MODULE

OPERATION MANAGEMENT AND

CMBE1
ACADEMIC YEAR 2020-2021

Prepared by:
MS. MARITES B. VARGAS
Instructor
 GUIDE ON HOW TO USE THE MODULE

A. For Faculty

This learning module is intended for the instructor to monitor how certain task is being done by
their students. Instructor designed this module to help you in understanding the concepts about
Operations Management and TQM. Instructors also provide two general activities for you to
accomplish before you can proceed to the next module. Assessment criteria were also designed
by your instructor for you to be aware how certain task is being assessed. However, if any part of
this topic is not clear to you please do not hesitate to ask me in clarifying the topic. Better
approach me during our schedule hours to discuss this topic. In addition, video recordings will be
used in some topics that require intensive discussion.

B. For Learners

This learning module is designed to engage the students on their learning process. It composed of
the lesson title, learning outcomes, lectures, activities and assessment. Students are expected to
be guided by this module to complete certain task every week. Activities are being presented at
the end of the module for you to accomplish. It is being classified as academic and life activities.
For these two general activities, all outputs must be submitted before you can proceed to your
next module. Please present your activities using MS word format or handwritten format but
make sure to write it legibly. Send it through messenger/gmail account:jan227049@gmail.com.
 FOREWORD

The topics to be covered for this preliminary period will include; Nature of Total Quality of
Management, TQM Gurus and their Contributions, TQM Models and Processes, Dimension of
Quality, Quality Control Process, Scope of quality control, Statistical Process Control, Lean
Operations Systems, Project Management. The first and second weeks, you will be learning
about the concepts of Nature of Total Quality Management, TQM Gurus and Their
Contributions. Third and fourth weeks, you will learn about TQM Models and Processes,
Dimension of Quality, Quality Control Process, Scope of Quality Control, Statistical Process
Control (SPC). Fifth and sixth weeks, you will learn about Lean Operating Systems
Project Management

May our willingness and commitment to help you in achieving your dreams will mark through
these learning modules.
 MODULE IN OPERATION MANAGEMENT AND TQM

Credits : 3 units lecture (3 hours/week)

Pre-Requisite : NONE

I. Lesson Title:
I. Nature of Total quality management
II. TQM Gurus and their Contributions and TQM Models and Processe
III. Dimension of Quality
IV. Quality Control Process, Scope of quality control, and Statistical Process Control
V. Lean Operations Systems
VI. Project Management
Text: Operations Management and TQM, Collier, et al, Chapter 13 and 14
Reference: Collier, D.A, Evans, J. Lindsay, W. (2019). Operations Management and TQM.
Philippines. Cengage. Page. 273-314
II. Learning Outcomes:
At the end of the lesson, the learners will be able to:
1. Discuss the nature of total quality management
2. Name the TQM GURU’s and identify their contributions
3. List the dimension of quality
4. State the scope of quality control

III. Lectures:
LESSON I. Total Quality Management (TQM) is an enhancement to the traditional way of
doing business. Total-Made up of the whole, Quality - Degree of Excellence a Product or
Service provides, and Management - Art of handling, controlling, directing etc. TQM is the
application of quantitative methods and human resources to improve all the processes within an
organization and exceed CUSTOMER NEEDS now and in the future.
Annotation: from the definition, you can see that you cannot just focus by simply producing
product or rendering service but you also aims to refine its features to have a competitive
advantage to different companies.
CHARACTERISTICS OF TOTAL QUALITY MANGEMENT
 Top management committed to quality in all aspects
 Customers focus of the organization
 Process focus and improvement
 Measurement of performance
 Employee involvement and empowerment
 Continuous improvement
 Benchmarking teams
 Supplier teaming
 Training of employees
  Inventory management
 Communication
 Quality cost
Annotation: To be considered if certain organization is implementing a total quality
management, these characteristic must be identify first. Take note that not all organization
can have a perfect condition of these characteristics of total quality management. But despite
those flaws of certain organizations may have, it always aim to continuously improve the
quality of their product or service.
PRINCIPLES OF TQM
 Customer’s requirements must be met the first time, every time.
 There must be agreed requirements, for both internal and external customers.
 Everybody must be involved, from all levels and across all functions.
 Regular communication with staff at levels is a must.
 Two way communication at all levels must be promoted.
 Identifying training needs and relating them with individual capabilities and requirements
is a must.
 Top management’s participation and commitment is a must.
 A culture of continuous improvement must be established.
 Emphasis should be placed on purchasing and supplier management
 Every job must add value.
 Quality improvement must eliminate wastes and reduce total cost.
 There must be a focus on the prevention of problems.
 A culture of promoting creativity must be established.
 Performance measure is a must at organization, department and individual levels.
 It helps to assess and meet objectives of quality.
 There should be focus on team work. (Total Quality Management,(n.d.))
Annotation: the scope of principles of TQM aims to maintain and assess the success of every
company who are always at the top of the competition.
OBSTACLES IN IMPLEMENTING TOTAL QUALITY MANAGEMENT
 Lack of Management Commitment
 Inability to change Organizational culture
 Improper planning
 Lack of continuous training and education
 Incompatible organizational structure and isolated individuals and departments
 Ineffective measurement techniques and lack of access to data and results paying
inadequate attention to internal and external customers
 Inadequate use of empowerment and teamwork
 Failure to continually improve (Total Quality Management,(n.d.))
 Annotation: whatever projects that we want to make, it always comes with certain obstacle
that we might encounter along. But knowing these obstacles should not be the reason for us
to quit or not to proceed to our target project. It only reminds us that with these obstacles, we
should analyze our strategy before we proceed to implementation so that we can anticipate
the burden that we might encounter along the way.
BENEFITS OF TOTAL QUALITY MANAGEMENT
 Improved quality
 Employee participation
 Team work
 Working relationships
 Customer satisfaction
 Employee satisfaction
 Productivity
 Communication
 Profitability
 Market share (Total Quality Management,(n.d.))

Annotation: Anything that we used always comes with a benefit. From these texts, the
obvious benefits of total quality management are the so called internal and external benefits.
Internal, because people working within the organization can improve quality, employees are
able to participate, it promotes team work, improve working relationships and able to
promote employee satisfaction. External, promote customer satisfaction, encourage
productivity, improve communication, improve the profitability and enhance a market share.

ROLE OF SENIOR MANAGEMENT

1. Management by Wandering Around (MBWA).
2. Strategize for problem solving and decision making.
3. Strong information base.
4. Recognition and Reward system
5. Spending most of the time on Quality.
6. Communication.
7. Identify and encourage potential employee.
8. Accept the responsibility
9. To play a role model.
10. Remove road blocks.
11. Study TQM and investigate how TQM is implemented elsewhere.
12. Establish policies related to TQM.
13. Establish priority of quality and customer satisfaction as the basic policy.
14. Assume leadership in bringing about a cultural change.
15. Check whether the quality improvement programs are conducted as planned.
16. Become coaches and cheer leaders to implement TQM.
17. Generate enthusiasm for TQM activities.
 18. Visit other companies to observe TQM functioning.
19. Attend TQM training programs.
20. Teach others for the betterment of society and the surroundings. (Total Quality
Management,(n.d.))
Annotation: In the success of every organizations or company there are always brilliant
minds behind it all. Most of the time, they are responsible for decision making. One of them
is in the upper level of an organization, the senior management.

