1Two such innovations, ________ and ________ systems have emerged as pivotal strategies in modern organizational management.
Total Quality Management (TQM) and Just-In-Time (JIT)
2What TQM stands for?
Total Quality Management
3What JIT stands for?
Just-In-Time
4________ emphasizes continuous improvement and customer satisfaction through the integration of quality principles throughout all aspects of operations.
Total Quality Management (TQM)
5________ focus on minimizing waste and inventory costs by synchronizing production with demand, resulting in streamlined processes and improved resource utilization.
Just-In-Time (JIT) systems
6________ is a fundamental aspect of any product, service, or process, reflecting its excellence, reliability, and consistency.
Quality
7________ is the degree to which a set of inherent characteristics of an object fulfills requirement.
Quality
8"__________________ is the unyielding and continually improving effort by everyone in an organization to understand, meet and exceed the expectation of customers"
Total quality (management)
9This description of TQM points out that the core principles of TQM are processes that:
• Focus on satisfying the customer
• Strive for continuous improvement
• Involve fully the entire work force
• Support and involve top management actively
• Use clear and measurable objective
• Recognize quality achievements in a timely manner
• Provide training on TQM continuously
10TQM Implementation Guidelines:
Year One - ?
Year Two - ?
Year Three - ?
Year One – Preparation and Planning
Year-Two – Training and Implementation
Year Three – Assessment, Review and Revise
11Year One – Preparation and Planning
• Create quality council and staff
• Conduct executive-quality training programs
• Conduct quality audits
• Prepare gap analysis (determine the between the best in class and the firm’s current practice)
• Develop strategy on quality improvement
12Year-Two – Training and Implementation
• Conduct employee communication and training program
• Establish quality teams
• Create a measurement system and set goals
13Year Three – Assessment, Review and Revise
• Revise compensation / appraisal / recognition systems
• Launch external initiative with suppliers
• Review and revise
14_______ involves conformance with specification for product or services that meet or exceed customer requirements and expectations.
Quality
15Types of Conformances
1. Goalpost Conformance (zero-defects conformance)
2. Absolute quality conformance (robust quality approach)
16This is conformance to a quality specification expressed as a specified range around the target. The target is the ideal or desired outcome of the operations.
Goalpost Conformance (zero-defects conformance)
17Goalpost Conformonace is also called ______________ with the specified range allowed of variations.
zero-defects conformance
18This is conformance which requires that all products or services to meet the target value exactly with no variation.
Absolute quality conformance (robust quality approach).
19What are the 4 Cost of Quality?
1. Prevention Costs
2. Appraisal Costs
3. Internal Failure Costs
4. External Failure Costs
20_________ are costs incurred to avoid poor-quality goods or services or educe the number of defects in product or services
Prevention Costs
21_________ also called inspection costs, are incurred to identify products before the products are shipped to customer.
Appraisal Costs
22_________ are costs that result from identification of defects during the appraisal process.
Internal Failure Costs
23_________are incurred when poor-quality goods or services are detected after delivery to customers.
External Failure Costs
24Appraisal Costs is also called as?
inspection costs
25_________ and _________ are costs of conformance because they are incurred to ensure that products and services meet customers’ expectations.
Prevention and Appraisal costs
26_________ and _________ are costs of nonconformance because they are costs incurred and opportunity costs because of rejection of production or services.
Internal failure and External failure costs
27The _________ is the sum of conformance and nonconformance costs.
cost of quality
28Use of Quality Cost Information
1. Quality cost information provides a basis for establishing budgets for quality costs as management looks for ways to reduce the total cost involved.
2. Quality cost information helps managers see the financial significance of quality
3. Quality cost information helps managers identify the relative importance of the quality problems faced by the firm.
4. Quality cost information helps managers see whether their quality costs are poorly distributed and when needed, it helps them distribute the costs better.
29Limitations of Quality Cost Information
1. Some important quality costs are typically omitted from the quality cost report.
2. Simply measuring and reporting quality costs does not solve quality programs. Only management action can solve them.
3. A log may exist between when quality improvement programs are put into effect and when the results are seen.
30___________ is to make management aware of the magnitude of quality costs and to provide a baseline against which the impact of quality improvement activities could measured.
Reporting Quality Cost
31Tasks for reporting quality costs include
data definitions, identification of data sources, data collection, and preparation and distribution of quality cost reports.
32__________________________________ to evaluate how well their actual performance satisfies customer needs and wants, companies supplement financial measures with nonfinancial measures of quality of design and conformance quality.
Nonfinancial Measures of Quality and Customer Satisfaction
33 __________ indicate the future needs and preferences of customers, as well as specific areas that need improvement.
Nonfinancial measure
34Nonfinancial Measures of Customer Satisfaction
To evaluate how well they doing, companies measure customer satisfaction over time.
Some measures are:
1. On-time delivery rate (percentage of shipments made on or before the scheduled delivery date)
2. Delivery delays (the difference between the scheduled delivery date and the date requested by the customer)
3. Percentage of products that fail soon or often
4. Number of customer complaints (Companies estimate that for every customer who actually complains, there are 10 to 20 others who have had bad experiences with the product or service but did not complain)
5. Number of defective units shipped to customers as a percentage of total units shipped
6. Market research information on customer preferences and customer satisfaction with specific product features.
35percentage of shipments made on or before the scheduled delivery date
On-time delivery rate
36the difference between the scheduled delivery date and the date requested by the customer
Delivery delays
37Companies estimate that for every customer who actually complains, there are 10 to 20 others who have had bad experiences with the product or service but did not complain
Number of customer complaints
38Nonfinancial Measures of Internal Performance
Most companies use nonfinancial measures of internal quality to supplement financial measures, such as prevention, appraisal, and internal failure costs. Example of trends to gauge quality are:
1. Number of defects for each product line.
2. Employee turnover (ratio of number of employees who leave the company to the average total number of employees)
3. Process yield (ratio of good output to total output)
39ratio of number of employees who leave the company to the average total number of employees
Employee turnover
40ratio of good output to total output
Process yield
41Many companies consider "____" as a driver of strategy
time
42Two common operational measures of time are:
1. Customer-Response Time
2. On-Time Performance
43___________________ is the duration from the time a customer places an order for a product or service to the time the product or service is delivered to the customer.
Customer-Response Time
44___________ which the product or service is actually delivered by the time it was scheduled to be delivered.
On-Time Performance
45Just-in-time (JIT) productio is also called as?
lean production
46____________, also called lean production, is a demand-pull manufacturing system because each component in a production line is produced as soon as and only when needed by the next step in the production line.
Just-in-time (JIT) production
47Components of customer-response time
• Manufacturing lead time also called manufacturing cycle time is the duration between the time an order is
received by Manufacturing to the time it becomes a finished good.
• Delivery time is how long it takes to deliver a completed order to the customer.
48What are the Key features of Just-in-time (JIT) production?
1. Maintaining a limited number of suppliers
2. Improving plant layout
3. Reducing Setup Time
4. Improving Production Scheduling
5. Targeting Zero Defects
6. Maintaining Flexible Workforce
49Financial Benefits of JIT
Other benefits of lower inventories:
1. Greater transparency of the production process,
2. Heightened emphasis on elimination the specific causes of rework, scrap, and waste, and
3. Lower manufacturing lead times.
50______________ reduce overhead costs through the reduction of materials handling, warehousing and inspection costs.
JIT Effects on Costing System