QUALITY MANAGEMENT:

Generally, there are two viewpoints as concerns quality - Producers (manufacturers or service
providers) view quality as a set of standards and specifications that must be met (called
conformance). On the other hand, customers view quality as attributes that please them.

Quality assurance starts by assessing the requirements of the customer. The quality goals are
determined by the preferences of the customer. The product has to satisfy a variety of customer
types (called market segments). Quality assurance requires a team effort—the Olympic
perspective. The Olympic perspective calls for team play with everyone striving to achieve the
company’s goals in the best possible manner.

Dimensions of Quality

The starting point for managing quality is to define the relevant set of quality dimensions,
recognizing the special needs of market niches and segments. Not everyone will agree about
what should be on the list or about the importance of the dimensions that are on the list. For
example if I ask this diverse CATUC MBA class WHAT should be included in the list of quality
measure, the answers will be varied due to people coming from different sectors and having
different experiences.

Generally, the dimensions of quality can be viewed on the basis of the following:

1. The performance dimension relates to the quality of the fundamental purpose for which
the product is purchased. How well does the car do what it is supposed to do? Are the
hotel rooms quiet and the beds comfortable?
2. The features dimension refers to product capabilities not considered to be part of normal
performance expectations. Example access to the internet (either wired or wireless) for
the resort guests.
3. The reliability dimension relates to performance that can be depended upon with a high
level of assurance. The car starts, drives, and does not break down. For the resort or hotel,
if the room key does not work all of the time, there is a reliability problem.

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 4. The conformance dimension relates to the degree to which the measured production
qualities correspond to the design quality standards that have been specified.
Conformance is definitely the producer’s responsibility (auto and resort management).
5. The durability dimension deals with how well the product endures in the face of use
and stress.
6. The serviceability dimension is related to how often service is required; and how
difficult, and how costly it is to service and repair the product.
7. The aesthetics dimension refers to the appearance of the product. For both autos and
resorts, design styling counts initially, and maintenance is crucial.
8. The perceived quality dimension relates to the customers’ perceptions of the product’s
quality and value received for money paid. This dimension integrates the prior seven
dimensions with the customers’ sense of value for them. Market research is one of the
most important means for determining the customers’ perceived quality.

Quality Control Techniques

To ensure high performance – quality products and services requires continuous quality
control with objective of improvements. Some quality control techniques include:

Checklists: requires you to check off a list of items that are imperative to manufacture and sell
your product.

Control charts: are used to illustrate the stability of a process. This quality control tool gauges
the behavior of a process over time. If, during the recorded time, process shows unacceptable
variance, the process is deemed unstable. Unacceptable variance would be a process that shows
seven consecutive readings above or below the central line. The upper and lower limits are also
set for the process and are usually at 3-sigma.

Flow-Charting: Flow-charting requires you to follow the flow of a process to determine

potential or existing problems in the process. You can use this quality control tool to predict
potential flaws in a process. Apart from being used as a quality control tool, these diagrams are
also used in risk analysis.

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Pareto Chart and Pareto Analysis: The Pareto Chart shows the Probability Density and the
Distribution Function. The probability density is the probability of the occurrence of a variable.

Run Charts: A run chart is a series of recorded data over time that is graphically represented.
This trend will help in understanding whether there is a problem or not.

Statistical Sampling: Statistical Sampling involves measuring a portion (sample) of the entire
population instead of measuring the entire population. This can save quite a bit of time. For
example, if you have to inspect 10,000 units a day, then it would take forever to complete the
activity. By sampling, it takes much less time.

Inspection: Inspection involves reviewing the product to see if it meets the defined quality
norms. Conducting reviews is an example of inspection.

Quality Based Strategy - Total Quality Management (TQM)

Total quality management is one of the most effective corporate strategies. As a comprehensive
process, it has the potential to a company to the forefront of the market. Total quality
management is a management philosophy for continuously improving overall business
performance based on leadership, supplier quality management, vision and plan statement,
evaluation, process control and improvement, product design, quality system improvement,
employee participation, recognition and reward, education and training, and customer focus. In
reality, Total Quality Management is not anything new, though it has just gotten emphasis of
recent.

Some Approaches to TQM

1. Deming’s Approach to TQM – Postulated by Deming (1986)

This approach stresses the responsibilities of top management to take the lead in changing
processes and systems. The approach argues that it is the top management’s responsibility to
create and communicate a vision to move the firm towards continuous improvement. Top
management is responsible for most quality problems; it should give employees clear standards
for what is considered acceptable work, and provide the methods to achieve it. These methods

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include an appropriate working environment and climate for work free of fault finding, blame or
fear.