LESSON II. TQM GURUS AND THEIR CONTRIBUTION

I. Philip Crosby:
The Four Absolutes of Quality Management
 Quality is conformance to requirements
 Quality prevention is preferable to quality inspection
 Zero defects is the quality performance standard
 Quality is measured in monetary terms – the price of non-conformance
14 Steps to Quality Improvement:
 Management is committed to quality – and this is clear to all
 Create quality improvement teams – with (senior) representatives from all departments.
 Measure processes to determine current and potential quality issues.
 Calculate the cost of (poor) quality
 Raise quality awareness of all employees
 Take action to correct quality issues
 Monitor progress of quality improvement – establish a zero defects committee.
 Train employees in quality improvement
 Hold “zero defects” days
 Encourage employees to create their own quality improvement goals
 Encourage employee communication with management about obstacles to quality
 Recognize participants’ effort
 Create quality councils
 Do it all over again – quality improvement does not end
(Focus, 2016)
Dr. Edwards Deming
Deming’s Fourteen Obligations of Top Management
1. Create constancy of purpose for improvement of product and service. Allocate
resources to provide for long range needs rather than only short term profitability
2. Adopt the new philosophy. We can no longer live with commonly accepted levels of
delays, mistakes, defective materials, and defective workmanship.
3. Cease dependency on mass inspection to achieve quality. Quality is achieved by
building quality into the product in the first place.
 4. End the practice of awarding business on the basis of price tag alone. The aim is to
minimize total cost, not merely initial cost. Establish long term relationship with
suppliers to develop loyalty and trust.
5. Improve constantly and forever every process for planning, production, and service. It is
management’s job to work continually on improving total system.
6. Institute training on the job for all, including management, to make better use of every
employee. New skills are required to keep up with changes in products and processes.
7. Adopt and institute leadership aimed at helping people do a better job. Management
must ensure that immediate action taken on issues that are detrimental to quality.
8. Drive out fear so that everybody may work effectively and more productively for the
company.
9. Break down barriers between departments and staff areas. Everyone must work
together to tackle problems that may be encountered with products or service.
10. Eliminate slogans and exhortations for the work force as they create adversarial
relationships. Also, bulk of the causes of low quality & productivity belong to the system
and lie beyond the power of the work force.
11. Eliminate arbitrary numerical targets for the workforce and management. Substitute
aids and helpful leadership in order to achieve continual improvement.
12. Remove barriers that rob people of pride of workmanship. This includes the annual
appraisal of performance and Management by Objective.
13. Encourage education. Institute a vigorous program of education and self-improvement
for everyone
14. Clearly define top management’s permanent commitment to ever improving quality
and productivity. Put everybody in the company to work to accomplish the
transformation. Support is not enough, action is required. (Focus, 2016)
Dr. Armand Feigenbaum
 Developed Total Quality Control (TQC) philosophy
 Quote: “Quality is everybody’s job, but because it is everybody’s job, it can become
nobody’s job without the proper leadership and organization.”
 Steps to quality:
 Quality leadership
 Modern quality technology
 Organizational commitment
II. Dr. Kaoru Ishikawa
 Known as father of Japanese quality control effort
 Established concept of Company Wide Quality Control (CWQC) – participation from the
top to the bottom of an organization and from the start to the finish of the product life
cycle
 Started Quality Circles – bottom up approach – members from within the department and
solve problems on a continuous basis
 The fishbone diagram is also called Ishikawa diagram in his honor
 Introduced concept that the next process is your customer (Focus, 2016)
Dr. Joseph Juran
Juran’s Quality Trilogy (compared to financial management):
 Quality planning (financial budgeting) – create process that will enable one to meet the
desired goals
 Quality control (cost control) – monitor and adjust the process
 Quality improvement (profit improvement) – move the process to a better and improved
state of control through projects
 Key points of Juran’s approach to quality improvement:
o Create awareness of the need for quality improvement
o Make quality improvement everyone’s job
o Create infrastructure for quality improvement
o Train the organization in quality improvement techniques
o Review progress towards quality improvement regularly
o Recognize winning teams
o Institutionalize quality improvement by including quality
o Concentration on both external and internal customers (Focus, 2016)

III. Dr. Walter Shewhart

 Shewhart’s control charts are widely used to monitor processes. Problems are framed in
terms of special cause (assignable cause) and common cause (chance-cause).
 The Shewhart Cycle – PDCA Problem Solving Process:
o Plan – what changes are desirable? What data is needed?
o Do – carry out the change or test decided upon
o Check – observe the effects of the change or the test
o Act – what we learned from the change should lead to improvement or activity
 Referred to as the “Father of Statistical Quality Control” (Focus, 2016).

IV. Dr. Genichi Taguchi

 The lack of quality should be measured as function of deviation from the nominal value
of the quality characteristic.
 Quality should be designed into the product and not inspected into it. The product should
be so designed that it is immune to causes of variation.
Taguchi recommends a three-stage design process:
1. System Design (Stage 1):
 development of a basic functional prototype design
 determination of materials, parts and assembly system
 determination of the manufacturing process involved
2. Parameter Design (Stage 2):
 selecting the nominals of the system by running statistically planned
experiments (DFSS/DOE)
3. Tolerance Design (Stage 3):
 deals with tightening tolerances and upgrading materials
(Focus, 2016,).
Annotation: The contribution of these Gurus have made a significant impact on the world to
improve not only businesses, but also organizations including state and national governments ,
military organizations, educational institutions, healthcare organizations, and many other
establishments and organizations.
Total Quality Management Models
Total Quality Management model requires meticulous planning and research. Every total quality
management model integrates customer feedbacks with relevant information and plans
accordingly to design effective strategies to achieve high quality products.
Strategies formulated to yield better quality products need to be evaluated and reviewed from
time to time. Remember, customers are satisfied only when products meet their expectations,
fulfil their needs and are value for money. Their overall experience with the organization needs
to be pleasant for them to be happy and return to the organization even the next time.
Continuous improvements, changes and modifications in the existing processes according to
customer expectations are necessary to yield higher profits. Processes can’t be same always. If a
customer complaints about a particular product of yours, find out the root cause of problem.
Understand and implement necessary total quality management models to rectify the problem,
remove the defect for a high quality product.
Following are the various models of total quality management:
1. Deming Application Prize
2. Malcolm Baldrige Criteria for Performance Excellence
3. European Foundation for Quality Management, and
4. ISO quality management standards (MSG.(n.d)
Deming Prize
 It recognizes both individuals for their contributions to the field of Total Quality
Management (TQM) and businesses that have successfully implemented TQM.
 It was established in 1951 to honor W. Edwards Deming who contributed greatly to
Japan’s proliferation of statistical quality control after World War II.
 His teachings helped Japan build its foundation by which the level of Japan’s product
quality has been recognized as the highest in the world, was originally designed to
reward Japanese companies for major advances in quality improvement.

