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TQM and Operations Management

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					     TQM & Operations Management

 1. Total Quality Management
 2. Operations Management


                   NOTE: SEE APPENDICES FOR DETAILED KNOWLEDGE




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                                      TABLE OF CONTENTS

1.    INTRODUCTION ------------------------------------------------------------------------------------         2

2.    TOTAL QUALITY MANAGEMENT ---------------------------------------------------------------                  2

2.1   PRODUCT DESIGN AND DEVELOPMENT ------------------------------------------------------                     2

3.    OPERATIONS MANAGEMENT – COMPETITIVE FACTORS -------------------------------                               4

3.1   FOUR V’S OF OPERATIONS MANAGEMENT --------------------------------------------------                      5

      REFERENCES -----------------------------------------------------------------------------------------      6

      APPENDIX I

      TABLE1: DMADV FRAMEWORK IN PRODUCT DEVELOPMENT --------------------------                                 8

      TABLE2: OPERATIONS EXCELLENCE IN IMPROVING COMPETITIVENESS OF BUDGET
      AIRLINE -----------------------------------------------------------------------------------------------   8

      APPENDIX II

      FIGURE1: TQM IMPLEMENTATION ------------------------------------------------------------                  9

      FIGURE2: INTERNAL AND EXTERNAL IMPACTS OF FIVE PERFORMANCE OBJECTIVES                                     10

      FIGURE3: FOUR V’S MODEL AGAINST OPERATIONAL OBJECTIVES OF A BUDGET
      AIRLINE -----------------------------------------------------------------------------------------------   11




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1. INTRODUCTION

This report has been divided into two sections. The first section consists of defining TQM
in the context of product and service and applying TQM methodology to the development
of product. The second section is based on to consider five objectives of operations
management against a budget airline (i.e. Ryanair).

2. TOTAL QUALITY MANAGEMENT

It is not easy to define Total Quality Management (TQM) precisely because it is a
philosophy of total organisational involvement in terms of improving quality of
products/services (Pegels, 1995; Allen, 2004). Juran (1981) and Agus (2002) describe
service-based TQM as a wide range of efforts aim to achieve overall service performance
in the areas of cost effectiveness, employee engagement, and customer satisfaction.

In the manufacturing industry, TQM primarily deals with the quality of the product
development from start to finish. The quality of the product is ensured at each step of the
product development in terms of materials, costs, workmanship, processes, and pricing
(Tennant, 2001). Nakajima (1988) defined TQM in product manufacturing context as “the
plant of improvement methodology which enables continuous and rapid improvement of
manufacturing processes through the use of employee involvement, employee
empowerment and closed loop measurement of results” (cited in Seth and Tripathi, 2006,
p. 812).

From the above discussion, it can be concluded that TQM deals with the overall
performance of the business which is based on customer satisfaction, employee
engagement, product quality, and management performance. It is also ensured that the
entire activities are interlinked with each other so that the TQM framework should be
applicable to all areas of concern as shown in figure 1 in appendix II.

2.1 PRODUCT DESIGN AND DEVELOPMENT

DMADV framework as six sigma strategy can be used to apply TQM methodology for
the development of the product (Poornima and Charantimath, 2011). DMACV stands for
Define, Measure, Analyse, Design, and Verify.


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Define: Juran and Gryna (1993) and Dale (1999) suggest that concurrent engineering
technique can be applied during define phase where key staffs from different departments
and internal and external customers meet with engineers and work closely with each other
in defining the product parameters in order to avoid problems during subsequent
production or assembly processes. Define phase is crucial in terms of product
development so implementing Belbin teamwork theory can be a useful strategy to behave,
contribute, and interrelate with others in a particular way (Belbin, 1993).

Measure: In order to measure the reliability of the product, reliability engineering helps
the organisation to discover the reasons of failure and also to set overall reliability goals
to prevent the product against failures by identifying critical areas of product success
(Bergman and Klefsjo, 1994). In this phase, the key practices include the use of modular
designs by breaking the whole work into smaller parts in producing the particular product
(Juran and Gryna, 1993). Work Breakdown Structure is the common technique that can
be utilised in this phase of product development (Feigenbaum, 1991).

Analyse: Value engineering helps the organisation to analyse the impact of internal and
external factors that cause to increase the cost of the products. After the critical analysis,
the management attempts to reduce or completely eliminate the impact of gratuitous costs
that do not contribute to the worth or the performance of the product (Dale, 1999).

