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Manufacturing and Production

15 Key Elements of Total Quality Management in a Business

Last Modified: 4 October, 2020 Leave a Comment

A primary role of management is to lead an organization in its day-to-day operations as well as to maintain its as a viable entity into the future. Quality has become an important factor in success in this latter strategic responsibility.

elements of total quality management system
elements of total quality management system

TQM finds out what the customers want. Customers include both the internal customer (the next person in the process) as well as the external customer (the final customer).

Design a product and service that will meet or exceed what customers want.

It keeps track of the result and uses those to guide improvement in the system. Never stop trying to improve.

The TQM concept supports the philosophies of customer focus, continuous improvement, defect prevention, and aa recognition that responsibility for quality is shared by all employees of an organization.

Elements of the Total Quality Management System

A brief overview of the key TQM concept is given in the following points:

1. Sustained Management Commitment to Quality

It an organization is serious about implementing TQM, the commitment to do so has to start at the top management level.

Top management commitment and involvement in implementing TQM are very crucial for ht success.

Top management gets involved in setting business strategies based on using product quality as a competitive weapon to capture the global market share and rewarding employees for achieving excellence in product quality.

2. Focusing on the Customer

Customers’ needs and expectations drive the TQM system.

The characteristics of that customer’s value more are built into products from design to after-sales services.

3. Preventing Rather than Detecting Defects

TQM prevents poor quality products or services rather than simply to detect and sort out defects.

Prevention rather than detection is a very strong single characterizes of TQM.

Some of the techniques of TQM which aim at defect prevention rather than defect detection are statical process control, continuous process improvement, Taguchi design of experiments, problem-solving, and system failure analysis, which will be discussed in later chapters.

Related: 5 Competitive Priorities in Operations Management.

4. Universal Responsibility for Quality

Another basic TQM precept is that the responsibility for quality is not restricted to only the quality assurance department, but is the guiding philosophy started by everyone in the organization.

The traditional thinking was that inspection (or detection rather than prevention) is necessary to ensure the quality of products, thereby installing a deep belief in people who manufacture the products that they are no longer responsible for the quality of their output.

In the TQM approach, everyone takes responsibility for quality.

As quality improves, the inspection activity reduces and the quality assurance department gets smaller and ultimately may disappear.

5. Quality Measurement

The quality measurement aspect of TQM asks the questions: where are we and where are we going? Quality s a measurable entity and we need to know what the current quality levels are (Where are we?) and what quality levels we aspire to (where we are going?).

6. Continuous Improvement

TQM involves a never-ending process of continuous improvement that covers people, equipment, supplies, materials, and procedures.

The basis of the philosophy is that every aspect of an operation can be improved.

The Japanese use the word “Kaizen” to describe the ongoing process of unending improvement in the setting and achieving of ever-higher goals.

In the USA, TQM zero defect and six sigma are sued to describe such efforts.

Related: Top Competitive Dimensions of Operations Management.

7. Root Cause Corrective Action

TQM seeks to prevent the repetition of problems which were thoughts to have been corrected by identifying the root causes of problems and by implementing corrective actions that address the problem,s at the root cause level.

Problem-solving skills a failure analysis approach ate useful in this regard.

8. Employee Involvement and Empowerment

Employee involvement means every employee is involved in every step of the production process and every employee plays an active role in helping the organization meet its goals.

key components of total quality management
key components of total quality management

Employee empowerment means enlarging the employee jobs so that the added responsibility and authority is moved to the lowest level possible in the organization.

Techniques for building employee empowerment include:

  1. Building communication networks that include employees,
  2. Developing open, supportive supervisors,
  3. Moving responsibility from both managers and staff to production employees,
  4. Building high morale organizations, and
  5. Creating such formal organization structures as teams and quality circles.

Must-Have Skills and Qualities of Effective Corporate Trainer.

9. The Synergy of Teams

Taking advantage of the synergy of the team is an effective way to address the problems and challenges of continuous improvements.

The concept of quality circles developed into a more sophisticated and focused teaming concept known as focus teams in the USA.

10. Thining Statistically

Statical methods or techniques are useful for reducing process or product design variation for improving quality.

Statistical process control (SPC) using charts for control of ongoing processes and the Taguchi concept for variability reduction is used for achieving continuous improvement.

These will be discussed in later chapters.

11. Benchmarking

Benchmarking involves selecting a demonstrated standard of performance that represents the very best performance for a process or activity.

