Improving Operational Efficiency 24

(Quality issues, Operational Planning)

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Quality  “Quality is the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs”.  “Quality is a measure of how closely a product conforms to predetermined standards and customer expectations”  “Quality is features of a product that allow it to satisfy customer’s needs”.  “Quality of a product means benefits derived from a product as compared to its cost.” Advantages of Producing Quality Products  Easy to create customer loyalty  Longer life  High prices can be charged  High market share Quality Control  Quality control is about checking to ensure that goods and services come up to an agreed standard.  The process of checking the accuracy of work completed in different departments according to the set quality standards. This is usually carried out by quality inspectors.  Stages of Effective Quality Control Prevention (set quality standards) Inspection (See figure 24.1 on page 374) Correction and Improvement  Drawbacks of inspections Quality Control Techniques  Setting Quality standers  Quality circles  Total quality management (TQM) Quality Assurance  Quality assurance is the attempt to ensure that quality standards are set, agreed and met throughout the organization, to ensure customer satisfaction. Aspects of Quality  Quality of design  Quality of performance  Quality of reliability  Quality of packaging  Quality of inputs  Customer services including after sales services

Planning Operations Resources are expensive and the most expensive resource is that which is unused or under used. Unused stocks take up space and working capital, machinery left idle etc. Efficient firms will always aim to use their resources as intensively as possible and avoid wasted time and idle assets. Keeping all assets busy is not easy, it needs strong planning. To plan operations, a technique is used by managers known as Net Work Analysis or Critical Path Analysis (CPA). Net Work Analysis Net work analysis is a term describing techniques for planning and controlling projects that consists of a series of interrelated activities. Net work or CPA allows a business to;  Estimate the minimum time that could be taken to complete a possibly complex operation.  Identify whether resources are being used efficiently.  Anticipate any tasks that may or may not cause delays in the operations. Net Work Net work is a diagram used in net work analysis that shows the activities needed to complete a project, the order in which they should be completed, and the activities that can be completed simultaneously. A simple net work diagram 0 Where; EST  Circles are called nodes. They show the start or finish of a task. These nodes contain information. In diagram note that every node is divided into three sections. Each section will contain information, LFT o In the left hand semi circle the node number o On the top right section (earliest starting time) EST o On the bottom right section (latest finished time) LFT  An arrow indicates the activity Earliest Starting Time –EST EST of an activity in CPA is the earliest it can start given that all preceding activities have been completed as speedily as possible. The EST on all activities within a net work are calculated from left to right, by adding the duration of the preceding activity to its own EST. Latest Finished Time –LFT LFT is the date by which an activity on a network must be completed in order that following activities can be started in time to finish the project as quickly as possible. The easiest way to calculate LFT is to work from right to left. LFT on last node must be equal to EST, the total project time. So subtract duration of 1st coming activity from right to left and so on. Float Time Spare time available to complete one activity within a project. If this activity delayed for certain period of time due to some reason, there will be no effect on the total duration of the project. Critical Path A path on network activities that must be completed in the shortest possible time in order that the project duration can be minimized is called critical path. The critical path can be found by identifying the activities that have no float time. (In simple words, critical path can be identified through the nodes where the EST and LFT are same.) Critical Activity An activity which is on the critical path is called critical activity. If it is delayed, the minimum duration of the whole project is lengthened.

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