Managing Quality and Productivity

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Chapter 16

2

QUIZ

1. In a production business what is most important in order to get more profits

One word answer

2. How would you ensure your customers stay with you

3 bullet points

Sr.Chapter Chapter HeadingNo.No.

1. 3 Understanding the Global context of business (031012)2. 4 Conducting Business Ethically and Responsibly (250212)3. 6 Organizing the Business Enterprise (030312)4. 7 Understanding Entrepreneurship and Small Business

(100312)5. 8 Managing Human Resources (240312)6. 9 Understanding Employee Motivating, Satisfying &

Leadership (310312)

7. 11 Understanding Marketing Processes and Consumer Behavior (140412)

8. 16 Managing Quality and Productivity (280412)9. 17 Managing Information Systems and Communication

Technology10. 19 Understanding Money and Banking11. 20 Intermediate Term and Lease Financing

Course Outline

FINAL PROJECT

GENERATE REVENUE Proposal Timelines Sponsors Groups

TOC

1.THE PRODUCTIVITY- QUALITY CONNECTION

2.TOTAL QUALITY MANAGEMENT

3.TOOLS FOR TQM

4. TRENDS IN PRODUCTIVITY AND QUALITY MANAGEMENT

5. PRODUCTIVITY AND QUALITY AS COMPETITIVE TOOLS

THE PRODUCTIVITY- QUALITY CONNECTION

The more we can produce while using fewer resources, the more productivity grows and the more profitable businesses are

is measured as a ratio of outputs to inputs

Quality: A product’s fitness for use plus its

success in offering features that consumers want

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PRODUCTIVITY CHALLENGE

Quality declines, demand declines, profits decline

Country that improves its ability to make something out of its existing resources can increase the wealth of all its inhabitants

Gross Domestic Product: Dollar value of all goods and services

produced in a country over a specified time period

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TOTAL QUALITY MANAGEMENT

TQM: The sum of all activities involved in getting

high quality products into the market place Quality ownership:

The principle of TQM that holds that quality belongs to each person who creates it while performing a job

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TOOLS FOR TQM

Competitiv

e Produ

ct Analy

sis

•Process by which a company analyses a competitor’s products to identify desirable improvements in its own

Value-Adde

d Analy

sis

•Process of evaluating all work activities, material flows and papers work to determine the value they add for customers

Statistical

process

control

•Methods for gathering data to analyze variations in production activities to see when adjustments are needed•Pro

cess variations, Control charts

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TOOLS FOR TQM

Quality/

Cost

studies

•Method of improving quality by identifying current costs and areas with the greatest cost-saving potential•Inte

rnal failures: costs incurred for correction of bad products while production and before they leave plant

•External failures: corrective costs, after bad product has left the plant

Quality

improvement teams

•TQM tool in which groups of employees work together to improve quality

Benchmarkin

g

•Process by which a company implements the best practices from its own past performance and those of other companies to improve its own products

Getting

Closer to Customer

•The most successful companies keep close to their customers and know what they want in the products they consumer

ISO 9000:2000 Program certifying that a company meets the

rigorous quality standards of the International Organization for Standardization (ISO)

To earn the rating firms are measured by qualified consultants

product testing employee training record-keeping correcting defects

ISO 14000

certifies improvements inenvironmental performance

need an environmental management system

plan to improve resource use and manage pollution

covers practices in environmental labelling

assesses total impact of firm’s products

Process Re-engineering

Radical redesign of processes

to improve performancedramatically

Supply Chain Management Supply chain = group of companies and

stream of activities involved in getting the product from raw materials to end consumer.

each stage adds value and depends on the others Supply chain management looks at the chain

as a whole to improve overall flow Improved coordination Enhanced communication Reduced inefficiencies Minimized costs