Quantitative Analysis

1) Mr. Almaas Haider borrowed equity worth Rs.35,000 from his father Dr. S M Naqi when he started making chappals and tarpaulins in his house backyard. 2) In 1982 SPEL had only 10 employees with a sales of Rs.800,000 per month, thereby assuming if the sales per month at average was Rs.800,000 then yearly sales would have been Rs. 800,000 X 12 = Rs. 9,600,000 3) In 1982, SPEL had taken a loan of worth Rs.300,000 from the ADBP (Agricultural Development of Pakistan) for its establishment. 4) By the year 1994 SPEL had an annual sales of Rs.24 million making Rs.2 million per month for the company at average. 5) All of the company’s profits were reinvested in mould making, injection of moulds and fusion welding for growth purposes of the business. 6) There had been forming 2 to 6 quality circles on a six months of basis, so the bifurcation goes as: March, 1993 = 2 Quality Circles Sept, 1993 = 4 Quality Circles March, 1994 = 6 Quality Circles Sept, 1994 = 2 Quality Circles 7) There were 3 to 7 employees in every quality circle formed. 8) The best Circle was awarded a cash prize of Rs.5,000 to each member and a trophy to the entire team.

9) 4 hours of time was lost just in changing the mould. . 11) Conversion of platen movement to automatic hydraulic control took 25 days but within a month they were running both the machines trouble free and smooth. Let’s assume if the mould required a changed twice a day then: 10) Then a plan was made that they buy a gear box with a ratio of 1:15 and a hydraulic motor with 480 rpm attach it to M2 platen while driving it with hydraulic equipment of M1. which was done using levers manually.45. 4.300 while the monthly saving was Rs. 12) Total labor cost incurred on this was worth Rs.000 per month on machine time.

They have been spending time of these quality improvement measures. . From financial performance we have seen that from 1988 to 1993. but at the same time they are getting returns of these spending. Sales improved by 228% (in 1988. improvement in technology and training of the employees.Rs23000) and employee productivity improved by 177%. Quality Circles. there financial performance has improved. They are investing time on above mentioned quality measures and at the same time they are getting returns of their investments.SPELL has taken different quality initiatives like Benchmarking. They are also diversifying in other related industries because of their success and handsome returns.Rs7000 to 1993.

. By showing how to better competitors. The company must train production workers to use control charts and the tools for sampling. random inspecting and measuring the product to ensure the process does not deviate from the control.     Statistical Quality Controll Quality Circles Benchmarking Technology Advancement Training and Workshops for employee Statistical quality control Statistical quality control. Advantages Statistical quality control or statistical process control provides instant feedback when a process goes outside of the process parameters. Inspections and sampling determine when a process is outside of the control parameters. BenchMarking: Benchmarking goes beyond competitive analysis to understanding the competitor’s output and process of obtaining the output. Production workers can monitor the process through sampling and random inspections to determine when a process has deviated from specifications. uses statistics to determine when processes or product quality deviate from specifications. Disadvantages Training is required to implement statistical quality control in a production environment. also called statistical process control. benchmarking ensures the basic survival of the business. This allows production to stop and correct the problem before creating a great deal of defective product. and placing organizations in a continuous improvement mode. The advantages of benchmarking include enabling organizations to outperform competitors. which reduce variations in product. opening minds to new ideas. labor or the environment. Statistical process control uses control charts to monitor changes in processes. The primary goal of statistical quality control is to maintain and improve processes through techniques such as sampling and process improvement projects. Advantages A primary advantage of benchmarking is that it sets the foundation of performance improvement aimed at enhancing competitiveness. machinery. which can result in a reduction in quality. The process also reduces the need for 100 percent inspections.

an organization by benchmarking such standards runs the risk of trying to ape such flawed standards or settling for extremely low standards. investigate. many organizations make the mistake of undertaking benchmarking as a stand-alone activity. The realization of having become the industry leader soon leads to arrogance. Many organizations tend to relax after excelling beyond competitors' standards. Benchmark heralds change by: Making explicit the competitors' standards that provide the organization with minimum standards of excellence. A bigger disadvantage of benchmarking is the danger of complacency and arrogance. generally the quality circle is also involved in implementation of solutions accepted for implementation by management. The solutions worked out by quality circles are management for implementation. Quality Circle Quality circle may be defined as group of people (say about 12) working in an organization who voluntarily meet on a regular basis to identify. it remains inadequate to measure the overall effectiveness of such metrics. analyse and solve their work related problems. DISADVANTAGES A major limitation of benchmarking is that while it helps organizations in measuring the efficiency of their operational metrics.Change Benchmarking help place organizational focus on change and provides the direction for the change process. Benchmarking opens minds to new ideas. Providing new ideas and better ways of doing things. when considerable scope for further improvements remains. Benchmarking reveals the standards attained by competitors but does not consider the circumstances under which the competitors attained such standards. allowing complacency to develop. and it is worthless if not accompanied by a plan to change. Finally. If the competitor’s goals and visions were flawed or severely restricted due to some specific factor. Benchmarking is only a means to an end. Advantages of quality circle include: . heralding a process of continuous learning that leads to a learning organization.

