Republic of the Philippines
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
OFFICE OF THE VICE PRESIDENT FOR BRANCHES AND CAMPUSES
MARAGONDON BRANCH
INSTRUCTIONAL MATERIALS
FOR
BUMA 20013
OPERATIONS MANAGEMENT (TQM)
Compiled by:
Checked by:
Almalyn Joy Tito
Faculty
Engr. Rosalia P. Pinlac, LPT, MEM
Member
Committee on Instructional Materials
Date: _________________
Date: ___________________
Approved by:
Dr. Agnes Y. Gonzaga
Head, Academic Programs
Assoc. Prof. Denise A. Abril
Director
Date: _________________
Date: __________________
INTRODUCTION
Welcome to the Polytechnic University of the Philippines. This module will help you become an
effective learner and successfully meet the requirements of the course. You will discover that
you can learn in a very challenging way at your own pace.
THE POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
VISION
PUP: The National Polytechnic University
MISSION
Ensuring inclusive and equitable quality education and promoting lifelong learning opportunities
through a re-engineered polytechnic university by committing to:
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provide democratized access to educational opportunities for the holistic development of
individuals with global perspective
offer industry-oriented curricula that produce highly-skilled professionals with managerial
and technical capabilities and a strong sense of public service for nation building
embed a culture of research and innovation
continuously develop faculty and employees with the highest level of professionalism
engage public and private institutions and other stakeholders for the attainment of social
development goal
establish a strong presence and impact in the international academic community
PHILOSOPHY
As a state university, the Polytechnic University of the Philippines believes that:
• Education is an instrument for the development of the citizenry and for the enhancement
of nation building; and
• That meaningful growth and transmission of the country are best achieved in an
atmosphere of brotherhood, peace, freedom, justice and nationalist-oriented education
imbued with the spirit of humanist internationalism.
TEN PILLARS
Pillar 1:
Pillar 2:
Pillar 3:
Pillar 4:
Pillar 5:
Pillar 6:
Pillar 7:
Pillar 8:
Dynamic, Transformational, and Responsible Leadership
Responsive and Innovative Curricula and Instruction
Enabling and Productive Learning Environment
Holistic Student Development and Engagement
Empowered Faculty Members and Employees
Vigorous Research Production and Utilization
Global Academic Standards and Excellence
Synergistic, Productive, Strategic Networks and Partnerships
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Pillar 9: Active and Sustained Stakeholders’ Engagement
Pillar 10: Sustainable Social Development Programs and Projects
SHARED VALUES AND PRINCIPLES
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•
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•
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Integrity and Accountability
Nationalism
Spirituality
Passion for Learning and Innovation
Inclusivity
Respect for Human Rights and The Environment
Excellence
Democracy
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
MARAGONDON BRANCH
GOALS
•
•
•
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•
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Quality and excellent graduates
Empowered faculty members
Relevant curricula
Efficient administration
Development – oriented researches
State-of-the-art physical facilities and laboratories
Profitable income – generating programs
Innovative instruction
ICT – driven library
Strong local and international linkage
PROGRAM OBJECTIVES
The College of Business aims to:
1. Provide complete understanding of the concepts, principles, theories, and philosophies
in Human Resource.
2. Assist students seek employment and facilitate the integration process in the corporate
environment so they can be immediately productive once employed.
3. Assist the students in appreciating the HR role in the organization and how they can
make meaningful contributions as a strategic partner in building the organization to
become globally competitive.
4. Develop researchers with quality output related to the field.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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iii
BUMA 20013
OPERATION MANAGEMENT (TQM)
COURSE DESCRIPTION
COURSE TITLE
COURSE CODE
COURSE CREDIT
PRE-REQUISITE
:
:
:
:
Operations Management (TQM)
BUMA 20013
3 units
none
This course is designed to provide the students with an in-depth study and exposure to the
concepts and theories about human behavior in organization and will have an opportunity to
build and enhance their skills and attitudes in Business Organization.
COURSE OBJECTIVES
After this course, the student should be able to:
1. Discuss the different theories, concepts, principles, leadership styles and practices
relevant to entrepreneurial leadership in an organization;
2. Apply the skills, knowledge, and attributes acquired to become an effective leader; and
3. Demonstrate appreciation of the leadership challenges in a global market environment.
COURSE REQUIREMENTS
The course requirements are as follows:
1. Students are encouraged to attend the class sessions (online students) and complete all
the requirements (online and offline students).
2. The course is expected to have a minimum of four (4) quizzes and two (2) major
examination (Midterm and Final Examination). Some activities will be rated using the
Rubrics.
3. Other requirements such as written/programming outputs, exercises, assignments and
the likes will be given throughout the sessions. These shall be submitted on the due
dates set by the teacher.
GRADING SYSTEM
The grading system will determine if the student passed or failed the course. There will be two
grading periods: Midterm and Final Period. Each period has components of: 70% Class
Standing + 30% Major Examination. Final Grade will be the average of the two periodical
grades.
Midterm Grading
Final Grading
Class Standing
70%
Class Standing
70%
• Quizzes
• Quizzes
• Activities
• Activities
Midterm Examination
30%
Final Examination
30%
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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100%
FINAL GRADE = Midterm Grade + Final Grade
2
100%
RUBRICS
Outstanding
5.0-4.5
Criteria
Completeness
Complete in all
aspects and
includes all
requirements
Analysis and Use
of the
Entrepreneurial
Concepts and
Business Tools
Presents an
insightful and indepth analysis of
all data; uses many
entrepreneurial
concepts and
business tools
learned in the
subject
Setting of
Recommendation
for future action
plans
Presents complete,
realistic, and
applicable
recommendations
from, and shows
how to use it in
their future action
plans
Over-all
cohesiveness
(writing and
presentation)
The paper has
sophisticated
clarity,
conciseness, and
correctness.
Includes all needed
relevant data and
analysis.
Very Good
4.0-3.0
Average
2.5-1.5
Poor
1.0
Complete in some
aspects and
includes most of
the requirements
Presents an
insightful and
analysis of most of
the data; uses
some
entrepreneurial
concepts and
business tools
learned in the
subject
Presents specific,
realistic, and
applicable
recommendations
from the data
gathered, and
shows how to use
it in their future
action plans.
Incomplete in
many aspects and
includes few
requirements
Incomplete and
does not include
requirements
Presents shallow
analysis of data;
and uses limited
entrepreneurial
concepts and
business tools
learned in the
subject
Presents
incomplete
analysis of data;
and fails to use
entrepreneurial
concepts and
business tools
learned in the
subject
Presents some
applicable
recommendations
from the data
gathered, and
shows how to use
it in their future
action plans.
Presents limited,
unrealistic
recommendation
from the data
gathered, and
failed to show how
to use it in their
future action plans.
The paper has
clarity,
conciseness, and
correctness.
Includes some
needed relevant
data and analysis.
The paper lacks
clarity,
conciseness, and
correctness.
Includes limited
relevant data and
analysis.
The paper is not
clear and contains
serious errors.
Failed to include
relevant data and
analysis.
COURSE GUIDE
First semester Class (18 weeks)
Wk
1
Topic
PUP VMGO; PUP
Graduate Attributes;
Program Educational
Objectives/ Student
Outcomes; Course
Objectives; Course
Policies
Learning Outcomes
Discuss and Explain the PUP VMGO,
PUP Graduate Attributes, Institutional
Learning Outcomes, Program Educational
Objectives/ Course Intended Learning
Outcomes, Course Policies, Course
Requirement, Grading System
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Methodology
Orientation
Discussion
Resources
* PUP
Student
Handbook
*Course
Syllabus
Assessment
None
v
2-3
Lesson 1 Introduction
of TQM
Unit 1 The Evolution of
Quality
Unit 2 Deming’s 14
Points
Unit 3 The Principles of
Total Quality
Management
Discuss the evolution of quality.
Distinguish the definition of quality in
different views.
Learn the benefits of TQM, and the
competitive measures why companies
compete.
Lecture
Interactive
Discussion
Written
Output
Assignment
Short Quiz
4-6
Lesson 2 The
Customer
Unit 1 Customer
Perception of Quality
Unit 2 Identifying
Customer Needs
Unit 3 Customer
Satisfaction Data
Determine the different customer
approach, customer’s perception to
quality, and customer’s attitude and
loyalty.
Identify the various companies on the
methods used to collect customer
satisfaction data.
Lecture
Interactive
Discussion
Written
Output
Assignment
Short Quiz
7-8
Lesson 3 Organizing
for Quality
Unit 1 The PDCA cycle
Unit 2 Six-Sigma
Unit 3 Building
Employee
Empowerment
MIDTERM
EXAMINATION
Unit 4 Benchmarking
Unit 5 The JIT System
Know the different ways how company
organize for quality.
Conceptualize their own company
quality policy statement.
Lecture
Interactive
Discussion
Written
Output
Assignment
Short Quiz
1213
Lesson 4 The Seven
QC Tools
Unit 1 Pareto Analysis
Unit 2 Ishikawa Diagram
Unit 3 Flowchart
Know the application of the seven Q.C.
tools.
Apply some of the QC tools in various
individual and group exercises
1415
Lesson 5 Inspection
Determine the objectives of inspection, its
purpose, and different stages.
Be aware of the drawbacks of inspection.
Lecture
Interactive
Discussion
1617
Lesson 6 Waiting
Lines
Determine the quality control practices
used in various companies.
Lecture
Interactive
Discussion
18
FINAL EXAMINATION
9
1011
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
Lecture
Interactive
Discussion
Inter-active
exercises
Lecture
Interactive
Discussion
Inter-active
exercises,
survey
70%
passing
Written
Output
Assignment
Short Quiz
Written
Output
Activity Pareto
Analysis,
Flowchart
Assignment
Short Quiz
Written
Output
Assignment
Short Quiz
Written
Output
Assignment
Short Quiz
vi
TABLE OF CONTENTS
Page
Introduction
i
Table of Contents
vii
Lesson 1
Introduction of TQM
Unit 1: The Evolution of Quality
Unit 2: Deming’s 14 Points
Unit 3: The Principles of Total Quality Management
1
1
5
8
Lesson 2
The Customer
Unit 1: Customer Perception of Quality
Unit 2: Identifying Customer Needs
Unit 3: Customer Satisfaction Data
13
13
17
22
Lesson 3
Organizing for Quality
Unit 1: The PDCA cycle
Unit 2: Six-Sigma
Unit 3: Building Employee Empowerment
Unit 4: Benchmarking
Unit 5: The JIT System
29
29
33
36
39
43
Lesson 4
The Seven QC Tools
Unit 1: Pareto Analysis
Unit 2: Ishikawa Diagram
Unit 3: Flowchart
47
47
50
53
Lesson 5
Inspection
Unit 1: Introduction
58
58
Lesson 6
Waiting Lines
Unit 1: Introduction
63
63
References
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vii
BUMA 20013
OPERATION MANAGEMENT (TQM)
LESSON 1 - INTRODUCTION OF TQM
Unit 1 : Evolution of Quality
Overview
This lesson focuses on the history of Total Quality Management.
Learning Objectives:
At the end of this lesson, you should be able to:
1. discuss what is Total Quality Management (TQM);
2. learn the history of Total Quality Management.
3. explain the importance of Total Quality Management.
Course Materials:
Discussion:
Total Quality Management (TQM) refers to
management methods used to enhance quality
and productivity in business organizations. TQM is
only one of many acronyms used to label
management systems that focus on quality. It is
also known as CQI (continuous quality
improvement), SQC (statistical quality control),
QFD (quality function deployment), QIDW (quality
in daily work), TQC (total quality control), etc.
It is a comprehensive management
approach that works horizontally across an
organization, involving all departments and
employees and extending backward and forward
to include both suppliers and clients or customers. Like many of these other systems, TQM
provides a framework for implementing effective quality and productivity initiative that can
increase the profitability and competitiveness of organizations.
The history of TQM starts with Elton Mayo’s Hawthorne experiements from 1927 through
1932. These experiments showed that workers participation in decision making improves
productivity. In the 1930s, the Hawthorne plant of the Western Electric Company studied lighting
levels, workday lengths, and rest period lengths to maximize productivity. During the lighting
level studies, researchers found that when the lights were brighter, worker productivity
increased. However when lighting level was decreased worker productivity also increased.
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This change in behavior from the employees
is now called the Hawthorne effect. It basically states
that when workers are involved in studies or decision
making, productivity increases. Also during the
1930s, Walter Shewhart developed control charts
which are a statistical method to control processes.
In the 1950s Edward Deming taught
statistical methods and Dr Juran taught quality
management techniques to the Japanese. Armand
Feigenbaun wrote Total Quality Control. This
became the first work that started many Total Quality
Management theories. In 1954 Abraham Maslow
created a pyramid of self actualization needs. In
terms of work productivity, the lower levels of needs
must be met prior to employees performing at higher
levels. The needs in order are
1. Physiological which is to eat, sleep, and have
shelter
2. Safety which is to have economic and
physical security
3. Belonging which is to be accepted by family
and friends
4. Esteem which is to be held in high regard
5. Self actualization which is to achieves ones best
In the 1960s Douglas McGregor formed the Theory X and Theory Y leadership models.
A Theory X leader applies a negative approach to management. They assume most workers
really do not like to work and try to avoid work. A Theory Y leader believes workers want to do a
good job. They believe workers will offer solutions to problems and participate in problem
solving events. An involved employee is a productive employee. In 1968 the Japanese shaped
the phrase Total Quality Control. TQC is a company wide quality control philosophy. This
philosophy drove Japan to the world quality leader in the 1970s. For the most part, Japan
remains the quality leader. However the world has significantly closed the gap.
