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MBA SEMESTER II

MB0044 Production & Operations Management - 4 Credits

ASSIGNMENT-01

Name : MORRIS RATAN ANEPY

Registration No. : 511125471

Learning Center : Arihant College of Management And Information Technology

Learning Center Code: 02860

Course : MBA

Subject : Production & Operations Management

Semester : II

Module No. : B1133

Date of submission : 13-01-2012

Marks awarded :

Directorate of Distance Education

Sikkim Manipal University

II Floor, Syndicate House

Manipal 576 104

Signature of Coordinator Signature of Center

Signature of Evaluator

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Master of Business Administration - MBA Semester II

MB0044 Production & Operations Management - 4 Credits

(Book ID: B1133)

Assignment

Set- 1 (60 Marks)

Q1. Explain in brief the origins of Just In Time. Explain how JIT is

implemented.

Ans. Just in time (JIT) is a production strategy that strives to improve a business return

on investment by reducing in-process inventory and associated carrying costs. Just-in-time production method is also called theToyota Production System. To meet JIT ob-

jectives, the process relies on signals or Kanban between different points in the pro-

cess, which tell production when to make the next part. Kanban are usually 'tickets'

but can be simple visual signals, such as the presence or absence of a part on a shelf.

Implemented correctly, JIT focuses on continuous improvement and can improve a

manufacturing organization's return on investment, quality, and efficiency. To achieve

continuous improvement key areas of focus could be flow, employee involvement and

quality.

Quick notice that stock depletion requires personnel to order new stock is critical to

the inventory reduction at the center of JIT. This saves warehouse space and costs.

However, the complete mechanism for making this work is often misunderstood.

For instance, its effective application cannot be independent of other key components

of a lean manufacturing system or it can "...end up with the opposite of the desiredresult." In recent years manufacturers have continued to try to hone forecasting meth-

ods (such as applying a trailing 13 week average as a better predictor for JIT planning,

however some research demonstrates that basing JIT on the presumption of stability is

inherently flawed.

The Just-in-Time inventory system focus is having the right material, at the right

time, at the right place, and in the exact amount

-Ryan Grabosky

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http://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Carrying_costhttp://en.wikipedia.org/wiki/Toyota_Production_Systemhttp://en.wikipedia.org/wiki/Kanbanhttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Lean_manufacturinghttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Carrying_costhttp://en.wikipedia.org/wiki/Toyota_Production_Systemhttp://en.wikipedia.org/wiki/Kanbanhttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Lean_manufacturinghttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Return_on_investment

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Based on a diagram modeled after the one used by Hewlett-Packards Boise plant to

accomplish its JIT program.

1) F Design Flow Process

F Redesign/relayout for flow

L Reduce lot sizes

O Link operations

W Balance workstation capacity

M Preventive maintenance

S Reduce setup Times

2) Q Total Quality Control

C worker compliance

I Automatic inspection

M quality measures

M fail-safe methods

W Worker participation

3) S Stabilize Schedule

S Level schedule

W Establish freeze windows

UC Underutilize Capacity

4) K Kanban Pull System

D Demand pull

B Backflush

L Reduce lot sizes

5) V Work with Vendors

L Reduce lead time

D Frequent deliveries

U Project usage requirements

Q Quality expectations

6) I Further Reduce Inventory in Other Areas

S Stores

T Transit

C Implement carrousel to reduce motion waste

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C Implement conveyor belts to reduce motion waste

7) P Improve Product Design

P Standard production configuration

P Standardize and reduce the number of parts

P Process design with product design

Q Quality expectations

Q2. Bring out the historical background of Value Engineering. Elucidate threecompanies which have incorporated VE with brief explanation.

Ans. Value engineering or value analysis had its birth during the World War II and

Lawrence D. Miles was responsible for developing the technique and naming it. Value

analysis is defined as an organized creative approach which has its objective,

the efficient identification of unnecessary cost-cost which provides neither

quality nor use nor life nor appearance nor customer features.

