TOTAL QUALITY MANAGEMENTTOTAL QUALITY MANAGEMENTEMM 5602EMM 5602
Chapter 3: Opportunities for Small and Medium Chapter 3: Opportunities for Small and Medium IndustriesIndustries
Prepared by:- Hamed Mirabi GS 29164- Lim Yan Bin GS 28756 - Ng Wei Lin GS 28873- Omar Abdullah @ Bonny Lu GS 29074 - Omar Mohammed Saeed GS 28658
IntroductionIntroduction
• Every company tries to satisfy their customer, they can only be achieved through cost reduction and improvement in product performance.
• In 1980s quality became a competitive weapon but today is essential to survival and growth.
• Many large companies rely on small companies for parts and services they use in producing their products.
The quantitative criteria are being used to measure the size of company include the following:
• Number of employees• Volume of scales• Volume of assets• Insurance in force• Volume of deposits
Definition of SMEs (Quantitative Characteristics)
Definition of SMEs (Qualitative Characteristics)
SMEs should have at least two of the following qualitative characteristics:
• Independent business management• Usually managers are the owners• Capital is supplied by owner or small group.• Locally operated, employers and owners reside in
one community.• Smaller size of the firm.
• Malaysian SMEs can be grouped into three categories : Micro, Small, or Medium.
• These groupings are decided based on EITHER• the numbers of people a business employs OR• on the total sales or revenue generated by a business
in a year.
Definition of SMEs in Malaysia
Strength of SMEs• Number of business unit• Economic output• Providing employment opportunities• Regional income generation through external
sale/Import substitution:• Saving• Training
Strength of SMEs (cont)
• Stimulate competition• Aid to large companies• Encourage innovation and complexity• As a seed-bed from which large companies grow• Breeding ground for new business ventures and
entrepreneurs
Percentage of SMEs in Agriculture, Manufacturing, and the Services Sector, Malaysia, 2003
Percentage Distribution of Output of SMEs by Sector, Malaysia, 2003
What is Globalization in Business?• Consists of transactions that are devised and
carried out across national borders• To satisfy the objectives of individuals,
companies, and organizations.• These transactions take on various forms,
which are often interrelated
Challenge of Globalization• Growing competition in domestic and
international markets.• The proliferation of free trade agreements.• No longer ‘protection’ through tariff and non-
tariff measures.• Trade impediments in the form of trade
conditionality and other non-tariff measures.
How To Cope?• Reap economies scale• Keep pace with technological progress.• Strong ICT to keep in touch with e-business• Differentiation by creating new markets• Developing new markets• Customer service, personalization and
efficiency
Thinking and Planning• How will our idea, good, or service fit into the
international market?• Should we enter the market through trade or
through investment?• Should I obtain my supplies domestically or from
abroad?• What product adjustments are necessary to be
responsive to local conditions?• What threats from global competition should be
expected and how can these threats be counteracted?
Herba Prima Marketing: Dr Rozmey• Started as a healthy supplement supplier in 2006• Tough competition in the early stage, but
managed to survive • Well known with ‘Just Mate 5’ product and now
raising popularity throughout the country• Currently expanding his business under dR
Rozmey Skin Care, dR Rozmey Beauty Slimming Fitness Centre, dR Rozmey Body Shop, dR Rozmey Fashion, dR Rozmey Sport Wear dan dR Movie Production, and dRPlaces.
• Rumors that he’s going to introduce dRBook
TQM
Why TQM in SMEs?• To improve business performance• To compete in globalization• To comply with Malaysian Standards for
product certification• Promotion growth by gaining investor’s
confidence• Gaining customers satisfaction and exceeding
expectation
Implementation of TQM in SMEs
Challenges of SMEs in TQM Implementation
• The application of quality methods in SME today is still limited
• Limited resources and location– Lack of capital and credit facilities – Shortage of skilled labor – Shortage of row materials– Inadequate infrastructure
Challenges of SMEs in TQM Implementation (cont)
• Lack of brand recognition, channel power, market reach
• Lack of managerial and technical experience• Limited application of new technology• Always functions in flat organization structure
How To Overcome?• Implement ICT into the business• Practice TQM• Switch from domestic market into global
supply chain• Hire skilled and talented workers regardless
the salary for long term benefit• Obtain quality systems such as MS ISO 9001
and TS16949.
How To Improve?
• Create a network among SMEs• Manager play vital role by implementing TQM• Train workers to be highly motivated and
gaining skills everyday
TQM implementations in SMEs which is related to a big factory. SKD factories(simply knocked down)
•Manufacturing of some parts
•Assembling the final product
•Follow the strategy of the mother factory
•Supplying parts to the market
•Product quality
•Assy’ line quality
•Line inspection
•Final product inspection
•Packing
•Labeling
•OQC
•LQC
•IQC
*all these quality reports provide by the original factory to the SKD factory .
QC Monitoring by the Original Factory
Quality Control
IQC
ProcessProcess
Safety Test1st Leakage
Function test
Characteris-tics
Appearance test
Assembly
Somg TestEarly Life
Test Withstanding
Voltage testInsulation testLeakage current
test
Low voltage sta -rting test
VibrationNoiseFunctionTemperature Diff
Input(current/ watt)
2st Leakage Test
Safety test Time Check
-1Time/2HrSampling Level
-2Units/1Day
All the units4hr→6hr
LQC OQC
PatrolInspection
Sampling level -1units/1dayTest Time 24hr
Shipment
Function TestWithstanding
Voltage test Insulation testLeakage current
test
IQC
Safety Test1st Leakage
Function test
Characteris-tics
Appearance test
Assembly
Smog test ELT
Time Check
Sampling
4hr→6hr
LQC OQC
Leak test
Sampling : 1set
: 24hr
Blue Ocean Innovation Profitable GrowthGreat Company Great People
Withstanding Voltage test
Insulation testLeakage current
test
Low voltage sta -rting test
VibrationNoiseFunctionTemperature Diff
Input(current/ watt)
2st Leakage Test
Function TestWithstanding
Voltage test Insulation testLeakage current
test
Shipment
•Save the international standards for the product
•To maintain the reputation of the company
•Compete the globalization
Why SKD FACTORIES SHOULD BE MONITERED
Malaysia Government’s Support in SME
1. Financing
2. License & Permit
3. Training & Development
4. Marketing & Networking
5. Advisory & Consultancy
Financing• Type
a. Loanb. Grantc. Subsidiesd. Guarantee
• Financial Institutiona. SME Bankb. SMIDECc. MITI, MATRADE, MOA and etc
License & Permit
1. Manufacturing License 2. Import license under ctrl items3. Licenses issue by MIDA4. Licenses manufacturing warehouse5. Form E
Training & Development
1. SMIDEC- such as SME- University Program2. 1 MALAYSIA Training Program- RM 200 Million to
HRDF for companies3. Ministry of Human Resource- RM 100 Million
Marketing & Networking1. SMIDEC2. MATRADE- Branding3. Malaysia Franchise Association
Advisory & Consultancy
1.SMIDEC2.SME Bank3.MITI
Conclusion
• Economic war is flat over the world• TQM- Increase the strength, improve the weaknesses
in an industry• Government support and industries exposure is
effectively improve the TQM implementation in SME
THE END
Thank You