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requirement of the customer. 1970 -1980 – US business focused more on cost and productivity than quality. – That give the Japanese the opportunity to capture a significant share in the market by focusing in the quality. Evolution of Quality Prior to Industrial revolution – Skilled craftsman performed all stages in the production During 1950’s – The quality movement evolved in quality assurance. – Quality efforts focus not only manufacturing but also in product design and incoming raw materials. During 1960’s – The “zero defect” evolved and gain favor. – Focus on employee motivation, awareness and the expectation of perfection from employee. During 1970’s – Quality assurance methods gained increasing emphasis in services include government operation, health care, banking and travel industry. During 1980’s – Focus on improve quality and lowering cost ISO’s (International Organization for Standardization ) was born – Promotes worldwide standard for the improvement of quality, productivity and operation efficiency through a series of standard and guidelines. – Increase the level of quality, reliability, productivity and safety in making product and services affordable. – Helps facilitate international trade – Provide governments with a base for health, safety and environmental legislation. – Aids in transferring technology Two well known ISO a. ISO 9000 – A set of international standards on management and quality assurance, critical to international business. Categories: 1. System requirements 2. Management requirements 3. Resources requirements 4. Realization requirements 5. Remedial requirements 8 Quality management principles: 1. A customer fucos 2. Leadership 3. Involvement of people 4. A process approach 5. A system approach to management 6. Continual improvement 7. Use of factual approach in decision making 8. Mutually beneficial supplier relationship a. ISO 14000 – A set of international standards that focus on assessment of a company’s environmental performance. Three major areas; a. Management system – Focus on system development and integration of environmental responsibility into business planning a. Operation – Consumption of natural resources and energy a. Environmental system – Measuring, assessing and managing emissions, effluents and other waste streams.
Create constancy purpose towards improvement of product and services 2. Management take action on report for improvement 8. Juran – Contributions: Quality is fitness –for. Armand Feigebaum – 1.e. a.believes that 80% of quality defect are management controllable and has the responsibility to correct them. W. Drive out fear. so that everyone may work effectively 9. Joseph M. –felt that it was the managements responsibility. – Stressed the need to reduce variation in output (deviation from standard).Remove barriers that stand between the hourly worker and his right to pride of workmanship 13. Do it right at the first time . Eliminate supplier that cannot qualify with the statistical evidence of quality. Crosby – Contributions: Zero defect.Create a structure in top management that will push everyday on the above stated 13 points. Focus primarily on technical and process 1.The GURUS of Management 1. Edwards Deming – Key contribution : 14 points (Key element). Institute modern methods on job training 7. Theory of knowledge d.” 1. Quality Trilogy (quality planning.e. Adopt new philosophy 3.Improving productivity by improving methods 11. Quality Trilogy – – – – Quality begins by knowing what customer wants Quality is fitness –for. An appreciation for a system b. not the employees. Psychology Demings 14 points 1.use. Philip B. Cease dependence on mass inspection (prevent defect rather than detect defect) 4. 5.Institute a vigorous program of education and training 14. 1. rondom) – Continual improvement and profound knowledge Profound knowledge includes. Breakdown barrier between department 10. special vs common cause of variation – The cause of inefficiency and poor quality is the system. variance reduction Known as father of statistical control Develop methods for analyzing output of process to determine when corrective action was necessary. quality improvement) Contributions: Quality is a total field. the customer defines quality Recognized that quality is not simply a collection of tools and technique but a “ total field. Walter Shewhart – – – – Key contribution : Control chart. A theory of variation c.use . correctable) and common causes of variation (i. quality control. which can be accomplished by distinguishing between special causes of variation (i. Find problem and solve it 6.Eliminate work standard that prescribe numerical quotas 12.
Cost Benefits of Good Quality 1. 8. High sales 7. Increased in market share 3.1. Serviceability – handling complaints or repairs. 6. Kauro Ishikawa – – – – – – – Contributions: Cause-and-effect diagram. feel smell. Liability 3. Reliability – the ability to perform a service dependably. 7. Performance – main characteristic of the product and services 2. Tangible – physical appearance of facilities.the speed with which service is delivered 5. Lower liability cost 5. evaluating and auditing 1. Reliability – consistency of performance 6. taste 3. Design 2. Perceived quality. Internal failure cost – cost on defective parts occurred during production b. Failure cost – Cost are incurred by defective parts or products by faulty service 2 Kinds a. Aesthetics – appearance. 3. Courtesy – the way the customer are treated 7. consistently and accurately. Assurance – the ability to convey the trust and confidence 6. External failure cost – cost incurred/ contributed by suppliers . Top management 2. Ease of use 4. equipment also ambiance Determinants of Quality 1. Ability to command premium price 2. Convenience – the availability and accessibility of the service 2.e. Service after delivery Consequences of Poor Quality 1. Greater customer loyalty 4. reputation) 8.indirect evaluation of quality (i. Special features – extra characteristic 4. Taiichi Ohno and Shigeo Shingo Product Quality is often judge on 8 dimensions of quality 1. Responsiveness – the willingness to help the customer in unusual situations and to deal with problems 4. 5. 4. High profit Key areas of responsibility in Quality 1. Design Procurement Production/operation Quality assurance Packaging shipping Marketing and sales Customer services The cost of Quality 1. Few complaint 8. quality circles Cause-and-effect diagram – fish bone analysis ( problem. Productivity 4. Time. Genichi Taguchi 1.solving technique) quality circles –group discussion on quality Make a quality control “ user friendly” for worker Contribution: Taguchi loss function Formula in determining the cost of poor quality Continuous improvement 1. Low cost 9. Prevention Cost – Cost related to reducing the potential for quality problem 1. Loss of Business 2. Higher productivity 6. Durability – the useful life of the product or services 7. 3. Appraisal cost – Cost related to measuring. Service Quality is often judge on 7 dimensions of quality 1. How well it conform with the design 3. Conformance – how well a product and services corresponds to design specifications 5.