The steps for developing benchmarking are:

  • Determine what to benchmark
  • Form a benchmark team
  • Identify benchmarking partners
  • Collect and analyze benchmarking information and
  • Take action to match or exceed the benchmark

Benchmarking will be discussed in later chapters.

Key Benefits and limitations of Benchmarking.

12. Inventory Reduction through Just in Time Production and PRocurement

The philosophy behind JIT is one of continuous improvement and forced problem-solving.

JIT systems are designed to produce or deliver goods just as they are needed.

JIT reduces the amount of inventory that a firm has on hand by establishing a quality and purchasing controls that bring inventory to the firm just in time for use.

JIT is related to quality in three ways:

  1. JIT cuts the cost of quality by cutting the cost of scrap, rework, inventory caring cost, and damage costs.
  2. JIT improves quality. IT creates an easy warning system for quality problem,s both within the firm and with vendors.
  3. Better quality means less inventory and a better easier to employ the JIT system. If consistent quality exists, JIT allows firms to reduce all the costs associated with inventory.

JIT production will be discussed in later chapters.

13. Value Improvement

The essence of value improvement is the ability to meet or exceed customer expectations while removing unnecessary costs.

TQM removes unnecessary costs while simultaneously customer expectation and requirements are satisfied.

However, simply cutting cost without satisfying the customers will not result in value improvement.

14. Suppliers Teaming

TQM aims at developing long term relationships with a few high-quality suppliers rather than simply selecting those suppliers who supply at the lowest costs.

15. Training

People have to be trained to use TQM concepts and technologies.

Employees are empowered by proving the tools necessary for continuous improvement training is the most basic tool for this.

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11 Key Benefits and limitations of Benchmarking

Last Modified: 3 October, 2020 Leave a Comment

Benchmarking is defined as “measuring our performance against that of best in class companies, determining how the best in class active those perform care levels and using the information as a basis for our own company’s targets strategies and implementation.

pros and cons of benchmarking
pros and cons of benchmarking

What is Benchmarking

A benchmarking is a point of reference against which things are measured.

In business, these points of reference or standards can take many forms. They are measured by cantons about the product or service.

By Studying other organizations and comparing the answers to these questions, we will be able to measure our performance against that of others.

As a result, we will be able to set new goals and adapt the best practices to our organization. This, in turn, will help us to satisfy our customers with the best quality, cost, product, and service.

Advantages of Benchmarking

The following are the important benefits of benchmarking in a company:

1. Creating a Profile of Company

A primary advantage of benchmarking practice is that it promotes a thorough understanding of the companies own process like the company’s current profile (strengths and weaknesses) is well understood.

2. Saving Time and Money

The benchmarking process involves limitation and adaptation of the practice of superior competitors, rather than invention, thereby saving time and money for the company practicing benchmarking.

Related: 5 Competitive Priorities in Operations Management.

3. Intensive Studies of Practices

Intensive studies of existing practices often lead to the identification of non-value-added activities and plan for process improvement.

4. Enables Comparisons

Benchmarking enables comparison of performance measures in different dimensions, each with best practices for that particular measure.

It involves completion with several companies that are best for the chosen measure.

(Some common performance measures return on assets, cycle time, percentage of on-time delivery, the proportion of defects, percentage of damaged goods, and time spent on administrative functions).

5. Focusses on Performance Measures and Processes

Benchmarking focusses on performance measures and processes and not on products.

Thus, it is not restricted to the industry to which the company belongs.

It extends beyond these boundaries and identifies organizations in other industries that are superior with respect to chosen measures.

6. Allows New Targets to Set

Benchmarking allows organizations to set realistic, rigorous new performance targets and this process helps convince people of the credibility of these targets.

Thes tend to overcome the “not invented here” syndrome and the “we were different” justification for the status zero.

Benchmarking indicates to a company that there may be people elsewhere who do things better than they do.

7. Implementation of Improvements

Benchmarking allows organizations to define specific gaps in performance and to select the processes to improve.

benefits and limitations of benchmarking
benefits and limitations of benchmarking

It enables the company to redesign its products and services to achieve outcomes that meet or exceed customer expectations.

Different Types of Advertising in Marketing (With Examples).

8. The Basis for Training Human Resources

Benchmarking provides a basis for training human resources. Employees begin to see the gap between what they are doing and what the best in class are doing.

Closing the gap between what they are doing and what the best in class are doing.

Closing the gap emphasizes the need for personnel to be involved in techniques of problem-solving and process improvement.