The Malcolm Baldrige Criteria for Performance Excellence

 The Malcolm Baldrige National Quality Award was envisioned as a standard of
excellence that would help U.S. organizations achieve world-class quality. The Malcolm
Baldrige Criteria for Performance Excellence have played a major role in achieving the
goals established for the Baldrige Award.
 In today’s business, health care, education, nonprofit, and government environments, the
Criteria help organizations respond to current challenges: openness and transparency in
governance and ethics; the need to create value for the business and its customers,
patients, or students; and the challenges of rapid innovation and capitalizing on
knowledge assets.
  The Criteria help to assess performance on a wide range of key business indicators:
customer, product and service, financial, human resource, and operational.
 The Criteria can help to align resources and approaches, such as ISO9000, Lean
Enterprise, Balanced Scorecard, Six Sigma, and regulatory requirements; improve
communication, productivity, and effectiveness; and achieve strategic goals.
 The Criteria are built upon a set of interrelated core values and concepts found in high
performing organizations. (Malcolm Baldrige Criteria for Performance,n.d.)
The EFQM Model
 This quality management model aims at sustainable excellence in which quality,
efficiency and sustainability are the key elements.
 The basis of the EFQM Model consists of the Total Quality Management
(TQM) concept. It consists of a universal framework of concepts, thus enabling
organizations to share information in an effective way, irrespective of the different
sectors, cultures and life stages in which they are located.
The EFQM Model consists of nine criteria that are subdivided into five Enablers and four
Results:
 The five organizational areas indicate how these objectives can be achieved:
1. Leadership
2. People
3. Policy & Strategy
4. Partnerships & Resources
5. Processes
 The four results indicate what the intended objectives are:
1. People Result
2. Customer Result
3. Society Result
4. Key Performance Results (Mulder, P., 2014).
QUALITY STANDARDS
 Are defined as documents that provide requirements, specifications, guidelines, or
characteristics that can be used consistently to ensure that materials, products, processes,
and services are fit for their purpose.
 Standards provide organizations with the shared vision, understanding, procedures, and
vocabulary needed to meet the expectations of their stakeholders. Because standards
present precise descriptions and terminology, they offer an objective and authoritative
basis for organizations and consumers around the world to communicate and conduct
business.
LESSON III. Eight dimensions of quality
Eight dimensions of product quality management can be used at a strategic level to
analyze quality characteristics. The concept was defined by David A. Garvin, formerly C.
Roland Christensen Professor of Business Administration at Harvard Business School. Some of
the dimensions are mutually reinforcing, whereas others are not—improvement in one may be at
the expense of others. Understanding the trade-offs desired by customers among these
dimensions can help build a competitive advantage.
Garvin's eight dimensions can be summarized as follows:
1. Performance
Performance refers to a product's primary operating characteristics. This dimension of quality
involves measurable attributes, so brands can usually be ranked objectively on individual aspects
of performance. Overall performance rankings, however, are more difficult to develop,
especially when they involve benefits that not every consumer needs. Performance is often a
source of contention between customers and suppliers, particularly when deliverables are not
adequately defined within specifications. The performance of a product often influences the
profitability or reputation of the end-user. As such, many contracts or specifications include
damages related to inadequate performance. The question of whether performance differences
are quality differences may depend on circumstantial preferences-but preferences based on
functional requirements, not taste. Some performance standards are based on subjective
preferences, but the preferences are so universal that they have the force of an objective standard.
2. Features
Features are additional characteristics that enhance the appeal of the product or service to
the user. Similar thinking can be applied to features, a second dimensions of quality that is often
a secondary aspects of performance. Features are the "bells and whistles" of products and
services, those characteristics that supplement their basic functioning. Examples include free
drinks on a plane, permanent-press cycles on a washing machine, and automatic tuners on a color
television set. The line separating primary performance characteristics from secondary features is
often difficult to draw.
3. Reliability
Reliability is the likelihood that a product will not fail within a specific time period. This is a key
element for users who need the product to work without fail. This dimension reflects the
probability of a product malfunctioning or failing within a specified time period. Among the
most common measures of reliability are the mean time to first failure, the mean time between
failures, and the failure rate per unit time. Because these measures require a product to be in use
for a specified period, they are more relevant to durable goods than to products and services that
are consumed instantly. Reliability normally becomes more important to consumers as downtime
and maintenance become more expensive. Farmers, for example, are especially sensitive to
downtime during the short harvest season. Reliable equipment can mean the difference between
a good year and spoiled crops. But consumers on other markets are more attuned than ever to
product reliability too. Computers and copying machines certainly compare on this basis.
4. Conformance
The dimension of conformance depicts to what extent a product’s design and operating
characteristics meet established standards. This dimension owes the most to the traditional
approaches to quality pioneered by experts like Juran. All products and services involve
specifications of some sort. When products are developed, these specifications are set and a
target is set, for instance the materials used or the dimension of the product. Not only the target
but also the tolerance (the range of permitted deviation from the target) is defined. One problem
with this approach is that there is little interest in whether the specifications have been met
exactly as long as the tolerance limits are met. On the one hand, this can lead to the so-called
“tolerance stack-up”. When two or more parts are to be fit together, the size of their tolerances
often determine how well they will match. Should one part fall at a lower limit of its
specification and a matching part at its upper limit, a tight fit is unlikely. The link is likely to
wear more quickly than one made from parts whose dimensions have been centered more
exactly.
5. Durability
Durability measures the length of a product’s life. When the product can be repaired, estimating
durability is more complicated. As well the item will be used until it is no longer economical to
operate it. This happens when the repair rate and the associated costs increase significantly.
Technically, durability can be defined as the amount of use one gets from a product before it
deteriorates. In other cases, consumers must weigh the expected cost, in both peso and personal
inconvenience, of future repairs against the investment and operating expenses of a newer, more
reliable model. Durability, then, may be defined as the amount of use one gets from a product
before it breaks down and replacement is preferable to continued repair. This approach to
durability has two important implications. First, it suggests that durability and reliability are
closely linked. A product that often fails is likely to be scrapped earlier than one that is more
reliable; repair costs will be correspondingly higher and the purchase of a competitive brand will
look that much more desirable. Second, this approach implies that durability figures should be
interpreted with care. An increase in product life may not be the result of technical improvements
or the use of longer-lived materials. Rather, the underlying economic environment simply may
have changed.
6. Serviceability
Serviceability involves the consumer's ease of obtaining repair service (example: access to
service centers and/or ease of self-service), the responsiveness of service personnel (example:
ease of getting an appointment, willingness of repair personnel to listen to the customer), and the
reliability of service (example: whether the service is performed right the first time). Competence
and ease of repair is the speed with which the product can be put into service when it breaks
down, as well as the competence and the behavior of the service personnel. Consumers are
concerned not only about a product breaking down but also about the time before service is
restored, the timeliness with which service appointment are kept, the nature of dealings with
service personnel, and the frequency with which service calls or repairs fail to correct
outstanding problems.
7. Aesthetics or Style
The aesthetic properties of a product contribute to the identity of a company or a brand. Faults or
defects in a product that diminish its aesthetic properties, even those that do not reduce or alter
other dimensions of quality, are often causes for rejection. Aesthetics refers to how the product
looks, feels, sounds, tastes, or smells. It is clearly a matter of personal judgement and a reflection
of individual preference. Nevertheless, there appear to be some patterns in consumers' rankings
of products on the basis of taste. The aesthetics dimension differs from subjective criteria
pertaining to "performance" in that aesthetic choices are not nearly universal. Not all people
prefer "rich and full" flavor or even agree on what that means. Companies therefore have to
search for a niche. On this dimension of quality, it is impossible to please everyone.
LESSON IV. How to establish quality control processes
When you think of quality control, you probably think of manufacturing businesses inspecting
products for flaws. In reality, quality control processes can be used in all types of businesses,
whether they are product-based or service-based, B2B or B2C.
Quality control is a key component of a well-run business. A quality control program helps to
ensure your small business is delivering a consistent product, service and customer experience.
Developing quality control processes allows your business to operate without you, making it
easier to expand into new locations, delegate duties and even sell your business when the time
comes.
Business growth requires careful attention to both peso and people, and quality control helps
ensure you’re monitoring both. If your products or services are poor quality, you'll spend a lot of
time and money redoing them and cutting into your profit margins. If customers aren't happy
with the quality of your products and services, they'll stop doing business with you. As word
spreads, you’ll gain a reputation for poor quality, making it harder to attract and keep customers
and employees.
6 steps to develop a quality control process:
1. Set your quality standards.
In some industries, you may have to meet quality standards set by an outside body, such as an
industry association, the local health and safety inspector, or a government regulatory agency. In
others, there aren't any official quality standards, so you'll need to set your own.
Each department of your business will have different quality control standards. However, they
must all be objectively measurable. Measurable standards might include:
 Answering all customer calls by the second ring
 Responding to all customer service emails within four hours
 Resolving customer service problems in five minutes or less
2. Decide which quality standards to focus on.
Of course, you want to ensure quality in all aspects of your operation. However, begin by
focusing on the most important measures — those that have the biggest effect on your profits and
your customer experience. This will enable you to get results quickly and also keeps you and
your team from becoming overwhelmed.
For instance, if you own a restaurant, keeping the restrooms clean is definitely something to
monitor in your quality control program—but not the most important thing. Getting orders out to
customers quickly and accurately is a more important standard because it has a more direct effect
on the quality of experience and customer satisfaction.
3. Create operational processes to deliver quality.
W. Edwards Deming, the founder of modern quality control, believed that well-designed
processes lead to high-quality products and services. If you create good processes, continually
measure the results of the processes, and work to consistently improve the process, your product
or service will get better and better.
Starting with your critical operations, create step-by-step processes that include benchmarks. For
instance, in a B2B company's accounting department, operational processes might require
preparing and delivering invoices within 24 hours after a job is completed or a product is
delivered. In a restaurant, operational processes might require servers to pick up food for
delivery to the customer’s table within two minutes of it being prepared.
4. Review your results.
Most business software, from financial and accounting apps to customer relationship
management or customer service tools, lets you customize the information you collect and use
dashboards to view it at a glance. Review your data regularly to see how well your company is
meeting its quality standards.
5. Get feedback.
Use measurable feedback from external sources, such as customer surveys, online ratings and
reviews and net promoter scores (NPS), to get a fuller picture of product and service quality.
Also, get regular feedback from employees. How well are the operational processes working to
deliver quality? How could they be improved?
6. Make improvements.
Once you’re meeting your quality control standards, don't stop there. For example, if you own a
residential cleaning service business and you can cut the time it takes your maids to clean a home
by 25 percent, you’ll be able to handle 25 percent more business without hiring any additional
employees. That will really boost your bottom line.
No matter how well your processes are running, quality control shows there's always room for
improvement, and making small changes can pay off in big ways. (Eight Dimension of Quality,
n.d.)