In the 1980 the U.S. Navel Air Systems coined the TQM phrase. The Navy based most
of the principles on the Japanese Total Quality Control philosophy. Many companies adopted
TQM during the 80s. TQM spread like wild fire. Many companies saw significant gains in
productivity. However many companies started the program and failed miserably because they
weren't willing to change.
In the 1990s' TQM evolved. Experts introduce new methods that supported TQM. These
include Lean Manufacturing and Six Sigma. Organizations could now become certified to ISO
9001. The Malcom Baldridge National Quality Award (MBNQA) was created for the US. MBNQA
auditors give this award to companies who show the most outstanding quality management
practices.
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In the 2000s, ISO revised ISO 9001 to focus more on business planning, quality
management and continuous improvement. Other certification standards were created including
AS9100 for aerospace, TS16949 for automotive, ISO 14001 for environmental, TL9000 for
electronics, and ISO 17025 for laboratories. These standards all include the ISO 9001.
ISO revised the ISO 9001 standard in 2015 to include Knowledge management.
Although Six Sigma started in the 1990s, it became the prevalent problem solving process used
by Quality professionals. The term Lean Six Sigma was born. A combination of Lean thinking,
5S, and Six Sigma forms the core of Lean Six Sigma. In addition experts start using Kaizen,
Gemba, and Hoshin Kanri concepts.
Concepts of Total Quality Management
1. structured system for exceeding customer expectations
2. system that empowers employees
3. drives higher profits
4. drives lower costs
5. continuous improvement.
6. management centered approach on improving quality
Benefits of TQM
1. Improves competitive position
2. Increase adaptability to global markets
3. Elevated productivity
4. Superior global image
5. Eliminates defects
6. Reduces waste
7. Reduces quality costs
8. Improves management communication
9. Raises profits
10. Drives customer focus
11. Customer loyalty
12. Reduces design time
History of Total Quality Management (TQM)
1920s • Some of the first seeds of quality management were planted as the principles of
scientific management swept through U.S. industry.
•
• Businesses clearly separated the processes of planning and carrying out the plan,
and union opposition arose as workers were deprived of a voice in the conditions
and functions of their work.
•
• The Hawthorne experiments in the late 1920s showed how worker productivity
could be impacted by participation.
•
1930s • Walter Shewhart developed the methods for statistical analysis and control of
quality.
•
1950s • W. Edwards Deming taught methods for statistical analysis and control of quality to
Japanese engineers and executives. This can be considered the origin of TQM.
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•
• Joseph M. Juran taught the concepts of controlling quality and managerial
breakthrough.
•
• Armand V. Feigenbaum’s book Total Quality Control, a forerunner for the present
understanding of TQM, was published.
•
• Philip B. Crosby’s promotion of zero defects paved the way for quality improvement
in many companies.
•
1968 • The Japanese named their approach to total quality "companywide quality
control." It is around this time that the term quality management systems arises.
• Kaoru Ishikawa’s synthesis of the philosophy contributed to Japan’s ascendancy as
a quality leader.
•
Today• TQM is the name for the philosophy of a broad and systemic approach to managing
organizational quality.
•
• Quality standards such as the ISO 9000 series and quality award programs such as
the Deming Prize and the Malcolm Baldrige National Quality Award specify
principles and processes that comprise TQM.
•
• TQM as a term to describe an organization's quality policy and procedure has fallen
out of favor as international standards for quality management have been
developed. Please see our series of pages on quality management systems for
more information.
•
Table 1 History of TQM from ASQ (Learn About Quality)
Activities:
Exercises:
1. In your own words, what is quality?
2. Why it is important to study Total Quality Management?
References:
•
•
https://www.quality-assurance-solutions.com/TQM-History.html#ixzz6XBX8ARHM
https://asq.org/quality-resources/total-quality-management/tqm-history
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Unit 2 : Deming’s 14 Points
Overview
This lesson focuses on the fourteen (14) points given by Dr. W. Edward Demings from his book
entitled Out of the Crisis.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn the 14 points from Deming to improve quality.
Course Materials:
Discussion:
Dr. W. Edwards Deming offered 14 key principles for management to follow to
significantly improve the effectiveness of a business or organization. Many of the principles are
philosophical. Others are more programmatic. All are transformative in nature. The principles
(points) were first presented in his book Out of the Crisis.
As noted by Dr. Deming in The New Economics, "My 14 Points for Management follow
naturally as application of the System of Profound Knowledge for transformation from the
present style of management to one of optimization."
The 14 points are a basis for transformation of American industry. Adoption and action
on the 14 points are a signal that management intend to stay in business and aim to protect
investors and jobs. Such a system formed the basis for lessons for top management in Japan in
1950 and in subsequent years. The 14 points apply to small and large organizations, from the
service industry to manufacturing.
1. Create a constant purpose toward product and service improvement.
• Plan for quality in the long term.
• Resist reacting with short-term solutions.
• Don't just do the same things better – find better things to do.
• Predict and prepare for future challenges, and always have the goal of getting better.
2. Adopt the new philosophy.
• Embrace quality throughout the organization.
• Put your customers' needs first, and design products and services to meet those needs.
• Be prepared for a major change in the way business is done. It's about leading, not
simply managing.
• Create your quality vision, and implement it.
3. Stop depending on inspections.
Deming wasn’t impressed by the idea of after-the-fact quality control. He
encouraged businesses to stop depending on inspections to get quality. He pointed out that
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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inspections can miss defects, that they are costly, and that they don’t improve quality
because all they can do is find poor quality.
• Inspections are costly and unreliable.
• Build quality into the process from start to finish.
• Don't just find what you did wrong.
• Use statistical control methods to prove that the process is working.
4. Use a single supplier for any one item.
• Quality relies on consistency – the less variation you have in the input, the less variation
you'll have in the output.
• Look at suppliers as your partners in quality. Encourage them to spend time improving
their own quality – they shouldn't compete for your business based on price alone.
• Analyze the total cost to you, not just the initial cost of the product.
• Use quality statistics to ensure that suppliers meet your quality standards.
5. Improve constantly and forever.
• Continuously improve your systems and processes. Deming promoted the Plan-DoCheck-Act approach to process analysis and improvement.
• Emphasize training and education so everyone can do their jobs better.
• Use kaizen as a model to reduce waste and to improve productivity, effectiveness, and
safety.
6. Use training on the job.
• Train for consistency to help reduce variation.
• Build a foundation of common knowledge.
• Allow workers to understand their roles in the "big picture."
• Encourage staff to learn from one another, and provide a culture and environment for
effective teamwork.
7. Implement leadership.
• Expect your supervisors and managers to understand their workers and the processes
they use.
• Don't simply supervise – provide support and resources so that each staff member can
do his or her best. Be a coach instead of a policeman.
• Figure out what each person actually needs to do his or her best.
• Emphasize the importance of participative management and transformational leadership.
• Find ways to reach full potential, and don't just focus on meeting targets and quotas.
8. Eliminate fear.
• Allow people to perform at their best by ensuring that they're not afraid to express ideas
or concerns.
• Let everyone know that the goal is to achieve high quality by doing more things right –
and that you're not interested in blaming people when mistakes happen.
• Make workers feel valued, and encourage them to look for better ways to do things.
• Ensure that your leaders are approachable and that they work with teams to act in the
company's best interests.
• Use open and honest communication to remove fear from the organization.
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9. Break down barriers between departments.
• Build the "internal customer" concept – recognize that each department or function
serves other departments that use their output.
• Build a shared vision.
• Use cross-functional teamwork to build understanding and reduce adversarial
relationships.
• Focus on collaboration and consensus instead of compromise.
10. Get rid of unclear slogans.
• Let people know exactly what you want – don't make them guess. "Excellence in
service" is short and memorable, but what does it mean? How is it achieved? The
message is clearer in a slogan like "You can do better if you try."
• Don't let words and nice-sounding phrases replace effective leadership. Outline your
expectations, and then praise people face-to-face for doing good work.
11. Eliminate management by objectives.
• Look at how the process is carried out, not just numerical targets. Deming said that
production targets encourage high output and low quality.
• Provide support and resources so that production levels and quality are high and
achievable.
• Measure the process rather than the people behind the process.
12. Remove barriers to pride of workmanship.
• Allow everyone to take pride in their work without being rated or compared.
• Treat workers the same, and don't make them compete with other workers for monetary
or other rewards. Over time, the quality system will naturally raise the level of everyone's
work to an equally high level.
13. Implement education and self-improvement.
• Improve the current skills of workers.
• Encourage people to learn new skills to prepare for future changes and challenges.
• Build skills to make your workforce more adaptable to change, and better able to find
and achieve improvements.
14. Make "transformation" everyone's job.
• Improve your overall organization by having each person take a step toward quality.
• Analyze each small step, and understand how it fits into the larger picture.
• Use effective change management principles to introduce the new philosophy and ideas
in Deming's 14 points.
Activities:
Exercises:
1. Who is Dr. W. Edwards Deming?
2. What is the effect of Demings 14 Principle in the Total Quality Management?
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References:
•
•
•
•
Deming, W. Edwards, Out of the Crisis, 14 Points, pages 23-24, © 2000 Massachusetts
Institute of Technology, by permission of The MIT Press.
https://deming.org/explore/fourteen-points/
https://tallyfy.com/demings-14-points/
https://asq.org/quality-resources/total-quality-management/deming-points
Unit 3 : The Principles of Total Quality Management
Overview:
This lesson focuses on the social system in the organization. It also includes social
environment, basic culture, security, opportunity and motivational patterns.
Learning Objectives:
At the end of this lesson, you should be able to:
1. understand how to employ Total Quality Management principles in organizations.
2. Identify different approaches of human behavior in organization.
Course Materials:
Discussion:
The principles of Total Quality Management centers around the customer, quality of
work, mutual respect and teamwork. Continuous improvement involves constant analysis of the
way work is carried out in order to determine more effective and efficient ways of making
improvements and achieving excellence. Organizations that employ Total Quality Management
principles foster mutual respect and teamwork amongst their employees. This is true because
TQM principles foster a single-organizational culture of excellence and ensure that employees
uphold the same principles of work.
The application of TQM principles helps organizations to put strategic approaches in
place to ensure the quality of products and services. This also means making sure their
suppliers offer quality products. Since it focus on the customer, it means that organizations
should tailor their products and services to meet or exceed their customer’s expectations. In
addition, products and services must be designed in a way that its attributes, convenience and
functionality satisfy customers.
With increased competition and market globalization, Total Quality Management
principles and practices are now becoming more and more important for the leadership and
management of any organization. The eight (8) principles of TQM were developed by ISO
TC176, an international organization responsible for maintaining ISO’s quality management
standards. While ISO enables an organization to streamline its quality assurance systems in line
with ISO systems and standards, TQM principles and practices ensure quality improvements in
an organization.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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1. Customer focus
Total Quality Management principles puts the focus back on the people buying the
product or service. Customers determine the quality of your product. If the product fulfills a need
and lasts longer than expected, customers know that they have spent their money on a quality
product. When the organization understand what customer wants or needs, the business have a
better chance of figuring out how to get the right materials, people, and processes in place to
meet and exceed their expectations.
To implement this TQM principle:
• Research and understand the customers’ needs and expectations.
• Aligning organization’s objectives with customer needs.
• Communicate with customers, measure satisfaction, and use the results to find ways to
improve processes.
• Manage customer relationships.
• Find a balance for satisfying customers and other interested parties (such as owners,
employees, suppliers, and investors).
Benefits:
• More sales, increased revenue, market share, and mindshare
• Strong customer loyalty leading to repeat business
• Increased possibility that satisfied customers will tell others about the products and
services
2. Total employee commitment
Employees need to understand the vision and goals that have been communicated.
They must be sufficiently trained and given the proper resources to complete tasks in order to
be committed to reaching goals on time. You can’t increase productivity, processes, or sales
without the total commitment of all employees.
To implement this TQM principle:
• Clearly communicate and acknowledge the importance of each individual contribution to
the completed product.
• Stress that each team or individual accepts ownership and give them the responsibility
and opportunity to solve problems when they arise.
• Encourage employees to self-evaluate performance against personal goals and
objectives, and make modifications as necessary to improve workflow.
• Acknowledge successes and optimized performance to build confidence in employees
and stakeholders.
• Make responsibilities clear, provide adequate training, and make sure resources are
used as efficiently as possible.
• Encourage people to continually seek opportunities to learn and move into other roles to
increase their knowledge, competence, and experience.
• Create an environment where employees can openly discuss problems and suggest
ways to solve them.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Benefits:
• Increased employee retention because employees are motivated, committed, and
actively involved in working toward customer satisfaction.
• Individual and team innovation and creativity in problem-solving and process
improvement.
• Employees who take pride and accountability for their own work.
• Enthusiasm for active participation and contribution to continual improvement.
3. Process approach
Adhering to processes is critical in quality management. Processes ensure that the
proper steps are taken at the right time to ensure consistency and speed up production.
To implement this TQM principle:
• Use Total Quality Management tools such as process flowcharts to define and delineate
clear roles and responsibilities so everybody knows who does what at certain times.
• Create a visual action plan so everybody can easily see the specific activities that need
to be completed to achieve the desired result.
• Analyze and measure current activities to see where improvements can be made or
where steps in the process are creating bottlenecks.
• Evaluate the impact your processes and activities may have on your customers,
suppliers, and all stakeholders.
Benefits:
• Faster development and production cycles, lower costs, and increased revenue.
• More consistency and predictable outcomes.
• Focus on continued improvements and success.
4. Integrated System
Integrated systems help the company to look for continual improvement in order to
achieve an edge over the competition. Everybody in every department should have a thorough
understanding of policies, standards, objectives, and processes.