The synergy between organizational activities is improved through cross-functional cooperation.

Disadvantages of Benchmarking

The following are some limitations of benchmarking:

1. Adopting New Technology Create Leap Performance

The primary limitation or weakness of benchmarking is the fact that best in class performance is not a static but a moving target.

New technology can create quantum leap performance improvement for example – the use of electronic data interchange (EDI).

2. It’s not an All in One Solution

Benchmarking is not a panacea that can replace all other quality efforts or management processes that can improve the competitive advantages of a company.

3. Need Proper Balance

Benchmarking is not instant pudding. It will not improve performance if the proper unfractured of the total quality programs not in place.

Unless a corporate culture of quality and the basic component of TQM such as information system, process control, and human resource programs are in place, trying to initiate the best in class may very well disrupt operations.

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5 Competitive Priorities in Operations Management

Last Modified: 28 September, 2020 Leave a Comment

The key to developing effective production. Operation strategy lies in understanding how to create or add value to customers. Specially value is added through the competitive priority or priorities that are selected to support a given strategy.

what are competitive priorities and how is it related to operations strategy
what are competitive priorities and how is it related to operations strategy

There are five basic competitive priorities. They are:

  1. Cost: Providing low-cost products.
  2. Quality: Providing high-quality products.
  3. Delivery: Providing products quickly.
  4. Flexibility: Providing a wide variety of products.
  5. Service: How products are delivered and supported.

Competitive Priorities in Operations Management

These five basic competitive priorities are discussed in detail in the following points:

1. Cost

To successfully compete in the market segment that buys strictly on the basis of low cost, a firm must necessarily be a low-cost producer. In the case of commodity-like products (flour, sugar, and petroleum) the customers can not distinguish the products made by one firm from those of another.

As a result, customers use cost/price as the primary determinant in making a purchase.

However, this segment of the market is frequently very large and there is potential for significant profits associated with large unit volumes of products. As a result, the competition is fierce and the failure rate is quite high.

After all, there can be only one low-cost producer and the firm usually establishes the selling price in the market.

Related: Top Competitive Dimensions of Operations Management.

2. Quality

Quality can be categorized as product quality and process quality. The level of quality in the product design will vary as to the particular market that it is aimed to serve.

The higher quality products command higher prices in the marketplace.

The proper level of product quality is established to focus on the requirements of the customer. Over designed products with too much quality will be viewed as being prohibitively costly.

Underdesigned products will lose customers to products that cost a little more but are perceived by the customer as offering much greater benefits.

Process quality is critical in every market segment and its goal is to produce defect-free products.

3. Delivery

The speed of delivery of products to customers is an important determinant in the purchasing decision.

competitive priorities in an operations strategy
competitive priorities in an operations strategy

The ability of a firm to provide consistent and fast delivery allows it to charge a premium price for its products.

Both profits and market share are directly linked to the speed with which a company can deliver its products relative to its competitors.

In addition to fast delivery, the reliability of the delivery is also important.

Top Factors that Affecting Cost of Logistics.

In other words, products should be delivered to customers with minimum variance in delivery times.

4. Flexibility

Flexibility refers to the ability of a company to offer a wide variety of products to its customers.

It is also the measure of how fast a company can convert its processes from making an old line of products to producing a new product line.

5. Service

In the case of products or commodities for which the primary determinant in the purchase decision is the price (for example, personal computer) firms are now providing value-added service to obtain a competitive advantage.

Conclusion

The next competitive advantage after the five basic competitive priorities are met by a company, that will distinguish its products in the marketplace is the trend toward offering environmentally friendly products that are made through environmentally friendly processes.

For example, the nowadays automatic manufacturer are changing their automobiles to meet the Euro 2 standards, refrigerator manufactures are using the CFC free refrigerators and petroleum refineries turnout lead-free petrol in their efforts towards reducing pollution and protecting the environment.

Also, manufacturers are increasingly using recycled raw materials such as plastic for packaging and also using biodegradable packing materials to reduce problems of waste disposal.

After knowing the competitive priorities which offer a competitive advantage to companies it is necessary to now achieve competitive advantages through operations function.