Quality Control
Concept of Quality Control: Quality control is an overall function designed to ensure that
manufactured products meet meaningful specifications. It involves the recognition and removal
of identifiable causes or defects and variations from the set standards of quality.
Quality control, in its broadest senses refers to the systematic control of those variables
encountered in manufacturing proms which affect the excellence of the end product- Bethel &
others.
More comprehensively, quality control may be defined as follows:
an effective system for integrating the quality development, quality maintenance and quality
improvement effects of the various groups in an organization so as to enable production and
service at the most economical levels which allow for full customer satisfaction.
It includes all the activities performed to fulfill the quality objectives of the enterprise.
In any manufacturing system, it is physically impossible to produce all the units of a product
exactly identical. Despite utmost care, two products are not perfectly identical. Variability in
quality is an inevitable feature of industry. Such variability results in rework, scrap and other
wastes and losses.

Steps in Quality Control

The process of quality control consists of the following steps
 I. Determination of quality standards-specification of desired quality level in terms of
weight, specific dimension, strength, chemical composition, etc.
II. The design of the production system which would be compatible to the achievement of
the specified quality.
III. Control action to ensure that established quality standards are met.
IV. Inspection of produced products to see if the overall quality of lots satisfies the
specifications.
Thus, quality control involves inspection of raw materials, parts, gauge, tools and finished
products. It operates when materials and parts are purchased, during manufacturing process and
in case of finished products through performance testing.
Scope of quality control
There are three broad areas where quality control should be applied in manufacturing industry.
1. Supply quality assurance. Supplier quality assurance (SQA) is a contract with the supplier of
raw materials and components. Under this agreement, the manufacturer ensures that incoming
materials and parts will be of uniform and acceptable quality. It is also called incoming material
control wherein the quality of bough-tout components and materials is continuously manicured
and maintained.
Unless the materials and parts conform to the establish quality standards, quality of finished
products cannot be maintained despite best efforts in manufacturing. Moreover, poor quality
materials lead to rejections, idle time, wastage of processing time and labour cost and delay in
supplies to customers. Therefore, effective control should be exercised on all incoming materials,
components and sub-assemblies.

2. In-process control. During the stage of processing materials, random samples of the product
are taken and their quality is measured against predetermined standards of quality. Such tests
may reveal certain defects in the production process. Corrective steps are taken to ensure that
right quality products are manufactured. In process control helps in building the desired quality
into the finished product and prevents production of sub-standard products.
A process is considered satisfactory or under control so long as it continues to produce products
of desired quality and specification. In process control techniques involve evaluation of process
standards in terms of rework, scrap, dimensions, rejection, etc. In process control consists of all
the procedures employed to evaluate, maintain and improve quality standards at different stages
of manufacture.

3. Post-mortem inspection. It is taken after the products are manufactured or completed. It is a

technique of evaluating the quality of a product and of classifying the units into acceptable and
reject-able categories. Inspection controls are often called quality assurance. Design controls
after the products leave the plant are known as reliability.

STATISTICAL PROCESS CONTROL TQM TOOLS

SEVEN TOOLS OF QUALITY
1. PARETO DIAGRAM
 2. FLOW DIAGRAM
3. CAUSE AND EFFECT DIAGRAM
4. CHECK SHEETS
5. SCATTER DIAGRAM
6. CONTROL CHART
7. HISTOGRAM

NEW MANAGEMENT TOOLS

1. WHY, WHY
2. FORCED FIELD ANALYSIS
3. NOMINAL GROUP TECHNIQUE
4. AFFINITY DIAGRAM
5. INTER-RELATIONSHIP DIGRAPH
6. TREE DIAGRAM
7. MATRIX DIAGRAM
8. PRIORITIZATION MATRICES
9. PROCESS DECISION PROGRAM CHART
10. ACTIVITY NETWORK DIAGRAM STATISTICAL FUNDAMENTALS (Total
Quality Management,n.d.)

LESSON V. Lean Operating Systems

Lean thinking refers to approaches that focus on the elimination of waste in all forms, and
smooth, efficient flow of materials and information throughout the value chain to obtain faster
customer response, higher quality, and lower costs. Manufacturing and service operations that
apply the principles of lean enterprise are often called lean operating systems.
“Any activity, material, or operation that does not add value in an organization is considered
waste.”

Principles of lean operating systems

Four basic principles:
1. Elimination of waste
Lean, by the very nature of the term, implies doing only what is necessary to get the job
done. Any activity, material, or operation that does not add value in an organization is
considered waste. The goal is zero waste in all value creation and support processes in the
entire value chain.
Seven major categories of waste:
1. Overproduction
2. Waiting line
3. Transportation
4. Processing
5. Inventory
6. Motion
 7. Production defects
2. Increased speed and response
Lean operating systems focus on quick and efficient response in designing and getting
goods and services to market, producing to customer demand and delivery requirements,
responding to competitors’ actions, collecting payments, and addressing customer
inquiries is to synchronize the entire value chain.
3. Improved quality
Lean operating systems cannot function if raw materials are bad; processing operations are not
consistent; materials and tools are not located in the correct place; or machines break down. Poor
quality disrupt work schedules and reduce yields, requiring extra inventory, processing time, and
space for scrap and parts waiting for rework.

4. Reduced cost
Certainly, reducing cost is an important objective of lean enterprise. Anything that is done to
reduce waste and improve quality often reduces cost at the same time. More efficient equipment,
better preventive maintenance, and smaller inventories reduce costs in manufacturing firms.

