The Principle of Total Quality Management - Assignment Example

Management A. World Manufacturing There is no hard and fast rules on what are world manufacturing companies. However, there are well established factors which characterizes a world class manufacturing company. The general rule to be a top manufacturer is to demonstrate the best practices in the field on which the company belongs to. Being the best in your field of concentration would involve top quality, reasonable and competitive pricing, speed of delivery, reliability of products and delivery, flexibility of the work force and degree of innovations. Top manufacturing companies can therefore be safely surmised to mean those companies which are able to maximize production outputs while minimizing if not altogether eliminating wastage and product defects. Furthermore, a top organization must maintain a ‘competitive edge’ against its competitor and must always look into possibilities of product upgrading and holistic improvements in the delivery of services. a.1 Total Quality Management A total commitment to the principle of Total Quality Management (TQM) is important to achieve a world class manufacturing company status. As a principle of management, TQM started in the 1950’s and gained popularity towards the early 1980’s and up to the present. Understanding TQM involves a good grasp of the culture of the organization involved, the attitude and norms observe within this organization that are geared towards providing customer satisfaction. According the principles of TQM, a culture of excellence should be observed within the organization whereby operations and process must be done right at the first attempt. The objectives of TQM applications in the manufacturing industry are to eradicate defective products and wasteful mistakes in production. The practice of TQM is an organization would enable management and employees to be deeply involved in the continuous improvement of goods and services of the company.(Khuram Hasmi 2006.) Continuous improvement must deal not only with improving results, but also more importantly with improving capabilities to produce better results in the future. Successful TQM implementation in any industry hinges on at least eight (8) key result areas such as, company ethics, product integrity, trust, personnel training, teamwork, strong leadership, recognition of ideas and open communication.(Navatara Padhi 2006). a.2 A Flexible and Highly Motivated Workforce A flexible and highly motivated workforce is one of the best assets of a company. In the manufacturing industry, there are several market drivers that affect production and require flexibility of the workforce. Having a highly motivated and flexible workforce is essential to increase competitiveness, improve the quality and widen the scope of services to customers, boost productivity, manage the production more effectively and efficiently, reduce costs and increase capacity to innovate.(flexibility.co.uk). In large manufacturing organizations, creation of teams can help achieve flexibility. Interdisciplinary and interdependent membership of a team will help sift loads during peak seasons and will allow for collaborations in tasks needing innovations. For instance, in a food processing industry, flexibility of employees can be observed through rotation of work schedules or shifting where multi-tasking is usually practiced. Where a certain shift in the assembly experiences delays and backlogs, a second shift can take over the excess work without disrupting production as the workers under this team is also well-versed with the work at hand. Furthermore, the organization of teams and providing group incentives would produce a highly motivate team where everyone member thereof would strive to do their best to make the team productive. In an assembly line, motivation of quality can be generated by giving bonuses to a line segment which produces none or the least incident of factory defects. a.3 Just-in-Time System The just-in-time system is a philosophy of manufacturing whereby the aims is to eliminate waste through planning and continuous upgrading.( Chase, Jacobs, and Aquilano. January 2006). True to its name, this practice in manufacturing involves the production of the “right part in the right place at the right time.” In other words, these systems would remove unnecessary materials in the inventory and will do away with excessive stocks in the warehouse. As early as the 1920’s manufacturers have used just-in-time systems. One of its earliest adopter was Ford Motors. The just-in-time system is an inventory strategy useful most especially in the manufacturing business where raw materials are often stored for future use. The technique of the just-in-time system involved the reduction of in-process inventory to cost and improve return of investment. By buying only the enough to raw materials to fit into the plan of production, manufacturing companies were able to save on raw materials expenses. According to Henry Ford of Ford Motors, “ That would save a great deal of money, for it would give a very rapid turnover and thus decrease the amount of money tied up in materials” (Ford 1926). a.4 Aim to Satisfy Customers at a Global level The aims of large manufacturing industries in to reach a global market. To ensure a share in the global market, it is imperative that the company satisfies customers at different levels. Quality of workmanship is very essential to achieve this level of satisfaction. There are factors, which will greatly affect customer satisfaction. Some of these factors are: 1. Quality of the product and services 2. Uniqueness of product features making it highly differentiated from those of the competition. 