To implement this TQM principle:
• Promote a work culture focused on quality.
• Use flowcharts and other visual aids to help employees understand how their functions
fit in with the rest of the company.
• Use as-is process analysis to see where improvements can be made.
• Make training available for employees who need to learn new processes and who want
to explore opportunities for advancement.
Benefits:
• Focus on quality that will help the business achieve excellence and meet or exceed
customer expectations
5. Strategic and systematic approach
Multiple processes within a development or production cycle are managed as a system
of processes in an effort to increase efficiency. The International Organization for
Standardization (ISO) describes this principle as:
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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“Identifying, understanding and managing interrelated processes as a system contributes to the
organization’s effectiveness and efficiency in achieving its objectives.”
To implement this TQM principle:
• Provide people with the proper training and resources that will help them complete their
individual steps in the process.
• Continually improve processes and products, and upgrade equipment as necessary to
reach goals.
• Make continual improvement a measurable objective for all employees.
• Recognize, acknowledge, and reward innovations and process improvements.
Benefits:
• An ability to quickly identify, react, and fix process bottlenecks or breakdowns
• Overall improved organizational capabilities and improved performance
6. Continual improvement
Total Quality Management principles should help business keep an eye toward continual
improvement. Optimal efficiency and complete customer satisfaction doesn’t happen in a day—
business should continually find ways to improve processes and adapt your products and
services as customer needs shift.
To implement this TQM principle:
• Implement policies to establish product, process, and system improvements as
measurable goals for individuals, teams, and departments.
• Recognize, acknowledge, and encourage innovation to improve processes and
development.
• Encourage employees to participate in available training sessions to learn and take on
new and additional roles.
Benefits:
• Improved knowledge and capabilities to increase performance.
• Improvement goals strategically aligned with organizational capabilities and goals.
• Quick reaction times to recognize and fix bottlenecks and broken processes.
7. Fact-based decision-making
Analysis and data gathering lead to better decisions based on the available information.
Making informed decisions leads to a better understanding of customers and the market.
To implement this TQM principle:
• Analyze and check data to ensure that it is reliable and accurate.
• Make relevant data available to stakeholders.
• Use valid methods to gather and analyze data.
• Make decisions based on the facts learned from the data in addition to experience and
intuition.
Benefits:
• Ability to make informed decisions.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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•
•
Ability to analyze and defend past decisions by referencing factual records.
Ability to change past decisions based on data review.
8. Communications
Everybody in the organization needs to be aware of plans, strategies, and methods that
will be used to achieve goals. There is a greater risk of failure if the organization don’t have a
good communication plan.
To implement this TQM principle:
• Establish an official line of communication so that all employees know about updates,
policy changes, and new processes.
• Where possible, involve employees in decision-making.
• Make sure everybody in every department understands their roles and how they fit in
with the rest of the company.
Benefits:
• Boost employee’s morale and motivation when they understand how their contributions
help the company achieve its goals.
• Ability to more accurately measure the effectiveness of current policies and procedures.
• Higher motivation from employees to achieve goals because they are part of the
decision-making process.
Successful implementation of these Total Quality Management concepts will not come
overnight. When total quality management principles are employed in any organization,
profitability is increased while errors and waste are minimized. Customer feedback, satisfaction,
and loyalty are achieved. Also, teamwork is boosted and staff are motivated to perform their
duties. In addition, the organization gains the confidence and loyalty of their staff as well.
Assessment:
Review Lesson 1, from Unit 1 to 3, and be ready for a quiz next meeting.
References:
•
•
•
•
https://www.economicsdiscussion.net/quality-management/total-quality-managementprinciples/31865
https://asq.org/quality-resources/total-quality-management
https://draminu.com/total-quality-management-principles/
https://www.lucidchart.com/blog/8-total-quality-management-principles
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
12
LESSON 2 – THE CUSTOMER
Unit 1 : Customer’s Perception of Quality
Overview
This lesson focuses on the definition of customers, and importance of customer’s satisfaction.
Learning Objectives:
At the end of this lesson, you should be able to:
1. determine the different customer approach, customer’s perception to quality, and
customer’s attitude and loyalty;
Course Materials:
Discussion:
A frequently used definition of quality is “Delighting the customer by fully meeting their
needs and expectations”. These may include performance, appearance, availability, delivery,
reliability, maintainability, cost effectiveness and price. It is, therefore, imperative that the
organisation knows what these needs and expectations are. In addition, having identified them,
the organisation must understand them, and measure its own ability to meet them.
Customer is considered as one of asset for an organization & treat as Boss or 'King'.
Customer dictates the market trends and direction. Manufacturing and service organizations are
using customer satisfaction to measure quality. Hence, the suppliers and manufacturers have to
closely follow at the heel of the customer.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Types of Customers
One of the most important factors for the success of an enterprise is its customers.
Without them, a business cannot exist. But to capture customers, a business must try to find out
what people want, how much and how often they will buy and how their post-purchase
satisfaction will be ensured. There are two distinct types of customers, external and internal.
1. Internal customers – are within the company-the colleagues working together for delivering
a service or product for the external customer.
2. External customer – can be an individual or an enterprise that hires or purchases the
product or service from another person or business in exchange of money.
What is Customer Satisfaction?
It refers to the measure of how products and defined as the number of customers, or
percentage of total customers, whose reported experience with a firm, its products, or its
services (ratings) exceeds specified satisfaction goals.
Customer satisfaction ratings can have powerful effects. They focus employees on the
importance of fulfilling customers’ expectations. Furthermore, when these ratings dip, they warn
of problems that can affect sales and profitability. When a brand has loyal customers, it gains
positive word-of-mouth marketing, which is both free and highly effective. Therefore, it is
essential for businesses to effectively manage customer satisfaction. To be able do this, firms
need reliable and representative measures of satisfaction.
Determinants of Customer Satisfaction
Key Indicators for Physical Products
• Reliability
• Aesthetics
• Adaptability
• Usability
• Functionality
• Appropriateness
Key Indicators for Services
• Safety/risk of service
• Honesty and an ability to communicate in clear language
• Employees are friendly and polite.
• Employees are honest and do not make fake promises.
• Employees are easy approachable.
• Employees are willing to listen and address customer grievances
• Appearance of physical facilities
• Organizations respond to customer requests on time.
External Customer Satisfaction
An external customer is one who isn’t a part of an organization, rather is one who
receives service or product from the organization. They are the ones who pay for a service or
product and can make or break an organization. They have a choice. If a particular product or
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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service does not please them, they can easily find another company that offers a better product
or services. Quality must be incorporated into all activities with a clear customer focus.
Customers usually compare perceptions of what they actually received from the
organization with their expectations (what they were expecting to get from the organization).
Customer delight arises when perceptions exceed expectations. External customer satisfaction
shows the extent to which the organization;
•
•
•
•
•
Uses methods for determining and monitoring external customer's perceived quality
and value.
Uses customer feedback to improve product/service quality.
Handles complaints, resolves them, and uses complaint information for quality
improvement and prevention of recurrence of problems.
Measures performance against customer targets.
Compares its customer satisfaction results with that of main competitors.
Internal Customer Satisfaction
An internal customer can be anyone within an organization. It could be another
department, another branch or even a co-worker. Getting the internal relationships working is
essential if external customers are to be satisfied. Every single person in the organization has
an effect on the external customers. Internal co-operation needs to be stimulated to enhance
organizational performance. The most effective leadership style tends to give high importance to
teams and employee participation.
Steps to improve Internal Customer Satisfaction
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•
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•
•
Treat employees as you would treat your customers – They are valuable members of
your organization and they must feel important for the organization.
Share your vision – Communicating the company’s vision with the employees will make
them feel a part of the company. It can help them align their goals with those of the
company.
Surpass their expectations – To make your employees happy, offer unexpected gifts or
bonuses, arrange team parties, take them out for a team lunch or dinner, etc.
Take feedback and suggestions – To better understand your employees; you must know
what they feel about their jobs, or their work environment.
Show appreciation for good work – Appreciate a good work done.
What is Customer Perception of Quality?
Customer Perception of Quality is judged by customers. Thus, quality must take into
account all product and service features and characteristics that contribute value to customers
and lead to customer satisfaction, preference and retention. Quality of a product is not defined
only in terms of its durability, packaging, reliability, timely delivery and so on but also a
customer’s overall experience with the organization. Customer dissatisfaction leads to loss of
business. In service industry, employees need to interact with the customers sensibly and with
utmost care and professionalism to expect happy and loyal customers.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Factors Influencing Customer Perception
1. Performance
It involves “fitness for use” determine product feature ready for customer usage. Other
considerations include:
•
•
•
Availability – which is the probability that a product will be there when needed;
Reliability – which is freedom from failure over time;
Serviceability – which is the ease of keeping the product operable.
2. Features
It involves attributes of product/services for primary & secondary nature depend upon
psychological, time-oriented, contractual, technological or ethical.
3. Services
This is an intangible requirement by customers and may differentiate between
purchasing a service or product in one place relative to another. It is a way of serving the
customer better.
4. Warranty
It is considered as public promise backed by guarantee for customer satisfaction. It gives
customer for commitment. It generates feedback about product’s features & services. It
encourage to purchase product & reduce risk level.
5. Price
The perception of customer changed about pricing, they can pay higher price to obtain
value. The customers have trend to compare multiple company’s product or services. If the
company wants to retain the customer they have to increase ongoing effort in terms of
identification, verification & update according to customer requirement.
6. Reputation
It sometimes relates to the goodwill for an organization. Total customer satisfaction gives
an organization reputation. Customer perception relates to purchase trusted brand name which
gives cost increase 5 times related to product. The strategy maker of an organization consider
the economical condition under consideration.
Activities:
Written Output:
1. In your own words, why Customer Satisfaction is important?
References:
https://slideplayer.com/slide/10316741/
https://www.slideshare.net/AneelRaza/total-quality-management-53460005?from_action=save
https://www.managementstudyguide.com/role-of-customers-in-total-quality-management.htm
http://tqmgroups.blogspot.com/p/customer-satisfaction-is-key-component.html
https://www.managementstudyguide.com/role-of-customers-in-total-quality-management.htm
https://www.businessballs.com/dtiresources/total_quality_management_TQM.pdf
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
16
Unit 2 : Identifying Customer Needs
Overview
This lesson focuses on the customer needs.
Learning Objectives:
At the end of this lesson, you should be able to:
1. understand and identify customer needs;
2. learn customer needs analysis.
Course Materials:
Discussion:
What is customer needs?
A customer need is a motive that prompts a customer to buy a product or service.
Ultimately, the need is the driver of the customer's purchase decision. Companies often look at
the customer need as an opportunity to resolve or contribute surplus value back to the original
motive.
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•
•
•
•
Who are my customers?
What are their true needs and expectations?
How do, or can, I find out what these are?
How can I measure my ability to meet their needs and expectations?
Do I have the capability to meet their needs and expectations? (If not, what must I do to
improve this capability?)
• Do I continually meet their needs and expectations? (If not, what prevents this from
happening when the capability exists?)
• How do I monitor changes in their needs and expectations?
An example of customer need takes place every day around 12:00 p.m. This is when
people begin to experience hunger (need) and decide to purchase lunch. The type of food, the
location of the restaurant and the amount of time the service will take are all factors to how
individuals decide to satisfy the need.
Types of Customer Needs in Product
1. Functionality
Customers need your product or service to function the way they need in order to solve their
problem or desire.
2. Price
Customers have unique budgets with which they can purchase a product or service.
3. Convenience
Your product or service needs to be a convenient solution to the function your customers
are trying to meet.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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4. Experience
The experience using your product or service needs to be easy -- or at least clear -- so as
not to create more work for your customers.
5. Design
Along the lines of experience, the product or service needs a slick design to make it
relatively easy and intuitive to use.
6. Reliability
The product or service needs to reliably function as advertised every time the customer
wants to use it.
7. Performance
The product or service needs to perform correctly so the customer can achieve their goals.
8. Efficiency
The product or service needs to be efficient for the customer by streamlining an otherwise
time-consuming process.
9. Compatibility
The product or service needs to be compatible with other products your customer is already
using.
Types of Customer Needs in Service
1. Empathy
When your customers get in touch with customer service, they want empathy and
understanding from the people assisting them.
2. Fairness
From pricing to terms of service to contract length, customers expect fairness from a
company.
3. Transparency
Customers expect transparency from a company they're doing business with. Service
outages, pricing changes, and things breaking happen, and customers deserve openness
from the businesses they give money to.
4. Control
Customers need to feel like they're in control of the business interaction from start to finish
and beyond, and customer empowerment shouldn't end with the sale. Make it easy for them
to return products, change subscriptions, adjust terms, etc.
5. Options
Customers need options when they're getting ready to make a purchase from a company.
Offer a variety of product, subscription, and payment options to provide that freedom of
choice.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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6. Information
Customers need information, from the moment they start interacting with your brand to days
and months after making a purchase. Business should invest in educational blog content,
instructional knowledge base content, and regular communication so customers have the
information they need to successfully use a product or service.
7. Accessibility
Customers need to be able to access your service and support teams. This means providing
multiple channels for customer service. We'll talk a little more about these options later.
What is a Customer Needs Analysis?
It is used in product development and branding to provide an in-depth analysis of the
customer to ensure that the product or message offers the benefits, attributes, and features
needed to provide the customer with value. To conduct a customer needs analysis successfully,
you need to do the following:
1. Customer Needs Analysis Survey
The customer needs analysis is typically conducted by running surveys that help
companies figure out their position in their respective competitive markets how they stack up in
terms of meeting their target customers' needs. The survey should primarily ask questions about
your brand and competitors, as well as customers' product awareness and brand attitudes in
general. Questions can include:
• Questions about positive and negative word associations with your brand
• Questions asking customers to group your brand in with similar and/or competing
brands
• Questions comparing and sorting brands according to their preferences for usage
2. Means-End Analysis
Once you've conducted the customer needs analysis survey, you can use the answers
to get a fuller picture of the reasons why your customers purchase from you, and what makes
your product or service stand apart from your competitors'. A means-end analysis analyzes
those answers to determine the primary reasons why a customer would buy your product.