Lean tools and approaches

The 5Ss
1. Sort refers to ensuring that each item in a workplace is in its proper place or identified as
unnecessary and removed
2. Set in order means to arrange materials and equipment so that they are easy to find and
use
3. Shine refers to a clean work area. Not only is this important for safety, but as a work area
is cleaned, maintenance problems such as oil leak can be identified before they cause
problems
4. Standardize means to formalize procedures and practices to create consistency and
ensure that all steps are performed correctly
5. Sustain means to keep the process going through training, communication, and
organizational structures.
Visual control
Are indicators for operating activities that are placed in plain sight of all employees so that
everyone can quickly and easily understand the status and performance of the work-system.
Single minute exchange of dies
Refers to the quick setup or change-over of tooling and fixtures in processes so that multiple -
products in smaller batches can be run on the same equipment.
Small batch and single-piece flow
One of the practices that inhibits increasing speed and response in manufacturing or service
processing of discrete parts such as a manufactured part, invoices, medical claims, or home loan
mortgage approval is batching-the process of producing large quantities of items as a group
before they are transferred to the next operation. Batching is often necessary when producing a
broad goods or service mix with diverse requirements on common equipment. When making
different goods, manufacturers often need to change dies, tools, and fixtures on equipment,
resulting in expensive time-consuming setups and teardowns. For services, preprinted forms or
software may have to be changed or modified. By running large batches, setups and teardowns
are reduced, providing economies of scale. However, this often builds up inventory that might
not match market demand, particularly in highly dynamic markets.
A better strategy would be to use small batches or single-piece flow. Single-piece flow is the
concept of ideally using batch sizes of one. However, to do this economically requires the ability
to change between products quickly and inexpensively.
Quality and continues improvement
Quality at the source requires doing it right the first time, and therefore eliminates the
opportunities for waste. Employees inspect, analyze, and control their own work to guarantee
that the good or service passed on to the next process stage conforms to specifications. Continues
improvement initiatives are vital in lean environments, as is teamwork among all managers and
employees. An important synergy exists between quality improvement and lean thinking.
Clearly, as an organization continuously improves its processes, it eliminates rework and waste,
thus making the processes leaner. Moreover, as an organization tries to make it self-leaner by
eliminating non value added activities and simplifying processes, it reduces the number of
opportunities for error, thus improving quality at the same time.
Total productive maintenance
Total productive maintenance is focused on ensuring that operating systems will perform their
intended function reliably. The goal of TPM is to prevent equipment failures and downtime-
ideally, to have zero accidents, zero defect, and zero failures in the entire life cycle of the
operating system. TPM seeks to
1. Maximize overall equipment effectiveness and eliminate unplanned downtime,
2. Create worker ownership of the equipment by involving employees in maintenance
activities, and
3. Foster continues efforts to improve equipment operation through employee
involvement activities. Because of its importance in lean thinking. TPM has been
called lean maintenance. Lean maintenance is more than preventing failures of
equipment and processes; it now includes maintenance and backup systems for
software and electronic network systems such as the internet or wireless networks.
Lean six sigma
Six sigma is useful and complementary approach to lean production.
For example, a cycle time reduction project might involve aspects of both. Lean tools might be
applied to streamline an order entry process. This application leads to the discovery that
significant rework occurs because of incorrect addresses, customer numbers, or shipping charges,
and results in high variation of processing time. Six sigma tools might then be used to drill down
to the root cause of the problems and identify a solution.Both are driven by customer
requirements, focus on real dollar savings, have the ability to make significant financial impacts
on the organization, and can easily be used in manufacturing environments. Both use basic root
cause, process and data analysis techniques.
However, some differences clearly exist between Lean production and Six sigma. First, they
attack different types of problems. Lean production addresses visible problems in processes; for
example, inventory, material flow, and safety. Six sigma is more concerned with less visible
problems; for example, variation in performance. In essence, lean is focused on efficiency by
reducing waste and improving process flow, whereas six sigma is focused on effectiveness by
reducing errors and defects. Another difference is that lean tools are more intuitive and easier to
apply by anybody in the workplace, whereas many six sigma tools require advanced training and
expertise of specialists, particularly in statistical analyses, commonly called black belts and
master black belts.
Lean Manufacturing and Service Topurs
Lean manufacturing plants look significantly different from traditional plants. They are clean and
organized, devoid of long and complex production lines and high levels of work in process have
efficient layouts and work area design, use multi-skilled workers who perform both direct and
indirect work such as maintenance, and have no incoming or final inspection stations. Next, we
tour a manufacturing firm to examine how it focuses on the four major lean objectives.
Timken Company
The Timken Company is a leading global manufacturer of highly engineered bearings and alloy
steel and related products and services for three major markets-industrial. Automotive and steel,
Timken employs about 18 000 employee in over 50 factories and more than 100 sales, design,
and distribution centers located throughout the world. Timken places increasing emphasis on pre
and postproduction services such as integrated engineering solutions to customer requirements.
Like most manufacturers, Timken faced intense, survival-threatening global competition. a key
Timken initiative was to increase productivity through lean manufacturing operating principles
and technologies, some of which we highlight next.
Eliminate waste: Timken’s automotive business uses a boot camp in which a certain factory
identifies several improvement opportunities, and Timken employees and managers from other
sites then try to solve these specific problems at the host factory. The problems of ten focus on
removing non value added steps from processes, reducing process and equipment variation, and
eliminating waste. The boot camp approach allows fresh eyes to evaluate improvement
opportunities and present solutions to host plant management.
Increase speed and response: Timken has focused on improving its product development
process- a nonmanufacturing, information –intensive process-with the objective to radically
reduce the total cycle time for new product development with fewer errors and to be more
responsive to customer requests, competitor capabilities, and marketplace changes.
Timken developed flexible manufacturing systems to facilitate rapid, cost effective changeover
from one product to another, combining the advantages of batch and mass production. Lean
manufacturing’s most distinguishing characteristic Timken, however, was the authority and
responsibility it gave to people on the shop floor. Initiatives aimed at empowering shop floor
employees included more open communication, enhanced training, widespread adoption of a
team approach of a team approach to problem solving and decision making, and changes in
measures of performance and rewards.
Improve Quality
Total quality and continues improvement have long been areas of focus for Timken. Through
programs like breakthrough and accelerated continues improvement, thousands of improvement
ideas have been implemented, saving millions of dollars. Quality standards are determined for all
manufacturing processes, and worldwide quality audits make sure that these standards are being
met. Each plant is certified to ISO 9000 or other quality certifications. Timken has applied six
sigma tools to minimize process variation. One initiative was to improve machine operator
efficiency and reduce variability. Workstation processes were standardized, and machine
operator walking and movement time were eliminated or reduced. The result was improved
quality and reduced scrap.
Reduce cost:
Timken redefined its mission statement in 1993 to be the best performing manufacturing
company in the world as seen through the eyes of our customers and shareholders.” Timken
factories, suppliers and customers share information using the internet. Purchasing, order
fulfillment, manufacturing strategy implementation, lean six sigma, and logistics have been
brought together to create an integrated supply chain model. The purpose of this focus is to
reduce asset intensity, improve customer service and systems support, respond faster to customer
needs, and better manage inventory levels.
Timken uses Lean six sigma to reduce waste and variation in production. All manufacturing
processes are flowcharted, and the DMAIC problem solving framework is used to generate
process improvements. The automotive business achieved a net documented savings of $7
million from lean six sigma projects in one year alone.
Service organizations can benefit significantly from applying lean principles, especially to back
room operations. Lean principles are not always transferable to front office services that involve
high customer contact and service encounters. In these situations, the service provider and firm
do not have complete control over creating the service. However, back-office service processes
such as hospital laboratory testing, check processing, and college application processing, are
nearly identical to many manufacturing processes. Time, accuracy, and cost are all important to
their performance, and therefore they can clearly benefit from the application of lean principles.
The following discussion shows how lean concepts have been used at southwest airlines.
Southwest airlines
Since its inception, Southwest Airlines has shown lean performance when compared to other
major airlines. It has consistently Bee profitable while other major airlines have not. The vast
majority of total airline cost focuses on operations management activities: traffic servicing 13% ,
aircraft servicing 7%, flight operations 47%, reservations and sales 10% and passenger in flight
service 7%. Note that the first three are low contact (back office) operations, whereas passenger
in flight service and reservation and sales are high contact, service management functions.
Therefore, taking a lean approach to all operations is vital to airline performance. Southwest is
clearly a lean airline- it does more with less than any other airline competitor; let us examine
some of the reasons.
Eliminate waste: In the airline industry, idle time is the largest form of waste. Southwest locates
its planes at non-congested airports to help it minimize airplane turnaround time. Fewer ancillary
services reduce the opportunity for waste and inefficiencies. Southwest also enjoys a much lower
employee turnover rate than its competitors, resulting in lower training costs.
All the resources at Southwest work to keep the airplanes in the air earning revenue-the primary
focus of its strategy. The more time spent on the ground, less revenue. It relies on motivated
employees, a culture focused on the customer, and teamwork to accomplish this strategy.
Southwest employees are cross trained and organized into teams to accomplish all key
operational activities. For examples, all employees cooperate to ensure timely take-off sand
landings; it is not unusual to see pilot helping load baggage if this will get the plane off on time.
This maintains smooth system schedules and reduces the need for re-schedules and re-ticketing,
both of which are form of rework. As one example, in as little as 15 minutes, southwest can
change the flight crew; deplane and board 137 passengers; unload 97 bags, 1000 pounds of mail,
and 25 pieces of freight; load another 123 bags and 600 pounds of mail; and pump 4500 pounds
of jet into the aircraft.
Increase speed and response: Southwest uses a much simpler structure and operating systems
than its competitors. It uses only one type of aircraft –the Boeing 737 making it easier to
schedule and train crews, perform maintenance, mange airplane parts inventory, and standardize
such activities as boarding, baggage storage and retrieval, and cabin operations. For example, if
southwest can turn its planes around on average in at most half an hour, whereas competitors
take one hour,Then, assuming a 901 minute flight, approximately one to two more flights per day
per plane can be made. This can be a significant economic and strategic advantages. Southwest
was the first airline to introduce ticketless travel. Customers simply get a confirmation number
and show up on time. A significant proportion of customers book their flights directly on
southwest .com. if a customer misses a flight, he or she can use the ticket for a future flight with
no penalty; this reduces paperwork and processing, contribution to a leaner operation.
Improve quality: Simplified processes reduce variability in flight schedules- a major source of
customer complaints- and therefore improve customer’s perceptions of a quality and satisfaction.
Southwest encourage carry-on baggage; hence, there is less opportunity for losing, misrouting, or
damaging baggage. People oriented employees are carefully chosen and empowered to both
serve and entertain passengers.
Reduce cost: Short setup and turnaround time translate into higher asset utilization and reduces
the need for costly inventories of aircraft. Southwest does not have assigned seating; customers
wait on a first-come, first –served basis and board in zones. This lower cost, and carry the high
overhead costs of airplane maintenance and repair, southwest outsources these tasks to third
parties.
Just in time was introduced at Toyota during the 1950s and 1960s to address the challenge of
coordinating successive production activities. An automobile, for instance, consists of thousands
of part. It is extremely difficult to coordinate the transfer of materials and components between
production operations. Traditional factories use a push system, which produces finished-goods
inventory in advance of customer demand using a forecast of sales. Parts and sub-assemblies are
pushed through the operating system based on a predefined schedule that is independent of actual
customer demand. In a push system, a model that might not be selling well is still produced at the
same predetermined production rate and held in finished- goods inventory for future sale,
whereas enough units of a model in high demand might not get produced.
Another problem was that traditional automobile production systems relied on massive and
explosive stamping press lines to produce car panels. The dies in the presses weighed many tons,
and specialists needed up to a full day to switch them for a new part. To compensate for long
setup times, large batch size were produced so that machines could be kept busy while others
were being set up. This resulted in high work in process inventories and high levels of indirect
labor and overhead.
Toyota created a system based on simple idea: produce the needed quantity of required parts
each day. This concept characterizes a pull system, in which employees at a given operation go
to the source of required parts, such as machining or subassembly, and withdraw the units as they
need them.
Then just enough new parts are manufactured or procured to replace those withdrawn. As the
process from which parts were withdrawn replenishes the items it transferred out, it draws on the
output of its preceding process, and so on. Finished goods are made to coincide with the actual
rate of demand, resulting in minimal inventories and maximum responsiveness.
JIT systems are based on the concept of pull rather than push. In a JIT system, a key gateway
workstation (such as final assembly) withdraws parts to meet demand and therefore provides real
time information to preceding work-station, the entire manufacturing process is synchronized to
the final assembly schedule. JIT operating systems prohibit all process workstations from
pushing inventory forward only to wait idle if it is not needed.
A JIT system can produce a steady rate of output to meet the sales ate in small, consistent batch
sizes to level loads and stabilize the operating system. This dramatically reduces the inventory
required between stages of the production process, thus greatly reducing costs and physical
capacity requirements.
Many supplier are asked to provide materials on a JIT basis to reduce inventories. Arriving
shipments are sent directly to production. To accomplish this, suppliers often locate their parts
warehouses close to final assembly factories. At the other end of the supply chain, distribution
centers and retails stores are located close to their customers to speed up delivery.
Operation of a JIT system
A simple, generic JIT system with two process cycles-one for the customer and a second for the
supply process-is shown in exhibit 13.2. Conceptually, the customer can be an internal or
external customer, and the customer –supply configuration in exhibit 13.2 can be chained
together to model a more complex sequence of production or assembly operations. In this
process, the supply cycle creates the good to replenish only what has been withdrawn by the
customer. The storage area is the interface and control point between the customer and supply
cycles.
Slips, called Kanban cards (Kanban is a Japanese word that means visual record or card) are
circulated within the system to initiate withdrawal and production items through the production
process. A Kanban is a flag or a piece of paper that contains relevant information for an order:
part number, description, process area used, time of delivery, quantity available, quantity
delivered, production quantity, and so on. Because of this a JIT system is sometimes called a
Kanban system.
The Kanban system begins when the customer buys or uses the good, and an empty container is
created. The withdraw Kanban authorizes the material handler to transfer empty containers to the
storage area. Withdraw Kanban trigger the movement of parts. The material handler detaches the
withdraw –ordering Kanban that was attached to the empty container and places the Kanban card
in the storage area or on the Kanban receiving post, leaving the empty container. A material
handler for the supply cycle places a production Kanban on the empty container, and this
authorizes the gateway workstation to produce parts. Production Kanban trigger the production
of parts. The container holds a small lot size of parts. Without the authorization of the production
Kanban, the gateway workstation and all other workstations may idle. The gateway workstation
must be scheduled to meet the sales rate, and it pulls parts from all other workstations. The other
workstation in the process do not need to be schedule because they get their production orders
from the production Kanban that pulls parts through the supply process. The supply process
returns a full container of parts to the storage area, with the production Kanban attached. The
Kanban process is of parts and takes the production Kanban card off the container. Normally, the
material handler drops off a withdrawal Kanban and empty container when picking up a full
container of parts.

