total quality management
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Total Quality ManagementBMG552J2
Edel O’Neill, Senior LecturerSchool of Business Organisation and Management
Email: [email protected] 2D20Tel: 02890 368990
Total Quality Management TopicsWk 1 General introduction to TQM
Wk 2 TQM Evolution, the “Gurus”
Wk 3 The Role of Management, Leadership and Teamwork
Wk 4 Quality Systems and Standards
Wk 5 Tools for Quality Improvement
Wk 6 Self Assessment and Quality Awards
Wk 7 Measuring Costs and Performance
Wk 8 Benchmarking and Business Process Re-Engineering
Wk 9 Service Quality and TQM in the Supply Chain
Wk 10 Planning, Implementing and Sustaining TQM
Wk 11 Guest Lecture
Wk 12 Course Review.
MODULE AIMOn Completion of This Module, Students Should Be Able To:
Define the principles and theories of underpinning business improvement
Discuss the impact of business improvement on business performance
Apply business improvement methodologies in organisational contexts
Examine relationships along the supply chain Formulate business improvement strategies Evaluate alternative solutions to business improvement problems
Assignment OneQuestion One“TQM Is An Approach To Improving Competitiveness, Effectiveness And
Flexibility Of An Organisation. It Is Essentially A Way Of Planning, Organising And Understanding Each Activity, And Depends On Each Individual At Each Level. For An Organisation To Be Truly Effective, Each Part Of It Must Work Properly Together Towards The Same Goals, Recognising That Each Person And Each Activity Affects And Is In Turn Affected By Others.”
Js OaklandWith Reference To An Organisation With Which You Are Familiar Discuss The Role Of Management Within The Context Of Effective Implementation Of Total Quality Management.
100 marks
Due Date: 4th April 2007Assignment Length: 2000 – 2500 wordsAssessment: 35% Coursework / 65% Examination
Assignment Two“TQM has both “hard” and “soft” sides. The former may involve a range of tools and techniques, including SPC, and the basic quality management tools. The soft side of TQM is concerned with HR and cultural change.”
BG DaleDiscuss the key features of Total Quality Management within the context of the evolution of TQM and the emerging business environment.
100 marks
Due Date: 22th November 2006Assignment Length: 2000 – 2500 wordsAssessment: 35% Coursework / 65% Examination
SUCCESS IN THE MARKET PLACE
CUSTOMERNeeds Seeking BenefitsAt Acceptable Prices
COMPETITORAssets & Utilisation
COMPANYAssets & Utilisation
VA
LUE V
ALU
E
COSTDIFFERENTIAL
COMPETITIVE ADVANTAGE
“Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering and supporting it’s product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation…the value chain disaggregates a firm into it’s strategically relevant activities in order to understand the behaviour of costs and the existing and potential sources of differentiation. A firm gains competitive advantage by performing these strategically important activities more cheaply or better than it’s competitors.”
MICHAEL PORTER
THE VALUE CHAIN
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
InboundLogistics
Operations
OutboundLogistics
Marketing& Sales
Service
Primary Activities
Supp
ort A
ctiv
itie
s
MA
RG
IN
CHANGING ENVIRONMENT
• The Customer Service Explosion
• Time Compression
• Globalisation of Industry
• Organisational Integration
CHALLENGES
• Cutting Short the Pipeline
• Improve Pipeline Visibility
• Manage As a System
CUSTOMER SERVICE DIMENSION
“All activities required to accept, process, deliver and bill customer orders and to follow up on any activity that erred”
“Timeliness and reliability of getting materials to customers in accordance with the customers expectation”
“A complex of activities involving all areas of business which combine to deliver and invoice the company's products in a fashion that is perceived as satisfactory by the customer and which advance our company’s objectives”
“Total order entry, all communication with customers, all shipping, all freight, all invoicing and total control of repair of products”
“Timely and accurate delivery of products ordered by customers with accurate follow-up and inquiry response , including timely delivery of invoice”
CUSTOMER SERVICE DIMENSION
• Pre Transactional Elements
• Transaction Elements
• Post-Transaction Elements
CUSTOMER SERVICE DIMENSION
• Pre Transactional Elements– Written Customer Service Policy
– Accessibility
– Organisation Structure
– System Flexibility
CUSTOMER SERVICE DIMENSION
• Transaction Elements– Order Cycle Time
– Inventory Availability
– Order Fill Rate
– Order Status Information
CUSTOMER SERVICE DIMENSION
• Post-Transaction Elements– Availability of Spares
– Call-Out Time
– Product Tracing/Warranty
– Customer Complaints, Claims Etc.
NISSAN’S PURCHASING CRITERIA
SUPPLIER SELECTION PERCEPTION
1. Quality 94%
2. Reliability of Delivery 92%
3. Commitment to Continuous Improvement 89%
4. Technical Expertise 86%
5. Flexibility/Responsiveness 78%
6. Customer Orientation 76%
7. Price 71%
8. Good Marketing/Publicity 38%
SERVICE SURROUND
COREPRODUCT
PRODUCTSURROUND
Tangible Elements:QualityProduct FeaturesTechnologyDurability etc.
Intangible Elements:Delivery Service FrequencyDelivery Reliability & ConsistencySingle Point of ContactEase of Doing BusinessAfter Sales Support etc.
LIFETIME AVERAGE YEARLY CUSTOMERVALUE = TRANSACTION X FREQUENCY X ‘LIFE
VALUE OF PURCHASE EXPECTANCY’
LIFETIME VALUE
SERVICE DRIVEN SYSTEMS
IDENTIFY CUSTOMER SERVICE NEEDS
DEFINE CUSTOMER SERVICE OBJECTIVES
DESIGN THE SYSTEM
CUSTOMER SERVICE NEEDS
• Identify Key Components
• Establish Relative Importance
• Identify Clusters of Customers
Customer Service Objectives
• Cost Benefit of Customer Service
• Setting Customer Service Priorities
• Setting Service Standards
COST/BENEFIT OF SERVICE
Service Level 100%
Cos
ts, R
even
ue &
Pro
fit
Con
trib
utio
n
RevenueCosts
Profit Contribution
SETTING PRIORITES%
Sal
es/P
rofi
ts
% Products/Customers
20% 50% 30%
“A” “B” “C”
80%
15%
5%
Customer Service Elements• Order Cycle Time
• Stock Availability
• Order Size Constraints
• Ordering Convenience
• Frequency Of Delivery
• Delivery Reliability
• Documentation Quality
• Claims Procedure
• Order Completeness
• Technical Support
• Order Status Information
COMPOSITE SERVICE INDEX
ServiceElement
ImportanceWeight
(i)
PerformanceLevel
(ii)
WeightedScore
(i) x (ii)
Order FillRate
30% 70% .21
On-TimeDelivery
25% 60% .15
OrderAccuracy
25% 80% .20
InvoiceAccuracy
10% 90% .09
Returns 10% 95% .095
Index = .745