3. Higher-end products where price is not the primary buying factor must posses maximum quality (businesstown.com). Competition is always steep in the world market and continuous innovations and upgrading is necessary to keep up with the ever-evolving market. Thus, it is highly desirable that in order to meet international standards and satisfy customers throughout the globe, an organization must be maintain the highest standard in its field. For instance, manufacturers such as Ford Motors and Toyota are constantly seeking means and methods to satisfy it global market through research and product innovations. They come up with new ideas every now and then that stimulates the market and create a new demand for certain products. B. Features of Just-in-Time System JIT is also known as lean production or stockless production, precisely because it simply operates like that. The main features of JIT can be clearly seen in the aspects of Purchasing, Production Control, Quality and Employee Involvement. In purchasing of materials, the JIT principles dictate that unnecessary materials should be removed in the inventory. No excessive stocks will be kept in the warehouse. Replenishment of raw materials is done only at the end of a certain cycle where it is calculated that only a certain amount of inventory is left. For instance, in a company manufacturing canned tuna and using the JIT systems, the company could opt to replenish raw materials when it reached about only 30%. In this way, capital exposure in stocks will be limited and more funds could be available for other purposes. In Production control, JIT systems can be instituted in terms of line production where the workers do different parts of the manufacturing process. This system of doing things ill speed up production and minimize unnecessary delays as each production segment will be doing repetitive jobs that they will be able to master in the long run and find means to minimize wastage. Furthermore, production control in an assembly line can be observed in terms of having access to specific parts of an item at the right place and at the right time. The practice of giving specific parts to specific segments of the production line will minimize the time wasted in looking of parts of choosing which part should fit into the item being assembled. Quality control in a JIT system is integrated in every aspect of the production. This control can be imbedded in the system form the very beginning where the company only keep limited raw materials. The lesser the time the materials are stocked in warehouses, the lesser the possibilities of damages brought about by lapse of time. For instance, the longer you keep metal parts in the warehouse, the higher the possibility of it being corroded. In the production line, quality control can be easily instituted the fact that each segment specialize a certain stage of the production. For instance, in the automobile industry, a different segment would do the engine while another will do the finishing and painting. Any flaws in the production can easily be traced and corrected since a certain stage can be easily isolated from the other. Employee Involvement is very important in a JIT system as precision and timing is the key towards its success. People factor is recognized as very important element in the production industry and is well recognized under the JIT system. By involving the employees in the planning and setting up of the system, we can generate some key ideas on how production process may be done more efficiently. Companies often have an idea award system where the employees are rewarded when they come up with ideas and systematic approaches that can improve production efficiency. Furthermore, as JIT would require workforce flexibility, the total involvement of the employees is very much needed. JIT has many plus factors in terms of increasing profits. In the experience of automobile manufacturers like Toyota (strategosinc.com), there was a dramatic increase in cash in the company following the moving out of raw materials from the warehouse the application of the JIT system in Toyota Manufacturing increased efficiency in production since the well-organized and controlled distribution of materials through the assembly line reduced the tendency of employees to spend time choosing which spare parts they will use. Every part provided along the assembly line had to fit perfectly into the item produced. Wastage is therefore minimized in terms of hours spent on the product as well as eliminate surplus materials. As the production line is now moving efficiently, Toyota is now able to produce cars within shorter periods and allows for assembly of made to order cars. This increases customer satisfaction and increase in company profitability (Ohno 1988). To facilitate just in time manufacturing, most companies observe the rules (Hirano, Hiroyuki 1998) : However, the downside of JIT can also be found in its strengths. By not keeping any inventory of materials for future use, the company exposes itself to risk of shortage of materials. In the event that a single part is found defective, the assembly lines tend to stop for lack of spare parts. Furthermore, where there is shortage of supply of raw materials as in cases of natural calamities or strikes affecting suppliers, production would certainly suffer. C. Principles of Material Requirement