“Jai Sri Gurudev”

S J C INSTITUTE OF TECHNOLOGY
DEPARTMENT OF MBA
Subject: Technology and Operational Strategy
Code: 20MBA302

Presented By: Presented TO:

1SJ20BA031- PARIMALA JAYANTHI C S Dr. SUMA S
1SJ20BA032-POOJA R (Associate Professor)
1SJ20BA033- PRABHU D M Department of MBA
1SJ20BA034 -PRADEEP D R
1SJ20BA035-PRANATHI G
1SJ20BA036-PRATHIBHA P
1SJ20BA037-RACHANA S
1SJ20BA038 -RAGAVENDRA M L
1SJ20BA039-RAHUL V
1SJ20BA040- RAKSHITHA M R
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Module-6
Quality Systems

ISO
INTRODUCTION
The International Organization for Standardization (ISO) is an international
nongovernmental organization made up of national standards bodies; it develops and publishes
a wide range of proprietary, industrial, and commercial standards and is composed of
representatives from various national standards organizations.
The organization's abbreviated name—ISO—is not an acronym; it derives from the ancient
Greek word ísos, meaning equal or equivalent. Because the organization would have different
acronyms in different languages, the founders of the organization decided to call it by the short
form ISO.
The International Organization for Standardization (ISO) was founded in 1947 and is
headquartered in Geneva, Switzerland.

Roles and Functions

● ISO develops and publishes standards for a vast range of products, materials, and
processes. The organization's standards catalog is divided into approximately 97 fields,
which include healthcare technology, railway engineering, jewelry, clothing, metallurgy,
weapons, paint, civil engineering, agriculture, and aircraft.
● In addition to producing standards, ISO also publishes technical reports, technical
specifications, publicly available specifications, technical corrigenda, and guides.
● The ISO plays an important role in facilitating world trade by providing common
standards among different countries. These standards are intended to ensure that
products and services are safe, reliable, and of good quality. For the end-user and
consumer, these standards ensure that certified products conform to the minimum
standards set internationally.
● The ISO has been credited with setting more than twenty thousand standards, ranging
from manufactured products and technology to food safety, agriculture, and healthcare
standards
● ISO 9000:2015 describes the fundamental concepts and principles of quality
management which are universally applicable.
ISO 9000:2015 specifies the terms and definitions that apply to all quality management
and quality management system standards developed by ISO/TC 176.

6.3. ISO 9000:

A revolution occurred in 1987 in the management of quality world wide when the
International Standards Organisation bought out a set of standards pertaining not to the quality
of products but rather to the practice of quality assurance methods within a company.

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Termed as ISO 9000 standards,these proved their value rather quickly and went global.
ISO 9000 was originally issued as a series of six internationally agreed-upon standards to guide
and audit a company's quality management practices. Named as ISO 9000, ISO 9001, ISO
9002, ISO 9003, ISO 9004 and ISO 8402 each standard contains specific guidelines pertaining
to a certain segment of quality- related activities. These standards are the minimum acceptable
level of standards that a supplier's quality management practices should meet, in order to receive
the " ISO 9000 accreditation or certification".

Structure of ISO 9000

ISO 9000: Quality management and quality assurance standards- guidelines for selection
ISO 9001: Quality Systems- model for quality assurance in design/ development, production,
installation and servicing.
ISO 9002: Quality systems- model for quality assurance in production and installation
ISO 9003: Quality systems- Model for Quality Assurance in final inspection and test.
ISO 9004: Quality measurement and quality system elements- guidelines.

Objectives of ISO 9000:

● Achieve, maintain and seek continuously improve product quality in relationship to

requirements
● Improve the quality of operations to continually meet customers and stakeholders stated
and implied needs.
● Provide confidence to internal management and other employees that quality
requirements are being fulfilled and that improvement is taking place
● Provide confidence to customers and other stakeholders that quality requirements are
being achieved in the delivered product and
● Provide confidence that quality system requirements are fulfilled.

