1. 3.2.2 Managing stock and quality
Have you seen these labels or stickers in the shops?
How does the customer feel?
How does the business manager feel?
What is the problem?
3.2.2 Managing stock and quality
3.2.2 Managing Stock and Quality

2. Stock Control What happens if a business holds too little stock?
What happens if a business holds too much stock?
Which is the lesser of two evils?
There are two stock control methods:
Buffer stock
Just in Time
3.2.2 Managing Stock
and Quality

3. Interpreting bar gate stock graphs
3.2.2 Managing Stock and Quality
Interpreting bar gate stock graphs
Maximum stock level
Stock
Level
Stock levels fall as it is used
New stock is delivered
Re-order level
Lead time – the time from placing the stock order to getting the delivery
Buffer stock – held in case there is a problem with delivery of new stock or a sudden increase in demand
When it reaches this level more stock is ordered either manually or automatically
Minimum stock level
Number of Weeks

4. Buffer stock
The buffer stock method of stock control is sometimes called “Just in Case”.
Can you explain why?
Advantages of holding buffer stock
Can meet customer demand
Quickly respond to increases in demand
Continue with production even if a problem with stock deliveries
Disadvantages of holding buffer stock
Money tied up in holding stock
Costs associated with stock holding e.g. storage, staff, insurance
Risk of waste e.g. out of date, damaged or obsolete
Should all businesses hold buffer stock or does it depend on the nature of the business?
3.2.2 Managing Stock and Quality

5. Work in pairs to identify the advantages and disadvantages of JIT.
3.2.2 Managing Stock and Quality
Just in time (JIT)
Just in time is a stock control method that involves holding zero or very limited stock. Raw materials are delivered as they are needed for production and finished goods completed ready to meet the demand of customers.
Advantages
Disadvantages
Work in pairs to identify the advantages and disadvantages of JIT.

6. 3.2.2 Managing Stock and Quality
Question time
SuperDenim is an online retailer of designer Japanese denim. It imports jeans directly from Japan and sells them over the internet. SuperDenim prides itself on a high level of customer service.
What is meant by the term “stock”? (2)
Using the diagram opposite, what is the:
number held as buffer stock
reorder quantity
lead time (3)
Explain one possible benefit of SuperDenim operating this method of stock control. (3)
State one advantage and one disadvantage to SuperDenim of switching to a Just in Time (JIT) method of stock control. For each, explain one likely effect on the business. (8)
Max. level
Re-order level
Stock levels
Min. level
No. of weeks

7. Identify Quality Problems
Produce a spider diagram to show the costs associated with quality problems
Italian fashion brand Gucci once used the slogan
“Quality is remembered long after the price is forgotten.”
Do you agree?
Jonathan talks to BBC World TV news about Toyota's brand faux pas
Can quality problems effect the long term brand image of a company?

8. Does this Toyota plant use quality control or quality assurance?
Quality control is the process of checking the quality of a product at the end of the manufacturing process
A specialist is employed to check the end product
Quality assurance is the process of checking the quality of a product at every step along the manufacturing process from the receipt of raw materials to the final output
Each employee is responsible for self inspection
Does this Toyota plant use quality control or quality assurance?
Lean Manufacturing Example Toyota Plant Kentucky
3.2.2 Managing Stock
and Quality

9. Quality control v Quality assurance
Advantages
Disadvantages
Which one is better? Justify your view.
Work in pairs to complete the table opposite.
3.2.2 Managing Stock and Quality

10. Team Activity – Quality Assurance
In teams prepare a poster to be displayed in your classroom that addresses the following points
What is a quality exam answer?
Who is responsible for achieving a quality answer?
What steps can be taken to maintain quality?
Individual activity: How could you improve the quality of your
Exam answers?
Class work?
Home work?

11. Question time
3.2.2 Managing Stock and Quality
Pret-a-Manger operates 295 sandwich shops worldwide. 210 of these have their own kitchens so sandwiches can be made on-site. Pret are proud of the freshness of their food, their website tells customers “We get vans to drop off good, natural ingredients every day. Our chefs get cracking early in the morning, making our stuff fresh so we can sell it fresh. This is absolutely, completely and utterly essential to the quality of our food.”
“We get vans to drop off good, natural ingredients every day”. What is this an example of?
Buffer stock
Just in time
Quality control
Quality assurance (1)
The first job of the chefs is to check the raw ingredients. What is this an example of?
What is meant by the term “quality”? (2)

12. Question time
3.2.2 Managing Stock and
Quality
Pret-a-Manger operates 295 sandwich shops worldwide. 210 of these have their own kitchens so sandwiches can be made on-site. Pret are proud of the freshness of their food, their website tells customers “We get vans to drop off good, natural ingredients every day. Our chefs get cracking early in the morning, making our stuff fresh so we can sell it fresh. This is absolutely, completely and utterly essential to the quality of our food.”
Explain one possible disadvantage to Pret of not holding a buffer stock. (3)
Explain one possible benefit of a quality product to Pret. (3)
Improving the quality of a product and improving productivity are two ways in which a business like Pret-a-Manger might become more competitive.
Which of these two methods do you think would be most effective in improving
the competitiveness of a business such as McDonald’s and why? (6)