Quality Goals
The main focus is to consistently meet or exceed customer expectations. This involves the quality of products, services, and processes.
Essential Elements of TQM
Total Quality Management (TQM) succeeds through:
- Customer focus
- Employee participation and empowerment
- Continuous improvement (Kaizen)
- Data-driven decision making
Customer Focus
Understanding the current and future needs of customers is essential. Quality is defined by the customer, not the company.
TQM Tools & Techniques
- Quality Circles: Groups of employees who discuss quality-related problems.
- Inspection: Ensuring products meet set standards (attribute & variable inspection).
- Statistical Process Control (SPC): Using statistical methods to monitor and control quality during the process.
Nature of the Operations Process
It is the process of converting inputs (materials, labor, capital) into outputs (products or services) that are of value to the customer.
Services vs. Manufacturing
- Tangibility: Products are tangible, services are intangible.
- Inventory: Goods can be stored, services cannot.
- Customer Involvement: Higher in service operations.
- Measurement: Quality and productivity are more easily measured in manufacturing.
Types of Manufacturing Operations
- Job Shops: Short production runs of small quantities of unique items.
- Repetitive Manufacturing: Long production runs to produce a large quantity of a standardized product.
- Batch Manufacturing: An intermediate form between Job Shops and Repetitive manufacturing.
Importance of Productivity
Productivity is the efficiency with which inputs are transformed into outputs. Increased productivity leads to lower costs and higher competitiveness.
Innovation is the key to increased productivity.
Reengineering
Fundamental restructuring to improve the operations process. It involves rethinking and radically redesigning basic processes to create value for the customer.
Operations Analysis
Analyzing workflow, equipment, layout, and individual jobs to improve efficiency.
- Motion Study: Analysis of all the motions a worker makes to complete a job.
- Time Study: Determination of the average time it takes to complete a task.
Purchasing Policies & Practices
The process of obtaining materials, equipment, and services from outside. Efficient purchasing affects quality, costs, and profitability.
Sources of Supply
Choosing between a sole supplier or multiple suppliers.
- Single Supplier: Outstanding quality, volume discounts.
- Multiple Suppliers: Price competition, supply assurance.
Strategic Alliances
An organizational relationship that links two independent business entities in a common endeavor. It promotes close coordination between buyers and sellers.
Objectives of Inventory Management
To ensure materials and products are available when needed, while minimizing inventory holding costs.
ABC Inventory Analysis
A system of classifying items in inventory by their relative value.
- Class A:
- Class B:
- Class C:
Class A (high-value) items require strict control.
Economic Order Quantity (EOQ)
The quantity to purchase in order to minimize total inventory costs (ordering costs + holding costs).
Just-In-Time (JIT) System
A method of reducing inventory levels to an absolute minimum. New items arrive at the same time that the last inventory item is placed in service. This requires excellent coordination with suppliers.