Quality Management System in BHP Billiton Limited - Assignment Example

Name : xxxxxx Tutor : xxxxxx Title : Quality management system in BHP Billiton limited Course : xxxxxx Institution : xxxxxx @ 2010 Executive summary BHP Billiton has grown immensely such that it featured among the top forty big companies in Australia according to the reports of Forbes, a company that classifies other companies in terms of their market capitalization and development. BHP Billiton has ensured that the quality management system is well development within the structure of the company which has resulted to high performance of the company. The appraisal of the system shows that, the system is well integrated in all the areas and departments of the company to ensure efficiency of the output of the company. Table of Contents 1. Introduction ………………………………………………………………………………4 2. Quality management system in BHP Billiton …………………………………………..4 3. Contribution of quality system to BHP Billiton missions and strategic objectives…………………………………………………………………………………….5 4. Integration of Human Resource Management and the quality system in BHP Billiton Company…………………………………………………………………………………….6 5. Costs associated with BHP Billiton quality system …………………………………….7 6. Evaluation of BHP Billiton Company quality system …………………………………9 7. Relevance of standardization and continuous improvement of the quality system of BHP Billiton Company …………………………………………………………………..9 8. Recommendations …………………………………………………………………….10 9. References ………………………………………………………………………………11 1. Introduction Quality management is a system adopted by top managers and acts as an organization guide to help them improve their performance as it is noted by Evans (2008). The principle behind this quality management focuses on customer focus, process approach and the activities dealing with leadership, approaches to decision making and system approach towards management (Kruger 2001). This management system has three components which include quality assurance, quality control and quality improvement. This system is therefore not only concerned with product or service quality but also on the means of achieving of it. The research will cover the following aspects; it will elaborate on the quality management systems within BHP Billiton, contributions of the quality management system within the company, Integration in relation to human resource Management and the quality system in BHP Billiton Company , Furthermore the research will elaborate on the Integration of Human Resource Management and the quality system in BHP Billiton Company, Costs associated with BHP Billiton quality system incorporation of the relevance of standardization and continuous improvement of the quality system of BHP Billiton Company and finally possible recommendations for future prosperity of the company. (Kruger 2001). The management of BHP Billiton which is the largest mining company in the world has incorporated quality management system towards its quench for improving the performance of the company. The quality management system manager of BHP Billiton uses quality assurance to obtain a consistent quality. It is the aim of quality management system to attain and meet the international standards together with meeting the customer needs Shen (2000). This company incorporated quality management system in the identification and the exploring of Olympic Dam which is large copper mining deposit. In this case BHP Billiton Company structured and designed a quality management system whose aim was to ensure that the company meets its planned objectives together with complying with the statutory requirements of the Refinery and Analytical Laboratory. It was also the main aim of this system to ensure that the company achieves a continued improvement in performance (Kruger 2001). This shows that BHP Billiton has a quality management system which encourages consistency in resource allocation hence assuring customers of the reliability of its services and operation. 3. Contribution of quality system to BHP Billiton missions and strategic objectives It’s the main aim or objectives of every company to achieve high sales and this is through obtaining a high market share and this applies to BHP Billiton Company as well (Kruger 2001). The main purpose of quality system is to improve a company’s performance through improved quality of products. Performance in the market means the ability of a company to meet its customer’s needs and demands. It is through the incorporation of the quality system that BHP Billiton that the company will work hard to achieve high product quality and product differentiation and hence obtaining a competitive advantage as noted by Shen (2000). One of the principles of quality system is to define approaches to decision making, this means that the system has a decision support system which enables the managers to make decisions pertaining the target markets or the customers. It’s through this quality system that decisions in BHP Billiton concerning target markets or customers are done hence the achievement of the company’s objective of achieving voluminous sales through obtaining a high market share (Kruger 2001). Decision making is one of the steps towards the achievement of target markets and therefore quality system in BHP Billiton has contributed to its achievement of its objective of market competition through product differentiation and market definition. Quality system is customer based in that it’s through the system that the top managers work towards the satisfaction of customers needs. This is by ensuring that the company supplies goods which meet the international standards or which are quality assured (Kruger 2001). One of the objectives of BHP Billiton Company is to ensure adequate supply of goods and services to the customers and hence ensuring adequate satisfaction of the customers. Therefore the use of quality system enables the company to achieve its objective of ensuring customer satisfaction. It is therefore evident that the use of quality management system in BHP Billiton has enabled it meet its objectives together with attaining its mission. 4. Integration of Human Resource Management and the quality system in BHP Billiton Company The purpose of Human resource management in BHP Billiton Company is to ensure adequate utilization of the human capital in the company to enhance the company’s performance. Quality management system in BHP Billiton is a very important feature of the top management and especially the Human Resource Management that is resource management is one of the categories of quality management system (Shen 2000). Human resource management has been integrated in BHP Billiton as shown by the way the company has been advertising its job vacancies through the internet to enable all qualified personnel to access and apply (Kruger 2001). It’s the purpose of quality system of BHP Billiton Company to ensure adequate control in the company which has ensured that the integrity and the reliability of the company is upheld and this has been achieved by the Human Resource Management ensuring that they employ a qualified personnel. When a company’s personnel are well qualified, then it’s highly possible for the company to control the quality of its activities and services. The quality system of BHP Billiton has highly applied or integrated Human Resource Management to assign responsibilities to different personnel, allocate resources adequately in the company, they give instructions on how to execute the processes and also to propose the effective methods to evaluate or monitor the progress of the company processes (Kruger 2001). The fact that BHP Billiton Company has been able to uphold its integrity then it means that the Human Resource Management is fully integrated into the company’s management system for the purposes of a thorough induction of its personnel. The Human Resource Management of BHP Billiton Company will therefore ensure that it recruits personnel who will work towards the achievement of quality objectives as noted by Parker (2000). 