Benefits of ISO 9000:

1. The standards provide a set of good common practices for quality assurance systems
2. The standards enforce the discipline of control that is necessary before the companies in
the early stages of formal quality programs can seriously pursue continuous
improvement
3. The requirements of periodic audits reinforce the stated quality system until it becomes
ingrained in the company
4. The rigorous documentation standards help companies uncover problems and improve
their processes
5. Certification helps companies in meeting contractual obligations with their customers
6. Certification helps companies in meeting trade regulations regarding product certification
to assume safety to users.
7. Certification helps companies in gaining a competitive advantage ( to get selected as a
supplier by their customers).

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6.4. ISO 14000

The ISO 14000 series of standards was established in 1996 to provide all industries
with a structure for an " Environmental Management System" that will ensure all operational
processes are consistent and effective and will achieve the environmental objectives of the
organisation.
There are six main areas broken down into two categories:
1. Organisation evaluation standards
2. Product evaluation standards

Organisation evaluation standards

1. Environmental management system standard

This requires that a company has a system that allows business units, divisions and
plants to meet environmental goals without continuous oversight from a corporate
environmental department. This means that in the company.
● A formal environmental policy and
standards or specifications are
communicated and understood by
all employees.
1. Environmental measures, objectives and goals developed and tracked.
2. legal requirements and compliance are monitored
3. Appropriate training is developed and implemented
4. Adequate documentation exists and is controllable and
5. Emergency tackling preparation and response has been developed

2) Environmental auditing Standards

This section describes the general principles of environmental auditing , procedures for
conducting environmental audits and auditor qualifications. Companies have to ensure that they
have not only a corporate- level audit programme, but also an audit programme at the business
unit/ division and plant levels which requires periodic self audit assessments to be performed
regularly.

3) Environmental Performance Evaluation

This requires a company to evaluate its environmental management system and the various
operational systems that should be in place. Companies must develop measures and goals to
assess environmental performance such as the performance reduction in air emissions, the
hazardous waste generated, the reduction in energy, water and other natural resources
conservation and the reduction in fines and penalties.

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Product Evaluation Systems

1) Environmental Aspects in Product Standards

This section is a guide for standards writers. Its purpose is to incorporate environmental training
into the development of product standards to prevent adverse impacts on the environment. The
development and the drive behind ISO-14000 has been strongly influenced by the British
Standard BS 7750, and the European Communities' Eco-Management and Audit Scheme(
EMAS), the Chemical Industry Responsible Care, the International Chamber of Commerce
(ICC), the Global Environmental Management Institute (GEMI), the Coalition for
Environmentally Responsible Economies( CERES) and particularly the ISO 9000 Quality
Standards.

2)Environmental Labelling Standards This section describes the general requirements for
various environmental seal and other label programs and deals with all environmental product
claims, regardless of the media used. Companies using environmental product advertising are
making environmental claims for products that would have to do so as per ISO standards. The
objective of this section is to prevent false advertising and false claims.

3) Life Cycle Assessment

This section describes the principles and guidelines used to determine the impact of a product
on the environment from the design stage through to disposal. This implies that firms should
implement the Design for the Environment DFE initiative, including training and revised
engineering processes to study how their products impact the environment. This addresses
such issues as finding: the beginning or less hazardous materials, redesigning manufacturing
processes to use less energy, water or other natural resources, redesigning products and
packaging for ease of disassembly and reuse and/or to use less materials that end up in
landfills and redesigning processes to reduce or eliminate discharges and waste.

6.5. ISO 21000:

ISO 21001 provides a common management tool for organizations providing educational
products and services capable of meeting the needs and requirements of learners and other
customers. It is a stand-alone management system standard, aligned with other ISO
management system standards (such as ISO 9001, ISO 14001, etc.) through the application of
ISO’s high-level structure.

ISO 21001 focuses on the specific interaction between an educational organization, the learner,
customers and other relevant interested parties. It specifies requirements for an Educational
Organization Management System (EOMS) when such an organization:

Needs to demonstrate its ability to consistently provide, share and facilitate the construction of
knowledge while conforming with applicable statutory and regulatory requirements
Aims to enhance the satisfaction of learners, other customers and personnel through the

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effective application of its EOMS, including processes for improvement of the system

All requirements of ISO 21001 are generic and intended to be applicable to any organization
that uses a curriculum to support the development of competence through teaching, learning or
research,regardless of the type, size or method of delivery. ISO 21001 can be applied to
educational organizations within larger organizations whose core business is not education,
such as professional training departments, but does not apply to organizations that only produce
or manufacture educational products.

