PSBA – Manila

Production Operation Management with TQM

Coverage for Midterm Exam October 26, 2022 4:00pm -5:30pm

TQM’s 7 Basic Elements

Quiz 2
Members: Angelo Figueroa
Mark Austine Gomez
Ivan Rey Piornato
Clarence Antonio
Maorice Nicasio

Identify the different 7 Basic elements of TQMs and be able to provide or identify
examples.

1. Customer Focus
- The primary focus of quality management is to meet customer
requirements and to strive to exceed customer expectations.
2. Leadership
- Leaders at all levels establish unity of purpose and direction and create
conditions in which people are engaged in achieving the organization’s
quality objectives.
3. Engagement of people
- Competent, empowered, and engaged people at all levels throughout the
organization are essential to enhance its capability to create and deliver
value.

4. Process approach
 - Consistent and predictable results are achieved more effectively and
efficiently when activities are understood and managed as interrelated
processes that function as a coherent system.
5. Improvement
- Successful organizations have an ongoing focus on improvement.
6. Evidence-Based Decision-Making
- Decisions based on the analysis and evaluation of data and information
are more likely to produce desired results.
7. Relationship Management
- For sustained success, an organization manages its relationships with
interested parties, such as suppliers.

Overview of Operations Management Module 1 and 2

1. Difference between goods and services

- The economic system is greatly impacted by goods and services. Things

that can be utilized, kept, evaluated, brought home, or consumed are
referred to as goods. They range from furniture and apparel to vehicles.
However, in economics, services are intangible assets in which the service
recipient does not acquire any physical possessions. Examples of
services include copyright fees, consultancy fees, and labor costs
associated with installing, modifying, and configuring software. People
might visit an optician, for instance, to replace their eyeglasses' frames.
The optician's duties include assisting a patient in selecting replacement
eyeglasses and taking the necessary measurements of the face and eyes.
In this instance, the frame is the good, and the service is the measuring
and replacement of the frames.

2. Definition: Production and productivity

 - The products being created can also be referred to as production. For
instance, a production run is what some companies refer to as a group of
products produced simultaneously. These two definitions can be used
interchangeably. In its simplest form, it simply refers to a production
procedure or its outcome. Producing companies are referred to as
producers by economists. These businesses produce goods to market to
consumers. For instance, a garment business makes apparel for
customers. To avoid having to do it themselves, businesses are now
inclining toward the trend of outsourcing their production capabilities.
- In economics, productivity is the ratio of output to input, such as labor,
capital, or any other resource. It is frequently determined for the economy
as a ratio of hours worked to gross domestic product (GDP). It is possible
to study patterns in salary growth, wage levels, and technical
advancement by further segmenting labor productivity. Productivity
increase is directly related to corporate earnings and shareholder returns.
Productivity is a measure of a company's production process efficiency at
the corporate level. It is calculated by comparing the number of units
produced to employee labor hours or by comparing the company's net
sales to employee labor hours.

Operations Management

- Most businesses provide customers with either a service or a product. Offering

top-notch services or goods not only helps you draw in clients, but it also fosters
customer loyalty, increases revenue, and provides you a competitive edge in the
marketplace. Undoubtedly, a crucial component of every business is making sure
the goods or services given to clients are of a high standard and worth their
money. Operations management is a branch of management that oversees the
entire production timeline of a service or product from the input stage to the
finished stage. This includes planning, organizing, and supervising operations,
manufacturing and production processes, and service delivery to produce the
 desired outcome of a high-quality product or service that satisfies customer
demands.

Quality

- In most cases, the term quality refers to a factor that determines whether a good
or service is poor or excellent. Knowing how a thing satisfies its requirements is a
test of goodness. Typically, when we hear the word quality, we picture a superb
good or service that meets or even surpasses our expectations. Based on the
purchase price and expected usage of the goods or services, these expectations
are formed. Simply said, we define good quality as when a good or service meets
or exceeds our expectations. As a result, it might be thought of as a
perception-based intangible expression.

External elements

- External influences are components that have an impact on a business'

performance and outcomes from the outside. The economic, political, and social
environments of the places where the corporation works frequently include these
elements. Performance of a corporation can be impacted by both internal and
external factors. Internal factors frequently include business governance,
organizational structure, marketing choices, financial soundness, or product
design. These elements influence a business inside.
However, there are other factors that have an impact on the firm from the
outside, such as macroeconomic factors like inflation, interest rates, and
currency value, or political factors like new laws affecting entire sectors of the
economy or free trade agreements with other nations. On the other side, a
company's external influences can also be influenced by the social and cultural
environment. Certain customs and practices can influence how customers
choose and use products, and societal discontent can also have an impact on
how firms grow over time. Companies commonly create strategic plans to
 foresee the influence of external factors on the operation of the firm in order to
address these concerns.

