Individual Assignment 2013

MANAGING BUSINESS

BM027-3-2-MBUS

INDIVIDUAL ASSIGNMENT

NAME: HUSSEIN SAID SEIF

STUDENT ID: TP027639

INTAKE: UC2F1303IT(NC)

HAND OUT DATE:

HAND IN DATE: 23rd May 2013

LECTURER’S NAME: DEVIKA A/P NADARAJAH

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Individual Assignment 2013

ContentsIntroduction...........................................................................................................................................3

Question 1.............................................................................................................................................4

Question 2.............................................................................................................................................5

Question 3.............................................................................................................................................7

Deming’s contribution:......................................................................................................................7

Juran’s contribution:..........................................................................................................................8

Crosby’s contribution:.......................................................................................................................8

Conclusion.........................................................................................................................................9

Question 4...........................................................................................................................................10

PDCA Cycle....................................................................................................................................10

Purpose and usefulness of PDCA................................................................................................10

Benchmarking.................................................................................................................................10

Purpose and usefulness of Benchmarking....................................................................................10

Six Sigma........................................................................................................................................11

Purpose and usefulness of Six Sigma..........................................................................................11

Conclusion.......................................................................................................................................11

Conclusion...........................................................................................................................................11

References...........................................................................................................................................12

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Individual Assignment 2013

IntroductionThis Assignment is a coursework for the module Managing Business (MBUS). In this report, the author will be explaining different Quality approaches and Quality Management tools including their purposes and usefulness. The author of this report will also focus on a case study explaining Japan’s evolution of the rebuilding efforts of their economy after World War II. However, the author won’t miss out on the relationship between Quality and competitiveness. Nevertheless, this report will also touch on the cost of poor quality together with its effect on competitiveness.

This assignment is divided into 4 questions, Question 1, Question 2, Question 3 and Question 4. Each question will be focusing on one of the subjects mentioned above.

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Question 1Quality is the ability of a product or service to meet or exceed customer expectations. It is the

totality of features and characteristics of a product or service that bear on its ability to satisfy

stated or implied needs, as defined by The International Organisation for Standards (ISO).

Competitiveness is the ability of an Organisation or a Nation to provide products and/or

services that meet the quality standards of the market place in order to remain into business or

conquer the market.

It is very important for an Organisation to keep in mind the competition with other firms in

terms of quality of the products and services but also the price of the products. Producing

high quality products is not enough if the products are too expensive to the customers. Hence,

for companies to be competitive, they not only have to offer good products and services but

also the right ones.

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Question 2It is clear to us that practising quality costs a lot and therefore increases the production

expenses which lead to expensive products. Well, according to Philip Crosby however,

practicing quality is not costly but non-conformance is.

We can define cost of poor quality that are the costs that would never appear if a company’s

quality practice in their products, services, system and processes were perfect or at least at

higher level. Poor quality has a lot of effects in the competitiveness of a company. Therefore,

not practicing quality at the first place is costly rather than offering quality products and

services to the customers.

The cost of poor quality can be obtained through quality failure. Failure costs are the costs

which are caused by defective parts or products discovered during production or after

delivery. However, according to author’s understanding, cost of poor quality includes

appraisal expenses and failure expenses.

Appraisal expenses - This is the cost of activities or measures designed to ensure

quality or detect and uncover defects. These expenses/costs would have been avoided

if quality was achieved at the first place. The costs involved in quality appraisal

include testing of the products, inspection, interruption of production.

Although Quality Appraisal is one of the resulting factors of The Costs of quality

itself, it is however worth obtaining by uncovering defects before it results into

quality failure costs. However, as one of Deming’s 14 points says; Cease dependence

on inspection, which means; if variation is reduced, there’s no need to inspect

manufactured items for defects, because there won’t be any. Therefore, appraisal cost

can also be included as a cost of poor quality.

Failure costs - These are the costs which are caused by defective parts of products

discovered during production or after delivery. These costs are resulted after failure in

preventing and uncovering defects in the production process. It involves internal and

external failure.

Internal failure - This is the failure which is discovered during the

production or after the production. It has a huge risk of causing extra

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Individual Assignment 2013

expenses during the production due to the need of either reproduce the

products, rework the production etc. it also bears the risk of lost of

sales due to non-delivering to the market place.

External failure - This is failure which is discovered after the product

has been delivered to the customers. It carries a huge risk of rejection

from customers which can result in lost of sales and therefore loss to

the company. External failure can also result in returns of the products,

recalls, warranty costs and most importantly damage to the

Organisation’s reputation.

These costs of poor quality will result a huge drop in the competitiveness of an Organisation.

It is always the best practice to achieve quality at the first place despite having to spend more

on quality assurance due to costs of quality prevention and appraisal. Cutting costs by

neglecting quality may actually result in even higher costs. These costs are what known as

Costs of poor quality.