Value analysis focuses engineering, manufacturing and purchasing attention to one

objective equivalent performance at a lower cost. It is concerned with the costs added

due to inefficient or unnecessary specifications and features. It makes its contribution

in the last stage of product cycle, namely, the maturity stage. At this stage, research

and development no longer make positive contributions in terms of improving the effi-

ciency of the functions of the product or adding new functions to it. Value is not inher-ent in a product, it is a relative term, and value can change with time and place. It can

be measured only by comparison with other products which perform the same func-

tion. Value is the relationship between what someone wants and what he is willing to

pay for it. In fact, the heart of value analysis technique is the functional approach. It

relates to cost of

function whereas others relate cost to product. It is denoted by the ratio between func-

tion and cost.

Value = Function

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Cost

Value Engineering has gained popularity due to its potential for gaining high Returns

on investment (ROI). This methodology is widely used in business re-engineering, gov-

ernment projects, construction, assembling and machining processes, health care and

environmental engineering, and many others. Value engineering process calls for adeep study of a product and the purpose for which it is used, such as the raw materials

used; the processes of transformation; the equipment needed, and many others. It is

also questions whether what is being used is the most appropriate and economical.

This applies to all aspects of the products.

1. General Electrical Corporation (GEC)

The concepts of value engineering originated in 1947 in General Electricals corporation

(GEC)

When a substitute for asbestos for flooring had to be found. Specialized dealers could

provide an

equally good material at a lesser price. Initially, the practioners were the people in

charge of purchasing who tried to locate substitute material which would be equally

good, if not better, at a lower price. This is the first and basic approach to value engi-

neering. The concept percolated to the manufacturing departments, engineers applied

the same principles and found that, they could use alternate materials, which were

cheaper giving the same performance. It was also fund that dimensions and tolerance

could be altered without affecting the performance of the part or the product. The in-

vestigations took them on the path of eliminating some operations. The focus was on

the value of each bit materials, each operation. This approach led to the design stage.

2. Navsea Warfare Centers, Crane

In implementation of VA, Traveling Wave Tube

Doubled TWT Life

Reduced Supply Demand by 190 Units per Year

Estimated Cost Avoidance of $ 2.8 M/Yr.

3. TVS

T.V. Sundaram Lyenger (TVS) Limited is one of the largest automobile distribution

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companies in India. During the mid 1940 to 1960s, TVS based in Madurai was ranked

as the best bus

transportation system in India. It could manage to run the fleets for about 96% of the

time.

TVS used the VE approach to restore the mobility of buses that had broken down. They

stocked their garage with some critical assemblies of a bus. Whenever, a part or an as-

sembly failed of a bus, they replaced it immediately with a new one, thus restoring

mobility within a couple of hours.

When compared to the traditional method, this approach has gained much more bene-

fits to the

company, it helped to save time, reduce cost, efficient, quicker, and competitive.

Q3. Explain the key elements of Quantitative modelling. What is work studyand motion study.

Ans. Whenever we have to make decisions in management, we have two approaches

to arrive at a decision. One approach is to consider the available facts, identify various

options for action and the likely consequences, and evaluate all the options based on

the experiences we had and the gut feeling as to what might happen and take a deci-

sion. In this approach, the quality of the decision depends on the individuals knowl-

edge, analytical capability, and judgment. However, this approach is useful when thematter concerned is small or personal in nature, as the consequences are not very se-

rious. If the decision involves complex issues, we choose the second approach.

The second approach involves complex issues and complex decision makings skills. In

this approach, the factors of different fields have different impacts on the result. We

try to quantify data, devise some models for predicting the likely consequences, and

some techniques to arrive at decisions. Historical data guide us to formulate the rela-

tionships between the variables. Uncertainties about the activities and results can beanticipated based on probabilities and choices made.

There are different quantitative models, whose details are as follows:

1. Linear Programming:

Linear programming technique is often used for optimizing a given objective like; profit

or

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revenue maximization, or cost outgo minimization. Distribution of the revenues is the

critical issue, when there are limited resources and they have to meet competing de-

mands.

2. Transportation Model:

Transportation model is concerned with goods from manufacturing center or warehous-

es

which have to be supplied to depots or retails outlets. The demand and supply position

of the places where they are required or produced and the cost of transportation are

considered in the model. We use this model to economize.

3. Assignment Model:

Allocating jobs or persons to machines, awarding different projects to contractors is

done so

that maximum returns occur or less expenses are incurred. Hence, calls for the use of

this model.