Those buyer reasons can be divided into three main groups:
a. Features
A customer buys a product or service because of the features included in the purchase.
If the customer were buying a computer, for example, they might buy it because it's
smaller and more lightweight than other options.
b. Benefits
A customer buys a product or service because of a benefit, real or perceived, they
believe it will offer them. The customer might also buy the computer because it syncs
easily with their other devices wirelessly.
c. Values
A customer buys a product or service for unique, individual values, real or perceived,
they believe it will help them fulfill. The customer might think the computer will help them
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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to be more creative or artistic and unlock other personal or professional artistic
opportunities.
As you might imagine, these reasons for purchasing something can vary from customer
to customer, so it's important to conduct these customer surveys, collect the answers, and
group them into these three categories. From there, you can identify which of those motivating
factors you're solving for, and which you can improve on to make your product or service even
more competitive in the market.
Types of Customer Service
The communication channel the business uses to respond to customer needs plays a
major role in their ability to resolve problems. Some customer needs are time-sensitive and
require immediate interaction via phone or chat. Others are less critical and can be resolved at a
more casual pace.
Email
It is one of the most fundamental forms of customer
service. It allows customers to fully describe their problems
and automatically records the conversation into a
resourceful thread. Email is best used with customer needs
that don't need to be resolved right away.
Phone
It is when customers have problems that need to be answered
immediately. Phones connect customers directly to
representatives and create a human interaction between the
customer and the business. Both parties hear each other's tone
and can gauge the severity of the situation. Phones come in
handy most when there's a frustrated or angry customer.
Chat
It is one of the most flexible customer service channels. It can solve a
high volume of simple problems or provide detailed support for
complex ones. Businesses continue to adopt chat because of its
versatility as well as the improvement in efficiency it provides for
customer service representatives.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
20
Social Media
It is a relatively new customer service channel. Businesses are
now beginning to adopt it as a viable service option. That's
because social media lets customers immediately report an issue.
And since that report is public, customer service teams are more
motivated to resolve the customer's problem.
In Person
It is the oldest form of customer service.
This fulfills a convenience need as
customers can purchase and return a
product without having to ship it back to the company through an
online service. In-person customer service is great for businesses
with strong service personnel.
There's no "best" type of customer service. When used
together, each medium compliments the other and optimizes your
overall performance. This creates an omni-channel experience for
your customers which will keep them coming back for more.
How to Solve for Customer Needs
What stops customers from meeting their needs with your services or products? The first
step to solve a problem is to put yourself in your customer's shoes: If you were the customer
when we purchase your goods, use your technology, or sign up for your services, what would
prevent you from achieving ultimate value?
1.
2.
3.
4.
5.
Offer consistent company wide-messaging
Provide instructions for easy adoption
Ask customers for feedback
Nurture customer relationships
Solve for the right customer needs
Activities:
Written Ouput:
1. In your own words, why Customer Satisfaction is important?
Assignment:
Answer the following:
1. What is Customer Satisfaction Data?
2. What are the methods used in collecting Customer Satisfaction Data?
3. Give at least three (3) companies and the method they used to collect Customer
Satisfaction Data.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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References:
•
•
•
•
•
•
https://slideplayer.com/slide/10316741/
https://www.slideshare.net/AneelRaza/total-quality-management53460005?from_action=save
https://www.managementstudyguide.com/role-of-customers-in-total-qualitymanagement.htm
http://tqmgroups.blogspot.com/p/customer-satisfaction-is-key-component.html
https://www.managementstudyguide.com/role-of-customers-in-total-qualitymanagement.htm
https://www.businessballs.com/dtiresources/total_quality_management_TQM.pdf
Unit 3 : Customer Satisfaction Data
Overview
This lesson focuses on the customer satisfaction data.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn what is customer’s satisfaction data;
2. identify the various methods used to collect customer satisfaction data.
Course Materials:
Discussion:
Customer satisfaction refers to the measure of how products and defined as the
number of customers, or percentage of total customers, whose reported experience with a firm,
its products, or its services (ratings) exceeds specified satisfaction goals.
Customer Satisfaction Tools
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•
•
•
•
•
•
Net Promoter Score
Live Chat Transcripts
Social Media Mentions
Marketing Emails
Short Message Service (SMS)
Churn Rate
Follow-Up Surveys
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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1. Net Promoter Score (NPS)
Net Promoter Score, or NPS, is a popular customer satisfaction survey used to gather
quantitative and qualitative customer data. We'll talk a lot more about this type of survey later in
this post, but you'll need to adopt some form of customer feedback software if you want to use it
with the tips shared in the next section.
2. Customer Satisfaction Surveys
The customer satisfaction survey is the standard approach for collecting data on
customer happiness. It consists of asking your customers how satisfied they are, with or without
follow up questions. Three useful variations:
• In-App Surveys
• Post-Service Surveys
• Long Email Surveys
In-App Surveys
It’s one of the methods with the highest response rates, thanks to the fact that the
customer is asked for her opinion while she’s engaged with your company. In-app surveys are
especially handy to measure some of the standard customer satisfaction metrics, like NPS or
CES covered below. Good tools for in-app customer surveys are Floq and SurveyMonkey.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Post Service Surveys.
This type of survey focuses on the customer’s satisfaction with a specific service she’s
just received. You ask it right after the delivery, when it's still fresh in the mind. This can be done
in email support with a rating link in the mail, or in live chat with a rating view that appears after
the chat. It can also be done over the phone, but it's somewhat problematic because it takes
more time from the customer, and she might not feel comfortable sharing an unfiltered opinion.
Email Surveys
These are a good tool for in-depth insights about your customer happiness. Why are
they happy or unhappy? Although they have a downside of low response rates (10% - 15%,
according to SurveyGizmo), they do allow your customer to take their time in answering multiple
questions. Google Forms is an excellent free tool for this purpose.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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3. Customer Satisfaction Score (CSAT)
This is the most standard customer satisfaction metric, asking your customer to rate her
satisfaction with your business, product, or service. Your CSAT score is then the average rating
of your customer responses.
The scale typically ranges between 1 – 3, 1 – 5, or 1 – 10. A larger range is not always
better, due to cultural differences in how people rate their satisfaction. An article in
Psychological Science, for example, showed that people in individualistic countries choose the
more extreme sides more frequently than those in collectivistic countries.
An American is more likely to rate a service as “amazing” or “terrible” than for example a
Japanese, who will stick to “fine” or “not satisfactory." Such differences are important to be
aware of with an international customer base.
4. Customer Effort Score (CES)
With this method, customers aren’t asked for their satisfaction or likeliness of referring,
but for the effort it took them to have their issue solved — generally on a scale from 1 (very low
effort) to 7 (very high effort). The aim is to lower this average score. According to CEB, 96% of
customers with a high effort score showed reduced loyalty in the future, while that was the case
with only 9% of those who reported low effort scores.
This idea for a customer satisfaction metric was introduced in the Harvard Business
Review article Stop Trying to Delight Your Customers. It challenges the accepted idea that
excellent customer service equals exceeding customer expectations. Through their analysis, the
authors found that customers are much more likely to punish bad service than to reward good
service. They showed that the costs of exceeded customer expectations are high, while the
payoffs are minimal.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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5. Live Chat Transcripts
It offer similar benefits to surveys or Net Promoter Scores. However, instead of asking
customers to participate, all you have to do is analyze previous chats recorded by your live chat
software. Customers will typically offer plenty of direct and indirect feedback within these
conversations and this information is valuable for measuring user satisfaction.
6. Short Message Service (SMS)
SMS, or texting, is another efficient option for gathering feedback. It's relatively cheap to
send messages in bulk and it allows to you put a survey in the palm of your customers' hands.
And, if you're looking for a free alternative, you can use a popular messaging app like Facebook
or WhatsApp.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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7. Churn Rate
This is the percentage of customers that leave your business over time. If you compare
your total unique survey responses against the number of customers that left your business,
you'll have an idea of how many people left without leaving feedback. It's safe to say that these
customers were probably unsatisfied with their experience, too.
8. Follow-Up Surveys
These are particularly effective because they capture the customer's immediate reaction
to the brand interaction. You'll know exactly how the customer is feeling right after a long sales
call or after a tricky support case.
How to Measure Customer Satisfaction
1. Define Your Goals.
2. Outline a Plan.
3. Choose a Type of Customer Satisfaction Survey.
4. Customize Your Survey's Layout and Questions.
5. Determine Your Survey's Trigger.
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6. Select Your Survey Medium.
7. Analyze Your Survey Data.
8. Make Adjustments and Repeat.
Assessment:
Review Lesson 2, from Unit 1 to 3 and be ready for a quiz next meeting.
References:
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https://slideplayer.com/slide/10316741/
https://www.slideshare.net/AneelRaza/total-quality-management53460005?from_action=save
https://www.managementstudyguide.com/role-of-customers-in-total-qualitymanagement.htm
https://www.userlike.com/en/blog/6-proven-methods-for-measuring-your-customersatisfaction
https://blog.hubspot.com/service/how-to-measure-customer-satisfaction
http://tqmgroups.blogspot.com/p/customer-satisfaction-is-key-component.html
https://www.managementstudyguide.com/role-of-customers-in-total-qualitymanagement.htm
https://www.businessballs.com/dtiresources/total_quality_management_TQM.pdf
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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LESSSON 3 - ORGANIZING FOR QUALITY
Unit 1 : The PDCA Cycle
Overview
This lesson focuses on the PDCA cycle in organizing for quality.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn about PDCA cycle;
2. understand the importance of PDCA in organizing quality in an organization.
Course Materials:
Discussion:
In organizing for Total Quality Management, it is essential that the structure must be
organized to focus on the fundamental purpose of quality management: achieving continuous
process improvement.
Quality is focused on problem correction. Problem correction only serves to remove the
defects that have been embedded in the product as a consequence of the development
process. When properly organized, the focus is on problem prevention. Problem prevention
serves to improve the quality of the product and improve the competitive position of the
organization.
The PDCA Cycle
The American statistician and physicist Walter Shewhart is considered the father of
PDCA. He was passionate about statistical analysis and quality improvement and he built the
foundation of PDCA recorded in numerous publications. Years later, inspired by Shewhart’s
ideas, William Deming actually developed the model into a learning and improvement cycle,
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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which became popular as PDCA. This is why the model is also known as Shewhart cycle or
Deming cycle.
PDCA (Plan-Do-Check-Act) is an iterative, four-stage approach for continually improving
processes, products or services, and for resolving problems. It involves systematically testing
possible solutions, assessing the results, and implementing the ones that have shown to work. It
is based on the scientific method of problem-solving and was popularized by Dr W. Edwards
Deming, who is considered by many to be the father of modern quality control.
It provides a simple and effective approach for solving problems and managing change.
It enables businesses to develop hypotheses about what needs to change, test these
hypotheses in a continuous feedback loop, and gain valuable learning and knowledge. It
promotes testing improvements on a small scale before updating company-wide procedures
and work methods. The PDCA cycle consists of four components:
Plan
This is a three-step process. The first step is
the identification of the problem. The second step is
an analysis of this problem. The third step is the
development of an experiment to test it. Some of the
things to consider during this process includes:
1. Problem Identification
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Is this the right problem to work on?
Is this problem important and impactful for the organization?
Who does the problem affect and what is the potential impact of solving it?
2. Problem Analysis
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•
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What is the requisite information needed to fully understand the problem and its root
cause?
What data do we already have related to the problem? What data do we need to collect?
Who should be enlisted or interviewed to better understand the problem?
After understanding the problem, is it feasible to solve it? Will the solution be economical
and practical?
3. Developing an Experiment
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What are some viable solutions?
Who will be involved in the process and who will be responsible for it?
What is the expected outcome of the experiment and how can we measure
performance?
What are the resources necessary to run a small scale experiment?
How will the results from the small scale experiment translate to a full-fledged
implementation?
Do
This stage is where we test the proposed solutions or
changes. Ideally, this should be carried out on small-scale
studies. Small-scale experiments allow us to learn quickly,
adjust as needed, and are typically less expensive to
undertake. Make sure that you measure the performance
and collect the data necessary to make an evaluation later
on.
Check
In this stage, review the experiment, analyze the results, and identify what you’ve
learned. Consider the following questions:
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Did the implementation of the change
achieve the desired results?
What did not work?
What was learned from the implementation?
Is there enough data to show that the
change was effective?
Do you need to run another experiment?
How does the small scale experiment
measure up to the larger picture?
Is the proposed solution still viable and
practical?
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Act
In this stage, take action based on what you learned in the study. If the change did not
work, go through the cycle again with a different plan. If you were successful, incorporate what
you have learned from the test into wider changes. Use what you have learned to plan new
improvements and start the cycle again. If your plan worked, you will need to standardize the
process and implement it across the business. During this phase of the PDCA cycle, you should
ask the following questions:
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What resources are needed to implement the solution company-wide?
What kind of training is needed for full implementation of the improvement?
How can the change be maintained and sustained?
How can we measure and monitor the impact of the solution?
What are some other areas of improvement?
How can we use what we have learned in this experiment to devise other experiments?
The role of PDCA Cycle to support Kaizen
PDCA cycle supports both the principles and practice of continuous improvement.
Kaizen focuses on applying small, daily changes that result in major improvements over time.
