Every organisation goes through three phases the first one is the Entrepreneurial phase where there is an idea and inspiration follows, there is a will to succeed and implement the idea Dijk (2008). Once the idea is in place and the business settles down to a norming phase, if there is a change in the idea it leads to the second phase known as the Mechanistic phase where there is a lack of vision and the business can’t cope up with the targets set. Systems are introduced into the business to save it and bureaucracy follows. The third stage is known as the Dynamic phase, where a newcomer sees potential in the organisation and recreates the vision for success Dittrich (2001). This is the phase organisations are facing today. This is where (TQM) total quality management comes in. TQM explores potential, sees the weakness and works on the strengths of the organisation.
Quality Management deals with optimisation, sub- optimisation, variation and builds on teamwork. This report takes examples from case studies ZURICH and BSI (British Standards Institution).
Q1. Learners need to show that they understand the role of operations management on an organisation by;
a) Explaining the importance of effective management in achieving the organisational development.
b) Evaluate the success of existing operations management processes in meeting an organisations overall strategic management objectives.
Ans: All organisations have products and processes. The products are assembled and every product has a good amount of time spent on planning and engineering. Each product serves a specific purpose to a customer. If the customer is satisfied with the product he will come back for more. Operations management is all about standardising the process for reduced variation. It is getting thing done for the productivity of the organisation. It is about outsourcing, benchmarking, supply chain management, inventory management, supplier relationship management, third party logistics and most importantly JIT that means Just in Time.
Resource Inputs
Material
Capital
People
Information
Product Output
Goods
Services
Planning Feedback Controlling
OPERATIONS MANAGEMENT
Managerial Decision Making and Problem Solving
Fig.1. Operations Management; managing the transformation of resources inputs into product outputs (Source: Schemerhorn, 1989, p 482) cited by Gene (2006)
ROLE OF OPERATIONS MANAGEMENT-
JUST IN TIME (JIT) – JIT is used for continuous improvement, visibility, simplicity and flexibility. JIT saves time and money. Example, Products that are made would have to be stored hence the business will be spending for storage facilities. JIT removes that area by immediately providing the product right in time for sale. According to Podolsk (1996) JIT is a Japanese Philosophy and has risen in popularity and is being studied further. Operation management has to ensure the quality as well as the delivery of the product in time to unaffected by mishaps and losses.
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PRODUCTION OF GOODS AND SERVICES- According to Pycraft (2007) operations deals with the allocation of tasks that are to be reserved for people with certain skills. What sequence it can be carried out. The standardised sequence of duties is premeditated to stop mistakes from happening. An operation also has to deal with the location of jobs that is to make sure there is no loss from where the good is produced and the selling point. Example, if the goods are made at one point and sold at a very place thus incurring transport loses or if the materials are very far from the factory.
DESIGN MANAGEMENT- Best (2006) states that design management is an important aspect that has to be considered when building a new product or process. Designers and Managers both have to be creative. When a business chooses a design the operations come into force as they deal with the establishment and promotion of the designs. Ensuring there is a smooth order of the process.
SRATEGIC OBJECTIVES-
IMPORTANCE OF EFFECTIVE OPERATIONS- According to Gene (2006) Every organisational strategy requires operations management because operations management provides an economic benefit one kind or another Example- Toyota is into production of cars that are utility and stores provide a place and custody of the car until sale.
ROLE OF OPERATIONS- Top management must ensure that they stress on high quality by making decisions that personify the operations. Thus determining the equipment to be used and the control that has to be exercised by operations Gene (2006).
PERFORMANCE MANAGEMENT-
BENCHMARKING- According to Damelio (1995) Benchmarking is used to make improvements in the organisation. It is used to discover the best way to do a business. Benchmarking is targeting the best competitor or successful organisation and understanding the elements that make the business victorious. Adapting their elements with certain changes to rise in the market. Benchmarking can be used for a particular process or for the organisation in whole.
BALANCED SCORECARD- The balanced scorecard represents how the company deals with different stakeholder groups. It is aimed at senior management but operation managers can find themselves accountable for activities that are seen on the scorecard Brown (2011).
Q2 Learners will be expected to understand the importance of managing quality in an organisation by;
Explaining the importance of effective quality management in achieving organisational objectives.
Evaluate the success of existing quality management processes in meeting an organisation’s overall strategic management objective.
Ans: Taking ZURICH into consideration Managing Quality is costly but it delivers a benefit to the business. It can gain savings from efficient staff, higher productivity and lower rework costs. Some benefits are harder to maintain such as improved employee motivation and morale. When quality is not managed customers get disappointed and will take their business elsewhere.
DEFINATION OF QUALITY-
According to Tapan (2011) Deming lays extra emphasis on Quality in comparison to Juran and Crosby, his definition of quality covers a wider perspective. Juran and Crosby are more focused on immediate business needs but the difference in their definitions of quality can be seen.