Total Quality Management (TQM) – Is a philosophy that involved everyone in the organization in a continual effort to improve quality and achieved customer ‘s satisfaction. 2. decision on facts 6. Scatter diagram – A graph that shows the degree of relationship between two variables 1. Interviewing. competitive bench marking 3. Check sheet – a tool for organizing and collecting data. Three 1. Affinity diagram – a tool used to organized data in to logical categories 3. Brainstorming – technique of generating free flow of ideas in a group of people 2. supplier quality 8. Control Chart – A statistical chart of time order values of a sample statistic 1. 3. Key’s A never ending push to improve which refer to as continuous improvement The involvement of everyone in the organization Customer satisfaction Elements of TQM 1. quality at source 9. a tally of problems or other events by category 2. promote TQM at all times Process improvement – a systematic approach of improving a process Steps: Map the process – collection of info and data Analyze the process Redesign the process Implement the process Audit the process Quality Tools 1. continuous improvement 2. Flow chart – A diagram of the steps in a process 1. Histogram – A chart that shows empirical frequency distribution 1. also known a fish bone analysis Methods in Generating idea in TQM 1. 5W2H approach – asking on the current process can lead into ideas to improve it Supply Chain Management . Benchmarking – process of measuring performance against the best in the same or another industry. employee empowerment 4. knowledge tools 7.technique for identifying problems and collection of information 5. Quality circle – groups of workers who meet to discuss ways of improving products 4. 6. team approach 5. Cause and effect diagram – A diagram that organize a search for cause(s) of a problem. Pareto chart – a diagram that arrange a categories from highest to lowest frequency occurence 2.
1. 5. Major areas for decisions. Generally on the direction to the end of the chain 3. suppliers Functions and activities includes. Exchange information which moves in both direction along the chain Supply Chain Management (SCM) – Is the strategic coordination of business functions within the business organization and throughout its supply chain for the of integrating supply and demand management. 6. The movement of materials. 3. 7. cash and information. 9. Supply component – Start at the beginning of the chain and end with the internal operation of the organization 1. services. services. 4. cash and information in a supply chain. 3. 1. 2. Demand component – Start at the point where the organization’s output is delivered to its immediate customer and ends with the final customer in the chain. activities – that are involved in producing and delivering a product or services. Goal of supply chain management – Is to link all components of the supply chain so that market demand is met as efficiently as possible across the entire chain. The physical movement of materials 2. Two (2) types of decision relevant to SCM 1. The operational decision – relate to day to day activities. 1. . Organizations in the supply chain are. functions. 1. 4. Purchasing Three (3) kinds of movement in these system. 8. Inventory mgt Information mgt Quality assurance Scheduling Production Delivery Customer services 1. Forecasting 2.Supply chain – – – is the sequence of organizations – their facilities. managing everything in accordance with the strategic decision. The strategic decision – are design and policy decisions 2. The sequence begins from supplier of raw materials and extended all the way until it reach its customer Are sometimes referred as value chain Two (2) components. Customer 2. Location Production Distribution inventory Logistic – – Is the part of supply chain involved with the forward and reverse flow of goods.
. substandard. moving backward through the chain from the final customers . Distribution requirements planning (DRP) – A system for inventory management and distribution planning Supply chain is essential for the following issues. 1. excess inventories add unnecessary costs Bullwhip effect – Occurred when inventory variability tends to increase. Vendor managed inventory – Vendors monitor goods and replenish retail inventories when supplies are low. order fulfillment and distribution. inventory. currency differences. cancelled or changed order 1. Increasing transportation cost – Transportation is increasing need to addressed 1. material handling.(returned defective goods) Goals: to recapture or create value in returned goods or properly dispose of goods that cannot be re sold Two (2) key element of managing returns are. Need to manage inventories – Shortages. Shortages and increased costs also has adversely effects. Competitive pressures – Increasing new products – Shorter product development cycles – Increased demand for customization 1. inherent uncertainty –adversely affect on supply chain – Inaccurate forecasting. Avoidance – finding ways to minimize the number of items that are returned. third party logistics and reverse logistic ( the return goods from customer) Reverse Logistic – Refers to backward flow of goods returned to the supply chain from their destination. The need to improved operation -lean production and TQM 2. machine breakdown. language and cultural differences 1. Increasing importance of e business – Buying and selling presented new challenges eg ebay 1. Increasing globalization – Lead time. monetary fluctuation. Traffic Management – Overseeing the shipment of incoming and outgoing goods. The complexity of supply chains – Dynamic. Increasing levels of outsourcing Outsourcing – buying goods or services instead of producing or providing them in house 3. causing inventories to oscillates in a large swing when seeks to solve the problem. Gate keeping –screening returned goods to prevent in correct acceptance of goods 2. warehousing. late deliveries. far reaching impacts.Logistic management – Includes management of inbound and outbound transportation . Even a small demand in the customer demand can result in large variation in order placed upstream. 1.