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Question 3Following the World War II, Japan has undertaken several efforts in the rebuilding of their

economy and market identification. In doing so, Japan has focused mostly on Quality of

products rather than quantity of the production. Teams were formed and efforts were taken to

achieve this.

Japanese teams went abroad to visit foreign countries and learn how they could manage

quality. They invited experts from foreign countries to help Japan on quality management.

These experts have played an important role in the improvement of quality products in Japan

as well as the rebuilding efforts. The three experts invited by Japan to help on quality

management issues were Quality gurus Edward Deming, Joseph Juran and Philip Crosby.

Deming’s contribution:In 1947, the U.S State Department sent Deming to Japan to help the war-devastated Japanese

manufacturing plants, hence their economy. As Japan also invited Deming over, he

introduced several methods, techniques as well as theories to the Japanese manufacturing

plants. He introduced “statistical process control” methods during his time of lecturing on

statistical methods. The Japanese appreciated Deming’s ideas and utilised them readily as

they also found him charming and considerate. Japanese personal ideas of employees

working together towards quality had fit very well to that of Deming and he then encouraged

building quality into the products at all stages as his philosophy went beyond just statistical

quality control.

Deming also developed an Economic chain reaction which states; “as quality improves, costs

go down and productivity goes up; this leads to more jobs, greater market share and long

term survival.”(Referenceforbusiness.com). Most importantly, Deming came up with his

theory that “Everything is the fault (or credit) of the management” as he also came up with

the “pride and joy at work” for the employees.

Together with all the above, Deming didn’t just stop there, he introduced 14 points for

management where by one among the points states that “Adopt the new philosophy” which

means, the implication of quality should adopt his philosophy. Deming also came up with the

PDCA cycle as well as the Seven Deadly diseases in management.

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According to referenceforbusiness.com, the GDP in Japan rose steadily from 1960 by more

than 10 percent a year and by 1951, the Japanese had named their quality prize in honour of

Deming.

Juran’s contribution:Just like Deming, Joseph Juran went to Japan in 1954 to assist the Japanese in their mission

to achieve quality. He developed basic steps that companies in Japan should take in order to

achieve quality. He also focused on management just like Deming did. According to him

(juran), “It is important that top management be Quality-Minded. In the absence of sincere

manifestation of interest at the top, little will happen below.”

Juran came up with the Pareto Principle, which is also called the Juran 80/20 rule. This

principle (rule) states that; 80 percent of the trouble comes from 20 percent of the problems.

This can be expressed as; “concentrate on the vital few sources of the problems, don’t be

distracted by less important problems.” This rule was named for Vilfred Pareto, an

economist, but Juran applied the idea to management.(referenceforbusiness.com).

Joseph Juran prescription focus on 3 major quality processes called Quality Trilogy which

involves Quality planning, Quality control and Quality improvement. He also came up with

10 steps to Quality improvement in addition to the Quality Trilogy and Pareto Principle.

According to referenceforbusiness.com, the Union of Japanese Scientists and Engineers

(JUSE) considered Juran’s vision of top-to-bottom quality management even more important

to their quality turnaround than Deming’s insights.

Crosby’s contribution:Philip Crosby also focused on management but he emphasized mostly in focusing on

prevention rather than correction. His claims were that poor quality costs could be avoided by

using good quality practices at the first place. Among his concepts were, “Quality is free”

and “zero defects”. He also came up with three steps to Quality Vaccine which are;

determination, implementation and Education.

Philip Crosby nonetheless, had 14 points for management just like Deming but the points

were not the same.

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ConclusionJapan has adopted the theories and teachings of all these quality Gurus. They have also using

different awards to a person or group of people who have advanced the practice and furthered

awareness of Total Quality Control. Deming Award has remained the most prestigious award

in Japan for Quality.

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Question 4

PDCA CyclePDCA Cycle is an iterative four-step problem solving process used in business process improvement. It is also known as the Deming wheel or Plan-Do-Check-Act. It is a primary tool that is used to implement changes and make improvements in all type of businesses.

Purpose and usefulness of PDCAi. PDCA is used to help implementing Kaizen. That is used as a model to help towards

continuous improvement. The cycle is a never ending process as it is repeated again and again as areas of improvement are sought and solved.

ii. PDCA is also used to identify new solutions and improvement to processes that are frequently repeated over and over.

iii. To search a variety of possible new solutions to several problems as well as trying them out and testing them in a controlled way before fully implemented.

iv. It is also used to avoid a huge wastage of resources that comes after a full scale implementation of changes or improvements or poor solutions. PDCA helps to minimise those wastage by testing the solutions before implementing them.

v. PDCA is also used when starting a new improvement project. It helps and enable teams to plan the new improvement and changes, to do and implement the changes, check the changes for faults and act on the changes for better results.