Six Sigma:

The term Six Sigma refers to a set of quality-control tools that businesses can use to eliminate
defects and improve processes to help boost their profits. It was developed by a scientist in the
1980s while he was working at Motorola.
Six Sigma is a statistical- and data-driven process that works by reviewing limit mistakes or
defects. It emphasizes cycle-time improvements while reducing manufacturing defects to no
more than 3.4 occurrences per million units or events. This means that an error generally occurs
with a six-standard deviation event from the mean because only 3.4 out of a million events
along a bell curve would fall outside of six standard deviations.

Features of Six Sigma:

Statistical Quality Control

Six Sigma is explicitly derived from the Greek alphabet from the Greek letter σ (Sigma),
denoting the Standard Deviation in Statistics. Standard Deviation is used to quantify variance
and is an essential method in terms of the output’s quality to measure non-conformance.

Methodical Approach
In theory, Six Sigma is not merely a quality management technique. It features a well-defined
methodical application approach in DMAIC and DMADV that can increase output quality. DMAIC
is an acronym for Design-Measure-Analyze-Improve-Control. The alternative method DMADV
stands for Design-Measure-Analyze-Design-Verify.

Fact and Data-Based Approach

The scientific basis of the technique is demonstrated by the statistical and systematic aspects of
Six Sigma. This accentuates an essential feature of Six Sigma that is focused on facts and data.

Project and Objective-Based Focus

For an organization’s project customized to its specifications and demands, the Six Sigma
process is applied. In order to get the best results, the procedure is flexible to fit the
requirements and circumstances in which a project operates.
In addition, Six Sigma is also objective-based. In the Six Sigma method, the management
needs some incentive to invest. It is aimed at enhancing profitability and generating financial
capital.

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Customer Focus
For the Six Sigma approach, the customer focus is fundamental. The criteria for quality
enhancement and control standards are based on the explicit requirements for customers.

Teamwork Approach to Quality Management

The process of Six Sigma allows organizations to coordinate when it’s about regulating and
enhancing quality. In the Quality Management team, depending on an individual’s role, Six
Sigma requires a lot of training.

At the project level, there are master black belts, black belts, green belts, yellow belts, and white
belts. These people conduct projects and implement improvements.

Master Black Belt: Trains and coaches Black Belts and Green Belts. Functions more at the Six
Sigma program level by developing key metrics and the strategic direction. Acts as an
organization’s Six Sigma technologist and internal consultant.

Black Belt: Leads problem-solving projects. Trains and coaches project teams.

Green Belt: Assists with data collection and analysis for Black Belt projects. Leads Green Belt
projects or teams.

Yellow Belt: Participates as a project team member. Review process improvements that
support the project.

White Belt: Can work on local problem-solving teams that support overall projects, but may not
be part of a Six Sigma project team. Understands basic Six Sigma concepts from an awareness
perspective.

Brown Belt: Brown Belt is not traditionally used in Six Sigma and is not recognized by most
organizations or accrediting agencies. However, some organizations may classify a Brown Belt
as a person who has their Green Belt and has passed the Black Belt certification exam, but
hasn't completed a second Six Sigma project.

Goals of Six Sigma:

The goal of Six Sigma is to reduce variation for optimal quality control. The discipline known as
Lean Six Sigma (LSS) blends these two approaches. Refinements to the production process are
essential to managing and reducing the 8 wastes analyzed by the Lean method.

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DMAIC Methodology

There are five stages of DMAIC project methodology:

Define: The team defines the problem statement during this process

Measure: The team maps the current method of the identified problem statement here, collects
information, recognizes and understands the root cause of the issue

Analyze: To reduce the flaws & waste of the current process, the team analyses the data &
process

Improve: When the data & procedure is evaluated, the team uses the improvement suggestions
to work on the defects

Control: In the final step, the team will document how they will pass on the process changes to
the workers working within the process

Six Sigma implementation:

Project
The best way to implement a Six Sigma program is to start with a pilot project. You can identify
a company process that generates defects or has other problems, usually in production. The
process of identifying a pilot project has to involve the people carrying out the work and consider
their input. Six Sigma only works when everyone is involved.