5. Costs associated with BHP Billiton quality system Different costs have been associated with the BHP Billiton quality system and they range from the cost of implementation to the costs of maintenance. According to Parker (2000), there is various costs which have been associated with the introduction of quality system in BHP Billiton Company which include prevention costs, appraisal and failure costs. The prevention costs are the costs which are involved in the process of designing, implementing and maintenance of the quality system. BHP Billiton Company incurred these costs before the quality system started to be operational (Kruger 2001). The prevention costs incurred by the company include the costs of training the company personnel on the development and maintenance of the system, the costs of ensuring that the system is of a high quality, the cost of specifying the requirements of the products or materials which are to be input into the system and the costs of planning to ensure that the system is highly reliable hence quality output (Evans 2008). Other costs incurred by BHP Billiton Company are the appraisal costs which are the costs which are involved in the process of evaluating whether the products purchased match the specification in them and this evaluation is done by the customers and the suppliers (Kruger 2001). The appraisal costs incurred by BHP Billiton Company include the costs of inspection and verification of the mining products to ensure that they agree with the given specification and the costs incurred to ensure that a quality audit takes place to determine the functionality of the system. BHP Billiton Company also incurred failure costs which include internal and external costs. For example BHP Billiton Company had earlier detected a problem associated with the shipping of the oil products to its customers but the results of this problem did not reach the quality standards meaning that the problem was not executed and as result internal failure cost was incurred (Shen 2000). These costs include the costs by BHP Billiton Company to ensure that the defects or errors were corrected and the costs involved in the process of evaluating the causes of the failure. External failure costs are the costs that are involved when the products of a company fail to reach the quality standards and are not detected until they are received by the customer (Kruger 2001). BHP Billiton Company also incurred these external costs which included the costs of dealing with customer’s complaints, costs of returns like transport and investigations and the cost of replacing the returned mining products. 6. Evaluation of BHP Billiton Company quality system The main purpose of implementing a quality system is to enhance company’s performance. BHP Billiton is the largest mining company in the world and it has a lot of customers all over the world. These numerous customers are due to the quality system whose effectiveness has improved the company’s performance in terms of output to be high and hence higher satisfaction of its customers needs (Kruger 2001). According to me therefore, BHP Billiton Company has an effective quality system which has enabled it to meet the needs of its customers together with the needs of the company which are the achievement of the company goals. A company is only ranked the best if and only if it has a high production rate of its goods and services and when the goods produced are able to meet the needs of its target market and by the fact that BHP Billiton is ranked as a large and best company then it means that its quality system is effective and meets the customers and the organizations needs. 7. Relevance of standardization and continuous improvement of the quality system of BHP Billiton Company Standardization of the quality system is done to ensure that the system meets the international standards which should be used in all organizations. According to Shen (2000), BHP Billiton Company should continually improve the effectiveness of its quality management system to ensure that it is in accordance to the international standards (Kruger 2001). Standardization and continued improvement on the quality system of BHP Billiton Company is important as it will lead to minimization of costs incurred in the maintenance of the systems. It also important as quality system improvement will lead to a continued increase in the company’s performance in the capital and target market. 8. Recommendations BHP Billiton Company has been incurring huge costs as a result of some weak points in its quality system and as a result I would recommend the work company to subsequently improve its quality system to meet the international standards as noted by Shen (2000). By upgrading its quality system it means that the company will be able to detect any weak point and any omission which might be present in the system and hence correct the inadequacy (Kruger 2001). To improve the effectiveness of the quality system, BHP Billiton Company should use quality objectives, corrective actions and preventive actions to prevent a repeat of any nonconformity, data analysis, audit results and quality policy or the quality international standardization policy. The diagram bellow in fig 1.0 shows the use of quality and effective standards policies in regards to BHP Billiton Company. Figure 1.0 Quality and effective standards policies in regards to BHP Billiton Company. (Evans, JR & Lindsay, W M. 2008). References Evans, JR & Lindsay, W. M. 2005, Total quality organizations’, The management and control of quality, South-Western Publishing. Evans, JR & Lindsay, W M. 2008, The management and control of quality, South-Western Publishing. Foster, ST & Gallup, L. 2002, ‘On functional differences and quality understanding’, Galbreath, J & Rogers, T. 1999, ‘Customer relationship leadership: a leadership and motivation model for the twenty-first century business’, The TQM Magazine, Emerald Management Xtra database. Kraines, G. A.2001, ‘Are you L.E.A.D.ing your troops?’.Strategy & Leadership, Emerald Management Xtra database. Kruger, V. 2001, ‘Main school of TQM: “the big five” The TQM Magazine. Parasuraman, A. 2002, ‘Service quality and productivity: a synergistic perspective’, Managing Service Quality. Parker, C. 2000, ‘Performance measurement’, Work Study, Emerald Management Xtra database. Shen, X, Tan, K & Xie, M. 2000, ‘Benchmarking in QFD for quality improvement’, Benchmarking: An International Journal. Wilkinson, A. 1998, ‘Empowerment: theory and practice’, Personnel Review, Emerald Management Xtra database. Read More