Planning Material Requirement Planning (MRP) is defined by APICS1 as a planning and inventory control system mostly applied in the management of manufacturing processes. This system is usually software based and is intended to meet three basis aims of the manufacturer namely; to ensure availability of materials and products for processing and delivery to customers, enable the company to maintain the lowest possible inventory level which can sustain production without delays and to map-out the different manufacturing activities, schedules for delivery and purchasing of raw materials. Under MRP, have the following important elements: 1. The master production schedule which includes all the know and expected demand for production 2. The inventory status records which gives us the materials available for use or those which are already in the warehouse 3. The bill of materials detailing the requirements for making the products at the product line including the main components and the sub-components thereof 4. The Planning data which will give us all the retrains and directions in the production of an item in the production line To illustrate this process, let us take the master production schedule. This system can be integrated into a software that will give us the following details on demand: the end items being created, the time required to create this items, the quantity of materials needed to complete these items and the time these materials should be given to the assembly line. MRP therefore simplifies the task of inventory control by simply letting the software sort out these information and generate reports on demand. D. Essential Features of MRP II Manufacturing Resource Planning (MRP II) is defined by APICS as a method for the effective planning of all resources of a manufacturing company. Ideally, it address operational planning in units, financial planning in dollars, and has a simulation capability to answer “what if “ questions (wikipedia the online encyclopedia). MRP II has a variety of interlocking functions. Most of these functions are focused on planning such sales an operations planning, business planning, master scheduling, production planning, capacity requirement planning and material requirements planning. MRP II is also useful is terms of financial reporting and budgeting. In other words, MRP II is not just a mere software application like MRP I but rather a dynamic system involving the whole organization. To illustrate, management rules for strategic planning can be established and made functional under MRP II and integrated into the other components such us sales and marketing. As MRP operations by interlocking different organizational functions, it operates somewhat like a steering wheel of the whole organizational structure. For instance, without MRP II, orders placed and confirmed deliveries may not be fulfilled as there is no proper coordination between the production department and the sales department. There is no cohesion of activities as the sales department would probably just continue promising sales of products which the production department is actually no longer in the capacity to produce. However, with MRP II as a planning and implementing tool/guide, the whole manufacturing environment is put into proper order thereby limiting waste and maximizing productivity. There are many benefits of MRP II namely: Organized workforce and production Existence of manufacturing control system There is cohesion between technology, human resource resulting to total company management However, there are also disadvantages of the MRP II namely: Having complex systems like MRP is rather difficult to set-up and manage Improper monitoring of the system would result in easy shifting of accountability of one department to other departments since MPR creates a loop of activities for instance, where the company notice discrepancies in materials pricing, it would be very difficult to trace where the fault originated and how it got there since MRP operates in a loop system Improperly managed MRP system would result to tremendous losses for instance, where the data from the engineering department is delayed or did not correspond to the data received by the purchasing department, orders of materials can be derailed resulting to expensive rush orders to replace or replenish wrong materials Bibliography 1. Flexibility.co.uk. An introduction to Flexible Working available online at http://www.flexibility.co.uk/Guide/Content/Chapter1.pdf last accessed April 3, 2006 2. Businesstown.com. Basic Marketing available online at http://www.businesstown.com/marketing/customer.asp last accessed April 3, 2006 3. Padhi, Navantara. Eight Elements of TQM available online at http://www.isixsigma.com/library/content/c021230a.asp last accessed April 3, 2006 4. Ford Henry (1926) Today and Tomorrow 5. Khurram Hashmi. Introduction and Implementation of Total Quality Management (TQM) available online at http://www.isixsigma.com/library/content/c031008a.asp last accessed April 3, 2006 6. Chase, Jacobs, and Aquilano (2006)Lecture Notes. Just-in-Time Production. Notes available online at http://personal.ashland.edu/~rjacobs/m503jit.html last accessed April 3, 2006 7. Wikipedia.org. MRP II at http://en.wikipedia.org/wiki/MRP_II last accessed April 3, 2006 8. Richard J. Schonberger: "Just-In-Time Production Systems: Replacing Complexity With Simplicity in Manufacturing Management", Industrial Engineering, October 1984, pages 52-63; 9. Tajichi Ohno(1988) Toyota Production System: Beyond Large-Scale Production Read More