Training
The person leading the Six Sigma implementation project has to be knowledgeable about Six
Sigma methods and principles. In Six Sigma terms, he must be a "black belt" expert. In small
businesses, one black belt for a pilot project is usually enough. The business can hire a
qualified new employee or can train within the ranks. Training for black belt certification and
implementation of the pilot project may overlap.

Team
Once the company has chosen the black belt team leader, it must assign team members who
will help with the implementation. The company has to consult the workers involved in the pilot
project. Some team members will become black belt leaders for other company
implementations, and many will become green belt support workers who help the black belt
leaders. Good workers are needed on the team, but also to run the Six Sigma pilot project after
implementation.

Plan
The team has to plan the implementation under the leadership of the black belt. The aim is to
put in place an organizational structure that streamlines the target production process to reduce

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defects. The black belt identifies problem areas, and the workers who carry out the work help
with solutions. The plan details the measures the team proposes to reduce waste, increase
worker efficiency and eliminate bottlenecks.

Execute
Six Sigma requires an initial effort and is then a continuous process. The pilot project has to set
up the initial steps and put in place the organization for continued application. The team makes
the necessary changes according to the plan and then puts in place a black belt to run it. Green
belts help with operation according to the new plan and take responsibility for specific aspects.

Evaluate
At the completion of the pilot project, an evaluation details what worked well and where there
were problems. The workers involved are a key source for evaluation criteria and parameters.
The company now has at least one qualified black belt and several candidates. The evaluation
is the basis for a continued application to other areas of company operations. In a small
business, a second round can probably encompass all the remaining production activities. A
third round can extend Six Sigma principles to services such as design and human resources.

Supply chain and Operations:

Both operations management and supply chain management are expected to add value to
the business, supporting more efficient processes and ultimately driving better revenue for the
company.
In fact, in pursuit of those objectives, the two roles are inextricably linked together. Supply
chain management controls the process for having the product produced; without it, operations
management wouldn’t have a product to oversee operations for.
Many industries require both supply chain management and operations management,
whether the business is moving services, products, raw materials, data, or money into the
hands of its customers.
● Organization
● Decision-making
● Goal-setting
● Cross-functional leadership
● Communication

The Difference Between Supply Chain Management and Operations Management

The major difference between supply chain management and operations management is that
the supply chain is mainly concerned with what happens outside the company – obtaining
materials and delivering products – while operations management is concerned with what
happens inside the company.
This means the supply chain manager spends time negotiating contracts and evaluating
suppliers, whereas the operations manager is often planning and overseeing the daily

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operations and processes. Supply chain management activities are generally the same across
industries; however, operations management roles and responsibilities can vary widely
depending on the product or service the business produces.

Keiretsu

● Keiretsu is a Japanese term referring to a business network made up of different

companies, including manufacturers, supply chain partners, distributors, and
occasionally financiers.
● Keiretsus work together, have close relationships, and sometimes take small equity
stakes in each other, all the while remaining operationally independent.
● Keiretsus rose to prominence after World War II and the destruction of the Japanese
zaibatsu.
● A horizontal keiretsu is an alliance of different companies, led by a bank that provides
them with finance.
● A vertical keiretsu refers to manufacturers, suppliers, and distributors partnering up to
cut costs and become more efficient.

History of keiretsu:

Powerful families, known as zaibatsus, once ran the majority of Japan’s major industries.
That all changed after World War II when the United States came in and busted up these
structures. Zaibatsus were seen as monopolistic and undemocratic, reportedly buying politicians
in exchange for contracts and using pricing mechanisms that exploited the poor. Faced with
economic hardships after the war, Japanese companies responded by reorganizing themselves
as keiretsus.