Design: Today, experimental design is known as one of the best techniques in new
product development. According to Blake et al (1994, p.99), “experimental design is a
strategic weapon to battle competitors worldwide by developing robust products,
reducing time to market, improving quality and reliability, and reducing life-cycle cost”
because the analytical examination of the information found by experimental design can
result in the identification of numerous parameters related to the new product (Dale,
1999). Moreover, Computer-Aided Design is a popular tool that helps the firms to design
a new product using computer. The CAD system also provides the facility to customize
products quickly and inexpensively (Juran and Gryna, 1993).

Verify: The quality function deployment technique is used to determine whether the
product meets the expectations of the customers. For this purpose, matrix charts are used
to determine and prioritize customer needs and expectations (Juran and Gryna, 1993).

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The summary of DMADV framework for developing product with the application of
TQM methodology is displayed in Table 1 (see appendix I).

3. OPERATIONS MANAGEMENT – COMPETITIVE FACTORS

According to Slack et al (2001), competitive advantage can be obtained by establishing a
set of performance objectives which are based on product/service’s quality, speed,
dependability, flexibility and cost. These key objectives can affect the internal
productivity of the firm as well as help the organisation to gain competitive advantage in
the external environment. In this section of the paper, the attempt will be made to
consider these five objectives against a budget airline and for this purpose a case study of
Ryanair is undertaken.

Quality: Juran (1981) defined the quality as “fitness for use”. In general sense, the quality
is the ability of the firm to generate error-free product/service according to the prescribed
specifications. In case of budget airlines, this includes well-organized booking, efficient
luggage handling, maintenance, punctuality, reliability, and communication with
customers. Ryanair is UK’s famous budget airline but due to the gap between quality
specifications and quality delivery, its popularity is going down day-by-day. This can be
judged through the recent customer reviews on SkyTrax website (SkyTrax, 2012).

Speed: According to Slack et al (2001), speed refers the ability to accomplish the task
quickly in responding customer demands. From budget airline perspective, speed is
concerned with reducing time of reservation and luggage handling. Also, turnaround time
of aircraft and its maintenance considered as two most important speed factors in airline
industry. Ryanair is currently looking to improve it services in terms of speed by taking
advantage from the advanced technology like internet. In order make reservation system
speedy, Ryanair converted its host reservations system to a new system so-called ‘Flight
Speed’ (Ryanair strategy, n.d.).

Dependability/reliability: In most cases, dependability refers to the ability to deliver
products/service on time according to the promises made to the customers. In the airline
industry, this refers to on-time flights without major delays with the reliability of luggage
service. According to the statistics of 2011, Ryanair is the leading budget airline in UK in


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terms of reliability of being on schedule and less than one missed bags per 1000
passengers (Ryanair Annual report, 2011).

Flexibility: Slack et al (2007) states that flexibility means additional options to customers
in terms of volume, delivery, and range of products and services. In a budget airline,
customers usually get basic products and services in return of ordinary fare but they can
get a variety of additional products and services by paying extra money. In case of
Ryanair, flexibility refers to the diversification of additional services as well as the
capacity to consider substitutes for numerous service industries such as maintenance
agreements and outsourced functions (Ryanair annual report, 2011).

Cost: According to Shingo (1988), the traditional cost model consists of maximising the
profit by reducing cost of the operations. Nowadays, the most crucial factor for a budget
airline is to run their operations against increasing fuel prices. Unlike other low cost
airlines, Ryanair is committed to absorb the fluctuations of fuel prices without imposing
them on customers. This policy resulted in first annual loss for Ryanair in 2009 when the
fuel prices were very high (BBC news, 2009).

Figure 2 in appendix II is showing how these operational objectives affect the internal and
external operations of the budget airline in terms of obtaining competitive advantage.
Similarly, table 2 in appendix I is demonstrating how budget airlines can achieve
operations excellence in improving competitiveness by applying different techniques.

3.1 FOUR V’S OF OPERATIONS MANAGEMENT

Slack et al (2007) introduced 4v’s operational model to describe and organise the
management operations. The four V’s are volume, variety, variation, and visibility.
According to them, it is important to understand how different operations are positioned
on the 4V model. Figure 3 in appendix II is representing 4V model against operational
objectives of a budget airline.




