TQM MIDTERMS 3.
Technology & Innovation:
Implementing automation, AI, or
BUSINESS IS A GAME new tools.
Internet 4. Performance Metrics: Tracking
E-business KPIs, quality control, and efficiency.
Technology
TECHNOLOGY
Product and Service Apple's Organizational Strategy
Research and Development Focuses on innovation, premium
Process branding, and ecosystem
Input > Process > Quality Control > integration.
Output
*Analysis > Repair Apple's Operational Strategy To
Information support its high-level goals, Apple
More Information focuses on supply chain excellence,
manufacturing efficiency, and
STATEGIC PLAYERS product quality.
Organization Strategy
Operation Strategy SIX SIGMA METHODOLOGIES:
DMAIC Framework (For Existing
ORGANIZATION STRATEGY Processes):
The long-term vision and
direction of a company. It defines Define: Identify the problem
what the organization wants to and goals.
achieve and how it positions itself Measure: Collect data on
in the market. current performance.
Analyze: Find the root causes of
Key Focus Areas: defects.
1. Mission & Vision: What the Improve: Implement solutions
company stands for and its long- to eliminate defects.
term goals. Control: Maintain
2. Competitive Positioning: improvements over time.
Differentiation, cost leadership, or DMADV Framework (For New
niche focus. Processes):
3. Growth Strategies: Expansion,
mergers, acquisitions, or Define, Measure, Analyze,
diversification. Design, Verify
4. Resource Allocation: Decisions
on where to invest, such as R&D, COMPANIES USE DATA-DRIVEN
marketing, or HR. TOOLS TO IDENTIFY AND SOLVE
PROBLEMS:
OPERATIONAL STRATEGY 1. Pareto Chart: Prioritizes major
The short-to-mid-term plan for causes of defects (80/20 rule).
efficiently running business 2. Fishbone Diagram (Ishikawa):
operations to support the Finds root causes of a problem.
organizational strategy. It defines
how the company will deliver on its A visual way to look at cause and
strategic goals. effect. It is a more structured approach
than some other tools available for
Key Focus Areas: brainstorming causes of a problem.
1. Process Optimization: Improving
supply chain, production, and The problem or effect is
logistics. displayed at the head or mouth
2. Cost Control: Reducing waste and of the fish.
improving efficiency. Possible contributing causes
are listed on the smaller "bones"
under various cause categories.
3. Process Mapping: Visualizes 2. Inventory: Excess raw
workflow inefficiencies. materials or products.
3. Motion: Unnecessary employee
4. Statistical Process Control
movements.
(SPC): Uses data to monitor
4. Waiting: Delays in production
process variations.
or service.
5. Failure Mode and Effects 5. Overproduction: Producing
Analysis (FMEA): Predicts more than needed.
potential failure points. 6. Overprocessing: Doing extra
work that doesn't add value.
7. Defects: Errors that require
rework.
80-20 Rule:
TOYOTA & MCDO
A principle that asserts that 80%
of outcomes (or outputs) result
from 20% of all causes (or Implemented "Made-for-You"
inputs) for any given event. Kitchen System Food is
prepared only when ordered.
LEAN SYSTEM
A data-driven methodology
used to improve business Optimized Workflow Using
processes by reducing defects 5S Sort, Set, Shine, Standardize,
and variations. It focuses on Sustain—for an organized
efficiency, quality, and kitchen.
customer satisfaction by Implemented Just-in-Time
(JIT) Manufacturing Cars are
identifying and eliminating
produced only when there is
errors in processes. customer demand.
Key Principles of Lean (5 Lean Used Kanban A visual workflow
system to control production
Principles):
levels and prevent
1. Value: identify what customers overproduction.
consider valuable and focus on
KAIZEN CYCLE FOR CONTINUOUS
delivering it.
IMPROVEMENT
2. Value Stream Mapping: Analyze
all steps in a process and remove Get Employees Involved:
Engage employees in the
non-value-added activities.
process.
3. Flow: Ensure work moves smoothly Gather a List of Problems:
and continuously without delays. Identify areas for Improvements.
Encourage Solutions:
4. Pull System: Produce only what is Brainstorm and choose an idea.
needed based on actual demand, Test the Solution: Implement
avoiding overproduction. and assess its effectiveness.
Regularly Measure and
5. Continuous Improvement Analyze the Results: Track
(Kaizen): Make small, continuous progress and identify areas for
refinement.
improvements to enhance
If Successful, Adopt the
efficiency and reduce waste. Solution: Implement the
SIX SIGMA: Focused on reducing changes permanently.
Repeat on an Ongoing Basis:
defects.
Continue the cycle for new or
LEAN SYSTEM: Focused on reducing unresolved issues.
waste.
CHALLENGES IN OPERATIONS
TYPES OF WASTE IN LEAN (7 MANAGEMENT
WASTES - "TIMWOOD"):
1. Transportation: Unnecessary Technology & globalization
Changing customer
movement of materials.
expectations
Changing workforce
The loss of manufacturing Effective integration of IT
jobs No intermediaries
Building sustainability
Service
Great emphasis on service
Value Chain A network of facilities Customer loyalty card
and processes that describe the flow
of goods, services, information, and ADDITIONAL ACTIVITIES IN THE
financial transactions. VALUE CHAIN:
Infrastructure: A set of support
activities such as management,
planning, finance, etc.