Precise units

- Every firm either offers a service or sells a product. People can receive services
from nonprofit groups as well. To ensure that your clients will buy your product or
service, you must ensure that it is of a high enough caliber and value. Due to
this, the process of producing a good or service is crucial. Customers are drawn
to high-quality goods and services, which also provide you a marketing edge,
boost sales, and establish you as a dominant player in your sector. How do you
make sure your services and products are produced effectively to assist you
accomplish all of these? through the administration of operations. Operations
management assumes complete control of the manufacturing process and
makes sure that each stage is carried out effectively to achieve optimal output.
The outcome is a high-quality good or service that satisfies customer needs.
Regardless of size or sector, every firm needs operations management. It
guarantees that businesses achieve their objectives and aids in maximizing
profits. I'll expose you to the lucrative world of operations management in a few
minutes. You will discover what operations management is, how it helps your
business, and all the information you require to implement it successfully.

Labor

- Labor or productive work, especially for financial gain's sake. the group of people
involved in such action, particularly those doing it for pay. A particular group of
people is regarded as a class (distinguished from management and capital).
Hard or exhausting physical or mental labor is referred to as toil.

Capital
 - Capital is a broad term for anything that gives its owner value or advantage, like
a factory and its equipment, intellectual property like patents, or a company's or
person's financial assets. Even though money itself can be called capital, the
word is usually used to describe money used to make things or invest.

Management

- Management, whether it be in corporate, non-profit, or governmental sectors, is

the administration of an organization. It is the science and art of managing the
business's resources. It is a separate process that involves both science and art,
and it is carried out in order to achieve predetermined goals. It consists of
planning, organizing, acting, and controlling.

Process

- A process is a collection of actions that converts inputs from suppliers, internal or

external, into outputs that are provided to customers internally or externally.
Process moves into the waiting state if it needs to wait for a resource, such as
waiting for user input, or waiting for a file to become available.
System

- A system is a collection of elements or components that are organized for a

common purpose. is an organized collection of parts (or subsystems) that are
highly integrated to accomplish an overall goal. The system has various inputs,
which go through certain processes to produce certain outputs, which together,
accomplish the overall desired goal for the system.

System perspective

- A systems perspective helps the decision-maker to comprehend how minor

systems interact with the larger system and suggest possible synergies or
downsides that should be investigated before adoption. The success or failure of
project management inside an organization ultimately depends on how a project
management system functions as an entity in its context.

Subsystem of organization

- 1. Production: To manufacture the products of right quality and right quality at

predetermined cost at pre-established time. Production department aims to offer
the customers products and or services that satisfy the needs of the customer at
an affordable cost, and at the same time enhancing the production efficiency.

2. Marketing: To create the demand for the company’s products and/or services
and satisfy the needs of the customer through various activities like market
research, marketing planning, sales administration and advertising.

3. Finance: To plan and allocate the finance to various activities of the

organization and to meet the long term and short term financial requirements of
 the enterprise. The activities include financial planning, budgets, general and
cost accounting.

4. Personnel: The objective of the personnel function is to match the jobs and
skills of the personnel and create a harmonious climate where each and every
individual in the organization contributes positively towards the achievement of
organizational objectives. The functions include – Recruitment, placement,
compensation, promotion and training.

History of Operations Management

- The beginning of operations management can be dated to the industrial

revolution, when production started to move from small, regional businesses to
large-scale manufacturing organizations. Early in the 20th century, Henry Ford
invented the conventional manufacturing manufacturing method, making it one of
the most important contributions to operations management. This method
significantly increased productivity and reduced the cost of cars for the general
public. Understanding the driving forces behind historical breakthroughs can help
us pinpoint elements that might inspire people in the operations management of
the future.

How to measure productivity?

- It's not as simple as you may believe to interpret productivity. Productivity is a

relative indicator that needs to be monitored over time. This enables us to
compare ourselves to one another, our rivals, and our sector. Simply looking at a
statistic, like the total productivity calculation from earlier, does not provide much
information. The operations management is in charge of controlling how various
 inputs are converted into a variety of outputs, such as commodities or services. It
is possible to study patterns in salary growth, wage levels, and technical
advancement by further segmenting labor productivity. Growth in productivity is
directly correlated with corporate profitability and shareholder returns.

Why study OM?

- Operations and all other divisions within the company are interconnected. You'll
regularly deal with operations in the departments of finance, marketing, and
human resources. No matter what department you work in, you need to grasp the
business' core transformation process. Effectiveness and efficiency will need to
be traded off in important decisions. Think about choosing to add a second
full-time waiter to your restaurant staff. Customers may get quicker service and a
higher level of table-specific service. However, there is a higher cost involved,
which is a loss of efficiency.

What are OM Jobs?

- An essential member of the management team, an operations manager is in

charge of high-level HR responsibilities like recruiting top people and establishing
training standards and hiring guidelines. They also aim to increase quality,
productivity, and efficiency by analyzing and improving organizational processes.
They may also go by the title of chief operating officer, or COO.
- Processes. The organization's procedures must be implemented and maintained
by an operations manager. Software and other programs that the company
utilizes on a daily basis are included in this.
- Personnel. Any organization's operations include a significant portion of human
resources. As an operations manager, you will either be in charge of the HR
division or actively involved in resolving human matters. Inventory. This is
 particularly valid for operations managers who work in retail or for companies that
market certain goods.
- Financials. Another significant component of an operations department is
accounting and finance. You will either be managing the accounting department,
much like HR, or closely monitoring budgets, revenue expansion, and profitability.
- Reporting. An operations manager is in charge of reporting on how the company
is doing and if processes and policies that have been put in place are effective or
need to be changed.

Characteristics of goods and services.

- Businesses produce goods and services to meet the needs of the consumer and
industrial markets. They differ from one another based on four traits.
- Tangibility. Goods are material items like furniture, clothing, and machinery.
They can be seen and touched, and they have shape. Intangibles are services.
For instance, there is no physical presence for services like equipment repair,
hair styling, and pest control.
- Perishability. All products have some longevity after the initial purchase.
Services don't last; they expire as soon as they are provided.
- Separability. Goods can be preserved for later use because of separability. As a
result, production and consumption are usually distinct. Services cannot be
distinguished from the service provider because they are produced and
consumed simultaneously.
- Standardization. Grading and standardization in the production process allow
for the control of product quality. However, each time services are provided, their
quality varies.

Challenges facing operations managers

The size of the responsibility's range

In general, the Operations Manager is in charge of managing every division

inside the business, including IT, Finance, HR, Marketing, and Logistics.
Therefore, the Operations Manager will be consulted first if any department is
facing problems, especially project management.

The standard of operational procedures must be raised.

It can be challenging or even impossible to keep track of what is happening in

each store, unit, or location, whether the brand is being presented appropriately,
adhering to the correct safety and hygiene protocols, or resolving urgent issues,
when you have to manage dozens, hundreds, or even thousands of locations
simultaneously. Human error will always occur in businesses. Regardless of how
big or small the impact, this will surely hurt the business.

Doing too many reports

The compilation of numerous corporate reports, from performance data reports to

financial data compilations, is one of the key jobs and problems for the operations
manager. In most cases, problems will occur if the company does not maintain current
data. To guarantee that the data to be used is correct and in line with field conditions,
the Operations Manager must cross-check and confirm with numerous parties.

Difficulty finding the right talents

Without a doubt, the operations manager does not work alone. You need a
capable team member who can support you in overcoming any business
difficulty. Finding team members who perform well is difficult, which is the
difficulty. A combination of personal compatibility and skill. The minimum pay
and turnover rate in the sector are also rising. Because of this, the company's
margins were under pressure, and the operations department was obliged to rely
on inexperienced personnel.
Three Levels of Quality

1. Quality Management (QM)

The collection and control of all actions undertaken by companies of all stripes
with the goal of producing quality is known as quality management. In the current
situation, this denotes the implementation and effective operation of a "Quality
System" in laboratories. For the organization or department in question, a
statement of goals and guidelines for producing excellence should be developed
(by the institute's directorate). Additionally, the organizational structure and roles
for the efficient functioning of the Quality System are identified in this statement.

2. Quality Assurance (QA)

The following stage, quality assurance, must be implemented after proper quality
management. The result of these actions aimed at the production of quality,
should ideally be checked by someone independent of the work: the Quality
Assurance Officer. The ISO defines quality as "the assembly of all planned and
systematic actions necessary to provide adequate confidence that a product,
process, or service will satisfy given quality requirements." The Head of
Laboratory typically handles this work as part of his responsibility for quality
management if there isn't a QA officer on hand. Customers may need unique
quality assurance procedures or a quality plan for customized projects.

