Process Improvement Techniques for Organisational Operations
For any organisation to succeed in improving productivity, the management needs to employ well structured and defined quality management techniques for continuous improvement. Although many strategies have been adopted by practitioners in management to improve productivity, the most prominent strategy is the concept of continuous improvement. This owed to the fact that it is central to the goal of best practice in human resource management.
Continuous improvement management practices are critical for any company’s performance. Continuous improvement infrastructure model is employed to eliminate inefficiencies in operation, reduce operational costs and improve manageability of the organisation. Companies must seek to operate in a comprehensive organisational management context while founding its propositions on critical areas of infrastructure for continuous improvement.
The overall concepts of the methodologies relevant to this work are examined. The authors have studied the application of a well-structured management system for continuous improvement. Their purpose was to investigate the practices employed by companies using a framework that they had postulated showing that CI can serve better when it involves a concerted and integrated organisational approach. The findings posited that total quality management (TQM) is a leading management concept for CI. TQM is successful in meeting or exceeding customer satisfaction due to its structure that employs a Plan-Do-Check-Act postulated by Deming.
The Six Sigma concept is also examined in this article. This concept is a widely-accepted and largely utilised methodology for CI that gained prominence among most modern companies. The work of Salah et al. (2010) shows that recent times have seen an entry of different management systems which have gained interest as they form the significant infrastructure for improving and controlling different operating areas of any organisation (Salah et al., 2010).
A continuous improvement program aims to ensure continuous productivity and performance. To attain such capacity, companies often adopt certain management programs such as Kaizen, TQM and Six Sigma. Proper implementation and even integration of CIP has more benefits than costs. For instance, it is perceived that a company will exceed customer expectations and increase sales, thereby increasing profits because of better quality delivery and performance associated with these continuous improvement programs. In other words, a company stays ahead of the competition.
The management practice also finds that the adoption of these concepts works to attract and retain highly qualified personnel who share in the principles of continuous improvement. When a company performs well, the reputation that comes with good performance is motivating to employees. The employees experience a higher self-confidence and self-motivation and will then strive to increase their productivity leading to higher performance and higher profitability.
Adoption of New Technology-Technology determines the efficiency of production significantly. This is an important element that further determines the quality of products manufactured in the company. Also, it increases the satisfaction of the final consumers since the products are based on high quality.
Supply chain management and control
One of the most important strategies that a company needs to implement is the application of social capital to the right goals. This basically implies that it needs to focus on creating value for its customers. This can be done by saving them money, time, and also benefiting their professional and personal well being. The first step is usually to learn the most important thing to the customers. A top indicator of performance is the on-time delivery of the right product at the right time. It must also ensure that employees are encouraged to address customer needs quickly. This greatly improves the company’s ability to meet the needs of the customers.
Competition implies costs. This is because their labour costs tend to be lower, their workforces are relatively highly educated, and technology is advanced. The result of this is that only companies that can manage to take up radical and proven cost-cutting measures are able to compete most favourably. As such strategies are taken up, production costs for the major players have gone down, and, as a result, the overall production costs of virtually every commodity have gone down with time. This has further increased global market competition.
Globalisation has caused increased labour and capital mobility in global markets. This has created a global marketplace in which opportunity is increased due to the existence of more possible customers. The effect of this is greater competition as foreign and local companies are forced to get into competition for customers. Competition for resources also has the effect of making organisations more adaptable and flexible. To maintain effectiveness and efficiency, employees and leaders of organisations have had to change into more flexible characteristics. They also have to acquire a greater variety of strategies and skills to handle the diverse nature of human capital working in the organisations.
The creation of close ties with the rest as a group makes it easy to cooperate in a manner that is faster as compared to what arms-length contracts allow. At the same time, it maintains flexibility as the organisation can be able to stop the relationship whenever it becomes necessary to do so. The current trend promotes networked structures and organisations. It causes a new form of tension between independence and interdependence in the industry. The arguments for and against such independence bring up new issues for organisations. For instance, there are questions about using independent contractors and joint ventures. These may either improve or decrease resource attainment.
In conclusion, organisational growth is an aspect that is critical for the success of an organisation and company in particular. One of the aspects that can help the company realise growth and remain competitive and relevant in the market is its ability to enact appropriate strategies. Some of these strategies can be single-focused while others, such as grand strategy and social responsibility can be initiated from the combined strategy perspective.
Rethinking basic principles of good operations management
There is a growing need to rethink on the operation management. Therefore, it is necessary for the various existing policies guiding the innovation process to be revisited. This will ensure an environment where businesses can successfully respond to the first emerging challenges in globalisation.
There is an increasing trend for firms not to consider themselves as either provider or as manufacturing firms but as responding to the needs of customers and solving their problems through the provision of both the products and the necessary services. Therefore, various scholars have argued that the policies should seek to improve the understanding of service innovation to improve the current knowledge on the manufacturing innovation.
However, the process of adjusting policies to meet the current challenges has met various challenges, especially on how to measure innovation. The past policy work is also criticised for putting much emphasis on what they describe as a supposed innovation gap existing between countries. This approach may leave out many other possible innovation forms that had not been studied in the past. Such forms, which may require additional research to reveal, may not have been studied or even known in the past.
Rethinking on the analysis requires a better understanding of the current service innovation. Services can be looked at as either intermediation activities or contact services. In all these forms of services, “jointness” of production and consumption can be said to be an important medium. It is therefore clear that, contrary to production that may not require the presence of the consumers, services will require jointness. This fact, therefore, points out the incorporation of the interactive role of the consumer in the innovation policies and processes. Another aspect of the analysis of the innovation process that needs to be reconsidered is how to define and measure the output of innovation.
It is also noted that the investments in the innovation inputs in both the production and service sectors have been portraying a variety of patterns. It is also noted that while the intensive knowledge services spend much of its expenditure on Research and Development, the retail and distribution and other services spend much of the is expenditure on technology embodied equipment and software (Shuji 2005, p. 18).
Most of the typologies currently used tend to rely much on external innovation which is supplier dominant. It is also noted that the degree of interaction with the customer, which is also known as the client led innovation is not given much attention in the current innovation policies. Other scholars have also argued that the intensity of in-house innovation, also known as the innovation in services, should be given more attention in the policy.
Therefore, measurement is not only useful in obtaining the average but also in decision making. The perception of measurement as only useful at the aggregate level has caused major financial problems in the innovation projects, especially the service-related ones.
Operations management: old technology equipment versus new technology equipment
A company should continue to make progress in implementing its enterprise strategy, which it believes will continue to help deliver concrete performance even in challenging market situations. Its strategy to drive growth is centred on delivering high performance in all facets of its business; arranging incremental resources to higher-growth areas, and delivering strong cash flow and setting it up to augment shareholder value further.
Delivering high performance in all facets of the business means sound execution on contracts for its customers, leveraging its advantages and widening its operational efficiency for added process improvement. Arranging incremental business resources mean that it will focus a bigger part of its business development and acquisition efforts toward pursuing quality products. Focusing on these growth areas and incorporating its outstanding talent and technology, the company is expected to grow faster than the market.
In acquiring new equipment, a company is bound to focus on productivity, effectiveness and changes in technology. The first, utilisation defines the new equipment’s ability to undertake its role in the new outfit. However, this should include a focus on a company’s capability to buy and’ maintain their profitable product lines and the competency in production following the acquisition. Eventually, the possibility of productivity-improving or acquiring company’s capabilities that will increase its competitive edge should be the basis of the capability issue. The next issue that Kellogg must focus on is compatibility.
Compatibility here defines the ability of the top management; other interface points in the company should at least be compatible with the requirement of the equipment. This should ensure that the resultant production process works well at the operational level. The company will have to consider equipment attractiveness in both short and long term to determine if the acquisition is meaningful.
The next consideration will be productivity. Productivity defines the ability of the acquired equipment to utilise resources continuously to the business benefit of the customer. The possibility of equipment o fail or be obsolete should be analysed. Importantly, they should avoid overpaying for overvalued assets and adopt adequate integration planning, effective communication, and cultural match to make the acquisition a success.
Changing organisational operations strategy mindset
Organisational change is the implementation of a new organisational culture or behaviour. In contrast, organisational innovation is the introduction of a new organisational culture or behaviour in the relevant industry or market. Establishing the view of successful change in an organisation, Daft has outlined five elements for this purpose. These five elements include an idea, a need, an implementation, adoption and resources. He has further argued that these elements are critical to successful organisational change and organisational management holds the primary responsibility to enforce these five elements for successful change in an organisation.
A change in an organisation will be easily communicated to and accepted by the people if the organisation has a more dynamic system. A more dynamic system encompasses a supportive environment that is characterised by having people who can comfortably talk to their superiors. They do not hesitate to convey information to their bosses because they know that their superiors will recognise it whatever kind of information they have. Also, a dynamic system is a working environment that allows its people to join in the communication process—a sense of belongingness.
There are various reasons why people are unwilling to accept organisational change—fear of change, uncertainty, insecurity, and the disturbance of the status quo—the reasons mentioned above all boil down to lack of communication and information. People resist organisational change because they do not understand what the change is for, why there is a change, and how this change can benefit them.
Due to lack of communication and information, some people tend to perceive the organisational change being introduced to them in a unidirectional view that it will only benefit the organisation while they suffer. The article suggested effective ways of implementing a change like educating the people about the change, providing the people with ample training and emotional support they will need for all the adjustments, and allowing the people to participate and get involved in the process.
Organisational priority for maximisation of customer satisfaction
The management team can develop control systems for attaining the short-term as well as the long-term organisational goals. In my business organisation, the corporate office had developed an effective, transparent, and accountable management control system for overseeing the day-to-day business operations of the processing plant, the marketing department, the sales department, and the customer service department.
The objective was to help the entire human resources in attaining the common organisational goals of enhancing the production, revenues, and profits. To keep the workers motivated, incentives and recreational tours were offered regularly. The performance of employees was also monitored and evaluated by using specialised accounting software; moreover, the expertise of the human resources department was also utilised while calculating the increment and rewards. General and analytical accounting procedures have also been recommended for preparing the financial statements, and for calculating the costs, revenues, and margin of profits. Based on the annual budget, each department was allocated the capital anticipated for the sustenance of its business operations.
A functional organisation acts as a role model for other organisations due to its consistency in attaining higher economic growth, transparency of business operations that show the actual financial performance to the shareholders, and accountability of stakeholders, including workers, managers, vendors and Board of Directors. The management is keen to devise innovative strategies for increasing production as well as quality, deliver excellent quality of goods and services to the customers, and implement cost-saving measures in every unit of the organisation.
On the other hand, a dysfunctional organisation has several inconsistencies, such as poor management policies that fail to induce motivation in the human resources, repetitive business processes that may be inefficient and costly, ignorance of the best performance enhancement practices in the industry, finding excuses for faults instead of finding solutions, and prevalence of unethical business practices.
There were also some dysfunctional attributes in the organisation that acted as a hindrance against the smooth functioning of the processing plant. For example, some of the equipment in the quality control laboratory was old and needed replacement due to the irregular supply of the raw material. The processing operations used to come to a standstill for a couple of days till the raw material reached the processing plant. Although a positive attitude prevailed in the organisation most of the time, the political behaviour of some employees interfered with professional conduct.
Management control systems enable a business organisation to achieve a phenomenal increase in sales and profits due to the enhancement of functional attributes and the elimination of dysfunctional attributes. Workers need regular training and motivation in addition to the adoption of state-of-the-art information technology for effective implementation of control systems and quality management initiatives. Six Sigma Benchmarking is a cost-effective method to ensure excellent quality of goods and services. Control systems and quality management have positively influenced my personal as well as professional development.
Operate with or without a sales forecast
The sales forecast should be prepared by competent people in the company. These people are those involved in sales and marketing as well as people in production. The production personnel will only give information as to the capability of the company to produce what salespeople are proposing. This means that those people in sales are responsible for sales-budget formulation. They use previous sales volumes as a base for sales predications. Proper scrutiny is done by sales executives on historical sales behaviour and relates it to these data such as economic indicators, advertising, pricing policies and competitive conditions. Current information is assembled, production capacity considered and then the outlook is delivered for the ensuing months. Sales executives should do service marketing research as a tool to eliminate guessing.
The impact of Deming, Duran, Crosby on quality management
As part of the quality management process, Wal-Mart’s quality policy ensures that it always seeks the best products for its customers. As such, it emphasises global sourcing. It greatly relies on products procured from different countries to draw consumers into stores and enable them to benefit from low prices. In addition, the company pursues quality assurance by testing. The company upholds customer safety as a paramount objective and remains serious in the provision of customers with safety as well as quality in all sold products. There is the application of various independent laboratories run by third parties to provide safety testing.
The company is committed to shrink reduction by source tagging. This refers to a process in which there is the incorporation of disposable labels into products at the distribution, packaging or manufacturing levels to prevent theft. The labels are known as Electronic Article Surveillance (EAS), and every product is required to be certified before tagging by a specific laboratory. The company’s quality design is aimed at cutting down prices for the benefit of customers.
The company has the lowest prices as long as customers seek inexpensive items. Quality conformance at Wal-Mart seeks to offer customers the lowest prices. It is also known worldwide for its operations performance and meeting of product specifications. The company’s human resource policy ensures quality in service provision to the customer. It is characterised by an ‘open-door’ approach.
Quality management at Wal-Mart has had a lot of positive effect on its positioning. Although competitors in the international scene are known for their greater sourcing from Asia, Wal-Mart has managed to remain the most effective in the integration of outsourcers and overseas sources into its own supply chain. This is because the policy ensures working with suppliers both at home and abroad in ways that both improve them and the company, mainly through sharing of market data.
Quality management has the effect of making it a highly competitive brand. The business model and approach that it has in place have so far been effective. It stands out in terms of positioning because it possesses a formula, which other retailers do not have. It offers the typical traditional form of retail business, with effective customer service, and this is combined with an excellent standing in terms of finances. Its profit and growth potential is also great, and management highly business savvy. Quality management has enabled it to adapt easily to changes with time. These elements add up to the competitiveness of the firm and its positioning within the retail markets at home.
From the discussion, quality management efforts ensure that two important aspects of competitiveness are met. First is the satisfaction of consumer requirements. This, in turn, leads to greater confidence in the company’s ability to provide consistent delivery of services and goods hence satisfying customer expectations and needs. It also results is the attainment of the organisation’s requirements. This is achieved both externally and internally and at optimal levels through efficient utilisation of available resources, whether human, information, material or technological.
The focus of business operations management
The product needs to satisfy consumer needs for it to be viable. Viability of the products is what provides a market outlook on the product, how it will be marketed, who the target market is, and the purchase locations. This provides an analysis of the way consumers will perceive the product or service in terms of how this will satisfy their demands, and help increase the possibility of using the product again. The company must present the product attractively online and list all the benefits of using the product. This will be followed by customer testimonials giving detailed information of that product, over a period, showing the benefits to consumers.
Before going online, the company will analyse the product using the BCG model where the product will be classified as a star, a cash cow, a problem child or a dog. Once a proper analysis has been made, the company will do a budget analysis to determine the extent of budgeting requirements. If the product is a star, more expenditure has to be incurred to ensure that there is wide market coverage for the product to make sure there will be a long period of consumer usage of the product. If a cash cow, modest expenditure should be incurred since the objective is to get as much revenue as possible from the product before phasing it out of the market.
The application of operation strategies before buying new equipment
Before buying new equipment, various factors are taken into consideration. The most important factor is the impact it will have on the product, whether quality or quantity. In the observation of the significance related to the perceptions of the benchmarks of service quality, several suggestions have been in the intellectual domain, which needs more clarification.
The significance of test assumptions concerning perceptual processes is relevant especially to disconfirmation models, though, they have impacts on alternative absolute, the yardstick of quality based on performance. Literature indicates that perceptions of an occurrence are blurred as time passes by: therefore, a questionnaire filled by a respondent during or shortly after the rendering of service may result to one pointer to the perception of the recipient.
Moreover, during the study, selective perception would influence the representation of just a percentage of stimuli that exist in an environment where a person is going about his or her activities related to service provision. Through a profound course of selectivity, the larger part of the proportion will transform. The capacity of memory processing varies among individuals, and perceptions may either fade completely from the mind or be partially selectively retained.
Owing to the importance of the impact of time on perceptions, marketers should seriously consider time issue in their activities. The best perception is normally exhibited at the instance when the subsequent purchasing decision is reached: therefore, much concentration which several organisations put in evaluating perceptions during or shortly after dispensing a service should be discarded because such moves have a modest bearing on perceptions of service quality.
Bad occurrences are normally removed selectively, from memory through cognitive dissonance process and that thus; discernment scores will increase as time elapses, because of an increase of the first service encounter. Due to the non-static nature of perceptions, as time elapses, the procedure of partial perception is shaped by the degree of significance which a person attaches to certain features of a process of service.
A “new paradigm” for Operations Management
Businesses enter markets to pursue profits. This is achieved through the sale of services or products to customers. In the majority of cases, many companies find themselves in competition to gain market share and sales or their products. The resulting competition may be in performance where every company tries to win the loyalty of potential customers, head-to-head competition in which the business not only tries to perform better than others but also attempt to slow down the other competitors from doing well. For instance, big manufacturing firms may engage in the predatory competition so that they can be able to maintain their competitive access to resources and markets in general.
The existence of various forms of markets is necessary for the economy. There are markets for the resources that are to be used in organisations. For instance, organisations are always in competition within financial markets as this is where they acquire their financial resources. Investors decide on the best place to entrust their capital by selecting from competing organisations. An ever-present competition also exists in supplier markets where every organisation seeks to get the materials used in the production of services and goods. The competition that occurs here determines the eventual labour, material, equipment and other costs that organisations require to operate.
At the beginning of an organisation’s operations, a quite small quantity of capital may be invested by the entrepreneur to prove that the developed business idea or concept is a potentially profitable and successful business opportunity. During the expansion and growth stage, working capital is required to expand the company as it produces and ships products. The returns on resources then tend to be limited as profit will not necessarily be evident yet at this stage. However, more funds will be needed for plant expansion, working capital and marketing. In some instances, there also arises the need for expansion in the product line, product improvement or adoption of new technology.
They are mostly concerned with the business that they are engaged in rather than dealing with the competitors. They keep trying to get the customers and satisfy them through the improvement of quality and extra services. Through the provision of good services and products, they seek to be at least successful, if not the best in their category. Through extra marketing and awareness creation, the business will try to ensure that its performance is maintained, if not improved.
For instance, through adopting Six Sigma or Total Quality Management (TQM) methods, the company may be able to enhance its capability of making better quality output and have a better-run firm. Most companies recognise their competitors and the position that they may be having in the marketplace. They therefore try and work harder to satisfy consumer needs. Such attempts may raise costs as the adoption of technology, more efficient supply chains and training of staff becomes necessary.
In some instances, businesses tend to compete directly with whoever they identify as their greatest competitors. As an addition to the attempts, they also struggle to make the success of their competitors in their shared market as difficult as possible. Because the competitors might be possibly exercising similar tactics, the firm usually needs to develop the best affordable defensive measures to cope with the attacks.
Such measures also have cost implications, as they are extra operational and strategic measures. Another way in which a business may deter opponents from being stronger than them is trying to gain control over supplies. This can be done by outbidding them in acquiring vital supplies.
Advertising is a common way of wrestling the competition for resources from opponents. Advertising and marketing at times, use negative messages regarding the opponents. The most effective advertisements tend to suggest that opponents are inferior in terms of quality through implication in messages. Advertising is a manipulation of information resources and is costly as an operational cost. An organisation may also opt to control product distribution as a means of deterring competition for resources. A good way of doing this, for instance, involves the acquisition of sole distribution rights for a commodity.
Case study on the production process
With total quality management (TQM), the company indulges in every attempt to maximise competitiveness through continuous improvement of products, services, people, process, and environment. Since today’s competition in the local and international market is filled with hundreds or thousands of industry players, it is said that a company with total commitment to quality often gains an edge in the market.
On the other hand, total quality management does not apply to every business setting as it does not prove to be a worthwhile investment for all kinds of companies. It is essential only for those who are in tight competition markets and whose definition of quality is subject to what the customer demands. But for those who are bureaucratically-controlled and already have a profitable business model, total quality management is not a necessity. To achieve this, this paper will compare when a business model needs total quality management to keep an edge in business and when the business model does not need total quality management to stay competitive and profitable.
Commitment to product and service quality is indispensable for any business endeavour. It is one of the important factors that help potential customers prefer one service or product over others. Now, in markets where competition is very tight, and if all marketing factors are price, place, product and promotion, quality becomes the major battleground. Because quality is this important, managers and owners of businesses find it necessary to ensure that every process their establishment conducts and every product that they bring out to the market will beat the quality of their competition. TQM has three main pillars: top management commitment, continuous improvement, and employee involvement.
In total quality management, everything runs in the Plan-Do-Check-Act cycle. The managers plan a particular strategy; the plan in acted out; both strategy and the action is evaluated through established quality control indicators, and the analysis is evaluated for continuous improvement. Anything in the entire process, from strategy to action, which does not fit the customer’s, needs, will be adjusted, and the process is run all over again.
This way, the definition of quality keeps improving or changing, depending on customer preferences. One clear setback with this system is in operational expenses. Since change is always happening, improvements at any point of the business process imply additional costs. However, since more satisfied customers and more sales, the expenses for changes required are counterbalanced by their continuous increase in sales.
Total commitment leaves no room for error, and everything is done with customer preference in mind. No wonder, their brand is already a household name across the globe. For companies that are bureaucratically controlled, which business model has resulted in their firm presence in the market, total quality management is not necessary. An organisational structure is one of the most common barriers to total quality management.
Specifically, it is because of their inability to change an organisation’s culture to be more supportive of the concept’s principles and practice. And if the organisation’s culture has traditionally adopted the top-down decisions-making system, total quality management will be a total reversal of their practice. To clarify, this does not mean that such companies do not prioritise the quality of their products and services. Rather, it means that such companies do not undergo a continuous change in their processes just to meet the customer’s definition of “quality.” They do not find value in getting the inputs of their employees because their existing system is the one that made them competitive.
They already have a fixed system that is tested and proven to bring in a profit, which is then strictly maintained by their multi-level bureaucracy. And if this balance is altered by total quality management concepts, it may become detrimental to the business. Take, for instance, an architectural design firm, whose architect and founder of the business is a multi-awarded professional in environmental-friendly residential models.
In this business, the main architect has a team of designers who help him come up with their newest models, yet the final decisions are based on his own preference since it is his own business anyway. The product designs that gave him success are more of trend-setting rather than patterned to what customers want. Profits are gained because customers want his designs; he sets the trend, and the customers follow. In such cases, there is little or no need for continuous improvement to satisfy a target market. Employees have no choice but to follow what the owner wants because it is how the company became highly competitive. Hence, the existing bureaucracy should be retained and not altered by total quality management concepts.
Total Quality Management does not apply to businesses whose particular bureaucratic arrangement is what makes them profitable. This also applies to arrangements where employee participation is limited only up to their immediate superiors.
The concept of total quality management requires the business’ owners or managers to be fully committed to continuous improvement, even if the suggestions are from the rank and file employees. Any corporation which has been operating successfully for several decades, and where top management officials have the expertise and competence to keep the company at its best, total quality management concepts are not needed. Moreover, their existence is already cemented in the market. Thus, regardless of existing competition, their established business model has no problem in getting more customers to patronise their products and services. Application of total quality management in such cases may only result in confusion, employee unrest, unnecessary expenses, and lesser profits.
Total Quality Commitment is a concept committed to engaging the entire workplace in pursuit of better quality standards that would meet customer’s needs and expectations. It is a good practice for businesses that are in tight competition markets. It is also applicable for businesses that define quality by the standards of the customers. On the other hand, total quality management concepts will not work for those who are bureaucratically-controlled and already have a profitable business model. Thus, while total quality management has ideal concepts that put importance on product and service quality, it cannot be the ideal arrangement for every business model and cannot be considered an indispensable ingredient for success.