Advantages and Disadvantages of Keiretsu

Working closely together can bring many benefits. Companies in the keiretsu can leverage
each other’s expertise to become stronger and better; information shared among customers,
suppliers, and employees within the keiretsu can lead to increased efficiency.
As a result of this information-sharing, investment decisions can be made faster, and
suppliers, employees, and customers know the purposes and goals of those investments.
The key to successful keiretsu-like partnerships is support, cooperation, trust, and goodwill.
While it may not be intuitive, in a hypercompetitive, cost-obsessed environment, these relational
elements are critical because they cut down on some of the hidden costs of arm’s-length
supplier relationships that are characteristic of the Western business model.
Forming an alliance also limits the threat of competition and makes it more difficult for its
members to be subject to takeover attempts by outsiders. In addition, the reduction of costs due
to dealing with intra-keiretsu firms can increase efficiency within the supply chain.

However, there are also several drawbacks. Critics point out that their large size makes it
difficult for keiretsus to adjust quickly to market changes and that limited competition leads to

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inefficient practices. Another potential issue is easy access to capital. Close relationships with a
bank might encourage a company to embark on risky, debt-fueled strategies that an outside
institution would probably never help to finance.

Example of Keiretsu

Mitsubishi is the driving force behind perhaps the largest and best-known Japanese horizontal
keiretsu. The Bank of Tokyo-Mitsubishi sits at the top of the keiretsu. Mitsubishi Motors and
Mitsubishi Trust and Banking are also part of the core group, followed by Meiji Mutual Life
Insurance Company, which provides insurance to all members.

Together they aim to help each other distribute goods all over the world. They may seek new
markets for keiretsu companies, help incorporate keiretsu companies in other nations, and sign
contracts with other companies around the globe to supply commodities used for the Japanese
industry. As you might have already noticed, many companies within this keiretsu have
"Mitsubishi" as part of their name.

Relationship of purchasing and supply chain

Procurement or purchasing:

The meaning of procurement when it comes to supply chain management is quite simple. In
short, procurement is the process of finding and acquiring the goods and services your
company needs to fulfill its business model.

In order for a company to make a profit, the cost of procuring goods and services must be less
than the amount it can sell the goods for, minus whatever costs are associated with processing
and selling them.

Hence, the goal of procurement management is to ensure that the company (i.e. the buyer)
receives goods, services, or works at the best possible price.

To do this effectively, a procurement manager must assess factors like quality, quantity, time,
and location on a continual basis, along with negotiating to find the best available pricing (and
therefore savings) for the company.

But procurement and supply chain management like this involves a variety of factors. Here are
some of the tasks involved in the procurement process:

● Developing standards of quality

● Financing purchases
● Creating purchase orders
● Negotiating price
● Buying goods
● Inventory control
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● Inventory management
● Disposal of waste products (e.g. packaging)
● Cost-benefit analysis or cost-utility analysis

It’s also important to note that companies can engage in both direct procurement and indirect
procurement. Direct procurement involves expenditure on goods and services that directly
impact the company’s bottom line, whereas indirect procurement is expenditure on day-to-day
operations and other requirements that do not have a direct impact on company profit.

In the overall supply chain process, procurement’s responsibilities stop once your company has
possession of the goods

Supply chain:

A supply chain is the network of entities, people, information, resources, and functions that
produce a specific product and distributes it to the final buyer.

Supply chains can include entities like:

● Raw material gatherers

● Vendors
● Warehouses
● Producers and manufacturers
● Transportation companies
● Retailers
● Distribution centres
● Wholesale warehouses
● In-house staff
● Stock rooms
● Even the teenage trainee working the register
At its core, supply chainmanagement is the act of overseeing a supply chain to improve the
flow of goods and services and transform raw materials into products for the end buyer.

Typically, a supply chain manager will oversee all aspects of a company’s supply chain by
coordinating the logistics of:

● Supply chain planning and strategy

● Determining the best source of raw materials or services
● Improving efficiency and productivity of the manufacturing process
● Delivery and logistics
● Supplier quality
● Overseeing the return of defective or unwanted products

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While there is a direct relationship between procurement and supply chain management, the
two functions are not interchangeable.

Procurement is the process of getting the goods and materials your company needs, while
supply chain management is the process of transforming those goods into products and
distributing them to customers as efficiently as possible.