Key principles highlighted by this approach for total quality management include:

 Create constancy of purpose towards improvement of product and service, with the aim
to become competitive and to stay in business, and to provide jobs.
 Cease dependence on mass inspection to quality. Eliminate the need for inspection on a
mass basis by building quality into the product in the first place.
 Improve constantly and forever the system of production and service, to improve quality
and productivity, and thus constantly decrease costs.
 Institute training on the job.
 Institute leadership with the aim to help people and machines and gadgets to do a better
job.
 Drive out fear, so that people may work effectively for the company.
 Break down barriers between departments. People in research, design, sales, and
production must work as a team, to foresee problems of production and in use that may
be encountered with the product or service.
 Put everybody in the company to work to accomplish the transformation. The
transformation is everybody’s job.

2. JURAN’S Approach to TQM – Postulated by Juran, (1993)

This approach argues that main quality problems are due to management rather than workers.
The attainment of quality requires activities in all functions of a firm. Thus firm-wide assessment
of quality, supplier quality management, quality information system, and competitive
benchmarking are essential to quality improvement.

This approach emphasis two major issues:

a. Team (QC circles and self-managing teams) and project work, which can promote quality
improvement, improve communication between management and employees
coordination, and improve coordination between employees.

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 b. The importance of top management commitment and empowerment, participation,
recognition and rewards.

Due to the fact that quality is essential for business growth and sustenance, this approach
highlights four categories of quality costs, necessary to be evaluated for better quality
improvement. These four cost categories are:

 Internal failure costs (rework, failure analysis, etc.), associated with defects found prior to
transfer of the product to the customer
 External failure costs (warranty charges, complaint adjustment, returned material,
allowances, etc.), associated with defects found after product is shipped to the customer
 Appraisal costs (incoming, in-process, and final inspection and testing, product quality
audits, maintaining accuracy of testing equipment, etc.), incurred in determining the
degree of conformance to quality requirements
 Prevention costs (quality planning, new product review, quality audits, supplier quality
evaluation, training, etc.), incurred in keeping failure and appraisal costs to a minimum.

3. FEIGENBAUM’S Approach to TQM – Postulated by Feigenbaum (1991)

This approach views TQM as an effective system for integrating the quality development,
quality-maintenance, and quality-improvement efforts of the various groups in a firm so as to
enable marketing, engineering, production, and service at the most economical levels which
allow for full customer satisfaction.

This approach argues that effective quality management consists of four main stages namely

1. Setting quality standards;

2. Appraising conformance to these standards;
3. Acting when standards are not met;
4. Planning for improvement in these standards.

Assignment: Read about ISO STANDARDS

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 Unit 7-Operations Scheduling

Scheduling pertains to establishing both the timing and use of resources within an
organization. Under the operations function (both manufacturing and services), scheduling
relates to use of equipment and facilities, the scheduling of human activities, and receipt of
materials. Thus scheduling is simply the process of arranging, controlling and optimizing
work and workloads in a production process or manufacturing process. Scheduling is used to
allocate plant and machinery resources, plan human resources, plan production processes and
purchase materials.

Objectives of Operations Scheduling

 Maximize Resource Utilization: One area that incurs high costs for a manufacturing company
is the poor utilization of all resources. This can be due to a poor schedule that leaves machines
idle for long periods of time.

 Manufacturing Time Reduction: When a proper schedule is created, your overall production
time should be reduced. This is usually because all operations required to make a product will be
performed only when they are needed. Therefore, the start to finish time will be shorter as you
will have less time between the various operations.

 Inventory Minimization: To elaborate on the last point, a shorter manufacturing time usually
means that you have less WIP inventory items waiting on availability on a resource. In addition,
if your production starts so that it can be completed just before it needs to be shipped out, you
will have less inventory to hold on to.

 Optimizing Efficiency of Labor: A great production schedule will be one that minimizes the
amounts of back and forth and changeovers/setup time on machines. In addition, when workers
know which item they are producing next and where the material is coming from, they will be
more efficient.

 Service Level Improvement: Having an efficient production schedule not only benefits the
workers on the shop floor but also the customer service employees. By looking at the schedule,
they will know when products will be completed and they will be able to give a more accurate

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 lead time. They will also be able to notify customers in advance in the event that a disruption
occurs which would cause jobs products to be late.