4. Inventory Control Model:

Inventory control model considers the:

a. Frequency of placing orders.

b. Quantities per order considering the cost of placing an order.

c. Number of pieces that are to be kept in reserve.

d. Rate of consumption.

e. Lead time required for the supplier.

f. Cost involved in storage.

We have different models which give solutions to optimization depending upon the

probabilities of consumption and supply.

5. Waiting Line Models:

Queues are formed when the rate of services is at a variance with the rate of arrival.

They

are formed when the rate of production is less at particular points compared to the

previous one.

Sometimes we see multiple service points and a single queue are formed for feeding

them. Number of items which includes the following is studied with some special tech-

niques.

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sequences in which they are done,andthe effect of these on the work.

3. The study enables the methodsengineer to search for better methodsfor higher utilization of man andmachine and accomplishment of

higher productivity.

3. The study may help in changingsomeof them and even eliminate some ofthem to effect improvements

4. The study gives an opportunity totheworkmen to learn the process ofstudythus making them able to offer sug-gestions for improved methods.

4. The new method should result insaving of time, reduced motions andsimpler activities.

Q4 What is Rapid Prototyping? Explain the difference between Automatedflow line and Automated assembly line with examples.

There are several ways to manufacture a component. Manufacturing is turning raw

materials to finished products to be used for various purposes. The demand of a

product depends on its performance by way of desirable exotic properties like

resistance to high temperature, higher operating speeds, extra loads, economics and

the surface finish. To be viable in the modern environment, a product has to be

competitively priced besides having the functional and aesthetic appeal. This

requirement shows the necessity for the engineer to give a proper thought to various

aspects of manufacturing. Manufacturing processes can be classified into three types:

material adding process-RP comes under this category, material subtracting process-

which include turning, drilling, and shaping e.t.c., neither adding nor subtracting

material-which include processes like forging, extrusion, coining, wire drawing, other

sheet metal operations. The competition in the world market for manufactured

products has intensified tremendously in recent years. It has become important, if not

vital, for new products to reach the market as early as possible, before the

competitors. To bring products to the market swiftly, many of the

processes have been squeezed, both in terms of time and material resources. The

efficient use of such valuable resources calls for new tools and approaches in dealing

with them, and many of these tools and approaches have evolved. They are mainly

technology-driven, usually involving the computer. This is mainly a result of the rapid

development and advancement in such technologies over the last few decades.

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In product development, time pressure has been a major factor in determining the

direction of the development and success of new methodologies and technologies for

enhancing its performance. These also have a direct impact on the age-old practice of

prototyping in the product development process. One such development is Rapid Prototyping

(RP).

Prototyping is a process by which a new product is developed in small numbers.

Prototyping is helpful to:

Determine the suitability of the materials

Study the various methods of manufacture

Determine type of machinery required

Develop techniques to overcome problems that may be encountered when full

scale

manufacturing is undertaken.

Prototypes do meet the specification of the components that enter a product and per-

formance

can be measured on those. It helps in confirming the design and any shortcomings can

be rectified at

low cost. If serious defects or problems arise during manufacturing, a thorough change

in design or

even its replacement may be considered. Toa arrive at decisions and to make use of

the advantageous

stated above, it is important that the prototypes are made within the shortest possible

time, Rapid prototyping facilities this.

During the last decade a class of technologies has emerged by which a computer

aided (CAD) files of an object can be converted into a physical model through special

sintering, layering (or) deposition techniques etc, called Rapid prototyping (or) Solid

Free- form fabrication.

The term rapid prototyping (RP) refers to a class of technologies that can automatically

construct physical models from Computer- Aided Design (CAD) data. These three

dimensional printers allow designers to quickly create tangible prototypes of their

designs, rather than just two-dimensional pictures, such models have numerous uses.

They make excellent visual aids for communication ideas with co-workers orcustomers. In addition, prototypes can be used for design testing. For example, an

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aerospace engineer might mount a model airfoil in a wind tunnel to measure lift and

drag forces. Designers have always utilized prototypes; RP allows them to be made

faster and less expensively.