JIT in service organizations

Although JIT has had its biggest impact in manufacturing, many service organizations are
increasingly applying it. At the Nashua Corporation, for example, a JIT –oriented study of
administrative operations reduced order –cycle time from three days to one hour, office space
requirement by 40 %, and errors by 95% percent, and increased productivity by 20 percent. One
overnight package delivery service saw its inventory investment climb from $16 million to $34
million with conventional inventory management techniques. Implementation JIT reduced its
inventory investment, but the company’s major objectives were to increase profits by providing
a 99.9% level of service to its customer. Before JIT implementation, its service level-computed
by dividing the number of items filled weekly by the number of items requested-was 79 percent.
After JIT, the level was 99% and the firm looked forward to meeting its goal. Baxter
international is another service company that has experienced the benefits of JIT system.
Some of the characteristics of a well-designed JIT system are summarized in exhibit 13.3.
However, lean principles can’t be blindly implemented in services without considering their
effects on customers, as Starbucks initiated a lean team that goes around the country with a Mr.
Potato toy used in a lean training program for Starbucks managers. Managers learn how to
assemble the toy in less than 45 seconds and apply the learning to their store processes. However
, customer service encounters may have suffered, as one customer wrote: customer come into
Starbucks—at least they did – to experience something that could only happen without lean-
friendly banter with the barista, sampling coffee or pastry, etc. Lean is best suited to assembly
lines and factories, not so for managing human interaction, which is never a repeatable routine.

LESSON VI: PROJECT MANAGEMENT

A project is a temporary and often customized initiative that consists of many tasks and activities
that must be coordinated and completed to finish the entire initiative on time and within the
budget. Suppose that a small business is considering expanding its facility. Some of the major
tasks in planning for expansion are hiring architects, designing a new facility, hiring contractors,
building the facility, purchasing and installing equipment, and hiring and training employees.
Each of these major tasks consists of numerous sub-tasks that must be performed in a particular
sequence, on time, and on budget. Taken together, these activities constitute a project.
In many firms, projects are the major value-creation process, and the major activities in the value
chain revolve around projects. Some examples are market research studies, construction, movie
production, software development, book publishing, and wedding planning. In other firms,
projects are used on an infrequent basis to implement new strategies and initiatives or for
supporting value chain design and improvement activities. Some examples are preparation of
annual reports, installing an automated materials–handling system, or training employees to learn
a new computer –support system.
In all project situations, project requires systematic management. Project management involves
all activities associated with planning, scheduling, and controlling projects. The 2004 Olympic
Games provide a good example of the importance of project management. The London 2012
Olympic organizing committee advertised for a variety of job opportunities, including project
management, and a post at blogspot.com. The London Olympics is a project that will unfold
before our very eyes, and what we will see, at least for the project management geeks among us,
is going to be a lot more amusing and instructive than the games themselves. Every four years,
another city faces similar project management issue.
Good project management ensures that an organization’s resources are used efficiently and
effectively. This is particularly important, because projects generally cut across organizational
boundaries and require the coordination of many different departments and functions, and
sometimes companies. In addition, most projects are unique, requiring some customization and
response to new challenges.
The project management institute reports that effective project management decreased failed
projects by 31 percent, delivered 30 percent of project under budget, and delivered 19 percent of
projects ahead of schedule.
Project management is becoming more important in achieving environmental, social, and
economic sustainability. New jobs are emerging, having titles such as environmental project
manager, health and safety manager, environmental auditor, and sustainability compliance
manager. Each of these requires project management skills. Green activities are becoming more
common in construction, waste management, procurement, recycling, and energy conservation
projects. Projects management skills are also essential to coordinate the multiple project
disciplines needed to successfully accomplish a project with complete or partial sustainability
objectives and desired outcomes.

The scope of project management

Most projects go through similar stages from start to completion. These stages characterize the
project life cycle and form the basis for effective project management.
 1. Define: projects are implemented to satisfy some need; thus , the first in managing a
project is to clearly define its goal, its responsibilities and deliverables, and when it must
be accomplished. A common way to capture this information is with a specific and
measurable statement of work. For example, the goal of an accounting audit might be;
audit the firm’s accounting and financial statements and submit a report by December 1
that determines statement accuracy in accordance with generally accepted accounting
principles in the Philippines. The audit fee shall not exceed 20000.
2. Plan: in this stage, the steps needed to execute a project are defined; it is determined who
will perform these steps; and the start and completion dates are developed. Planning
entails breaking down a project into smaller activity and scheduling them so they meet
the project due date.
3. Organize: organizing involves such activities as forming a team, allocating resources
calculating costs, assessing risk, preparing project documentation, and ensuring good
communications. It also requires identifying a project manager who provides the
leadership to accomplish the project goal.
4. Control: this stage assesses how well a project meets its goals and objectives and makes
adjustments as necessary. Controlling involves collecting and assessing status reports
managing changes to baselines, and responding to circumstance that can negatively
impact the project participants.
5. Close: closing a project involves compiling statistics, releasing and or reassigning people,
and preparing a lesson learned list.
Roles of the project manager and team members
Project managers have significant responsibilities. It is their job to build an effective team,
motivate them, provide advice and support, align the project with the firm’s strategy, and direct
and supervise the conduct of the project from beginning to end. In addition to managing the
project, they must manage the relationships among the project team, the parent organization, and
the client. The project manager must also have sufficient technical expertise to resolve disputes
among functional specialists.
1. Good project managers recognize that people issues are as important as technical issues.
Several principles can help project managers be successful.
2. Manage people individually and as a project team.
3. Reinforce the commitment and excitement of the project team.
4. Keep everyone informed.
5. Build agreements and consensus among the team
6. Empower the project team.
Organizational structure
How a project fits into a firm’s organizational structure impacts its effectiveness. Some
organizations use a pure project organizational structure whereby team members are assigned
exclusively to projects and report only to the project manager. This approach makes it easier to
manage projects and report teams can be designed for efficiency by including the right mix of
skills. However, it can result in inefficiencies because of duplication of resources across the
organization; For example having a different information technology support person on each
project.
A pure functional organizational structure charters projects exclusively within functional
departments, such as manufacturing or research and development. Although this approach allows
team members to work on different projects simultaneously and provides a home for the project,
it ignores an important reality: in a typical functional organization, a project cuts across
organizational boundaries. Assigning projects exclusively to functional areas makes
communication across the organization difficult and can limit the effectiveness of projects that
require a systems perspective.
A practical solution to this dilemma is a matrix organizational structure, which lends resources to
projects while still maintaining control over them. Project managers coordinate the work across
the function. This minimizes duplication of resources and facilities communication across the
organization but requires that resources be negotiated. Functional managers may be reluctant to
provide the resources, and employee assigned to projects might relegate a project to a lower
priority than their daily functional job, making it difficult for the project managers to control the
project.
Factor for successful projects
Projects are not always successful. Information technology projects have a notorious rate of
failure. One study in the united states found that over 30 percent of software projects are
canceled before completion, and more than half cost almost double their original estimates.
Ensuring project success depends on having well defined goals and objectives, clear reporting
relationships and channels of communication, good procedures for estimating time and other
resource requirements, cooperation and commitment among all project team members, realistic
expectations, effective conflict resolution, and top management sponsorship.

Techniques for Planning, Scheduling and Controlling Projects

All project management decisions involve three factors: Time, resources and cost. Various
techniques have long been used to help plan, schedule, and control projects. The key steps
involved are the following.
1. Project definition: Identifying the activities that must be completed and the sequence
required to perform them.
2. Resource planning: for each activity, determining the resources needs: personnel, time,
money, equipment, materials, and so on.
3. Project scheduling: specifying a time schedule for the completion of each activity.
4. Project control: establishing the proper controls for determining progress and developing
alternative plans in anticipation of problems in meeting the planned schedule.
Several software packages, such as Microsoft project, are available to help project managers plan
and manager projects. Although we will not discuss such software in detail, we will introduce the
underlying techniques that are in Modern project management software.
To illustrate how these steps are applied in project management, we will use a simple example.
Wildcat software consulting Inc. helps companies implement software integration projects. Raj
Yazisi has been named the project manager in charge of coordinating the design and installation
of the new software system. In the following sections, we address the various tasks involved in
project definition, resource planning, project scheduling, and project control that he will in his
role as project manager.
Project definition
The first step is to define the project objectives and deliverables. Mr. Yasizi and his project team
decided on the following statements:
Project objective: to develop an integrative software package within a predetermined budget
and promised project completion date that meets all system requirements while providing
adequate interfaces with legacy systems.
Deliverables (1) new software package, (2) successful implementation of the package,(3) pre-
training of sale force and PC system operators.
Next, Mr. Yasizi needed to identify the specific activities required to complete the project and
the sequence in which they must be performed. Activities are discrete tasks that consume
resources and time. Immediate predecessors are those activities that must be completed
immediately before an activity may start. Precedence relationships ensure that activities are
performed in the proper sequence when they are scheduled.
For instance, activities A and B can be started at any time because they do not depend on the
completion of prior activities. However, activity C cannot be started until both activities A and B
have been completed. Mr Yazisi and his team reviewed and discussed the list several times to be
sure that no activities were omitted from the project definition.
Defining the list of activities in a project is often facilitated by creating a work breakdown
structure, which breaks a project down into manageable pieces, or items, to help ensure that all
of the work elements needed to complete the project are identified. The work breakdown
structure is a hierarchical tree of ends items that will be accomplished by the project team during
the project. a work breakdown structure allows project teams to drill down to the appropriate
level of detail in defining activities. For example, Activity A might be broken down into
individual tasks of defining the objectives, developing the budget, determining the due date, and
identifying staff. Deciding on the appropriate work breakdown structure depends on how
responsibility and accountability for accomplishing the tasks are viewed, and the level at which
the project team wants to control the project budget and collect cost data.
The activities and their sequence are usually represented graphically using a project network. A
project network consists of a set of circles called nodes, which represents activities and a set of
arrows called arcs, which define the precedence relationships between activities. This is called an
activity –on-node (AON) network representation.
Resource planning includes developing time estimates for performing each activity, other
resources that may be required, such as people and equipment, and a realistic budget. Activity
times can be estimated from historical data of similar work tasks or by the judgment and
experience of managers and employees who perform the tasks. Cost control is a vital part of the
cost of completing the activities in the software integration project.
Project scheduling with the critical path method
The critical path method is an approach to scheduling and controlling project activities. The
critical path is sequence of activities that makes the longest time and defines the total project
completion time. Understanding the critical path is vital to managing a Project because any
delays of activities on the critical path will delay the entire project.
CPM assumes the following:
 the project network defines a correct sequence of work in terms of technology and
workflow.
 Activities are assumed to be independent of work in terms of technology and finish dates.
 The activity time estimates are accurate and stable.
 Once an activity is started, it continues uninterrupted until it is completed.

Project network for the software integration project:

A G
H J

C D K
I

B E F

Annotation: To better understand the CPM, I provided here another illustration.

Wildcat Software Consulting Inc. Project Work Activities TIME and Cost
Activit Activity Description Immediate Normal Normal
y letter predecessors time cost
(in weeks) Estimate
(Php)
A Define software objectives, budgets, due None 3 1200
date, and possible staff
B Inventory new and old software None 5 2500
interfaces and features
C Assemble teams and allocate work A,B 2 500
D Design and develop code from old to C 6 300
new databases
E Design and develop code For PC C 5 6000
network
F Test and debug PC network E 3 9000
G Design and develop code for off-site C 4 4400
sales
H New complete system test and debug D,G,F 3 3000
I Train PC system test and debug D,F 4 4000
J Train off-sites sales force H 2 3200
K Two week beta test new system with I,J 2 1800
legacy back up system
 Annotation:
These letters represent on what you see on the CPM network.
This part describes of what activity these letters being represented.
This part, simply describes what letter activity comes before another letter activity will start.
This part describes the allotted time duration for each letter activity.
This part describes how much each letter activity will cost in
finishing the letter activity.
Project control
A schedule specifies when activities are to be performed. A schedule enables a manager to assign
resources effectively and to monitor progress and take corrective action when necessary.
Because of the uncertainty of task times, unavoidable delays, or other problems, projects rarely,
if ever, progress on schedule. Managers must therefore monitor performance of the project and
take corrective action when needed.

Time/Cost trade –offs

One of the benefits of the critical path method is the ability to consider shortening activity times
by adding additional resources to selected activities and thereby reducing the overall project
completion time. This is often referred to as crashing. Crashing a project refers to reducing the
total time to complete the project to meet a revised due date.
However, doing so does not come without a cost. Therefore, it is necessary to evaluate the trade-
off between faster completion times and additional costs.

Uncertainty in project management

Another approach to project management that was developed independently of CPM is called
PERT (project evaluation review technique). PERT was introduced in the late 1950s specifically
for planning, scheduling, and controlling the Polaris missile project. Because many activities
associated with that project had never been attempted previously, it was difficult to predict the
time needed to complete the various tasks. PERT was developed as a means of handling the
uncertainties in activity completion times. In contrast, CPM assumes that activity times are
constant.
Any variation in critical path activities can cause variation in the project completion date. Also,
if a non- critical activity is delayed long enough to expend all of its slack time, that activity will
become part of new critical path, and further delays there will extend the project completion
date. The PERT procedure uses variance in the critical path activities to understand the risk
associated with completing the project on time.
When activity times are uncertain, they are often treated as random variables with associated
probability distributions. Usually three times estimates are obtained for each activity.
Optimistic time: the activity time if everything progresses in an ideal manner.
Most probable time: the most likely activity time under normal conditions
Pessimistic time: the activity if significant breakdowns and /or delays.

IV. Activities:
 A. Academic (i.e. research, case analysis, reaction paper, exercises, etc.)
1. Prepare a reflection paper for lessons1, 3, and 4.
1. What do think you did well during this lesson?
2. Describe your learning experience and how you think it went?
3. What are the significant lessons that might help you as a student and in your
future career?
2. Exercise 1: In column A represents the most well-known Gurus of TQM. In column
B are their contributions in total quality management. For each item in column B, write
the corresponding Gurus who made this contribution to TQM which you can find at
column A.
A.TQM GURUS B.CONTRIBUTIONS
A. Philip Crosby 1. Zero defects is the quality performance standard
B. 2. Train the organization in quality improvement
techniques
Dr.Armand Feigenbu 3. PDCA Problem Solving Process
m 4. Remove barriers that rob people of pride of
C. Dr. Walter Shewhart workmanship.
D. Dr. Kaoru Ishikawa 5. Quality is everybody’s job, but because it is
E. Dr. Joseph Juran everybody’s job, it can become nobody’s job without
F. Dr. Genichi Taguchi the proper leadership and organization.
G. Dr. Edwards Deming 6. Quality planning (financial budgeting) – create
process that will enable one to meet the desired goals
7. Plan
8. Institute training on the job for all, including
management, to make better use of every employee.

Discussion Questions (lesson 5)

1) Provide some examples of different types of waste in an organization with which
you are familiar, such as an automobile repair shop or a fast food restaurant.
2) Recycle technologies manufactures and sell recycled antifreeze that is 20 percent
cheaper and has a carbon footprint about 80 percent smaller than new antifreeze
made from original raw materials. The company is trying to reduce waste in the
traditional antifreeze supply chain. Would you buy this recycled antifreeze and
put it into your vehicle? Explain the pros and cons of your decision.
Discussion questions: (Lesson 6)
1. The local chapter of the project management institute is planning a dinner meeting with a
nationally known speaker, and you are responsible for organizing it. How could the
methodology discussed in this chapter help you?

B. Life Activity:
Choose only two from these activities.
 1. From the definition given on this lesson; Total Quality Management (TQM) is an
enhancement to the traditional way of doing business. TQM is the application of
quantitative methods and human resources to improve all the processes within an
organization and exceed CUSTOMER NEEDS now and in the future.
Using your materials at home, find a certain product, list and study of its quality features.
After studying the quality features of your chosen product, think of a possible
improvement that you can make to enhance its quality features.
2. Think of a certain task at home, at your community, or your organization. Choose a
principle proposed by any of the TQM Gurus, apply your desired principle on how to
accomplish this task.
3. Instruction: From the lessons above, use the dimension of product and services as your
reference for evaluation. Choose your best product and service. Note: you can only select
1 product and 1 service being rendered. Make a review for the dimension of your chosen
product and service. Present your review in a two – three minutes recorded audio or video
clip.
4. At your particular task at home, at your community or at your organization.
Using the steps in Quality Control improve your task, assignment or designation by
designing your own Quality Control. Please follow the step by step procedures.
The process of quality control consists of the following steps:
I. Determination of quality standards-specification of desired quality level in terms of
weight, specific dimension, strength, chemical composition, etc.
II. The design of the production system which would be compatible to the achievement of
the specified quality.
III. Control action to ensure that established quality standards are met.
IV. Inspection of produced products to see if the overall quality of lots satisfies the
specifications.
5. Find an application of project management in your own life (e.g., in your home,
fraternity/sorority/ or business organization). List the activities and events that comprise the
project, and draw the precedence network. What problem did you encounter in doing this?

V. Assessment
1. Academic activity:30%
Skills
Depth of 5 Demonstrate a conscious and thorough understanding of the
reflection subject. This reflection can be used as an example for other
students.
4 Demonstrate a thoughtful understanding of the subject matter.
3 Demonstrate a basic understanding of the subject matter.
2 Demonstrate limited understanding of the subject matter. This
reflection needs revision
1 Demonstrate little or no little understanding of the subject
matter. This reflection needs revision.
Use of textual 5 Use specific and convincing examples from the texts studied to
evidence support claims in your own writing, making insightful and
applicable connections between texts.
4 Use relevant examples from the texts studied to support claims
in your own writing, making applicable connections between
texts
3 Use examples from the texts to support most claims in your
writing with some connections made between texts.
2 Use incomplete or vaguely developed examples to only partially
support claims with no connections made between texts
1 No examples from the text are used and claims made your own
writing are unsupported and irrelevant to the topic at hand.
Language used 5 Use language that is precise and engaging, with notable sense of
voice, awareness of audience and purpose and varied sentence
structure.
4 Use language that is fluent and original, with a sense of voice,
awareness of audience and purpose, and purpose and the ability
to vary sentence structure.
3 Use basic but appropriate language, with a basic sense of voice ,
some awareness of audience and purpose and some attempt to
vary sentence structure
2 Use language that in vague or imprecise for the audience or
purpose , with little sense of voice , and limited awareness of
how to vary sentence structure.
1 Use language that is unsuitable for the audience and purpose ,
with little or no awareness of sentence structure.
Conventions 5 Demonstrate control of the conventions with essentially no
errors, even with sophisticated language
4 Demonstrate control of the conventions exhibiting occasional
errors only when using sophisticated language
3 Demonstrate partial control of the conventions exhibiting
occasional errors that do not hinder comprehension
2 Demonstrate limited control of the conventions, exhibiting
frequent errors that make comprehension difficult.
1 Demonstrate little or no control of the conventions, making
comprehension almost impossible.

2. Life activity Criteria;30%

Clarity of ideas-20%
Lesson applied-20%
Values learned-50%
Punctuality -10%
 3. Online Quiz-40%
References:
Total Quality Management [PDF file].Retrieved from
https://www.academia.edu/37213047/TOTAL_QUALITY_MANAGEMENT_notes
Focus.(2016,JUNE 12).Quality Gurus and their Key Contributions. Retrieved from
https://www.focusstandards.org/quality-gurus-key-contributions/
MSG.(n.d).TQM models .Retrieved from
https://www.managementstudyguide.com/total-quality-management-models.htm
(Deming Prize,”n.d.). Retrieved from. https://en.wikipedia.org/wiki/Deming_Prize
Malcolm Baldrige Criteria for Performance Excellence [PDF file]. Retrieved from
http://www.asq104.org/app/download/557659904/The+Malcolm+Baldrige+Criteria+for+Perfor
mance+Excellence+200910.pdf
How to establish Quality Control Processes. (2019, June 23.). Retrieved from
https://www.score.org/blog/how-establish-quality-control-processes
Knowledgiate Team. (2017, October 1.).Scope of Quality Control. Retrieved from
https://www.knowledgiate.com/steps-and-scope-of-quality-control/
Total Quality Managemen[PDF file]. Retrieved from
https://www.academia.edu/37213047/TOTAL_QUALITY_MANAGEMENT_notes
Collier, D.A, Evans, J. Lindsay, W. (2019). Operations Management and TQM. Philippines.
Cengage

Prepared by:

Ms. Marites B. Vargas

Instructor

Checked by: Reviewed by: Noted:

Vivian E. Asacta, CPA Vivian E. Asacta, CPA Daria A. Tolentino, CPA,

MBM
Program Head, Area Coordinator (CBME1) Dean, Department of
(BSA/BSENTREP) Accountancy and
Entreprenuership

Recommended by: Approved by:

Randall B. Pasco, MBM Alvaro T. Dioquino, Jr.

CLAMDEV Focal Person, Director, CLAMDEV
(DAE)