The PDCA Cycle provides a framework and structure for identifying improvement opportunities
and evaluating them objectively.
With the use of PDCA, an organization undergoing continuous improvement can create
a culture of problem solvers and critical thinkers. Improvement ideas can be rigorously tested on
a small scale. Using data, the team can make adjustments to the solution and reassess the
hypothesis. After an idea has been shown to be effective, it can be standardized and
implemented companywide. The iterative process of the PDCA cycle enables ideas to be
continuously tested and promotes a continuous improvement and continuous learning culture.
References:
•
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https://www.slideshare.net/MUNIF/organizing-for-quality
http://kpa-group.com/en/our-customers/our-customers-1/organizing-for-qualitymanagement
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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•
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https://kanbanize.com/lean-management/improvement/what-is-pdca-cycle
https://www.lucidchart.com/blog/plan-do-check-act-cycle
https://www.investopedia.com/terms/p/pdca-cycle.asp
https://theleanway.net/the-continuous-improvement-cycle-pdca
https://www.mindtools.com/pages/article/newPPM_89.htm
https://asq.org/quality-resources/pdca-cycle
Unit 2 : Six Sigma
Overview
This lesson focuses on the role of Six Sigma in organizing for quality in the organization.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn about Six Sigma and it’s importance;
2. understand the use of Six Sigma in Total Quality Management.
Course Materials:
Discussion:
“Six Sigma is a quality program that, when all is said and done, improves your customer’s
experience, lowers your costs, and builds better leaders.” – Jack Welch
Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects
(driving toward six standard deviations between the mean and the nearest specification limit) in
any process – from manufacturing to transactional and from product to service. The differing
definitions below have been proposed for Six Sigma, but they all share some common threads:
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The use of teams that are assigned well-defined projects that have a direct impact on
the organization's bottom line.
Training in "statistical thinking" at all levels and providing key people with extensive
training in advanced statistics and project management. These key people are
designated "Black Belts." Review the different Six Sigma belts, levels, and roles.
Emphasis on the DMAIC approach to problem solving: define, measure, analyze,
improve, and control.
A management environment that supports these initiatives as a business strategy.
The Five Steps of Six Sigma
True believers and practitioners in the Six Sigma
method follow an approach called DMAIC which stands
for define, measure, analyze, improve and control. It is a
statistically driven methodology that companies
implement as a mental framework for business process
improvement. The ideology behind DMAIC is that a
business may solve any seemingly unsolvable problem
by following the DMAIC steps.
1. A team of people, led by a Six Sigma champion,
defines a faulty process on which to focus, decided
through an analysis of company goals and
requirements. This definition outlines the problem,
goals, and deliverables for the project.
2. The team measures the initial performance of the
process. These statistical measures make up a list of potential inputs, which may cause the
problem and help the team understand the process's benchmark performance.
3. Then the team analyzes the process by isolating each input, or potential reason for the
failure, and testing it as the root of the problem. Through analysis, the team identifies the
reason for process error.
4. From there, the team works to improve system performance.
5. Finally, the team adds controls to the process to ensure it does not regress and become
ineffective once again.
The martial arts belt structure is used to recognize proficiency in training and application in Six
Sigma, using the following colors:
✓ White Belt – Overview, DMAIC, Define Phase
✓ Yellow Belt – White Belt + process mapping, data collection and charting, assisting with a
project
✓ Green Belt – Yellow Belt + Project leader, core Six Sigma tools (Gage R&R, SPC,
Capability, ANOVA, Regression), change management, hypothesis tests and more
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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✓ Black Belt – Green Belt + advanced statistical analysis and experiments, change
management, nonnormal distributions
✓ Master Black Belt – Black Belt + Design for Six Sigma, more advanced statistical analysis,
unique tools for specific industries and processes, working with leadership, implementing
successful improvement programs
✓ Champion – executive leader who drives the initiatives. Helps select projects and remove
barriers for project teams. Support change and develops a lean Six Sigma culture.
Formal certification is recognized at the Green Belt, Black Belt and Master Black Belt
level based on one or more of the following criteria:
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Completion of training covering the body of knowledge.
Years of work experience with the body of knowledge.
Passing an exam covering the body of knowledge.
Completion of one or more Six Sigma projects.
Certification is typically authorized by consulting firms or industry organizations and
membership groups.
A combined Lean Six Sigma belt typically is an expanded or modified version of Six
Sigma training with the addition of Lean principles and tools.
Lean Six Sigma
It is a team-focused managerial approach that seeks to improve performance by
eliminating waste and defects. It combines Six Sigma methods and tools and the lean
manufacturing-lean enterprise philosophy, striving to reduce waste of physical resources, time,
effort, and talent while assuring quality in production and organizational processes. Under the
tenets of Lean Six Sigma, any use of resources that do not create value for the end customer is
considered a waste and should be eliminated.
The Origins of Lean Six Sigma
Lean originated at Toyota in the 40’s and Six Sigma originated at Motorola in the 80’s.
Although they’ve been taught as separate methods for many years, the line has blurred and it’s
now common to see Lean & Six Sigma teachings combined in order to reap the best of both
worlds. Understanding both approaches and accompanying toolkits is extremely valuable when
solving problems.
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What Are the Benefits of Using Lean Six Sigma?
Organizations face rising costs and new challenges every day. Lean Six Sigma provides
a competitive advantage in the following ways:
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Streamlining processes results in improved customer experience and increased loyalty.
Developing more efficient process flows drives higher bottom-line results.
Switching from defect detection to defect prevention reduces costs and removes waste.
Standardizing processes leads to organizational “nimbleness” and the ability to pivot to
everyday challenges.
Decreasing lead times increases capacity and profitability.
Engaging employees in the effort improves morale and accelerates people development.
Assignment:
Written Output
1. If you are a supervisor, how will you emplower your employees?
References:
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https://asq.org/quality-resources/six-sigma
https://www.leansixsigmadefinition.com/glossary/six-sigma/
https://www.isixsigma.com/new-to-six-sigma/getting-started/what-six-sigma/
https://goleansixsigma.com/what-is-lean-six-sigma/
Unit 3 : Building Employee Empowerment
Overview
This lesson focuses on how to build employee empowerment in the organization.
Learning Objectives:
At the end of this lesson, you should be able to:
1. understand the meaning of employee empowerment and its importance;
2. identify the techniques in building employee empowerment in the organization.
Course Materials:
Discussion:
What is Employee Empowerment?
Employee empowerment is about allowing the employee the autonomy to flourish with
the supervisor’s guidance. Mistakes are viewed as lessons learned, and risk-taking is seen as a
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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chance to grow. When implemented the right way, employee empowerment helps workers feel
more comfortable developing as professionals in the company.
Thirteen (13) Techniques for Empowering Employees
1. Demonstrate your trust.
The best way to gain employee loyalty is by showing staff that they have your trust.
Clarify the ends instead of the means, and let your staff go about projects in their own way.
They might not accomplish everything exactly as you would have, but they will get the job done
with their own flair.
2. Communicate a clear vision.
As a leader, it's your job to get everyone on the same page. People who don't know
what they're supposed to be doing won't be able to accomplish their jobs very well at all. Clearly
define the roles of your staff so they know their duties and don't step on each other's toes.
3. Don't avoid small talk.
Make it a habit to sit down with your employees and engage in one-on-one
conversations. You can have these talks in your office, in the break room or at a coffee shop
down the street. Intentionally ask about their work progress, such as accomplishments or even
complaints, but also make an effort to get to know your staff on a personal level.
Ask what's going on with their families, or lives in general, to show that you care about
them as human beings. This will lead to a friendlier and more productive office environment. It
will also help you grow as a leader. Two-thirds of people agree that their boss had some kind of
impact on their career – make sure yours is a positive one.
4. Encourage self-improvement.
When your employees learn new skills, it improves the company as a whole. Some
companies even support continued education or classes outside of the workplace that enhance
personal growth. If you can't lend your employees financial support for their development, at
least be flexible with their schedules to a certain degree. Allowing your salesperson or HR
representative to leave half an hour early every Thursday for community orchestra practice can
do wonders for their well-being and work ethic.
5. Leave your office door open.
Let your employees know that their opinions are valued. A simple gesture such as
leaving your office door open can do wonders to communicate this. An open-door policy shows
employees that you care what they think while enabling them to give their input and play an
active role in your company.
6. Support vacation time.
This might seem counterintuitive, but you'll get a lot more out of your employees if you
work to keep them from burning out. Learn to spot the symptoms of burnout, and avoid
employees getting anywhere close by actively supporting vacation time. Employees will actually
be more productive and better at their jobs if they are well rested and rejuvenated.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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7. Delegate more than just work.
As a manager, you'll inevitably have to delegate work. Ask a staff member to lead an
important meeting, even if it's just while you step out to take a phone call. Share the projects
that people and customers notice. This will show employees that they have a real effect on the
business. [Read related article: Building an Employee-Centric Environment to Boost Morale and
Productivity]
8. Learn flexibility.
Be flexible with your employees as things come up. Trying a schedule that allows a
parent to drop their kids off at school in the morning. As a bonus, they'll be able to avoid rushhour traffic and put in even more work. Also allowing an employee to work from home to take
care of a sick parent or child if the job allows. If long WFH periods don't work for the company,
experiment with one WFH day a week or a couple each month.
9. Inspire creative thinking.
Just because you have been doing a task one way for your entire career does not mean
that's the best way to accomplish it. There are always problems to be solved and better ways to
do things, so use the minds around you and encourage your employees to share creative
business solutions. Not only will putting the challenge in the hands of your employees save you
some headache, but it’s also likely that you’ll come out with a better end result. They do say that
two heads are better than one.
10. Show you appreciate their efforts.
Employees are paid to show up every day, but it's always helpful to receive some
encouragement. Whether it's a sales call that was handled exceptionally well or a report that
was put together flawlessly, let your employees know when they are doing a good job. This will
ensure continued high-quality work in the future, and they will feel more job satisfaction.
11. Listen to their concerns.
You should not only encourage open feedback and ideas from employees, but also be
there to listen to any issues or concerns they have. This will help them feel heard and
supported.
12. Practice forgiveness for their mistakes.
If you get angry every time an employee makes a mistake, they will continue to play it
safe. The purpose of employee empowerment is allowing them to feel confident and
courageous enough to take risks and make their own decisions.
13. Play to their strengths.
Understand each employee's strengths and weaknesses so you can empower them in
the ways that work best for them and your company. For instance, if one of your workers is a
great public speaker, have them lead the next meeting. If another employee prefers to work
behind the scenes, let them write the next newsletter.
Benefits of Employee Empowering
There are many reasons to practice employee empowerment as a manager. Not only
will it help your individual employees feel more confident in their positions, it will also help your
business perform better as a whole.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Here are some specific benefits of empowering your employees:
1. It holds employees accountable. When you allow employees to make their own decisions
and take risks in the workplace, you are essentially investing in them. Your trust will hold
them accountable for their actions, motivating them to work harder and smarter.
2. It increases employee retention. Employees who feel appreciated and supported are more
likely to be loyal to the company.
3. It sparks job satisfaction. When an employee is free to take risks and perform at their own
pace and to their own standards, they tend to be more satisfied. Employee satisfaction
translates to a positive work culture.
4. It improves customer service. When handling customers, employees often pause to check in
with their managers on how to go about a specific request or resolve an issue. By
empowering your employees to get the job done without waiting for your approval, you set
your company up for better customer service.
5. It allows individual growth. Empowered employees feel more confident and inspired to grow,
which benefits not only their careers but also your company.
References:
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https://smallbusiness.chron.com/employee-empowerment-techniques-1843.html
https://blog.proofhub.com/employee-empowerment-the-right-way-to-do-it-7d894654a393
https://www.business.com/articles/trust-the-process-10-tips-to-empower-and-encourageyour-staff/
https://www.beekeeper.io/blog/10-tips-on-how-to-empower-and-engage-youremployees/
Unit 4 : Benchmarking
Overview
This lesson focuses on benchmarking in Total Quality Management.
Learning Objectives:
At the end of this lesson, you should be able to:
1. understand the meaning of employee empowerment and its importance;
2. identify the techniques in building employee empowerment in the organization.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Course Materials:
Discussion:
Evolution of Benchmarking
The method may have evolved in the early 1950s, when W. Edward Deming taught the
Japanese the idea of quality control. Other American management innovations followed. The
best example is Toyota Motor Corporation’s following the footsteps of Ford Motor Corporation
albeit with the adaptation of the Ford’s Just-in-case system into Toyota’s Just-in-time system.
The term “benchmarking,” however, was not coined by that time.
The term “benchmarking” emerged when the idea took ground in US during 1980s when
Xerox, Ford and Motorola became the pioneers of benchmarking in USA. Robert Camp, the
logistics engineer who initiated Xerox’s benchmarking program and who is generally regarded
as the guru of the benchmarking movement, defines it: “Benchmarking is the search for industry
best practices that lead to superior performance”.
What is Benchmarking?
It is the process of measuring the performance of one's company against the best in the
same or another industry. It is using the knowledge and the experience of others to improve the
organization. It is analyzing the performance and noting the strengths and weaknesses of the
organization and assessing what must be done to improve.
Importance of Benchmarking
There are several reasons that benchmarking is becoming more commonly used in
industry;
• Benchmarking is a more efficient way to make improvements. Managers can eliminate
trial and error process improvements.
• Benchmarking speeds up organization’s ability to make improvements.
• Compare business practices with those of world class organizations
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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•
•
•
Challenge current practices and processes
Create improved goals and practices for the organization
Change the perspective of executives and managers.
Objectives of Benchmarking
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Becoming competitive
Improving industry best practices
Defining customer requirement
Establishing effective goals and objectives
Developing the measures of productivity
Types of Benchmarking
1. Process benchmarking
The initiating firm focuses its observation and investigation of business processes with a
goal of identifying and observing the best practices from one or more benchmark firms. Activity
analysis will be required where the objective is to benchmark cost and efficiency; increasingly
applied to back-office processes where outsourcing may be a consideration.
2. Financial benchmarking
Performing a financial analysis and comparing the results in an effort to assess your
overall competitiveness.
3. Performance benchmarking
Allows the initiator firm to assess their competitive position by comparing products and
services with those of target firms.
4. Product benchmarking
The process of designing new products or upgrades to current ones. This process can
sometimes involve reverse engineering which is taking apart competitors products to find
strengths and weaknesses.
5. Strategic benchmarking
Involves observing how others compete. This type is usually not industry specific
meaning it is best to look at other industries.
6. Functional benchmarking
A company will focus its benchmarking on a single function in order to improve the
operation of that particular function. Complex functions such as Human Resources, Finance and
Accounting and Information and Communication Technology are unlikely to be directly
comparable in cost and efficiency terms and may need to be disaggregated into processes to
make valid comparison.
7. Internal benchmarking
It is comparison against the best within the same organization or corporation, often
called benchmarking within your own class.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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8. Competitive benchmarking
It is comparison against the best direct competitors, which then can be termed
benchmarking against someone in the parallel class.
9. External benchmarking
It involves seeking outside organizations that are known to be best in class. It provides
opportunities of learning from those who are at the leading edge, although it must be
remembered that not very best practice solution can be transferred to others.
10. International benchmarking.
It is used where partners are sought from other countries because best practitioners are
located elsewhere in the world and/or there are too few benchmarking partners within the same
country to produce valid results.
Benchmarking Procedure
Considerations
• Before an organization can achieve the full benefits of benchmarking, its own processes
must be clearly understood and under control.
• Benchmarking studies require significant investments of manpower and time, so
management must champion the process all the way through, including being ready and
willing to make changes based on what is learned.
• Too broad a scope dooms the project to failure. A subject that is not critical to the
organization’s success won’t return enough benefits to make the study worthwhile.
• Inadequate resources can also doom a benchmarking study by underestimating the
effort involved or inadequate planning. The better you prepare, the more efficient your
study will be.
Plan
1. Define a tightly focused subject of the benchmarking study. Choose an issue critical to the
organization’s success.
2. Form a cross-functional team. During Step 1 and 2, management’s goals and support for the
study must be firmly established.
3. Study your own process. Know how the work is done and measurements of the output.
4. Identify partner organizations that may have best practices.
Collect
1. Collect information directly from partner organizations. Collect both process descriptions and
numeric data, using questionnaires, telephone interviews, and/or site visits.
Analyze
1. Compare the collected data, both numeric and descriptive.
2. Determine gaps between your performance measurements and those of your partners.
3. Determine the differences in practices that cause the gaps.
Adapt
1. Develop goals for your organization’s process.
2. Develop action plans to achieve those goals.
3. Implement and monitor plans.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Benefits of Benchmarking Program
1. Cultural Change
Benchmarking allows organizations to set realistic, rigorous new performance targets,
and this process helps convince people of the credibility of these targets. It helps people to
understand that there are other organizations who know and do job better than their own
organization.
2. Performance Improvement
Benchmarking allows the organization to define specific gaps in performance and to
select the processes to improve. These gaps provide objectives and action plans for
improvement at all levels of organization and promote improved performance for individual and
group participants.
3. Human Resources
Benchmarking provides basis for training. Employees begin to see gap between what
they are doing and what best-in-class are doing. Closing the gap points out the need of
personnel to be trained to learn techniques of problem solving and process improvement.
References:
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•
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https://totalqualitymanagement.wordpress.com/2008/09/12/benchmarking/
https://asq.org/quality-resources/benchmarking
https://totalqualitymanagement.weebly.com/benchmarking.html#:~:text=Benchmarking%
20is%20the%20process%20of,industry%20standard%20or%20best%20practice.
http://tqmgroups.blogspot.com/p/benchmarking.html
https://www.slideshare.net/amarjeetgorai/benchmarking-tqm
Unit 5 : The JIT System
Overview
This lesson focuses on the JIT (Just-in-Time) System.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn JIT System and it’s importance;
2. understand the importance of JIT System in Total Quality Management.
3. identify the techniques in building employee empowerment in the organization.
Course Materials:
Discussion:
History of JIT System
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Its origin and development was mainly in Japan, largely in the 1960s and 1970s.
Following the war, Japan lacked the cash to finance big-batch, large inventory production
methods used by other developed countries. They also had high unemployment and a lack of
abundant natural resources.
In order to survive, they had to “lean out” their processes. They built smaller factories,
which focused on quickly turning small amounts of raw materials into small amounts of physical
products. Processing smaller batches allowed the manufacturers to reduce financial risk, while
slowing generating sustainable levels of working capital. The system that they used came to be
known as just in time manufacturing, popularized in Western media as the Toyota Production
System.
JIT System
The just-in-time (JIT) inventory system is a management strategy that aligns rawmaterial orders from suppliers directly with production schedules. Companies employ this
inventory strategy to increase efficiency and decrease waste by receiving goods only as they
need them for the production process, which reduces inventory costs. This method requires
producers to forecast demand accurately.
Supporting a JIT manufacturing system requires discipline, structure, and explicit
processes. In addition to strictly limiting inventory, the following methods are included in a true
JIT system:
•
•
•
•
•
•
•
•
•
•
•
•
•
Housekeeping – physical organization and discipline
Elimination of defects
Setup reduction and flexible changeover approaches
Small lot sizes – the ultimate lot size and flexibility.
Uniform plant load – leveling as a control mechanism
Balanced flow – actively managing flow by limiting batch sizes
Skill diversification – multi-functional workers
Control by visibility – using visual tools to improve communication
Designing for process
Streamlining the movement of materials
Cellular manufacturing
Pull system – signal [kanban] replenishment/resupply systems.
Kanban – is a scheduling system often used in conjunction with JIT to avoid
overcapacity of work in process.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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The Benefits of JIT System
1. Reduction in the order to payment timeline
Many businesses will suffer with cash flow problems as they will often have to purchase
large amounts of raw materials prior to manufacturing and subsequent payment by the
customer. Often this gap is many months. Through implementing JIT you are able to
considerably reduce that time period.
2. Reduction in Inventory costs
The main aims with any JIT implementation is to improve stock turns and the amount of
stock being held. Personal experience has seen reductions of more than 90% stock in some
industries. Along with the reduction in the stock come many other associated benefits.
3. Reduction in space required
It is by removing large amounts of stock from the system and moving processes closer
together we will often see a significant reduction in the amount of floor space being used.
Results from 100’s of projects run within companies in the UK through the Manufacturing
Advisory Service saw average reductions of 33% for simple 5 day implementation projects.
4. Reduction in handling equipment and other costs
If you don’t have to move large batches there is less need for complex machinery to
move them and all of the associated labor and training.
5. Lead time reductions
One of the most significantly impacted areas is that of the time it takes for products to
flow through the process. Instead of weeks or months most JIT implementations result in lead
times of hours or a few days.
6. Reduced planning complexity
The use of simple pull systems such as Kanban, even with your suppliers, can
significantly reduce the need for any form of complex planning. With many implementations the
only planning is the final shipping process.
7. Improved Quality
The removal of large batch manufacturing and reduction in handling often results in
significant quality improvements; often in the region of 25% or more.
8. Productivity increases
To achieve JIT there are many hurdles that must be overcome with regards to how the
process will flow. These will often result in productivity improvements of 25% upwards.
9. Problems are highlighted quicker
It is cited as being a negative aspect of JIT in that any problems will often have an
immediate impact on your whole production process. However this is the perfect way to ensure
that problems are highlighted and solved immediately when they occur.
10. Employee empowerment
One requirement of JIT as with most other aspects of Lean manufacturing is that
employees are heavily involved in the design and application of your system.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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References:
•
•
•
•
•
•
•
•
https://www.planview.com/resources/guide/what-is-lean-manufacturing/just-in-timemanufacturing/
https://en.wikipedia.org/wiki/Just-in-time_manufacturing
https://www.thebalancesmb.com/just-in-time-jit-inventory-management-393301
https://leanmanufacturingtools.org/just-in-time-jit-production/
https://www.tradegecko.com/inventory-management/what-is-just-in-time-inventorymanagement
https://www.thebalancesmb.com/just-in-time-jit-inventory-management-393301
https://leanmanufacturingtools.org/just-in-time-jit-production/
https://kanbanize.com/lean-management/pull/just-in-time-production
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
46
LESSON 4 - THE SEVEN QC TOOLS
Unit 1 : Pareto Analysis
Overview
This lesson focuses on the Pareto Analysis as part of the seven quality control tool.
Learning Objectives:
At the end of this lesson, you should be able to:
1. define motivation;
2. explain the importance of motivation in organization.
Course Materials:
Discussion:
History
In 1906, Italian economist Vilfredo Pareto discovered that 80% of the land in Italy was
owned by just 20% of the people in the country. He extended this research and found out that
the disproportionate wealth distribution was also the same across all of Europe. The 80/20 rule
was formally defined as the rule that the top 20% of a country’s population accounts for an
estimated 80% of the country’s wealth or total income.
Joseph Juran, a Romanian-American business theorist, stumbled on Pareto’s research
work 40 years after it was published, and named the 80/20 rule Pareto’s Principle of Unequal
Distribution. Juran extended Pareto’s Principle in business situations to understand whether the
rule could be applied to problems faced by businesses. He observed that in quality control
departments, most production defects resulted from a small percentage of the causes of all
defects, a phenomenon which he described as "the vital few and the trivial many."
Following the work of Pareto and Juran, the British NHS Institute for Innovation and
Improvement provided that 80% of innovations come from 20% of the staff; 80% of the
decisions made in meetings come from 20% of the meeting time; 80% of your success comes
from 20% of your efforts; and 80% of complaints you make are from 20% of your services.
Today, Pareto Analysis is employed by business managers in all industries to determine
which issues cause the most problems within their departments, organization, or sectors. A
good approach typically involves conducting a statistical technique, such as a cause and effect
analysis, to produce a list of potential problems and the outcomes of these problems. Following
the information provided from the cause and effect analysis, the 80/20 analysis can be applied.
Pareto Analysis
It is a statistical technique in decision-making used for the selection of a limited number
of tasks that produce significant overall effect. It uses the Pareto Principle (also known as the
80/20 rule) the idea that by doing 20% of the work you can generate 80% of the benefit of doing
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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the entire job. Take quality improvement, for example, a vast majority of problems (80%) are
produced by a few key causes (20%). This technique is also called the vital few and the trivial
many.
We can apply the 80/20 rule to almost anything:
• 80% of customer complaints arise from 20% of your products and services.
• 80% of delays in the schedule result from 20% of the possible causes of the delays.
• 20% of your products and services account for 80% of your profit.
• 20% of your sales force produces 80% of your company revenues.
• 20% of a systems defects cause 80% of its problems.
When to use a Pareto Chart
• When analyzing data about the frequency of problems or causes in a process
• When there are many problems or causes and you want to focus on the most significant
• When analyzing broad causes by looking at their specific components
• When communicating with others about your data
Examples:
1. It shows how many customer
complaints were received in each
of five categories.
2. It takes the largest category,
"documents," from the previous
chart, breaks it down into six
categories of document-related
complaints, and shows cumulative
values.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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If all complaints cause equal distress to the customer, working on eliminating documentrelated complaints would have the most impact, and of those, working on quality certificates
should be most fruitful.
Pareto Analysis Steps
1. Identify and list problems
Write a list of all of the problems that you need to resolve.
2. Identify the root cause
For each problem, identify its fundamental cause.
3. Score the problems
Score each problem that you've listed by importance. The scoring method use will depend
on the sort of problem that needs to be solved. If the problem revolves around a business
trying to improve profits, then the scoring might center on how much each problem is costing
them.
4. Group the problems
Group the problems by the root cause. Use the root cause analysis that you carried out in
Step 3 to group problems together by common cause. For example, if three of your
problems are caused by lack of staff, you could put these into the same group.
5. Add the scores
Add up the scores for each cause group. The group with the top score is should be the
highest priority, while the one with the lowest score should be the lowest priority.
6. Action
Start tackling the causes of the problems. Deal with the top-priority problem, or group of
problems, first.
Assignment:
Research: What is Isihikawa Diagram?
References:
•
•
•
•
•
•
https://en.wikipedia.org/wiki/Pareto_analysis
https://www.projectsmart.co.uk/pareto-analysis-step-by-step.php
https://www.mindtools.com/pages/article/newTED_01.htm
https://www.investopedia.com/terms/p/pareto-analysis.asp
https://asq.org/quality-resources/pareto
https://www.businessnewsdaily.com/6154-pareto-analysis.html
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
49
Unit 2 : Ishikawa Diagram
Overview
This lesson focuses on the Ishikawa Diagram.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn the Ishikawa Diagram;
2. understand the use of Ishikawa Diagram in quality control.
Course Materials:
Discussion:
Ishikawa diagrams is also called as fishbone diagrams, herringbone diagrams, causeand-effect diagrams, or Fishikawa. These are diagrams created by Kaoru Ishikawa in 1960s. It
is commonly used in manufacturing and product development to outline the different steps in a
process, demonstrate where quality control issues might arise and determine which resources
are required at specific times.