In addition to prototype, RP techniques can also be used to make tooling (referred to

as rapid tooling) and even production-quality parts (rapid manufacturing). For smallproduction runs and complicated objects, rapid prototyping is often the best

manufacturing process available. Of course, rapid is relative term. Most prototypes

require from three to seventy- two hours to build, depending on the size and

complexity of the object. This may seem slow, but it is much faster than the weeks or

months required to make a prototype by traditional means such as machining. These

dramatic time savings allow manufacturers to bring products to market faster and

more cheaply.

The advanced Rapid Prototype Modeling Processes are:

1. Computer Aided Design (CAD)

2. Selective Laser Sintering (SLS)

3. Fused Deposition Modeling (FDM)

4. Lamination Object Manufacturing (LOM)

5. Electronic Beam Melting (EBM)

Advantages of RP

Todays automated, tool less, pattern less systems can directly produce functional

parts in small production quantities. Parts produced in this way have accuracy and

surface finish inferior to those made by machining. However, some advanced systems

are able to produce near tooling quality parts that are close to or are the final shape.

The parts produced, with appropriate post processing, will have material qualities and

properties close to the final product. More fundamentally, the time to produce any partonce the design data is available will be fast, and can be categorized into direct and

indirect benefits.

Difference between Automated Flow lines and Assembly Flow line.

AUTOMATED PRODUCTION SYSTEMS

The technology of automation has indeed spawned newer and non-sophisticated ma-

chines. Increasingly ,these machines are getting lined up for broader purposes .Four

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categories of machines are discernible : automated flow lines, automated assembly

systems ,flexible manufacturing systems, automated storage and retrieval systems.

Automated Flow Lines :

In this, several automated machines are linked together by automated parts transferand handling machines.

The individual machines on the line, use automated raw materials feeders and auto-

matically carry out their operations without the need for human intervention .As each

machine completes its operations ,partly completed parts are automatically trans-

ferred to the next machine on the line in a fixed sequence until the work of the line is

finished .These systems are generally used to produce an entire major component ,for

example ,rear axle housings for trucks. They are common in the automobile industry.

Automated flow lines are also called as fixed automation or hard automation in as

much as the lines of machines are designed to produce one type of component or

product. These demand high investment and are highly inflexible. Hence, these ma-

chines are justified when demand for the product is high, stable and predictable .But

the demand is never stable Shortened product life cycles and changes in production

technology render the fixed automation lines unpopular and call for flexible manufac-turing systems.

Automated Assembly Lines :

Here ,the automated assembly machines are linked together by automated materials-

handling equipment .Materials are automatically fed to each machine ,which is some

type of robot, which joins one or more materials, parts, or assemblies. Then the part-

completed work is automatically transferred to the next assembly machine. Thisprocess is repeated until the whole assembly is completed. The purpose of these sys-

tems is to produce major assemblies or even completed products.

Product-design modifications are essential to make the automated assembly system

successful Table below show the principles to be observed while redesigning products

for automated assembly.

Principles of Product Redesign

1. Reduce the amount of assembly required

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2. Reduce the number of fasteners required.

3. Design components to be automatically delivered and positioned

4. Design products for layered assembly and vertical insertion of parts.

5. Design parts so that they are self-aligning.

6. Design products into major modules for production.

7. Increase the quality of components.

Three advantages are claimed in favor of automated assembly systems. First, these

systems can provide manufacturers with low per unit production costs improved prod-

uct quality and quicker production rates. Second, because some of the machines tend

to be standard robots are available at competitive rates, initial investment is not high.

Third, these robots can be reprogrammed to other products and operations, thereby

reducing the dependence on stable product demand.

The difference between Automated Flow lines and Assembly Flow Lines can be briefly

explained as follows:

Automated Flow Lines Assembly Flow Lines

1. Several Automated machines arelinked

by a transfer system.

1. All equipments are needed to in

automated Assembly line2. Handling machine have main roletomove semi finished product to thenextstage.

2. All equipments make role of mak-ingsub-assemblies put together andfitted.

3. Semi-finished products are themaincore activities.

3. Here Sub-assemblies products arethecore activities.

4. Here raw materials are achieving

to getrequired shapes and acquire specialproperties.

4. Here intermediated products are

achieving to get finished product.