 Increasing Profits and Output: Overall, having an efficient schedule will increase the number
of products that are capable of being produced. This is turn will decrease production costs, as all
resources will be utilized optimally. The overall result will be increased profits and increased on-
time delivery.

Functions of Operations Scheduling

 Resource Allocation: The first part of scheduling operations is to allocate resources to each job.
This is different than assigning jobs to departments as not every machine or labor resource is
capable of producing each item. This will give you a more realistic picture of the actual capacity
you possess.

 Sequence of Jobs: The next part is to determine the right sequence of jobs that will be
performed on each resource. A common technique used is grouping jobs together as to minimize
the amount of setup and changeover required. This could be running jobs of similar color or
materials one after the other to reduce machine setup.

 Start and End Time of Job: When your operations are scheduled in the right order, you will
now have a specific start and end time. For the most accurate schedule, you should consider the
different machine run rates for various products and various machines. Knowing when
operations are supposed to start and finish will help you notify customers of the status of their
order.

 Maximum Utilization of Plant: Often, resources are not utilized to their full capacity. This
leaves many resources idle for long periods of time which can be costly. One method to improve
the overall schedule is to focus on the scheduling of operations on resources that are bottlenecks
or that cost a lot to run. This will ensure that those resources are always processing items while
upstream and downstream operations are adjusted to limit the number of WIP items.

 Information on Machines: Operations scheduling means that you have up-to-date operations on
machines and the products that are being produced. Shop floor feedback on the status of
operations offers additional visibility on the status of orders.

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 Shop Floor Control: Having optimized operation schedules ensures that everyone knows what
should be started and completed when. This gives additional structure and control over the shop
floor operations.

Factors Considered while scheduling operations

Internal Factors: These are the factors which are with in the control of the management. These
factors should be manipulated in such a that objectives of the production function can be
achieved most efficiently and economically. Some important internal factors are as under.

a. Stock of Finished Goods with the Firm: In the continuous production where the production
is made to stock, the scheduling should be adjusted to the stock of the finished goods with the
dealers. Generally the stock is maintained at certain month’s supply on hand. The new sales
forecast should be made and the scheduling should be made in the light of the fluctuation in the
stock holing.

b. Time Interval to Process Finished Goods from Raw Material: In other words how much
time will be required to manufacture each component subassembly and then assembly ( i, e, the
final product).

c. Availability of Machines: The machines and equipments have varying production capacities.
Moreover their occupancy scheduling can be made with the help of machine load charts .

d. Availability of Manpower: The scheduling should be made in the light of the availability of
the manpower. The rushing or production should be adjusted to overtime working extra shift
working or hiring of the temporary labor. The slacks should be adjusted through transfers if
possible. Due consideration should be given to the factors like induction and training to new
employees. As far as possible the layout should be minimized.

e. Availability of Materials: Sometimes the production flow is interrupted by the stock outs. In
continuous production proper stock levels should be maintained to facilities scheduling. In case
of probable stock outs of strategic items extra efforts should be made to procure them as far as
possible and the limited stock in hand should be issued only to critical operations. The
scheduling should be adjusted in the light of such situation in intermittent production , the

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 materials should be acquired according to the bill of materials enlisting the need of specific
orders. Such process will smoothen the scheduling task.

f. Manufacturing Facilities: The manufacturing facilities in terms of power requirements

material handling services storekeeping workbench area and such other facilities should be
provided in adequate quantities so that it may not affect the smooth flow of the production
adversely. Such situation will facilities scheduling function.

Approaches to Scheduling

There are basically two approaches to scheduling in operations management. These are:

1. Forward scheduling
Is commonly used in job shops where customers place their orders on ―needed as soon as
possible‖ basis. Forward scheduling determines start and finish times of next priority job by
assigning it the earliest available time slot and from that time, determines when the job will be
finished in that work centre. Since the job and its components start as early as possible, they
will typically be completed before they are due at the subsequent work centers in the routing.
The forward method generates in the process inventory that are needed at subsequent work
centers and higher inventory cost. Forward scheduling is simple to use and it gets jobs done in
shorter lead times, compared to backward scheduling.
2. Backward scheduling
Is often used in assembly type industries and commit in advance to specific delivery dates.
Backward scheduling determines the start and finish times for waiting jobs by assigning them
to the latest available time slot that will enable each job to be completed just when it is due,
but done before. By assigning jobs as late as possible, backward scheduling minimizes
inventories since a job is not completed until it must go directly to the next work centre on its
routing. Forward and backward scheduling methods are shown in the following figure.

