Easternisation of Management

Controlling

Total Quality ManagementHOW CAN QUALITY BE IMPROVED?

Total quality management (TQM) is a comprehensive approach, led by top manager and supported throughout the organization, dedicated to continuous quality improvement, training, and customer satisfaction The two core principles of TQM are people orientation (everyone involved in the organization should focus on delivering value to customers), and improvement orientation (everyone should work on continuously improving work processes) There are several techniques for improving quality including employee involvement, benchmarking, outsourcing, reduced cycle time, and statistical process control

Total Quality ManagementHOW CAN QUALITY BE IMPROVED?

Total quality management (TQM) is a comprehensive approach, led by top manager and supported throughout the organization, dedicated to continuous quality improvement, training, and customer satisfaction The two core principles of TQM are people orientation (everyone involved in the organization should focus on delivering value to customers), and improvement orientation (everyone should work on continuously improving work processes) There are several techniques for improving quality including employee involvement, benchmarking, outsourcing, reduced cycle time, and statistical process control

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Complete productsjust in time to

ship customers.

Complete productsjust in time to

ship customers.

Complete partsjust in time for

assembly into products.

Complete partsjust in time for

assembly into products.

Scheduleproduction.

Scheduleproduction.

Receive materialsjust in time for

production.

Receive materialsjust in time for

production.

Receivecustomer

orders.

Receivecustomer

orders.

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Flexibleworkforce

Flexibleworkforce

Reducedsetup time

Reducedsetup time

Zero productiondefects

Zero productiondefects

Improvedplant layout

Improvedplant layout

JIT purchasingFewer, but more ultrareliable suppliers.

Frequent JIT deliveries in small lots.Defect-free supplier deliveries.

JIT purchasingFewer, but more ultrareliable suppliers.

Frequent JIT deliveries in small lots.Defect-free supplier deliveries.

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More rapidresponse to

customer orders

More rapidresponse to

customer orders

Freed-up fundsFreed-up fundsReducedinventory

costs

Reducedinventory

costs

Greatercustomer

satisfaction

Greatercustomer

satisfactionHigher qualityproducts

Increased throughput

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Disadvantage:Just-In-Time (JIT) systems have many advantages, but they are vulnerable to unexpected disruptions in supply. A production line can quickly come to a halt if essential parts are unavailable. Toyota, the developer of JIT, found this out the hard way. One Saturday, a fire at Aisin Seiki Company’s plant in Aichi Prefecture stopped the delivery of all brake parts to Toyota. By Tuesday, Toyota had to close down all of its Japanese assembly lines. By the time the supply of brake parts had been restored, Toyota had lost an estimated $15 billion in sales.Source: “Toyota to Recalibrate ‘Just-in-Time,’” International Herald Tribune, February 8, 1997, p. 9.

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is

ContinuousImprovement

TQM improves productivity by encouraging the use of fact and analysis for decision making and if properly implemented,

avoids counter-productive organizational infighting.

Systematic problem solving using tools such as benchmarking

ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES

Management By ObjectivesMBO (Management By Objectives)

A process of joint objective setting between superior and subordinate

ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES

Quality ControlTotal Quality Management (TQM)

commits to quality objectives, continuous improvement, and doing things right the first time.

Quality Circle is a small group that meets regularly to discuss ways of

improving work quality.Four Absolutes of Quality Control

1. Quality means conformance to standards. Workers must know exactly what performance standards they are expected to meet.

2. Quality comes from defect prevention, not defect correction. Leadership, training, and discipline must prevent defects in the first place.

3. Quality as a performance standard must mean defect-free work. The only acceptable quality standard is perfect work.

4. Quality saves money. Doing things right the first time saves the cost of correcting poor work.

ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES

Purchasing And Inventory Controls

Purchasing Control buying what is needed at the right quality, at a good price,

and for on-time delivery. Supply Chain Management

uses information technology to link suppliers and purchasers in cost efficient ways.

Inventory Control ensures that inventory is only big enough to meet immediate

needs. Economic Order Quantity

places new orders when inventory levels fall to predetermined points.

Just-in-time Scheduling routes materials to workstations just in time for use.

ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES

Breakeven AnalysisBreakeven Point

is the point at which revenues equal costsBreakeven Analysis

calculates the point at which sales revenues cover costs.

How to Calculate a Breakeven Point Breakeven Point = Fixed Costs / (Price - Variable Costs)

ORGANIZATIONAL CONTROL SYSTEMS AND TECHNIQUES

Breakeven Analysis