5. The materials are needed to bemoved,held, rotated, fitted and positioned forcompleting different operations.

5. Here All parts or sub-assembliesarefitted to enables the product to be inreadiness to perform the function itwas designed to. This process iscalled assembly.

6. Human intervention may be need-ed to

verify that the operations are takingplace according to standards.

6. No human intervention is needed,methodologies are framed to achieve

the final result, basic principle is to fitparts together and ensure linkages sothat the functions are integrated and

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give out the desired output.Q5. List different methods for selecting a suitable plant location and explainany two.

A) Plant location or the facilities location problem is an important strategic level

decision making

for an organization. One of the key features of a conversion process (manufacturingsystem) is the efficiency with which the products (services) are transferred to the cus-

tomers. This fact will include the determination of where to place the plant or facility.

The selection of location is a key-decision as large investment is made in building plant

and machinery. It is not advisable or not possible to change the location very often. So

an improper location of plant may lead to waste of all the investments made in build-

ing and machinery, equipment. Before a location for a plant is selected, long range

forecasts should be made anticipating future needs of the company. The plant locationshould be based on the companys expansion plan and policy, diversification plan for

the products, changing market conditions, the changing sources of raw materials and

many other factors that influence the choice of the location decision. The purpose of

the location study is to find an optimum location one that will result in the greatest ad-

vantage to the organization.

Various models are available which help to identify the ideal location. Some of the pop-

ular modelsare:

1. Factor rating method

2. Weighted factor rating method

3. Load-distance method

4. Centre of gravity method

5. Break even analysis

Factor Rating Method:

The process of selecting a new facility location involves a series of following steps:

1. Identify the important location factors.

2. Rate each factor according to its relative importance, i.e., higher the ratings is in-

dicative

of prominent factor.

3. Assign each location according to the merits of the location for each factor.

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4. Calculate the rating for each location by multiplying factor assigned to each location

with

basic factors considered.

5. Find the sum of product calculated for each factor and select best location having

highest

total score.

For better understanding a small illustration can be taken

ILLUSTRATION 1: Let us assume that a new medical facility, Health-care, is to be

located in Delhi. The location factors, factor rating and scores for two potential sites

are

shown in the following table. Which is the best location based on factor rating

method?

Sl.No

Location factorFactorRat-ing

Rating

Location 1Location

21. Facility utilization 8 3 5

2. Total patient per month 5 4 33. Average time per emergency trip 6 4 5

4. Land and construction costs 3 1 2

5. Employee preferences 5 5 3

SOLUTION:

Sl.No Location factor

Fac-tor

Rat-ing(1)

Location 1 Location 2

Rat-ing(2)

Total =(1) X(2)

Rat-ing(2)

Total =(1) X(2)

1. Facility utilization 8 3 24 5 40

2. Total patient per month 5 4 20 3 15

3. Average time per emergen-cy trip

6 4 24 5 30

4. Land and construction costs 3 1 3 2 6

5. Employee preferences 5 5 25 3 15

Total 96 Total 106

The total score for location 2 is higher than that of location 1. Hence location 2, is thebest

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choice.

2Weighted Factor Rating Method

In this method to merge quantitative and qualitative factors, factors are assigned

weights based

on relative importance and weightage score for each site using a preference matrix is

calculated.

The site with the highest weighted score is selected as the best choice.

ILLUSTRATION 2: Let us assume that a new medical facility, Health-care, is to be

located in Delhi. The location factors, weights, and scores (1 = poor, 5 = excellent) for

two potential sites are shown in the following table. What is the weighted score for

these

sites? Which is the best location?

Sl.No

Location factorWeigh

t

Scores

Location 1Loca-tion 2

1. Facility utilization 25 3 5

2. Total patient per month 25 4 3

3. Average time per emergency trip 25 3 3

4. Land and construction costs 15 1 2

5. Employee preferences 10 5 3

SOLUTION:The weighted score for this particular site is calculated by multiplying

each

factors weight by its score and adding the results:

Weighed score location 1 = 25 3 + 25 4 + 25 3 + 15 1 + 10 5

= 75 + 100 + 75 + 15 + 50 = 315

Weighed score location 2 = 25 5 + 25 3 + 25 3 + 15 2 + 10 3

= 125 + 75 + 75 + 30 + 30 = 335

Location 2 is the best site based on total weighted scores.