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Top 8 Competitive Dimensions of Operations Management

Last Modified: 30 December, 2022 Leave a Comment

Companies, either manufacturing goods (tangibles) or offering services (intangibles) must be competitive to sell their goods or services in the marketplace. In the present era of globalization, any progressive company can not restrict its operations to the domestic market only. A global marketplace for goods and services involve more customers and more intense competition.

competitive dimensions of operations management
competitive dimensions of operations management

Competitiveness is a major factor that determines whether a company propers, barely manages to survive, or ceases to exist sooner or later. Business firms compete with one another in several ways.

These include prices, quality, product or service differentiation, dependability as a supplier, flexibility, time to market (or speed to market), customer service, employee productivity, and managerial expertise.

However, in the broadest terms, we speak of competitiveness about the countries rather than to other similar firms.

This is because how effectively a nation competes in the global market plc affects the success of the nation and the quality of life (or standard of living) for its citizens.

Different Competitive Dimensions of Manufacturing

The following are the dimensions of competitiveness in operations management:

1. Cost or Price

Price is the amount a customer must pay for the product or service. If two products are comparable in quality and differ in price, customers will buy the product or service that has a lower price.

Although the price is the competitive weapon used in the marketplace. profitability is related to the difference between price and cost.

Hence, the cost is an important variable that can allow lower prices that may still be profitable for the firms.

Some firms which compete on price may be satisfied with lower profit margins, but most firm focus on lowering the cost of goods or services instead of accepting lower profits.

To compete based on price, the production function must be capable of producing the outputs at a low cost.

Production management decisions regarding location, product design, equipment utilization, and replacement, labor productivity, inventory control, process technology, and tolls all contribute to the reduction of costs.

2. Quality

Quality refers to the ability of the product or service to met the requirements of the customer and achieve customer satisfaction for the firm selling the goods and services. generally quality relates to the customer’s perceptions of how well the product or services will serve its purpose.

Generally, customers are often willing to pay more for or wait for delivery if products of superior quality.

3. Product or Service Differentiation

Refers to any special features (such as design, cost, quality, convenience of use, warranty, etc.) that cause a product or services to be perceived by the customer as more suitable or attractive than the product or service offered by the competitors.

4. Dependability as a Supplier

A supplier who has a reputation for dependability (like, keeping the promised delivery schedule) or who can meet customer demand through off the shelf availability of the product has a strong competitive advantage.

Customers are often willing to compromises on cost or price or even quality to obtain on tie delivery when they need an item.

The production managers must develop the ability of the productive system to the product on time by scheduling and coordinating all the elements of the system.

Related: Reasons and Importance of Product Innovation.

5. Flexibility/Service

This refers to the ability of a firm to respond to changes demanded by the customer.

The changes might relate to increases or decreases in volume demanded or to changes n the design of product or service or changes in the delivery time.

dimensions of competitiveness in manufacturing
dimensions of competitiveness in manufacturing

A firm having higher flexibility can have a competitive advantage over other firms.

The ability to be flexible depends a great deal on the design of the productive system and the process technology employed by the firm.

Also, the service offered by the firm before and after-sales, and in providing repair service and spare parts quickly ad effectively add to the competitive position of the firm.

6. Time

Time to perform certain activities refers to several aspects of an organization’s operations such as:

  1. How quickly a product or service is delivered to a customer (like speed to market or minimum lead time to supply).
  2. How quickly new products or services are designed, developed, and launched to the market (speed to market of new products or services) and,
  3. The rate at which improvements in products or processes are made.

Related: Top 11 Brand Image Damage Control Strategies.

7. Customer Service

Sevice might involve after-sales services that are perceived by customers as a value-added, for example, delivery, set up or installation, warranty/guarantee repairs, technical support, or extra attention such as courtesy, keeping the customer informed, and attention to even little details or small problems of customers.

8. Employee Productivity and Managerial Expertise

Managers and other employees are the people at the heart and soul of any organization.

Competent and motivated employees including managerial personnel can provide a distinct competitive edge by their expertise, skill, and creative ideas.

Conclusion

Hence, in a broader sense, competitiveness can e defined as “The degree to which a nation can produce goods and services which meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens.

The most common measure of competitiveness at the national level is productivity. Increases in productivity allow wages to grow without causing inflation and thus raising the standard of living of the people of a nation.

Productivity growth is a true indicator of how quickly an economy can expand its capacity to produce goods and services and meet customer demand both within the countries well as in the global market.

The dimensions of competitiveness that measure the effectiveness of the production function of a manufacturing firm are discussed briefly in the following one. In the context of individual firms, competitiveness refers to “how effectively an organization meets the needs of customers relative to other firms which offer similar goods and services.

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