This article is an excerpt from the Shortform book guide to "High Output Management" by Andrew S. Grove. Shortform has the world's best summaries and analyses of books you should be reading.
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What is production testing? Why should you do production testing?
Production testing examines the process of production as well as the quality of goods. You’ll need to conduct production testing to ensure you’re meeting quality standards at the most effective output.
Read more about production testing and how it works.
Production Testing
Testing examines the raw materials, parts, or the final product for flaws. First, we’ll look at when you should test, and then we’ll look at the different ways you can carry it out.
Timing of Tests
As we learned, material gains value as it passes through each production stage. Therefore, you should always try to catch problems at the lowest possible stage to save yourself money.
You should test at three different points during production:
Point #1: Upon Receipt of the Raw Materials
This is also called an incoming or receiving inspection. If you can catch any problems at this early stage, you can avoid contaminating the whole product with one bad component.
- Manufacturing example: If your eggs are rotten, you’ll have to throw out all the breakfasts you make with them, wasting toast and coffee as well. If you can reject the eggs before you even get started, you’ll save other raw materials.
- (Shortform example: If one of your tasks is to organize the printing of a festival program, look at the page proofs as early as possible so that if there’s a critical mistake, you can fix it before printing samples or the final program.)
If raw material inventory doesn’t meet your standards, you have two choices:
Choice #1: Send it back. If you do this, you won’t be able to build anything until you replenish your supply, which may cost you in lost opportunity.
To avoid getting into this situation, purchase extra raw material inventory. The general rule is that you should have enough to last you the amount of time it would take to replace your inventory.
- Manufacturing example: If you get eggs delivered once a day, you should always keep a day’s worth of eggs, so that if one day, the entire delivery is rotten, you have enough to last until the next delivery. The rule is general because having inventory costs money (storage space costs money), so you have to consider the trade-off.
- Business example: In a managerial sense, raw inventory is yet-to-be-started discretionary projects that aren’t urgent. You should have these backburner tasks to work on so that when you get free time, you aren’t tempted to micromanage or interfere with your subordinates’ work.
Choice #2: Use it anyway. If you do this, the quality of some of your final products will be lower.
In manufacturing, the decision is usually based on cost—which is more expensive, an idle factory, or a lower-quality product? (To decide, manufacturers gather managers from the manufacturing, design engineering, and quality assurance departments to discuss.)
However, there is one hard rule: Never use unacceptable material if it could cause your product to completely fail, which is called a reliability problem. Complete failure has unpredictable and potentially dangerous consequences.
- (Shortform manufacturing example: If your company makes bicycle helmets and the paint you use to color them blue is the wrong shade, go ahead and use it. If there’s something wrong with the life-saving parts of the helmet, don’t use them, because someone could die.)
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Here's what you'll find in our full High Output Management summary :
- How to increase your managerial output and productivity
- The 11 activities that offer a higher impact on output
- How meetings can be used as a time management tool