Deming defines quality cited by Tapan (2011) “Good quality means a predictable degree of uniformity and dependability with a quality standard suited to the customer.”
Crosby defines Quality cited by Tapan(2011) ”Quality is conformance to requirements.” And
Juran defines Quality as cited by Tapan (2011) ”Quality is fitness for use.”
MANAGING QUALITY-
Dr Kaoru Ishikawa is a prominent person in the field of quality management he went to the extent to say that unreasonable behaviour of industry and society can be corrected by thoughtful application of total quality management Tapan (2011).
Quality can be managed using techniques such as Servqual questionnaire, 5 Gap Model, PDCA, Process Mapping, SMART etc.
SERVQUAL PARASURAMAN QUESTIONNAIRE and a 5 GAP MODEL BUILD TO DEAL WITH THE SHORTFALL OF THE QUALITY SERVICE Nargundkar (2010) –
According to Grigoroudis (2010) the Servqual model is used for quality measurement. The gaps are as follows
Gap 1. Between Customers Expectations Managements perceptions about these perceptions.
GAP2. Between Managements Perceptions Customers expectations
GAP3. Between Service quality specifications Service Delivery
GAP4. Between Service Delivery External Communication to customers about service delivery
GAP5. Between Customers expectations their perceptions on service quality
The GAP model takes into account the tangibles, reliability, responsiveness, assurance and empathy that is required in Quality Management.
PDCA- PDCA is known as PLAN-DO- CHECK- ACT. It is also known as the Deming Wheel. The PDCA is used for continuous improvement. The PDCA cycle permits two types of counteractive action namely temporary and permanent. The temporary stage goal is to tackle and fix issues that are a hindrance and permanent counteractive action is used to eliminate the source of that cause Basu (2004)
P (PLAN)- Formulate the plan
D (DO)- Implement the plan
C (CHECK) – Compare the results that are recorded after implementation to targets set.
A (ACT) – If the change has triumphed then outcome is standardised.
BPR- BPR is known as Business Process Reengineering. According to Radhakrishnan (2008) BPR was introduced by Frederick Taylor when he printed ‘principles of scientific management’ in 1900s. BPR is an analysis of the existing processes in an organisation and reengineering it for improvement in performances instead of a complete replacement of a process. BPR is used to bring about change in an organisation through focusing on employee responsibilities, organisational structures, incentive systems the use of information technology etc. It can reduce the time and cost of processes to do a certain job.
Q3 Learners should understand and plan a strategic quality by;
Planning a strategic quality, change to improve organisational performance.
Defining resources, tools and systems to support business processes in a strategic quality.
Evaluating the wider implications of planned strategic quality change in an organisation.
Ans:
A strategic quality change can be planned by several methods such as a scanning the environment, pilot study, implementing SMART goal, designing tools such as TQM (Total Quality Management) and SPC(Statistical process control)etc.
PLANNING A STRATEGIC QUALITY CHANGE-
SCANNING THE ENVIRONMENT- According to Goyal (2006) environment can be scanned via verbal, written internal and formal sources. It is used to understand the changes that take place in macro and micro levels, to estimate future needs of an organisation. Comparing the results with the targets set and forecasting to meet the changing needs of a business. Scanning the environment is an important factor to evaluate the present strategy, setting the objectives and to formulate new strategies.
The diagram below represents the objective of scanning the environment.
Strategy Formulation
Environment Scanning
Strategy Implementation
Evaluation and Control
Fig2. The link between Environmental Scanning and Strategic Management.
K. Ashwathapa, Essentials of Business Environment, 6th edition p.23.
This figure depicts how Environmental analysis has to facilitate strategic thinking, provide the inputs for strategic decisions and understand the changes that take place in an environment.
SMART- the SMART model is used for setting objectives.
According to Ramsey (1999) Smart stands for;
Specific- that is well defined
Measurable- so that you measure the progress
Action- Action oriented
Realistic- challenging but doable
Time Oriented- include deadlines
The SMART model is designed to lessen vague assumptions, removes ambiguity and forces hidden agenda to come out, allowing to measure progress. The SMART Model prevents unnecessary costs and schedule overruns, establishes stakeholder expectations and reduces politics Richman (2006).
PROCESS MAP- According to Hunt (1996) Process mapping is all about ‘where are we’ and ‘where we need to be.’ Process mapping serves a range of functions it enables an organisation to see know where a process starts and ends, recognise what functions the process has, create several maps and scrutinise specific process steps. Process maps can support quality recognitions such as ISO 9000. It helps decision making to improve their actions and can be a useful communication tool.