BenchmarkingBenchmarking is the process of comparing one Organisation’s performance to other Organisations. It is a way of discovering the best performance achieved whether by a competitor or a leader in a particular industry or even a different industry. In the pursuit for increased competitiveness, it is important for companies to examine their own operations and compare them to their competitors and/or leaders in that particular field.

Purpose and usefulness of Benchmarkingi. The main purpose of benchmarking is to improve the competitive position of a

company through knowing themselves, their industry leaders and competitors, incorporating the best and gaining superiority.

ii. Benchmarking provides an objective evaluation of a company’s business processes against similar processes in other organisations. It helps to identify the good and the bad/worst of the Organisation to either maintain (the good) or improve (the bad and the good) to better.

iii. It is serves a medium to basis of improvement of ideas obtained from other organisations. Ideas obtained from learning other organisations can be used to improvement one’s own Organisation.

iv. Benchmarking as well, broadens an Organisation’s experience and understanding by providing insights into system and methods that work and those that don’t. Hence, it supports the concept a learning organisation. (www.argi.com)

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Six SigmaSix Sigma is business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing as well as service processes. It focuses on outputs which are critical to consumers. It is a methodology which is used into businesses’ quality improvement.

Purpose and usefulness of Six Sigmai. Six Sigma is used to improve customer satisfaction by identifying defects, variation

and errors in the manufacturing process and/or service providing. It is used to measure and eliminate the defects as well as increasing efficiency of the processes, say manufacturing or services.

ii. Standardisation of business development is another purpose and usefulness of Six Sigma methodology. Leaders in Organisation can choose to define, measure, analyse, improve and control their results or they can choose to develop entirely new products and services by doing the same, defining, analysing, measuring and verifying their plans.

iii. Sig Sigma is also used to ensure Industry and Government compliance. By eliminating defects, Organisations can maintain large contracts from government or even from other Organisations. This leads to better business opportunities.

iv. Organisations also use Six Sigma to develop career opportunities. Employees can get professional development opportunities by helping their employers adopt Six Sigma methodology.

ConclusionQuality management is a never ending an ongoing process which is dedicated towards continuous improvements. PDCA cycle, benchmarking and Six Sigma as explained above play a very important role as tools used in the Quality Management process.

ConclusionFrom the research done to accomplish this report, as a reader, you can come up with several conclusions from your own perspective. However, it is clearly seen as explained from above writing that Quality is a very important tool towards successful business and competitiveness in the World Market. One has to focus on quality in order to manage and remain into market from the competition available today.

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ReferencesCollege of Engineering & Computing, Florida International University, Miami, Florida, Quality and Global Competitive [Online]. Available from: <http://www.scribd.com/doc/88680216/1-Quality-Global-Competitiveness-Ch-2> [Accessed 6th May 2013].

Huff Post, What is Competitiveness [Online]. Available from: <http://www.huffingtonpost.com/gerald-bracey/what-is-competitiveness_b_77532.html> [Accessed 6th May 2013].

SixSigma.com, Cost of poor Quality [Online]. Available at: <http://www.isixsigma.com/dictionary/cost-of-poor-quality-copq/> [Accessed 7th May 2013].

Reference for Business, Quality and Total Quality Management [Online]. Available at: <http://www.referenceforbusiness.com/management/Pr-Sa/Quality-and-Total-Quality-Management.html> [Accessed 7th May 2013].

Process Improvement Japan, Japan’s Quality Improvement Process, Total Quality Control and employee engagement [Online]. Available at: <http://www.process-improvement-japan.com/quality-improvement-process.html> [Accessed 13th May 2013].

Mind Tools, Plan-Do-Check-Act (PDCA) [Online]. Available at: <http://www.mindtools.com/pages/article/newPPM_89.htm> [Accessed 16th May 2013].

ASQ, Plan-Do-Check-Act (PDCA) cycle [Online]. Available at: <http://asq.org/learn-about-quality/project-planning-tools/overview/pdca-cycle.html> [Accessed 16th May 2013].

Argi.com, What is Benchmarking [Online]. Available at: <http://www.argi.com.my/whatispage/benchmarking.htm> [Accessed 17th May 2013].

Management Analysis & Development, What is Benchmarking [Online]. Available at: <http://www.mad.state.mn.us/benchmarking> [Accessed 17th May 2013].

Bright Hub PM, Six Sigma, What is the purpose of Six Sigma [Online]. Available at: <http://www.brighthubpm.com/six-sigma/2947-what-is-the-purpose-of-six-sigma/> [Accessed 20th May 2013].

Systems Quality Consulting, Six Sigma, What is Six Sigma [Online]. Available at: <http://www.systemsquality.com/id33.html> [Accessed 20th May 2013].

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