Common uses of the Ishikawa diagram are product design and quality defect prevention
to identify potential factors causing an overall effect. Each cause or reason for imperfection is a
source of variation. Causes are usually grouped into major categories to identify and classify
these sources of variation.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Ishikawa Diagram resemble a fish skeleton, with the "ribs" representing the causes of an
event and the final outcome appearing at the head of the skeleton. The purpose of the Ishikawa
diagram is to allow management to determine which issues have to be addressed in order to
gain or avoid a particular event.
Karou Ishikawa revived the idea of the fishbone diagram to solve problems at the
Kawasaki shipyards in the 1960s, and the idea soon caught on. Even back in the 60s, the
fishbone diagram wasn’t anything new. In the 1920s it was seen as an important quality control
tool. The iconic Mazda Miata car was designed to overcome the issues identified in a fishbone
diagram. Even details such as designing the sportscar’s doors so that the driver could rest his
arm on it while driving was taken into account.
Variation = Imperfection
When it comes to quality and efficiency, variation is your enemy. Whatever your
business is, you don’t want to leave anything up to chance. From the moment your client
contacts you, a predictable process should be followed with its aim being complete customer
satisfaction. Variation in the process will mean variation in the product. Ishikawa diagrams help
you to determine the variables that may enter the equation. They allow you to make your plans
so that you know how to deal with them in such a way that the quality of your final product is still
up to standard and without significant variation.
Categorizing Sources of Variation
Possible causes of variation may be numerous, but they will invariably fall into the
following categories:
1. Methodologies
Consider the need for policies, rules, regulations, or procedures to ensure consistent quality.
2. Machinery
This could be anything from assembly line robots to tools or even computers.
3. Materials
The materials needed to produce a quality product can’t be overlooked.
4. Measurements
How is the process measured and monitored to evaluate quality?
5. Environment
This includes anything outside the company’s control that may impact on results.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Identifying Causes of Variation
Five 5 (or 8) Ms used in Manufacturing
1. Material
2. Machine
3. Method
4. Manpower
5. Measurement
6. Milieu
7. Management and Money
8. Maintenance
Eight 8 Ps used in Marketing
1. Product
2. Price
3. Promotion
4. Place
5. People
6. Process
7. Packaging
8. Physical evidence
Five 5 Ss used for Service Industry
1. Suppliers
2. Surroundings
3. Systems
4. Scope of skills
5. Standard documentation
References:
•
•
•
•
•
•
https://www.cms.gov/medicare/provider-enrollment-andcertification/qapi/downloads/fishbonerevised.pdf
https://www.moresteam.com/toolbox/fishbone-diagram.cfm
https://en.wikipedia.org/wiki/Ishikawa_diagram
https://asq.org/quality-resources/fishbone
https://www.investopedia.com/terms/i/ishikawa-diagram.asp
https://tallyfy.com/definition-fishbone-diagram/
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
52
Unit 3 : Flowchart
Overview
This lesson focuses on the flowchart.
Learning Objectives:
At the end of this lesson, you should be able to:
1. learn flowchart and it’s part;
2. explain the importance of flowchart as QC tool.
Course Materials:
Discussion:
History
Flowcharts to document business processes
came into use in the 1920s and ‘30s. In 1921,
industrial engineers Frank and Lillian Gilbreth
introduced the “Flow Process Chart” to the American
Society of Mechanical Engineers (ASME). In the early
1930s, industrial engineer Allan H. Morgensen used
Gilbreth’s tools to present conferences on making work
more efficient to business people at his company. In
the 1940s, two Morgensen students, Art Spinanger
and Ben S. Graham, spread the methods more widely.
Spinanger introduced the work simplification
methods to Procter and Gamble. Graham, a director at
Standard Register Industrial, adapted flow process
charts to information processing. In 1947, ASME
adopted a symbol system for Flow Process Charts,
derived from the Gilbreths’ original work.
Also in the late ‘40s, Herman Goldstine and
John Van Neumann used flowcharts to develop computer programs, and diagramming soon
became increasingly popular for computer programs and algorithms of all kinds. Flowcharts are
still used for programming today, although pseudocode, a combination of words and coding
language meant for human reading, is often used to depict deeper levels of detail and get closer
to a final product.
What is a Flowchart?
A flowchart is a graphical representations of steps. It was originated from computer
science as a tool for representing algorithms and programming logic but had extended to use in
all other kinds of processes. Nowadays, flowcharts play an extremely important role in
displaying information and assisting reasoning. They help us visualize complex processes, or
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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make explicit the structure of problems and tasks. A flowchart can also be used to define a
process or project to be implemented.
Flowchart Symbols
Different flowchart shapes have different conventional meanings. The meanings of some
of the more common shapes are as follows:
•
Terminator
The terminator symbol represents the starting or ending point of the system.
•
Process
A box indicates some particular operation.
•
Document
This represents a printout, such as a document or a report.
•
Decision
A diamond represents a decision or branching point. Lines coming out from the diamond
indicates different possible situations, leading to different sub-processes.
•
Data
It represents information entering
or leaving the system. An input might be
an order from a customer. Output can be a product to be delivered.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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•
On-Page Reference
This symbol would contain a letter inside. It indicates that the flow continues on a matching
symbol containing the same letter somewhere else on the same page.
•
Off-Page Reference
This symbol would contain a letter inside. It indicates that the flow continues on a matching
symbol containing the same letter somewhere else on a different page.
•
Delay or Bottleneck
Identifies a delay or a bottleneck.
•
Flow
Lines represent the flow of the sequence and direction of a process.
Benefits of Flowchart
• It helps to clarify complex processes.
• It identifies steps that do not add value to the internal or external customer, including delays;
needless storage and transportation; unnecessary work, duplication, and added expense;
breakdowns in communication.
• It helps team members gain a shared understanding of the process and use this knowledge
to collect data, identify problems, focus discussions, and identify resources.
• It serves as a basis for designing new processes.
Types of Flowcharts
There are a wide variety of flowchart types. Here are just a few of the more commonly used
ones.
1. High-Level Flowchart for an Order-Filling Process
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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2. Detailed Flowchart
How to Draw a Basic Flowchart
1. Define your purpose and scope. Be detailed enough in your research but simple enough in
your charting to communicate with your intended audience.
• What do you hope to accomplish?
• Are you studying the right things with appropriate start and end points to accomplish
that purpose?
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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2. Identify the tasks in chronological order. This might involve talking to participants, observing
a process and/or reviewing any existing documentation. You might write out the steps in
note form, or begin a rough chart.
3. Organize them by type and corresponding shape, such as process, decision, data, inputs or
outputs.
4. Draw your chart, either sketching by hand or using a program.
5. Confirm your flowchart, walking through the steps with people who participate in the
process. Observe the process to make sure you haven’t missed anything important to your
purpose.
Assessment:
Review Lesson 4, from Unit 1 to 3, and be ready for a quiz next meeting.
References:
•
•
•
•
•
•
•
•
https://www.mindtools.com/pages/article/newTMC_97.htm
https://creately.com/diagram-community/popular/t/flowchart
https://www.smartdraw.com/flowchart/
https://www.lucidchart.com/pages/what-is-a-flowchart-tutorial
https://asq.org/quality-resources/flowchart
https://creately.com/blog/diagrams/flowchart-guide-flowchart-tutorial/
https://www.visual-paradigm.com/tutorials/flowchart-tutorial/
https://en.wikipedia.org/wiki/Flowchart#:~:text=A%20flowchart%20is%20a%20type,conn
ecting%20the%20boxes%20with%20arrows.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
57
LESSON 5 - INSPECTION
Unit 1 : Introduction
Overview
This lesson focuses on the objective and purpose of inspection.
Learning Objectives:
At the end of this lesson, you should be able to:
1. understand the role of inspection to Total Quality Management;
2. determine the objectives of inspection, its purpose, and different stages;
3. be aware of the drawbacks of inspection.
Course Materials:
Discussion:
Inspection are measures aimed at checking, measuring, or testing of one or more
product characteristics and to relate the results to the requirements to confirm compliance. This
task is usually performed by specialized personnel and does not fall within the responsibility of
production workers. Products that don't comply with the specifications are rejected or returned
to improve.
The use of inspection has been evident throughout the history of organised production.
In the late of Middle Ages, special measures were taken to inspect the work of apprentices and
journeymen in order to guard the Guild against claims of makeshift or shoddy work.
During the early years of manufacturing, inspection was used to decide whether a
worker’s job or a product met the requirements; therefore, acceptable. It was not done in a
systematic way, but worked well when the volume of production was reasonably low. However,
as organisations became larger, the need for more effective operations became apparent.
In 1911, Frederick W. Taylor helped to satisfy this need. He published ‘The Principles of
Scientific Management’ which provided a framework for the effective use of people in industrial
organisations. One of Taylor’s concepts was clearly defined tasks performed under standard
conditions. Inspection was one of these tasks and was intended to ensure that no faulty product
left the factory or workshop; focuses on the product and the detection of problems in the
product. It involves testing every item to ensure that it complies with product specifications. It
also carried out at the end of the production process; and relies on specially trained inspectors.
This movement led to the emergence of a separate inspection department. An important
new idea that emerged from this new department was defect prevention, which led to quality
control. Inspection still has an important role in modern quality practices. However, it is no
longer seen as the answer to all quality problems. Rather, it is one tool within a wider array.
The producer or supplier should provide checklists to inspectors to determine the
acceptable quality tolerance level for defects or non-conformity.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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Determining Defects
Factory inspections for defects are performed by marking products (units) which do not
satisfy the product’s intended use. On-site quality control inspectors use ANSI/ASQ A3534-21993 standard checklists to mark any defective units according to the severity level of any
defects.
Examples:
✓ Button and buttonhole on a garment do not align
✓ A product or part of a product that does not function
✓ Incorrect or unauthorized materials used
Determining Non-Conformity
Factory inspections for non-conformity determine whether a completed product (unit)
meets the customer’s specification requirements. Inspected units are marked according to the
severity level of any characteristics which don’t meet accepted standards.
Examples:
✓ Wrong size
✓ Incorrect labeling
✓ Dimensions do not meet accepted values
✓ Weight
✓ Incorrect power input/output for the destination market
Food Inspections
Inspections on processed and perishable foods are done in accordance with the
guidelines of the WHO Food Code (Codex Alimentarius).
The Scope of Quality Inspection
Organization which uses quality inspection, treats inspector as if he was a customer.
The optimum form of quality inspection is the man's aim is the best customer satisfaction.
Quality inspection serves three main purposes:
1. Identification of the quality problem
2. Provision of information to managers
3. Elimination of the problem by managers
Quality inspection can be performed at the end of production process (final inspection) or
at several stages of the production (intermediate inspection).
Inspection Process
The process should have entry criteria that determine if the inspection process is ready
to begin. This prevents unfinished work products from entering the inspection process. The
entry criteria might be a checklist including items such as "The document has been spellchecked".
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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The stages in the inspections process are: Planning, Overview meeting, Preparation,
Inspection meeting, Rework and Follow-up. The Preparation, Inspection meeting and Rework
stages might be iterated.
1. Planning
The inspection is planned by the moderator.
2. Overview meeting
The author describes the background of the work product.
3. Preparation
Each inspector examines the work product to identify possible defects.
4. Inspection meeting
During this meeting the reader reads through the work product, part by part and the
inspectors point out the defects for every part.
Types of Quality Inspections
•
Initial Production Inspection (Pre-production inspection)
During the pre-production phase, raw materials should be tested before entering
production. This may include a number of tests to examine the material for weight, dimensional
stability, pilling resistance, torqueing, pile retention, stretch recovery, and much more.
Components including closures, zippers, elastics and other embellishments such as beads,
rhinestones, sequins and rivets should also be tested for regulatory requirements.
Since quality issues are often a result of defects in the materials, inspections during the
pre-production phase allow auditors to address any issues before production begins. Ultimately,
by inspecting the materials up front, brands and retailers can avoid unanticipated costs and
delays.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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•
In-line Inspection
Additional inspections should take place during various stages of production. For
apparel, inspections should occur at each critical step of the production process, from cutting to
assembling to pressing or other finishing procedures. For example, during the cutting phase,
each cutting ticket should be randomly inspected to ensure that each part is accurately notched
and shades are separated. If fabric is incorrectly cut, the parts cannot be properly assembled.
In-line inspections are important, as quality issues are often re-workable during the
production phase and can be fixed before the final product is complete. When quality issues are
not corrected during the production process, minor issues in the beginning of production can
lead to larger issues in later stages.
•
Final Inspection
The final inspection is the last opportunity for auditors to catch and address quality
issues before they end up in the hands of the buyer, or even worse, the consumer. During the
final audit, products are examined for specific performance requirements, overall appearance,
sizing and fit.
Brands and retailers often skip inspections while the products are still at the factory and
only perform random, final inspections once the order is received at the ultimate destination. By
then, it is too late and the only recourse is discarding the poor quality units. This is costly to
every party, especially the factory, which will bear the brunt of the expense.
5. Rework
The author makes changes to the work product according to the action plans from the
inspection meeting.
6. Follow-up
The changes by the author are checked to make sure everything is correct.
The process is ended by the moderator when it satisfies some predefined exit criteria.
The term inspection refers to one of the most important elements of the entire process that
surrounds the execution and successful completion of a software engineering project.
Inspection Roles
During an inspection the following roles are used.
1. Author
The person who created the work product being inspected.
2. Moderator
This is the leader of the inspection. The moderator plans the inspection and coordinates it.
3. Reader
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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The person reading through the documents, one item at a time. The other inspectors then
point out defects.
4. Recorder/Scribe
The person that documents the defects that are found during the inspection.
5. Inspector
The person that examines the work product to identify possible defects.
Activity:
Play Kahoot!
Assessment:
Review Lesson 5 and be ready for a quiz next meeting.