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DESIGNING SYSTEMS-
TQM (TOTAL QUALITY MANAGEMENT)- TQM is about planning a structure to hold on to the market share. Customers look for quality, and they are ready to pay the price for better quality. Therefore quality has exchanged places with price. TQM is about identifying the customers want, to meet these needs economically. Checking the materials that are brought in is up to standard. Focusing on prevention rather that rectifying arrears. Educating the employees and constantly training them for good output. Measuring the customer satisfaction and constantly reviewing the systems to ensure progress Oakland (2003).
SPC (STATISTICAL PROCESS CONTROL)-According to Doty (1996) SPC finds variations, the correction of these variations depend on the people involved. Statistical process control was used in manufacturing processes. Soon it uses in other fields became apparent such as health care, politics, management and education etc. When used in other areas than manufacturing plants it is known as TQ (total quality), TQI (total quality improvement), TQM (total quality management), WCQ (world class quality) etc. The reason SPC was changed to TQM was because of the word statistical that sounded mathematical and control sounded controlling rather than co operative. SPC is more focused on a process and not a product. It evaluates the output of a particular process to find out its acceptability Gupta (2009).
WIDER IMPLICATIONS- According to McDonald (2011) the constant need to tighten quality is due to wider implications Example a little time can be put to handle and rectify customer complaints as losing a customer will result in loss of earnings and the customers stop referring to their friends about the product or start to talk negative about the organisation.
CORPORATE IMAGE (BRAND NAME) – When an organisation achieves a good quality product and develops into a strong brand is a long term commitment to the organisation, customers and suppliers Costa (2011). There is a time corporate image is revamped. A lot of organisations go through a lot of negativity while changing their corporate image. Although resistance is faced by employees it is the consumers who want to see the business changing their image and getting innovative and keeping up with times Griffith (2008).
IMPROVED BUSINESS PERFORMANCES- According to Manning (2003) taking a look at Japanese performances a lot of U.S organisations have adopted quality management. The organisations that adopted quality management seen an improvement in their businesses. They achieved greater productivity, increased market share, better employee relations, better customer satisfaction and increase in profits.
Q4. Learners will be able to implement a strategic quality change in an organisation by;
Implementing a strategic quality change in the organisation.
Embedding a quality culture in an organisation to ensure continuous.
Monitoring the implementation of a strategic quality change in an organisation.
Ans: Taking an EXAMPLE OF (BSI) British Standards Institution Quality all successful organisations manage to identify their consumer’s needs and create a process that enables the business to deliver them. To implement a quality system in an organisation a company will need to carry out market research to identify customer’s needs, conduct a customer satisfaction to monitor the existing service. Check the relationship between the existing service processes. Identify methods to make sure these processes are carried out on time. An organisation can register with a body like BSI and ISO 9000 that will continuously assess the organisation thus keeping the organisation processes revised and improved.
IMPLEMENTING A STRATEGIC CHANGE-
COMMUNICATION- According to Ahuja (2009) Formal channel of communication can be upward downward or horizontal. It is that communication that flows along a prescribed network. Knowledge and nature flow of communication is got through by several structural patterns of a business organisation through Proper Channel. Thill and Bovee define formal communication as “The flow of information which follows an official chain of command.”
Informal channel of communication consists of personal communication. It
follows no set pattern and is ever changing. It is also known as Grapevine which
means there is no beginning there is no end. Thill and Bovee define informal
communication as “Carrying information along the organisations unofficial
lines of activity and power.”
MONITORING CHANGE- According to Khandker (2010) a monitoring system consists of setting goals and targets. The results that are derived from it are used to evaluate the performance. Monitoring helps in promoting accountability and dialogue among the policy makers and stakeholders and also policy design and implementation. Evaluation is an assessment of the results that are achieved by the programme.
The challenges in monitoring are to;
Identify the goals that are supposed to be achieved.
Identify key indicators that are used to monitor progress against these goals.
Set targets that are supposed to be achieved by a given date.
Set up a monitoring system to track progress to achieve specific targets. Therefore, encouraging better management and responsibility for projects and programs.
QUALITY CULTURE-
QUALITY CIRCLES- quality circles is a group of members who form a team to come together and problem solve. This technique came from Japan from Dr Kaoru Ishikawa. Dr Ishikawa realised the need of transferring the responsibility of problems to people who were closest to it so they would suggest the best way to solve the problem. EXAMPLE; solving a problem on the factory floor, workers on the factory floor were closest to the problems and could provide solutions to dealing with problems such as delivery and meeting production deadlines. Quality circles meet regularly once a week and develop solutions to problems Bagad (2008).
FISHBONE DIAGRAM- According to Lighter (2004) the fishbone diagram provides an insight into the root causes of the problems instead of treating it from the top. The base line of the fishbone represents main problem and the branches that come from it gather information. The fishbone diagram relies on IQ, brainstorming, team work etc. The fishbone is an excellent tool in Quality improvement as it visually represents the root causes of the problem.