3. Quality Control (QC)

Quality Control, as defined by ISO as "the operational techniques and activities

that are used to satisfy quality requirements," is a significant component of
quality assurance. Quality Assessment, the system of activities to determine
whether the quality control activities are effective, or an assessment of the
products themselves, is a crucial component of quality control. Error prevention is
 the main goal of quality control. But mistakes will inevitably still be made despite
all efforts. As a result, the control system needs checks to catch them.

Quality Tools

- Cause-and-effect diagrams, also known as Ishikawa or fishbone diagrams, are

valuable tools for organizing ideas into categories that can be put to good use.
- Check sheet A generic instrument that can be customized for a wide range of
uses; a structured, prepared form for data collection and analysis.
- Control chart A graph used to track a process' evolution. To determine if the
process variance is predictable or consistent (under control), current data is
compared to historical control limits (out of control, affected by special causes of
variation).
- Histogram is the most popular graph for displaying frequency distributions or
how frequently each unique value in a set of data occurs.
- Bar graph known as a Pareto chart can be used to identify the most important
variables.
- Scatter diagram with one variable on each axis, a scatter diagram graphs pairs
of numerical data in order to find relationships.
- Stratification is a method for sorting data from several sources so that patterns
may be identified (some lists replace stratification with flowchart or run chart).

Definition Quality Assurance

- A product or service's compliance with predetermined specifications is

determined through a systematic procedure known as quality assurance (QA).
QA creates and upholds standards for creating or producing dependable
products. A quality assurance system enables a company to compete more
 effectively with rival businesses by enhancing work processes and efficiency as
well as client confidence and a company's credibility.

Strategic Approach

- Collaboration and cooperation, technology, policy development and change,

capacity building, and systemic change and integration are some of the strategic
approaches. Each of the five Strategic Approaches provides a tactic, chance, or
tool to leverage development and advancement in those content areas when
combined with the five Elements.
- Collaboration and partnership: involving numerous groups and cooperating to
achieve a shared vision, goals, and outcomes.
- Technology: utilizing developing technology to enhance program implementation
and evaluation while increasing efficiency.
- Policy change and development: Utilizing previous or fresh lessons learnt to
guide the establishment of new state and municipal policies or the reform of
existing ones.
- Capacity building: To more effectively and sustainably address the
requirements of the community, organizational structures and procedures must
be improved, as well as human knowledge, skills, and capacities.
- Systemic change and integration: In order to improve outcomes for the target
population, existing mechanisms must be changed to better coordinate
numerous service organizations and programs. Collaboration naturally results in
system integration and change.

Dimensions of Quality
 Defining quality is very subjective, there's no common agreement on what
constitutes quality. Each individual has his/her own definition of quality. They are
the things that make it stand out from its competitors and give it value. These are
the things that differentiate your business from others in the marketplace.
The degree to which a product or a service successfully satisfies its intended
purpose has four primary determinants:

1. Design.
2. How well it conforms to the design.
3. Ease of use.
4. Service after delivery.
Consequence of poor quality

Quality is important to business organizations and can benefit them in a variety of

ways. Some examples include: an enhanced reputation for quality, the ability to
command premium prices, an increased market share, greater customer loyalty,
lower liability costs, fewer production or service problems, and higher profits to
name a few. The consequences of poor quality include: loss of business, liability,
productivity, and costs.

The TQM approach

- The term total quality management (TQM) refers to a quest for quality in an
organization. There are three key philosophies in this approach. One is a
never-ending push to improve, which is referred to as continuous improvement;
the second is the involvement of everyone in the organization; and the third is a
goal of customer satisfaction. TQM systems are intended to prevent poor quality
from occurring.
Basic Steps in Problem Solving

Step 1: Define the problem and establish an improvement goal. Give the
problem definition careful consideration; don’t rush through this step because this
will serve as the focal point of problem solving efforts.

Step 2: Develop performance measures and collect data. The solution must be
based on facts. Possible tools include check sheet, scatter diagram, histogram,
run chart, and control chart.

Step 3: Analyze the problem. Possible tools include Pareto chart,

cause-and-effect diagram.

Step 4: Generate potential solutions. Methods include brainstorming,

interviewing, and surveying.

Step 5: Choose a solution. Identify the criteria for choosing a solution. Apply
criteria to potential solutions and select the best one.

Step 6: Implement the solution. Keep everyone informed.

Step 7: Monitor the solution to see if it accomplishes the goal. If not, modify the
solution, or return to step 1. Possible tools include control charts and run charts

Basic Quality Tools

- There are a number of tools that an organization can use for problem solving and
process improvement. These tools include: flowcharts, check sheets, histograms,
pareto charts, scatter diagrams, control charts, and cause-and-effect diagrams.