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JUST-IN-TIME AND LEAN PRODUCTION

Just-In-Time (JIT) is a very popular term these days among the managers of various industries.
JIT is a system, a concept, a philosophy, a set of tools, a way of life etc which varies according to
the places and conditions in which they are being applied.

JIT emphasizes waste reduction, total quality control, and devotion to the customer. It strives to
eliminate sources of manufacturing waste by producing the right part in the right place at the
right time. Waste results from any activity that adds cost without adding value, such as moving
and storing of an item. It tries to provide the right part at the right place and at the right time.

JIT is also known as lean production or stockless production system. It should improve profits
and return on investment by reducing inventory levels (or increasing the inventory turnover rate),
improving product quality, reducing production and delivery lead times, and reducing other costs
(such as those associated with machine setup and equipment breakdown).

The results of just-in-time inventory management are apparent: cost reduction, increased speed
to market and identification of bottlenecks in the workflow. Effective implementation, however,
requires a different way of thinking about relationships with suppliers, bringing them into a
cooperative endeavor with the recognition of mutual goals.

Characteristics of JIT and Lean Production

Generally JIT and lean systems exhibit the following characteristics

 To have only required inventory when needed

 To improve quality to zero defects
 To reduce lead times by reducing setup times
 To incrementally revise operations themselves
 To accomplish activities at a minimum cost
 To get products and services to customer fast

With growing volatility (unpredictability) of the business environment, business competitiveness

is highly dependent on an organizations ability to drastically reduce order-to-delivery cycle. JIT
is increasingly used today as a weapon to reduce elapsed time of this cycle. The diagram below
illustrates the order-to-delivery cycle.

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Order to Delivery Cycle

Key Processes to eliminate waste in JIT systems (Keys to successful JIT implementation)

For successful JIT implementation, organizations need to consider the following

1. Stabilize and level the Master Production Schedule (MPS) with uniform plant loading: create a
uniform load on all work centers through constant daily production (establish freeze windows to
prevent changes in the production plan for some period of time) and mixed model assembly
(produce roughly the same mix of products each day, using a repeating sequence if several
products are produced on the same line).

2. Reduce or eliminate setup times

3. Reduce lot sizes (manufacturing and purchase): reducing setup times allows economical
production of smaller lots; close cooperation with suppliers is necessary to achieve reductions in
order lot sizes for purchased items, since this will require more frequent deliveries.

3. Reduce lead times (production and delivery): production lead times can be reduced by moving
work stations closer together, applying group technology and cellular manufacturing concepts,
reducing queue length (reducing the number of jobs waiting to be processed at a given machine),
and improving the coordination and cooperation between successive processes; delivery lead
times can be reduced through close cooperation with suppliers, possibly by inducing suppliers to
locate closer to the factory.

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4. Preventive maintenance: use machine and worker idle time to maintain equipment and prevent
breakdowns.

5. Flexible work force: workers should be trained to operate several machines, to perform
maintenance tasks, and to perform quality inspections. In general, the attitude of respect for
people leads to giving workers more responsibility for their own work.

6. Require supplier quality assurance and implement a zero defects quality program: errors
leading to defective items must be eliminated, since there are no buffers of excess parts. A
quality at the source program must be implemented to give workers the personal responsibility
for the quality of the work they do, and the authority to stop production when something goes
wrong. Techniques such as ―JIT lights‖ (to indicate line slowdowns or stoppages) and ―tally
boards‖ (to record and analyze causes of production stoppages and slowdowns to facilitate
correcting them later) may be used.

Pre-requisites (Requirements) for implementation of JIT systems

For JIT to be successful the following requirements must be met:

1. The environment has to support it.

2. A hybrid model (traditional + JIT) is best. If JIT fails, the traditional model will
be used as a fallback position.

3. A flexible management system is essential. The private sector is usually more compatible.

4. Key elements of the JIT system must be in place. They are:

(i) Close ties with few reliable suppliers.

(ii) Low inventories of raw materials, work-in-process inventories and finished goods.

(iii) Appropriate material handling system, so that there would not be work-in-process
inventories.

(iv) Small lot sizes with shorter lead times.

(v) Low cost set-up times.

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