References:
•
•
•
•
•
•
•
•
•
•
•
•
•
https://www.bpir.com/total-quality-management-history-of-tqm-and-business-excellencebpir.com.html#:~:text=The%20following%20shows%20the%20history,from%20inspectio
n%20to%20business%20excellence.&text=Inspection%20involves%20measuring%2C%
20examining%2C%20and,specified%20requirements%20to%20determine%20conformit
y.
https://qualityinspection.org/what-is-quality-inspection/
https://www.slideshare.net/samikshasawant146/quality-control-and-inspection
https://ceopedia.org/index.php/Quality_inspection
https://www.qima.com/quality-control-services/inspections/inspection-types
https://www.school-for-champions.com/tqm/inspection.htm#.X1qLMXkzbIU
https://www.ngcsoftware.com/post/140/how-to-benefit-from-three-different-types-ofquality-inspections/
http://docenti.unimc.it/elena.cedrola/teaching/2014/12840/files/materiali-integrativi/totalquality-management
https://www.ispatguru.com/role-of-inspection-and-testing-in-maintaining-product-quality/
https://ceopedia.org/index.php/Quality_inspection
https://qualityinspection.org/what-is-quality-inspection/
https://en.wikipedia.org/wiki/Software_inspection
https://www.ngcsoftware.com/post/140/how-to-benefit-from-three-different-types-ofquality-inspections/
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
62
LESSON 6 - WAITING LINES
Unit 1 : Introduction
Overview
This lesson focuses on the waiting lines.
Learning Objectives:
At the end of this lesson, you should be able to:
1. understand the meaning of waiting lines;
2. determine the types, level, and phase of waiting lines;
3. be aware of the role of waiting lines to Total Quality Management.
Course Materials:
Discussion:
Waiting Line
A waiting line is when one or more customers wait for service. The customers can be
people or objects, such as machines waiting for maintenance, sales orders waiting to be
processed or shipped, or materials in inventory waiting to be used. In order to get an intuitive
feeling for the behavior of waiting lines, let us start with a very simple model where the rate of
the arrivals is homogeneous (i.e. the time between successive arrivals is always the same,
like clockwork), and the rate of service is also homogeneous.
The behavior of waiting line is very sensitive to small changes in the rates of arrival and
service. But observation shows that in most cases the rates of arrival and service are not
homogeneous. Hence, a waiting line which grows and shrinks because of an imbalance
between the demand for service and the capacity of the system to provide service.
A few examples of waiting lines are (Gaither and Freizer 2002)
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Computer printing jobs waiting to be printed;
Workers waiting to punch a time clock;
Customers in line at a drive-up window;
Drivers waiting to pay a highway toll;
Skiers waiting for a chair lift;
Airplanes waiting to take off;
Processes, in a computer system, waiting to be dispatched;
Requests for input/output for a disk or communication LINES
Waiting line problems exist because the demand patterns are irregular or random and
service times vary among customers. Most often, the rate of producing the service also varies
depending upon customer needs.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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TWO LEVELS OF SERVICE FOR A WAITING LINE:
1. Low level – it is initially inexpensive to the company. For example, if a customer waits in
line to return an item to a store without a receipt, a 'no return policy' would be a low level
of service.
2. High level – it is initially expensive to the company. However, that expense may be
worth it because the higher the customer satisfaction, the more likely a customer is to
return. For example, if a business issues a store credit, it would be offering a high level
of service.
OPTIMAL WAITING LINE
This is used to estimate the number of potential customers that can fit into the process of
a service system at any given time.
For example, if a physician's waiting room only has five chairs available for patients to
sit, you would expect that there would never be more than five people scheduled at any one
time. That means the person scheduling the patients would also need to know how long it takes
the physician to examine each patient.
In order to make this determination, the estimated customers, or population, are divided
by the total customers the service system can hold. If the service system holds less than the
population, the company cannot meet the demand and customers leave.
Optimization occurs in the service line by balancing the number of lines or
servers, customer arrival times, and waiting line rules, meaning how people are serviced.
TYPES OF WAITING LINE
1. Finite – it is where new customers can only be added to the line once others move out of
the line.
2. Infinite – it is where new customers are not affected by the number of customers already
in the system.
Lines can also be set up. A single line system often presents a view of fairness to the
customer because it typically works on a first come, first serve basis. This perception of fairness
often causes a single line system to work best. (However, in some single line instances, such as
a hospital waiting room, the rule about who is served first is based on the nature of the
emergency.)
A multiple line system, such as the one you see at a grocery store, may be used to
allow customers with fewer items to check out more quickly. Multiple line systems often provide
different transaction types by customer type.
There are three ways that customers may behave when they're unhappy with waiting in a line:
1. Balking - when a customer chooses not to enter the waiting line.
2. Reneging - when a customer enters the line, but leaves.
3. Jockeying - when a customer changes from one line to another.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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WAITING LINE PHASES
A single phase line is when the customer's transaction is completed all at once.
For example, the customer purchases
their clothing item and leaves the store.
A multiple phase line is when there are
multiple steps to the transaction, and
each phase can have either single or
multiple lines.
Each waiting line will have different
characteristics, but nine elements are
common to all:
1. Queue
It is a waiting line.
2. Channels
It is the number of waiting lines in a
queuing system.
3. Service phases
It is the number of steps in service
process.
4. Arrival rate ()
It is the rate at which persons or things arrive (in arrivals per unit of time).
5. Service rate ()
It is the rate at which arrivals are serviced (in arrivals per unit of time).
6. Queue discipline
The rule that determines the order in which arrivals are serviced.
7. Queue length
The number of arrivals waiting for service.
8. Time in system
It is the arrival’s waiting time and service time.
9. Utilization
The degree to which any part of the service system is occupied by an arrival.
Performance measures are used to gain useful information about waiting line systems.
These measures include:
1. The average number of customers waiting in line and in the system.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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The number of customers waiting in line can be interpreted in several ways. Short
waiting lines can result from relatively constant customer arrivals (no major surges in demand)
or from the organization’s having excess capacity (many cashiers open). On the other hand,
long waiting lines can result from poor server efficiency, inadequate system capacity, and/or
significant surges in demand.
2. The average time customers spend waiting, and the average time a customer spends in the
system.
Customers often link long waits to poor-quality service. When long waiting times occur,
one option may be to change the demand pattern. That is, the company can offer discounts or
better service at less busy times of the day or week.
For example, a restaurant offers early-bird diners a discount so that demand is more level. The
discount moves some demand from prime-time dining hours to the less desired dining hours. If
too much time is spent in the system, customers might perceive the competency of the service
provider as poor. For example, the amount of time customers spend in line and in the system at
a retail checkout counter can be a result of a new employee not yet proficient at handling the
transactions.
3. The system utilization rate
Measuring capacity utilization shows the percentage of time the servers are busy.
Management’s goal is to have enough servers to assure that waiting is within allowable limits
but not so many servers as to be costinefficient. We calculate these measures for two different
waiting line models: the single-server model and the multiserver model.
QUEUING SYSTEMS
Queuing theory is a mathematical approach used by operations managers for the
analysis of waiting lines. The objective of queuing analysis is to minimize customer waiting and
service capacity cost. With this, managers try to strike a balance between efficiently utilizing
resources and keeping customer satisfaction high.
There are also other costs associated with waiting lines, such as loss of business due to
customers leaving and refusing to wait, or loss of reputation. Queuing analysis can assist
managers in determining answers to waiting lines such as:
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How many servers to use;
Likelihood a customer will have to wait;
Average time a customer will wait;
Average number of customers waiting;
Waiting line space needed;
Percentage of time all servers are idle.
For example:
Lily Collins pulls stock from his warehouse shelves to fill customer orders. Customer orders
arrive at a mean rate of 20 per hour. The arrival rate is Poisson distributed. Each order received
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
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by Jim requires an average of two minutes to pull. The service time is exponentially distributed.
What is Jim’s mean service rate per hour?
Since Jim can process an order in an average time of 2 minutes (= 2/60 hr.), then system is:
W =
(1/30 – 10) = (1/10 hour or 6 minutes)
s
What is the average number of orders Jim has waiting to be processed?
The average number of orders waiting in the queue is:
Lq = pLs; and substituting for p and Ls one gets;
Lq = (/) (/  - )
Lq = ²/ [ (-)] = (20)2 / [(30) (30 – 20)] = 400 / 300 = 4/3 or 1.33 orders.
MODELS 2 – Single Channel – Constant Service – Time
This model is very similar to model 1, the only difference being that service time is
constant instead of exponentially distributed. This is quite useful in order to model waiting lines
being served by automated systems which have constant service times, such as vending or
ATM bank machines.
Single channel
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Single phase
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Poisson arrival – rate distribution
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Constant service rate
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Unlimited maximum queue length
Examples:
It assumes: single channel, single phase, Poisson arrival – rate distribution, Constant
service rate, and unlimited maximum queue length. For example, Single – booth automatic car
wash and Soda vending machine. The formulas for model 1 are the same for model 2, the only
exception being the number of customers in the queue which is reduced by half.
Sample Problem:
Lq = ² / [2 (-)] = (15) ²/ ((2)(30)(30 – 15)) = 0.25 children
MODEL 3 – Multiple Servers:
It deals with multiple servers serving one line of customers. The basic assumptions of
model 3 are: multiple channel, single phase, Poisson arrival – rate distribution, Poisson service
– rate distribution, and unlimited maximum queue length.
For example: Expressway exit multiple toll booths, Bank with multiple teller stations, etc.
The probability of an empty queue is important for this model as this is required to calculate the
average number of customers in the line L . The formulae are in figures 3 and 4.
q
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Where:
Changing Operational Characteristic
After calculating the operating characteristics for a waiting line system, sometimes you
need to change the system to alter its performance. Let’s look at the type of changes you can
make to the different elements of the waiting line system.
1. Customer arrival rates.
You can try to change arrival rates in a number of ways. For example, you can provide
discounts or run special promotions during the nonpeak hours to attract customers.
2. Number and type of service facilities.
You can either increase or decrease the number of server facilities. For example, a grocery
store can easily change the number of cashiers open for business (up to the number of
registers available). The store increases the number of cashiers open when lines are too
long.
Another approach is to dedicate specific servers for specific transactions. One example
would be to limit the number of items that can be processed at a particular cashier (ten items
or less) or to limit a cashier to cash-only transactions. Still another possibility is to install selfservice checkout systems.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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3. Changing the number of phases.
You can use a multiphase system where servers specialize in a portion of the total
service rather than needing to know the entire service provided. Since a server has fewer
tasks to learn, the individual server proficiency should improve. This goes back to the
concept of division of labor.
Forecasting
The use of forecasting theory is an integral part of almost all aspects of production
andoperations management. Forecasting is certainly useful in the classical application
ofinventory management and sales forecasts; however, forecasting can be used in other areas
ofoperations management, such as product design, business strategy, production resources,
quality, maintenance and many more applications
Some uses of forecasting in other areas of business are (Stevenson & Hojati 2004):
Accounting – cost/profit estimates
Finance – cash flow and funding
Human resources – Hiring / recruiting/training
Marketing – Pricing, promotion, strategy
The idea of forecasting is to assume the future, based on information from the past. This
israrely perfect because of the randomness of events which can affect the forecast.
Althoughforecasts are not accurate, it is possible to improve their accuracy if they are made by
groupsand not individuals, as groups are more predictable than individuals (Stevenson &
Hojati2004)
Stevenson & Hojati (2004) provide an excellent six – step process for forecasting:
1. Determine purpose of forecast
2. Establish a time horizon
3. Select a forecasting technique
4. Gather and analyze data
5. Prepare the forecast
6. Monitor the forecast
Adding to these steps, as with all modelling tools, the first step is to ensure that the
baseassumptions of the model have not been violated. A basic assumption of any forecast
modelis that the same underlying systems which existed in the past will continue to exist in
thefuture. A correlation might be that the common cause variation associated with a
processwhich existed in the past will continue to exit in the future, without any interference
fromspecial cause variation. As with all forecasts or prediction models, the longer the forecast
orprediction time span, the less accurate the model. This makes sense as assumptions that
thesame underlying systems exist in perpetuity are unrealistic
Forecasting methods can be classified as qualitative and quantitative approaches
(Gaither &Freizer 2002). Qualitative methods are usually based on judgements about causal
factors thatunderlie the demand of particular products or services, and do not require a demand
historyfor a product or services. They are therefore useful for new products or services.
Judgementalforecasting models, such as executive opinion or Delphi techniques, are examples
ofqualitative approaches.
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Activities:
Play Kahoot!
1. What is waiting line, and what are its characteristics?
2. What is querying theory, and its use in waiting line problem analysis?
3. How to select and apply the appropriate queuing models to solve waiting line problems?
4. What is forecasting, and what is its use in operations management and other business
areas?
Assessment:
Review Lesson 6, and be ready for a quiz next meeting.
References:
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Crosby, Philip B. (1979) Quality is Free. New York: McGraw Hill
Deming, W. Edward (1986) Out of Crisis Cambridge, MA: Center for
AdvancedEngineering study
Deming, W. Edwards, Out of the Crisis, 14 Points, pages 23-24, © 2000 Massachusetts
Institute of Technology, by permission of The MIT Press.
Feigenbaum, A. V (1983) Total Quality Control: Engineering and Management 3rd
ed.New York: McGraw – Hill
Gaither N. And Fraizer G. (2002) Operations Management 9th ed. Thompson Learning
Heizer, J. And Render B. (2006) Operations Management and Student CD 8th ed.
PrenticeHall
Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Crosby, Philip B. (1979) Quality is Free. New York: McGraw Hill
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Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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Subject: BUMA 20013 – OPERATIONS MANAGEMENT (TQM)
Compiled by: ALMALYN JOY TITO
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