Human Resource Management:
Employee remuneration,
motivation, training, and
development.
HOW TO INCREASE VALUE? Technology Development: Use
of technology to increase
Increase perceived benefits while efficiency.
holding price/cost constant. Procurement: Purchase of assets
Increase perceived benefits while and raw materials.
reducing the price or cost.
Decrease price or cost while SUPPLY CHAINS
holding perceived benefits
constant. The portion of the value chain that
focuses on the physical movement of
goods and materials and supporting
flows of information and financial
transactions through the supply,
production, and distribution processes.
OFFSHORING & OUTSOURCING
Offshoring: Building, acquiring, or
moving process capabilities from a
domestic location to another
country location, while maintaining
ownership and control.
OFFSHORING BENEFITS:
STARBUCKS VALUE-CHAIN 1. Reduces labor costs by moving
ANALYSIS FOR THE UK MARKET operations to countries with lower
hourly rates.
Inbound Logistics 2. Creates skilled employment
opportunities in the home country
Strategic relationships with for administrative and operational
suppliers roles.
Effective supply-chain 3. Minimizes risks, enabling better
management client support.
4. Maintains complete control over
Operations operations, unlike outsourcing.
5. Generates new revenue by
607 stores in two formats: boosting demand for products,
company-operated & licensed especially high-tech items, in
Convenient store locations destination countries.
Marketing & Sales 6. high-tech items.
Reliance on word-of-mouth MEASURING PERFORMANCE IN
marketing OPERATIONS AND STRATEGY:
Competitive CSR initiatives (MIT,
2012) Measurement: Defined as "The act
of quantifying the performance
Outbound Logistics
criteria of organizational units, performance (internal focus) for all
goods and services, processes, service encounters.
people, and other business
activities." Every service encounter provides an
opportunity for error. Errors in service
DIFFERENT PERFORMANCE creation and delivery are sometimes
MEASURES: called service upsets or service
failures.
The listed measures are:
5. Time:
Financial
Customer and Market Processing time is the time it takes
Safety to perform some tasks.
Quality Queue time is a fancy word for wait
Time time—the time spent waiting.
Flexibility
Innovation and Learning. 6. Flexibility:
1. Financial: Flexibility is the ability to adapt
quickly and effectively to changing
Revenue requirements.
Return on investment Goods and service design flexibility
Operating profit is the ability to develop a wide
Pretax profit margin range of customized goods and
Asset utilization services to meet different or
Growth changing customer needs.
Revenue from new goods and Measures include the rate of new
services product development or percent of
Earnings per share product mix developed over the
Other liquidity measures past three years.
2. Customer and Market: 7. Volume Flexibility:
Customer-satisfaction Volume flexibility is the ability to
measurement systems provide a respond quickly to changes in the
company with customer ratings of volume and type of demand.
specific goods and service features Measures include the time to
and indicate the relationship change machine setups or time
between those ratings and the required to "ramp up" to an
customer's likely future buying increased production volume.
behavior.
8. Innovation and Learning:
3. Safety:
Innovation: The ability to create
Measuring safety is vital to all new and unique goods and services
organizations, as the well-being of that delight customers and create a
its employees and customers competitive advantage.
should be an organization's Learning: Refers to creating,
principal concern. Moreover, safety acquiring, and transferring
enhances employee productivity knowledge, and modifying the
and morale in all types of behavior of employees in response
organizations. to internal and external changes.
4. Quality Measures of Innovation and
Learning:
Quality measures the degree to
which the output of a process 1. Intellectual asset growth.
meets customer requirements. 2. Patent applications.
Goods quality relates to the 3. Best practices implemented.
physical performance and 4. New product development.
characteristics of a good. 5. Employee training and skills
Service quality is consistently development.
meeting or exceeding customer 6. Employee satisfaction.
expectations (external focus) and 7. Work system performance and
service delivery system effectiveness.
Environment, Relationships, and
Challenges:
1. Leadership
2. Strategic Planning
3. Customer Focus
Explanation: Productivity increases 4. Measurement, Analysis, and
when output increases for a Knowledge Management
constant input level or input 5. Workforce Focus
decreases for a constant output 6. Operations Focus
level. 7. Results
BALDRIDGE PERFORMANCE
EXCELLENCE FRAMEWORK
Purpose: A framework for
performance excellence through
self-assessment.
o Helps identify organizational
strengths and weaknesses.
o Assists in setting priorities for
improvement.
How Did It Start?
William Edwards Deming,
considered the father of the
modern quality movement, took his
talents to Japan after being
underappreciated in the US.
o He helped organizations like
Toyota and Sony improve
processes, reduce defects,
and focus on what workers
and customers value.
o This led Japanese
organizations to gain market
share previously dominated
by American firms.
Public and private sector leaders in
the US developed a plan to
encourage Japanese-style
operational excellence:
o In 1987, Congress passed
legislation to establish the
Malcolm Baldrige National
Quality Award (named after
Secretary of Commerce
Malcolm Baldrige).
o It is managed by the
National Institute of
Standards and
Technology (NIST) within
the Department of
Commerce.
Goals of the Award:
1. Recognize outstanding quality and
performance excellence.
2. Highlight best practices and
principles that lead to better
results.
Organizational Profile:
