining/decreasing inventory and operating cost.

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- Serves for identifying and measuring the full environmental cost of current production processes and to integrate these costs.

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-It is applied during manufacturing stage in which it focuses on production processes as it aims to reduce the cost of the processes by relying on employee empowerment.

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- Included in the cost are cost to clean up, environmental fines, penalties and taxes and waste management cost.

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- The process of continual cost reduction that occurs after a product design has been completed and is now in production.

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- Field that can identifies resource use, communicate and measures costs of company's or national economic impact on the environment.

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- Introduced by Japanese organisations as a mechanism for reducing and managing costs. It is a Japanese term to make an improvements to a process. It relies on an employee empowerment.