CNC machines employing CAD/CAM. Unless properly supported by top management commitment and assisted by proper guidance and training in group processes as well as tools and techniques for data collection. Training and Workshops: . fear and misunderstanding among middle level executives Delay or non-implementation of Circle recommendations Irregularity of Quality Circle activities Non-application of simple techniques for problem solving Lack of or non-participation by some members in the Circle activities Circles running out of problems Inadequate visibility of management support Non-maintenance of Quality Circle records Too much facilitation or too little Language difficulty in communication Communication gap between Circles and departmental head Change of management Confusing Quality Circle for another technique Resistance from trade unions Investing in Technology: They have been investing all of the profits into the acquisition of state of the Art knowledge and technology in Mould making . When this happens. quality circles may degenerate in to frivolous discussions on problems and need for improvement without resulting in improvement.It improves effectiveness and efficiency of the organization Improving understanding of the quality circle members about their jobs. Lack of faith in and support to Quality Circle activities among management personnel Lack of interest or incompetence of leaders/facilitator Apathy. Leadership of the group leaders is strengthened. analysis and problem solving. injection moulding and fusion welding. the morale of employees may be affected adversely. Better relationships between employees is established. Disadvantages                 However quality circle may have some disadvantages also.

They call their customers to give quality trainings to SPELL employee and they also send their employee to customers plant to understanding customers demands. they discuss problem in form of teams and share and implement their knowledge on process which they learnt from their previous experience and trainings. and the Japanese adopted and adapted the concept and its application. they can support continuous quality improvement at shop floor level. workshops and traning sessions and gave them the opportunity to see practices in action. whilst restoring the war torn nation.Identify and verify that the causes are indeed causes.Define. Though quality circles are not the silver bullet solution for quality improvement.Analysing the context of a problems and its situation . but also motivate and enrich the work lives of fellow employees. quantify and measure the impact of a given problem . with the right top end management commitment.Understand the quality objectives . ensuring that solutions address the real problem . they can not only improve the performance or an organisation. though it is also argued that the practice started with the United States Army soon after 1945. A typical Quality Circle group will display a good approach to: . From training and workshops they being able to cross learn different standards and process in different industries and they able to implement these changes in their industries. This two way communications and training help SPELL in improving products according to the need of customers MOST EFFECTIVE ONE: Most effective techniques were training and Quality circles. Because of the social focus of a Quality Circle group. From Quality circles. The circle is empowered to promote and bring quality improvements through to fruition. QUESTION # 3 Quality Circles The concept behind quality circles is widely believed to have been developed in Japan in 1962 by Kaoru Ishikawa as a method to improve quality. and organisation. A quality circle is a volunteer group of employees from the same work area who meet together to discuss workplace improvement.SPELL has been sending theirs employess to attend seminars.Define exactly what the problem is and the relationship between its component parts . resources.

improving product design. value analysis. or Fishikawa) are causal diagramscreated by Kaoru Ishikawa (1968) that show the causes of a specific event. and pareto analysis. and motivate and enrich the work of employees. and make presentations to management with their ideas. etc. and improving manufacturing process. temperature. required to accomplish the job Materials: Raw materials. procedures. reverse engineering. regulations and laws Machines: Any equipment. etc. pens. improving product design. though they retain the option to call in expertise or request training when needed. There are different quality circle tools. paper.Create a solution to a given problem Quality Circle groups generally address issues such as improving safety. such as policies. lot sampling. Typical topics are improving occupational safety and health. and culture in which the process operates The Pareto Chart – which analyses different causes by frequency to illustrate the vital cause.. rules. such as location. Techniques used by a Quality Circle group will usually consist of process capability flow charts. . and improvement in manufacturing process. computers. tools. cause-and-effect diagrams. time. brainstorming. A Quality Circle A Quality Circle is a volunteer group composed of workers (or even students) who meet to discuss workplace improvement. cause and effect analysis. especially relating to quality of output in order to improve the performance of the organization. herringbone diagrams. used to produce the final product Measurements: Data generated from the process that are used to evaluate its quality Environment: The conditions. parts.       People: Anyone involved with the process Methods: How the process is performed and the specific requirements for doing it. Because Quality Circle groups remain intact from project to project they have the advantage of consistency. namely: The Ishikawa diagram – which shows hierarchies of causes contributing to a problem Ishikawa diagrams (also called fishbone diagrams.

Analysis of the causes of the problem 4. Development of key performance indicators (KPI) 3. saving 9000 Elimination of grinding process pf Alto steering horn pad May 1993. Saving 28000 Automation of Platen Movement of M-2 Machine July 1993. Continuous improvement process (CIP) . Definition of the problem and description of the status quo 2. Implementation 7. Action planning 6. Improvement from Quality Circles: Reduction in the screen printing rejection of Bezel instruction Cluster in May 1993. saving 45000 Pneumatic system on sterring wheel wlding machine June 1993.A Pareto chart. Controlling 8. Development of solutions and suggestions for improvement 5. saving 9500 Construction of new cooling tower for injection moulding machine 1994 From these few changes SPELL been able to safe 92500 in just 4 Months (May-Aug) STEP OF Quality circle: 1. and the cumulative total is represented by the line. is a type of chart that contains both bars and a line graph. where individual values are represented in descending order by bars. saving 1000 Increase welding capacity 1993.

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