80/20 RULE-
According to Glowik (2011) Strategic factors should be focused by following the 80/20 rule. Monitoring 20 percent of the factors determine 80 percent of the results. Control should only monitor meaningful activities and results.
If cooperation has to be measured some form of qualitative and quantitative
measure can be established. Control should be monitored before it is too late.
KAIZEN CONTINOUS IMPROVEMENT- Kaizen means continuous improvement. It has to be noted that kaizen will fail if it is not conducted with commitment and kaizen philosophy. Kaizen is all about taking apart a process understanding how it works, how to improve it and make it better. Kaizen focuses on adding value to a process and eliminate its waste Productivity Press (2002).
Q5. Be able to evaluate the outcomes of a strategic quality change in an organisation by;
Evaluating the outcomes of a strategic quality in an organisation.
Recommending areas for improvement to a strategic quality change that align with organisational objectives.
Ans: Taking an Example of British Gas from BSI case study. BSI implemented strategic quality change and benefited from the implementation of ISO 9001:2000 which included employee support for initiates and clearly defined work targets, costs savings and improved relationships from suppliers. The improvement in adopting a strategic quality change gave them the Queens award for Enterprise.
EVALUATION OF OUTCOMES FOR STRATEGIC CHANGE-
PILOT STUDY OR DOING a FEASIBILITY STUDY- A pilot study is a small panel or committee that is established by the organisation to have an overlook of the entire business or a particular process. A pilot study can safeguard a business against failure. The feasibility study is conducted to give a yes or no signal to a business project. A feasibility study can take hours to weeks to give an answer, it depends on the amount of investment that dictates how much amount of energy has to be put into it Dalcher (2000).
SETTING OR MEASURING OUTCOMES- According to Barker (2006) Output is the product of integrated communication that is brand messages, whereas outcomes are the effects of those messages on stakeholder’s relationships. Integrated communication is interested in stakeholder’s relationships. In order to evaluate the success of such communication, the quality, nature of the organisation relationship with the stakeholders is to be evaluated. Thus brand messages have to be measured.
AUDITING COMMUNICATIONS TO AMPLIFY PERFORMANCES- According to Owen (2000) organisations that are ill-mannered in their communications makes the audience feel ignored or insulted. A good focused communication strategy puts a stop to this. A communication audit is defined by (Emmanuel 1985, p.50) “A comprehensive and thorough study of communication philosophy, concepts, structure, flow and practice within an organisation.”
BUSINESS PERFORMANCE INDICATORS- Ansoff Matrix- According to Bachmeier (2008) the ansoff model suggests that several strategies can be used at once. It is based on beliefs that the most appropriate growth strategies are based on decision to sell old or new products or vice versa. The Ansoff matrix is used by managers for decision making and to forecast. It is also used to describe optional strategies in a growing economy.
CUSTOMER FEEDBACK- Customer feedback allows organisations to meet their customer’s requirements and change their service style or products. It can be called feedback and not complaint as it used to be called previously. An organisation may not understand the customers need until a customer’s feedback comes in. If an organisation sees customers complaints as gifts that opens a new path which benefits the customers as well as everyone. It depends how the organisation uses the customer
complaint as a strategic tool to expand in business Barlow (1996).
Conclusion-
The report talks about ZURICH and BSI. It focuses of strategic quality. How quality influences a business. Effective operations help the organisation achieve its goals. Strategic quality change improves organisational performance Operations management deals with designing, production of goods. Quality can be managed using a 5 gap model and PDCA. Quality change can be planned by scanning the environment, making SMART goals, process mapping and creating a climate of change. Quality change can be implemented by using quality circles, fishbone diagram, 80/20 rule and Kaizen. Quality can be evaluated by measuring performance, doing a pilot study and customer feedback.
GLOSSARY TERMS:
Norming- settling down, calming down.
Bureaucracy- a complicated and annoying system of rules and processes.
Optimisation- to make something such as a method or process as good or as effective as possible.
Variation- the existence of differences in amount, number, level, form etc
Benchmarking- an amount, level, standard etc that you can use for judging how good or bad other things are.
Logistics- the practical arrangements that are necessary in order to organize something successfully, especially something involving a lot of people or equipment.
Visibility- the distance that you can see, depending on conditions such as the weather or the place that you are in.
Responsiveness- quick to react in the way that is needed, suitable, or right for a particular situation.
Tangibles- something that is tangible is something that you can touch.
Empathy- he ability to understand how someone feels because you can imagine what it is like to be them.
Re-engineering- a business management theory that advocates the reorganization of a business on the basis of the market value each department adds to the products produced by the business.
Resistance- refusal to accept something new such as a plan, idea, or change
Grapevine- informal the way in which information spreads quickly from one person to another through conversation.
Premeditated- a strategy has been deliberately planned in advance.
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