Risk and Quality Management in Engineering - Coursework Example

Quality Management in Engineering Table of Contents 0 Executive Summary………………………………………………………………...……..3 2.0 Introduction………………………………………………………………………………..3 3.0 Case Study: General Electric Company…………………………………………...………4 3.1 Introduction to GE case……………………………………………………………..……..4 3. 2 Six sigma Implementation…………………………………………………………..…….4 3.3 Results of Sigma Implementation…………………………………………………………5 3.4 Evaluation of the Quality Improvement Process…………………………………………..6 4.0 Conclusion…………………………………………………………………………………8 5.0 Recommendation……………………………………………………………………...…...8 6.0 References…………………………………………………………………….…………..9 7.0 Appendices………………………………………………………………………….……10 7.1 Appendix 1…………………………………………………………………………….…10 7.2 Appendix 2………………………………………………………………………...……..10 1.0 Executive Summary The primary purpose of this report is to discuss quality management approach in business enterprises. The report introduces and describes pertinent features of quality management in relation to modern business enterprises. Proper understanding of the benefits of quality management implementation is critical in modern markets characterized by complexity and dynamism. General Electric Company provides the best case study for quality management implementation due to the company’s widespread prosperity attributed to Six Sigma approach. Evaluation of Six Sigma implementation in GE is based on the benefits that accrued to the company after adopting Six Sigma quality approach. 2.0 Introduction Businesses strive to achieve the desired degree of excellence at an acceptable price and control of variability at an acceptable cost. Quality management uses quality assurance and quality control tools to achieve a consistency in quality of products and services. Quality implies meeting the requirements of customers, both internal and external through provision of defect-free products, service and business processes (Wiengarten, Fynes, Cheng & Chavez, 2013). The primary goal of quality management is to achieve products and services with all the desirable dimensions of quality as well as fitness for the purpose for which they are designed. Managers have a responsibility of determining how quality fits into the overall organizational strategy. Effective managers, therefore, must be able to identify the elements of quality: people, facilities, and materials, and seek to comprehend how they affect quality of the final product. Maintaining quality is based on the ability to realize continuous improvements in production processes. General Electric (GE) transformed its production and achieved quality standards that enabled the company to be a leader in electronic product market. 3.0 Case Study: General Electric Company 3.1 Introduction The quality policy of GE is based on a strategic objective of maintaining the reputation of leadership while continuously satisfying and exceeding the expectations customers (General Electric Company, 2012). The company recognizes the necessity of the human resources in achieving quality productivity; thus, GE gives all the necessary support for them to utilize their fullest potential. The company also focuses on constant employee participation, continuous improvement, and teamwork as the fundamental ingredients of quality implementation. 3.2 Six sigma Implementation General Electric is a model example of the best success stories in successful implementation of Six Sigma. The company’s management launched Six Sigma in the year 1994 when the company under Jack Welch’s leadership (General Electric Company, 2012). The launch of Six Sigma featured intensive investment in employees training process changes. The company’s objective of implementing Six Sigma constituted streamlining manufacturing processes in order to improve efficiency, quality, speed, and productivity. GE’s management team actually managed to internalize the benefits accruing from Six Sigma into all organizational processes. Jack Welch reported that GE began to realize the potential of Six Sigma after starting focusing on external customers (Barjaktarovic & Jecmenica, 2011). According to Jack Welch, the traditional approaches to quality management concentrated on slogans and were not oriented towards producing desirable results. The company was in need of a quality management strategy founded on the objective of achieving results, and not based on theories and slogans. The executive level management performed the reviews of Six Sigma projects quarterly. Quarterly reviews were critical because they provided visibility into leadership on critical matters of management. The company assigned the top talent the responsibility of leading all initiatives in the production process (Barjaktarovic & Jecmenica, 2011). General Electric Company took them out of their jobs occasionally in order to make them Black Belts. Exposure to various aspects of management through training and experience provided employees with practical skills necessary for achieving quality management productivity. The Six Sigma personnel secured most of the rewards and recognitions from the GE since they achieved excellence in their functions. This provides clear evidence that Six Sigma was the best approach to quality management as far as GE was concerned (Alden, 2014). GE provided further training on strategies and tools of solving day-to-day problems at the company to thousands of Green Belts. The management stressed on the necessity of ensuring that all business projects were linked to the strategic objectives and the long-term prospects of the company. Irrelevant activities were eliminated from the manufacturing processes to minimize waste in manufacturing processes. 