Cadbury uses TQM. All the employees involved the Cadbury production process is responsible for quality and has the power to take the corrective action, even stop the production line. An advantage is that products are regularly checked so as a result there will be lower costs and satisfied customers. The disadvantages are that TQM only works if every employee is motivated to play their part and also it takes time and money to put into practice. Cadbury uses lean production to reduce waste of resources during production, which in turn improves efficiency.
By using lean production Cadbury will aim to reduce the time it takes for the product to progress from the development stage to the shop shelves. Just In Time (JIT) is where a company receives materials and components immediately prior to production beginning, and no earlier. JIT systems try to keep the stock to a minimum by having replacement stock arrive at the point when it is required. This reduces wastage of time, storage and money.
Cadbury uses JIT for its packaging from Scotland but its cocoa beans from Ghana and Fruit and Nut from South America cannot guarantee to arrive at precise times so reserved stock is kept.
Cadbury uses computer aided design (CAD) to design and test much of their products. Testing through the use of computer simulation can be a lot safer and cheaper. Computer aided manufacture (CAM) is also use to manufacture the products. Cadbury uses flow rap machines which wraps 800 bars a minute. Cadbury’s employs 8,000 people in the UK.
In the UK chocolate is manufactured at the Bournville site in Birmingham. Cadbury has a few advantages of being a big company which result in lower average costs.
Cadbury uses computers and technology to replace employees on the production line. They are able to transport bulk materials. Bulk buying results in lower unit prices. Cadbury’s can employ specialist buyers who negotiate for better prices. This means that advertising costs can be spread. Being a large firm Cadbury’s will find it easier to raise capital. Administration costs can be spread. Better lending terms and lower interests rates make it easier to borrow. There is a larger risk over products.
Cadbury can employ more specialised managers this saves money and is more efficient. Top managers can be employed because they will be attracted by top salaries. The firm can afford to take risks with new products because other products or parts if the business are still profitable. By having skilled labour in the area, local colleges my run specialist courses. By being close to other similar businesses that can work with each other is also an advantage. As the area that the business is located develops so will the roads and rail network which results in better communication.
If a town becomes known for a particular industry it will build up a reputation. The disadvantages if Cadbury’s being big will result in higher average costs. Decision making takes longer because there are more people involved in the process this will mean that the business can be slow to respond to changes. Communication between employees becomes poor because once again there are more people involved which means there are too many layers in the organisation hierarchy. Lines of communication can become blurred or broken.
There will be too much paperwork and bureaucracy. The business might try to do too many things at once and going in too many directions for anyone to have an overall grasp of what is going on. As a result there will be staff problems, employees may not feel part of the business, leading to lower morale and motivation. Employees do not feel that they belong to the company because the day to day contact might have been lost. Also industrial relations might not be good, leading to disputes over pay or conditions.