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REFERENCES

Agus, A., (2002). TQM as a focus for improving overall service performance and customer
satisfaction: an empirical study on a public service sector in Malaysia. Total Quality
Management, 15 (5&6), pp. 615 – 628


Allen, J. E., (2004). Assisted Living Administration: The Knowledge Base, 2nd edition,
Springer Publishing Company


Anthony, J. and Preece, D., (2001). Understanding, managing, and implementing quality:
frameworks, techniques, and cases, Routledge


BBC News, (2009). Ryanair reports first annual loss, [online]. Available from:
http://news.bbc.co.uk/2/hi/business/8078349.stm [Accessed: 08 May 2012]


Belbin, R. M., (1993). Team roles at work, Butterworth-Heinemann


Bergman, B. and Klefsjo, B., (1994). Quality: from customer needs to customer satisfaction,
Studentlitteratur


Blake, S., Launsby, R.G., and Weese, D.L., (1994). Experimental design meets the realities
of the 1990s, Quality Progress, pp. 99-101


Dale, B. G., (1994). Managing quality. 2nd edition, Prentice Hall


Dale, B. G., (1999). Managing quality. 3rd edition, Oxford: Blackwell-Business


Feigenbaum, A., (1991). Total quality control. 3rd edition, New York: McGraw-Hill


Juran, J. M., (1981). Juran on quality improvement: workbook, Juran Institute


Juran, J. M. and Gryna, F. M., (1993). Quality Planning and Analysis. 3rd Edition, New
York: McGraw-Hill


Nakajima, S., (1988). Total Productive Maintenance. Cambridge: Productivity Press


Pegels, C. C., (1995). Total quality management: a survey of its important aspects. New
York: Boyd and Fraser




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Poornima, C. M. and Charantimath, P. M., (2011). Total Quality Management, Pearson
Education India


Ryanair strategy, (n.d.). Strategy, [online]. Available from:
http://www.ryanair.com/doc/investor/Strategy.pdf [Accessed: 07 May 2012]


Ryanair annual report, (2011). The World’s favourite airline, [online]. Available from:
http://www.ryanair.com/doc/investor/2011/Annual_Report_2011_Final.pdf [Accessed: 07
May 2012]


Seth, D. and Tripathi, D., (2006). A critical study of TQM and TPM approaches on business
performance on Indian manufacturing industry, Total Quality Management, 17(7), pp. 811 –
824


SkyTrax, (2012). Ryanair passenger reviews and Ryanair customer trip reports, [online].
Available from: http://www.airlinequality.com/Forum/ryan.htm [Accessed: 07 May 2012]


Slack, N., Chambers, S. and Johnson, R., (2001). Operations management. 3rd edition,
FT/Prentice Hall


Slack, N., Chambers, S. and Johnson, R., (2007). Operations management. 5th edition,
Pearson Education Ltd


Shingo, S., (1988). Non-Stock Production: The Shingo System for Continuous Improvement,
Productivity Press


Stevenson, W. J., (2002). Operations management, 7th edition, McGraw-Hill Irwin


Tennant, G., (2001). Six sigma: SPC and TQM in manufacturing and services. Gower
Publishing Ltd




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APPENDIX I

                          Table 1 - DMADV framework in product development

                        DMADV                             TQM approach
                                              Concurrent engineering
              Define
                                              Belbin teamwork theory
                                              Reliability engineering
              Measure
                                              Work breakdown structures
                                              Value engineering
              Analyse
                                              Cost models
                                              Experimental design
              Design
                                              Computer-Aided Design (CAD)
              Verify                          Matrix charts



              Table 2 - Operations excellence in improving competitiveness of budget airline

Competitive                                                                          Technique /
                       Ability to compete       Performance Objectives
 Indicator                                                                           Approache
                                               On-specification products/
                                                services                          Total Quality
                                               Error-free booking                 Management
Quality            High quality
                                               Efficient luggage                 Six Sigma
                                               Maintenance                       Kaizen
                                               Reliability
                                               Fast throughput
                                                                                  Single Minute
                                               Shorter reservation time
Speed              Meeting the schedules                                           Exchange of Die
                                               Quick luggage handling
                                                                                   (SMED)
                                               Aircraft’s turnaround time
                                               On-time flights
                                               Reliability in luggage service
Dependability      Reliability                                                    Just-In-Time (JIT)
                                               Dependable delivery
                                               Reliability in operations
                                               Frequency new products/           Training
                   Wide range of                services                          Multi-skilled staff
Flexibility
                   products/services           Additional products/services      Operational
                                               Customization                      flexibility
                                               Low price with high margin        Cost models
                                               High total productivity           Reducing costs
Cost               Low price
                                               Managing the increased fuel        throughout the
                                                prices internally                  supply chain




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APPENDIX II

              Figure 1 – TQM Implementation




                                         Source: Anthony and Preece (2002, p. 127)




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               Figure 2 – Internal and external impacts of five performance objectives




                                                                   Source: Slack et al (2001, p. 57)


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               Figure 3 – Four V’s model against operational objectives of a budget airline




                                                                            Source: Slack et al (2007)




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