4. – Is responsible in obtaining goods and services that will be used in the production in producing product and services. To identify and analyze factors that differ from country to country 2. 6. Transportation Communications Governmental requirements Environmental Regulatory issues Political issues Benefits of effective supply chain management 1. 2. – Select suppliers. 7. Purchasing receives the requisition Purchasing selects a supplier Purchasing places the order with a vendor Monitoring orders Receiving orders Centralized Purchasing – Purchasing is handled by one special department Decentralized Purchasing . 4. 2. Financials Inventory – is a essential in most supply chains. Purchasing – is the link between an organization and its suppliers. Local capabilityies 3. 6. establish alliances and act as a liaison between suppliers and various internal department Goal : Is to develop and implement purchasing plan for product and services that support the operation strategies Duties of purchasing 1. negotiates contract. 5. 5. 1. 8. Identifying sources of supply Negotiating contracts Maintaining a data base of suppliers Obtaining goods and services that meet operation requirements in a timely and costly manners Managing suppliers Established alliances Acts as a liaison between supplier and various internal department Purchasing Cycle 1. 5. 8. 3. Lower inventories Lower cost Higher productivity Greater agility (quickness/ alertness) Shorter lead time High profits Greater customer loyalty Global supply chain manager must be able. 5. 7. 9. 4. 6. Language Cultural differences Currency fluctuation Armed conflict Increase in transportation cost Lead time The increase need for trust Cooperation among supply chain partners 4. 2. 5. 6. 7. 3. 2. 3. balance is the main objective.Global Supply Chain – When your products and services are sold globally a chain for supply has been interlinked with other function of business organization globally. 3. Complexity in Global Supply Chain 1. 4. 7.
Use e.Walmart in USA Requirements for a successful supply chain 1. Loyalty to employer 2. – This identify by a radio tag that is attached to an object. Determine order status in real time . Principle in Purchasing 1.evaluating the sources of supply in terms of price. Verify that a supplier meet or exceed the expectation of the buyer. Web site 2. Unique identification 2. E. Access inventory data of partners Eg. Justice to those you deal with 3. 4. Supplier certification 3. reputation and services.– Individual departments on separate location handled their own purchasing requirements.Business – – Refer to the use of electronic technology to facilitate business transaction. Performance metrics Radio frequency identification (RFID) – A technology that uses radio waves to identity objects. monitor 3. Faith in your profession Reliable and trustworthy suppliers are a vital link in an effective SCM. Trust Effective communication Supply chain visibility Event management capability -ability to detect and respond to unplanned event 5. 1. 1. Provide. such as goods in supply chain. Order fulfillment Parties/participants in supply chain must share. 1.business 1. 3. 2. To promote their product and services 2. Locating it – – Is a detailed examination of the policies and capabilities of a suppliers. – The tag has an integrated circuit and an antenna that project info or other data to network connected RFID reader using radio waves. Sometimes refer as to e – commerce. Provide info about them/ company EG UPS and Fed ex Two (2) essential features of e business. quality. Vendor analysis . Enabling business to identify. Forecast 2. track.
reducing one or more steps in a supply chain by cutting out one or more intermediaries. Velocity – refer to the rate or speed of travel through the system Two (2) area a. .Collaborative planning. Coordinate activities with suppliers and with customers 4. Quality 2. Cost 3. Coordinate planning and execution across supply chain 5. Consider the possibility of forming strategic partnerships Performance drivers. Step in creating an effective supply chain 1. Inventory velocity – the rate at which inventory (material) goes through supply chain. forecasting and replenishment (CPFR) – A supply chain initiative that focuses on information sharing among supply chain trading partners in planning. Flexibility – refer to the ability to adjust to change in order quantity 4. b. Strategic partnering – Two or more business organizations that have complementary products or services join so that each may realize a strategic benefits. Disintermediation. Information velocity – the rate at which information is communicated in supply chain 1. forecasting and inventory replenishment. Develop strategic objectives and tactics 2. 1. Integrate and coordinate activities in the internal portion of the chain 3. Customer services Optimizing the supply chain – Means maximizing shareholder and customer value.
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