8 Technical Supply Chain Competencies

1. Capacity Planning
Assuring that needed resources (e.g., manufacturing capacity, distribution centre capacity,
transportation vehicles, etc.) will be available at the right time and place to meet logistics and
supply chain needs. In other words, capacity planning focuses on determining the appropriate
production levels that the company is capable of completing.
This also includes capacity planning with suppliers, at all manufacturing cells and also
critical machine/equipment; this also includes overall Equipment Effectiveness (OEE) and Sales
Inventory & Operations Planning (SIOP)

2. Demand Management
The demand management is the process of determining what customer will purchase and when,
in other words predicting demand. The good demand management uses qualitative and
quantitative methods to use customer data to reduce uncertainty, predict short-term incoming
demand for use as input into the Sales, Inventory, & Operations Planning (SIOP) process.

The competency includes the use of high analytical techniques, excel spreadsheets and maybe
software to generate baseline statistical forecasts.

3. Order Processing
Out of all supply chain competencies, Order Processing is the most underrated competency.
Order processing entails the system that an organisation has for getting orders from customers,
checking the status of orders, communicating with customers about them, and actually filling the
order and making it available for customers. In some business, it also includes processes until
invoicing.

Part of the order processing includes checking inventory status, customer credit and accounts
receivable in some businesses. Because the order processing cycle is a key area of customer
interface with the organisation, it can have a big impact on a customer’s perception of service
and, therefore, satisfaction
The knowledge and skills are necessary to manage the receipt and scheduling of customer
orders. Processes included in this competency include standard order receipt, exception
identification, and exceptional resolution.

Key to the success of this function are 1) the ability to work effectively with customers to
clarify requirements and negotiate solutions when constraints exist, and 2) the ability to work

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effectively with other company functions to assess the ability to meet customer needs and to
develop workaround solutions when necessary.

4. Master Production Scheduling

The Master Production Scheduling is a statement of the anticipated manufacturing schedule for
selected items by quantity per planning period (Fogarty and Hoffman 1983; Higgins and Tierney
1990). It is a response to the forecast demand described by the production plan, and the actual
demand in terms of received customers’ orders.

This supply chain competency also includes evaluation of plant capacity effectively, attaining the
strategic objectives of the business as reflected in the production plan.

5. Inventory Management & Optimization

Inventory management is a practice to manage inventory as working capital. The key objective
of inventory management is to increase corporate profitability through improved inventory
activities such as demand planning, inventory optimization, safety stock management, excess
and obsolete inventory management or right inventory levels to meet customer services
expectation with a minimum possible inventory

6. Materials Replenishment Planning

SAP has defined this competency very well as, “the main function of material requirements
planning is to guarantee material availability, that is, it is used to procure or produce the
requirement quantities on time both for internal purposes and for sales and distribution. This
process involves the monitoring of stocks and, in particular, the automatic creation of
procurement proposals for purchasing and production.

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In doing so, material requirements planning tries to strike the best balance possible between

● Optimizing the service level and

● Minimizing costs and capital lockup.

7. Logistics, Warehousing and Distribution

One of the key supply chain competence is to management physical flow of the goods,
which mean the knowledge and skills necessary to effectively manage logistics communication,
warehouse and storage management, material handling and distribution of goods (including
reverse logistics).

This includes activities like Goods-in (receiving), put-a-way to stores, picking, packing,
shipping and managing return goods from the customer. The competency include handling and
distribution of goods (including reverse logistics).

This includes activities like Goods-in (receiving), put-a-way to stores, picking, packing,
shipping and managing return goods from the customer. The competency includes the
knowledge and understanding of above-mentioned activities, creating the right processes as
well as effective application

8. Knowledge of Continuous Improvement Processes or Methods

As the name suggests knowledge of the processes or methods that seek to improve
performance, which assumes more and smaller incremental improvement steps. In general
learning and implementing the best known of these are the aforementioned: lean manufacturing
(JIT), Six Sigma, Lean Six Sigma, and Agile.
But learning these philosophies it is not the rate of improvement which is important, it is the
momentum of improvement in the area want to improve.

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