# 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.