These are the two models which are available that help to identify the ideal location.

Q6. Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List outDemings 14 points.

Ans:JURANs Quality Triology

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Juran uses his famous universal Breakthrough Sequence to implement quality pro-grammes. The universal break through sequences are;

Proof of need: there should be a compelling need to make changes.

Project identification: here what is to be changed is identified. Specific projects

with

time frames and the resource allocation are decided.

Top management commitment: Commitment of the top management is to assign

people and fix responsibilities to complete the project.

Diagnostic journey: Each team will determine whether the problems result from

systemic causes or are random or are deliberately caused. Root causes are ascer-

tained

with utmost certainty.

Remedial Action:This is the stage when changes are introduced. Inspection, test-

ing,

and validation are also included at this point.

Holding on to the gains: the above steps results in beneficiary results. Having

records

or all actions and consequences will help in further improvements. The actions that

results in the benefits derived should be the norm for establishing standards.

JURAN has categorised cost of quality into four categories:

1. Failure CostsInternal:These are cost of rejections, repairs in terms of materials,

labour, machine time and loss of morale.

2. Failure Costs-External:These are cost of replacement, on-site rework including

spare

parts and expenses of the personnel, warranty costs and loss of goodwill.

3. Appraisal Costs:These are cost inspection, including maintenance of records,

certification, segregation costs, and others.

4. Prevention costs: Prevention cost is the sequence of three sets of activities, Qual-

ity

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planning, Quality control, and Quality improvement, forming the triology to achieve

Total quality management.

JURANs argument says that;

Quality is the result of good planning consideration the needs of both internal and ex-

ternal

customers and develops processes to meet them. The processes are also planned to

meet them.

Quality is built into the system of manufacture, inputs and processes that are on

stream like raw

material, spare parts, labour, machine maintenance, training, warehousing, inspection

procedures, packaging, and other. All these have to follow standards and control exer-

cises to

make sure that mistake do not occur often and that if mistakes do occur then they are

corrected

at the source.

Quality improvement measures are essential to keep the quality culture alive. Newer

methodswill be found, some operations can be eliminated, improved technology available. In

short, as

experience is gained things can always be done better. IT is for the management to

take the

initiative and encourage the employees to be on lookout for opportunities for improve-

ment.

CROSBYS Absolutes of Quality

Like Deming, Crosby also lays emphasis on top management commitment and respon-

sibility

for designing the system so that defects are not inevitable. He urged that there be no

restriction on

spending for achieving quality. In the long run, maintaining quality is more economical

than

compromising on its achievement. His absolutes can be listed as under:

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Quality is conformance to requirements, not goodness

Prevention, not appraisal, is the path to quality.

Quality is measured as the price Paid for non-conformance and as indices

Quality originates in all factors. There are no quality problems. It is the people de-signs andprocesses that create problems.

Crosby also has given 14 points similar to those of Deming. His approach emphasizes

on measurement of quality, increasing awareness, corrective action, error cause re-

moval and continuously reinforcing the system, so that advantages derived are not

lost over time. He opined that the quality management regimen should improve that

overall health of the organization and prescribed a vaccine.

The ingredients are.

1. Integrity: Honesty and commitment help in producing everything right first time,every time.

2. Communication: Flow of information between departments, suppliers, customershelps in identifying opportunities.

3. Systems and operations:These should bring in a quality environment so that no-body iscomfortable with anything less than the best.

Deming Wheel

Demings approach is summarized in his 14 points.

1) Constancy of purpose for continuous improvement

2) Adopt the TQM philosophy for economic purposes

3) Do not depend on inspection to deliver quality

4) Do not award any business based on price alone

5) Improve the system of production and service constantly6) Conduct meaningful training on the job

7) Adopt modern methods of supervision and leadership

8) Remove fear from the minds of everyone connected with the organisation

9) Remove barriers between departments and people

10) Do not exhort, repeat slogans and put up posters.

11) Do not set up numerical quotas and work standards

12) Give pride of workmanship to the workmen

13) Education and training to be given vigorously

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14) State and exhibit top managements commitment for quality and produc-

tivity

Using the above principles, Deming gave a four step approach to ensure a purposefuljourney of TQM.

Plan means that a problem is identified, processes are determined and relevant theo-ries are checked out.

Do means that the plan is implemented on a trial basis. All inputs are correctlymeasured and recorded.

Check/Study/Analyze means that the trials taken according to the plan are inaccordance with the expected results.

Act When all the above steps are satisfactory regular production is started sothat quality outcomes are assured

An elaborated study of Demings 14 principles

Constancy of purpose: Create constancy of purpose for continual improvement of

products and service to society, allocating resources to provide for long range needs

rather than only short term profitability, with a plan to become competitive, to stay in

business, and to provide jobs.

The new philosophy: Adopt the new philosophy. We are in a new economic age,

created in Japan. We can no longer live with commonly accepted levels of delays, mis-

takes, defective materials and defective workmanship. Transformation of Western

management style is necessary to halt the continued decline of business and industry.

Cease dependence on mass inspection: Eliminate the need for mass inspection

as the way of life to achieve quality by building quality into the product in the first

place. Require statistical evidence of built in quality in both manufacturing and pur-

chasing functions.

End lowest tender contracts: End the practice of awarding business solely on

the basis of price tag. Instead require meaningful measures of quality along with price.

Reduce the number of suppliers for the same item by eliminating those that do not

qualify with statistical and other evidence of quality. The aim is to minimize total cost,

not merely initial cost, by minimizing variation. This may be achieved by moving to-

ward a single supplier for any one item, on a long term relationship of loyalty andtrust. Purchasing managers have a new job, and must learn it.

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Improve every process: Improve constantly and forever every process for plan-

ning, production, and service. Search continually for problems in order to improve ev-

ery activity in the company, to improve quality and productivity, and thus to constant-

ly decrease costs. Institute innovation and constant improvement of product, service,

and process. It is management's job to work continually on the system (design, incom-

ing materials, maintenance, improvement of machines, supervision, training, retrain-

ing).

Institute training on the job: Institute modern methods of training on the job for

all, including management, to make better use of every employee. New skills are re-

quired to keep up with changes in materials, methods, product and service design, ma-

chinery, techniques, and service.

Institute leadership: Adopt and institute leadership aimed at helping people do a

better job. The responsibility of managers and supervisors must be changed from

sheer numbers to quality. Improvement of quality will automatically improve productiv-

ity. Management must ensure that immediate action is taken on reports of inherited

defects, maintenance requirements, poor tools, fuzzy operational definitions, and all

conditions detrimental to quality.

Drive out fear: Encourage effective two way communication and other means to

drive out fear throughout the organization so that everybody may work effectively and

more productively for the company.

Break down barriers: Break down barriers between departments and staff areas.

People in different areas, such as Leasing, Maintenance, Administration, must work in

teams to tackle problems that may be encountered with products or service.

Eliminate exhortations: Eliminate the use of slogans, posters and exhortations

for the work force, demanding Zero Defects and new levels of productivity, without

providing methods. Such exhortations only create adversarial relationships; the bulk of

the causes of low quality and low productivity belong to the system, and thus lie be-

yond the power of the work force.

Eliminate arbitrary numerical targets: Eliminate work standards that prescribe

quotas for the work force and numerical goals for people in management. Substitute

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aids and helpful leadership in order to achieve continual improvement of quality and

productivity.

Permit pride of workmanship: Remove the barriers that rob hourly workers, and

people in management, of their right to pride of workmanship. This implies, among

other things, abolition of the annual merit rating (appraisal of performance) and of

Management by Objective. Again, the responsibility of managers, supervisors, foremen

must be changed from sheer numbers to quality.

Encourage education: Institute a vigorous program of education, and encourage

self improvement for everyone. What an organization needs is not just good people; it

needs people that are improving with education. Advances in competitive position will

have their roots in knowledge.

Top management commitment and action: Clearly define top management'spermanent commitment to ever improving quality and productivity, and their obliga-tion to implement all of these principles. Indeed, it is not enough that top managementcommit themselves for life to quality and productivity. They must know what it is thatthey are committed to-that is, what they must do. Create a structure in top manage-ment that will push every day on the preceding 13 Points, and take action in order toaccomplish the transformation. Support is not enough: action is required