3.3 Results of Sigma Implementation The company was experiencing outages in newly designed gas turbines, in the power systems division. This quality problem resulted from the breaking rotors that caused engineers to remove and replace 37 units. This inflated the costs of production and compromised the quality of power that GE produced. The Six Sigma team investigated the process and eliminated all possibilities of rotor breakages at the base of approximately 210 units (Alden, 2014). The team identified faulty processes and activities in the power systems. The primary objective of the Six Sigma was to eliminate all faulty processes and activities with the aim of ensuring systems are streamlined for quality productivity. The results led to GE becoming the leader in technology in the electronics industry. During the year 1994, the first year of Six Sigma implementation in GE, the management changed the bonus structure to 60% financial success and 40% Six Sigma success (Alden, 2014). GE had ceased hiring people to the strategic management positions if they did not have at least Green Belt training; this policy was adopted during the year 1988. The executives screened new employees to all management levels based on Six Sigma qualifications and evidence of commitment to Six Sigma approach. The company had identified the excellent contribution of Six Sigma to overall productivity; this is the reason for emphasizing on this policy of selection. The GE plastics unit was eliminated from of bidding on contracts to provide Sony CD-ROMs because of quality issues in the company’s products. One of the Black Belts managed the process through the approach of Six Sigma, leading to implementation of a change in the production process. The process rose from 3.8 Sigma to 5.8 Sigma; this made GE to win the Sony contract (Hilmi & Zülküf, 2013). A 3.8 sigma implies a 1.2% probability of failure, while 5.7 Sigma implies 0.00001% probability of failure. Thus, the possibility of GE’s supplied CD-ROMS failing was 0.00001 percent. If the company produced 100,000 CD-ROMS, only 1 CD-ROM had the probability of featuring a quality issue (100,000x0.00001%=1). 3.4 Evaluation of the Quality Improvement Process Six Sigma implementation in GE was actually a quality improvement process because the approach promised minimized levels of defects and variations from standards. Welch also realized that Six Sigma was critical at the business level because it could lead to improved profitability, long-term viability and increased market share (Hilmi & Zülküf, 2013). Quality management processes are characterized by employee trainings sponsored by their employer companies. GE sponsored trainings for employees at different levels including Green Belts, Black Belts, and Master Black Belts. Implementation of Six Sigma in GE was widely sponsored and financed by the top management. The strategy of implementing quality management approaches requires executives to develop and communicate an expectation of quality to guide the organization (Barjaktarovic & Jecmenica, 2011). The top management in GE participated in defining the desired quality for all its products and services, and setting the desired standards of quality that support the fundamental goals of the business. The company considered quality first in all its business thinking and actions to ensure that products feature all the dimensions of quality. The company implemented Six Sigma methodology in three failed processes and achieved the results. Quality management was intended to control and assure quality of both the production process and the final product. At the live call centres, only 76% of the incoming calls at the mortgage section were successfully answered and 24% were going to voicemail. After Six Sigma implementation, it was possible to receive and answer 99.9% of the calls. Six Sigma implementation also led to increased market share and profitability. The quality team instituted proper methods of stopping breaking of rotors in the turbine engines, which eliminated all chances of removing and replacing 37 units. Costs of production, thus, reduced and profitability increased. Additionally, GE achieved 0.00001% probability of its Sony CD-ROMS failing to conform to standards. The strategy led to GE winning the Sony contract. Thus, the market share for GE CD-ROMS increased with consequent increase in profit margins. 4.0 Conclusion Quality management is critical in enhancing the market share and increasing profit margins. All products and services should feature the dimensions of quality products in order to ensure conformance to standards and customer satisfaction. Six Sigma implementation in GE was successful because of top management in terms of leadership and financing. All activities of the company had to contribute to the overall success of the business. GE achieved the results that characterize quality management approaches; these include increased demand and market share for its products, improved customer care services, increased profit margins and improved reputation of the firm. 5.0 Recommendation General Electric can achieve further improvement in quality if the management considers integrating Six Sigma with other quality management approaches. The company should focus on implementing total quality management, benchmarking, and business process re-engineering in addition to Six Sigma. Total quality management will be beneficial to the company because the approach will seek to integrate all organizational functions to focus on satisfying customer needs and meeting organizational objectives. This approach will also improve the effectiveness and flexibility of the entire organization including the production processes. Business process re-engineering will help the company focus on rethinking and redesigning of production processes, eliminating unnecessary processes and finding effective ways of operations with the ultimate goal of creating value for the customers. GE should recognize that no company survives in a vacuum; therefore, the process of benchmarking will be critical since it will enable the management to analyse the best practices in the industry and adopt business processes representing best practice to establish its rational performance goals. 6.0 References Alden, W 2014, “General Electrics industrial segments lift earnings”, The New York Times, 2014, Opposing Viewpoints in Context, EBSCOhost, viewed 26 April 2014. Barjaktarovic, L, & Jecmenica, D 2011, “Six Sigma Concept”, Acta Technica Corvininesis - Bulletin Of Engineering, 4(4), pp. 103-108 General Electric Company. 2012, General Electric Company SWOT Analysis, pp. 1-9 Hilmi, K, & Zülküf, C 2013, “Measuring and Reporting Cost of Quality in a Turkish Manufacturing Company: A Case Study in Electric Industry”, Journal Of Economic & Social Studies (JECOSS), 3(2), pp. 87-100. Wiengarten, F, Fynes, B, Cheng, E, & Chavez, R 2013, “Taking an innovative approach to quality practices: exploring the importance of a company’s innovativeness on the success of TQM practices”, International Journal Of Production Research, 51(10), pp. 3055-3074. 7.0 Appendices 7.1 Appendix 1: Diagrammatic Representation of Sigma Sigma (Source: http://www.symbolbv.com/en/six-sigma.html) 7.2 Appendix 2: Constant profit improvements and cost-reduction in GE after Six Sigma Implementation (Source: http://maaw.info/ArticleSummaries/ArtSumLucierSeshadri2001.htm) Read More