Quality Management, Lean Operations and Performance

Abstract

This report entails an analysis of two operations management topics, which include quality management and lean operations. The report outlines a brief introduction illustrating the significance of management in organizations’ efforts to attain long term survival. However, the attainment of long-term success is influenced by the effectiveness and efficiency with which an organization integrates the diverse operations management concepts. The second part identifies quality as a critical element in an organization’s operation management. Failure to manage quality may increase the cost of operation hence reducing affecting an organization’s performance.

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The report assesses the importance of quality improvement as one of the core aspects of quality management. The different quality improvement aspects that organizations should take into account are analyzed. Examples of such aspects include quality control, identification of common and special causes. Moreover, the report identifies the various contextual factors associated with quality improvement. Some of these factors include conducting a feasibility study, customer focus, and employee focus.

The second part of the report entails an analysis of just in time technique as one of the lean operations concepts. JIT enables an organization to minimize the cost of operation by ensuring the firm has sufficient raw materials to enhance its operations. Moreover, JIT enhances organizational performance by eliminating any ‘through put’ instances. Optimal JIT improves the effectiveness with which an organization optimizes its carriage capacity, which is attained through effective scheduling of the shipment process. The contextual factors involved in JIT include a body of knowledge and principles.

Introduction

The long-term survival of an organization is subject to the management practices it plans to adopt. Subsequently, it is imperative for organizational managers to integrate optimal strategic management practices. Some of the two main issues that a firm should take into account include quality management and lean operations (Evans & Lindsay, 2008). Pfeifer (2002) argues that quality is a fundamental element in an organization’s long-term survival.

The definition of quality varies across organizations depending on their operation. Pfeifer (2002, p.5) asserts that quality ‘includes the various characteristics that are necessary for ensuring that customers are satisfied’. Therefore, quality is not only comprised of the product, but also the various processes involved in ensuring that a product is produced successfully.

A firm’s management team should take into account a number of issues in its quest to integrate quality in its operations. Some of these issues include consistency, perfection, speed of delivery, total customer service, and compliance with the set operational standards and procedures. Therefore, diverse perspectives are taken into account in the process of defining quality. Some of these perspectives include the user-based perspective, product-based perspective, manufacturing-based perspective, and value-based perspective. In a bid to achieve its quality objective, it is imperative for an organization’s management team to nurture a high level of interdependence with various stakeholders such as customers, suppliers, regulators, investors, employees, and the community in which it operates.

Lean operations enable organizations to achieve cost-effectiveness, improve the quality of their products, and enhance delivery metrics. According to Bauer, Duffy, and Westcott (2006), the term ‘lean operations’ refers to the various business practices that are adopted by an organization, hence ensuring minimal utilization of resources such as raw materials and time while contributing to the production of high-quality products and services. One of the main examples of lean operations includes lean manufacturing. This paper evaluates the role of lean operations and quality management in enhancing an organization’s performance. The paper considers a number of case studies in a bid to illustrate the contribution of the two strategic management practices.

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Quality management

Description of quality management

Total quality management enhances an organization’s performance by minimizing the costs associated with poor quality products and services (Shim & Siegel 2009). Chao (2007) further asserts that quality costs include the costs incurred in evaluating whether the products and services produced to meet the set quality standards. Additionally, quality costs also include the costs incurred in preventing non-conformance. Firms should take into account different components in order to enhance their performance through quality management. Some of these components include quality control, quality assurance, quality planning, and quality improvement. This paper focuses on quality improvement as one of the sub-topics in quality management.

Firms in different economic sectors are experiencing a challenge emanating from changes in the external and internal business environment. Subsequently, it is essential for organizations to enhance their competitiveness. This goal can be achieved by undertaking quality improvement.

Analysis of quality improvement

Quality improvement betters the effectiveness and efficiency with which diverse activities and processes are undertaken. Bissoondoyal (2006, p.34) further argues that quality improvement ‘includes all the activities whose resultant effect is a beneficial change with regard to quality performance’.

One of the issues that firms should take into account in an effort to achieve quality improvement entails setting effective control standards. Upon achieving the set standards, the firms’ management teams should focus on setting a new benchmark by improving the standards. Subsequently, quality improvement entails changing the set standards. Charantimath (2007) contends that quality improvement entails eliminating or reducing variations in a particular production process. Furthermore, quality improvement is concerned with the identification and removal of the common causes, which are intrinsic in an organization’s quality management system. For example, firms specializing in the production of water pipes may experience variation with regard to the diameter of the pipe. This aspect may affect the quality of the final product, and hence it is market acceptability. In a bid to deal with this challenge, the organization may be forced to install a new milling machine.

In addition to common causes, it is essential for the management teams to be cognizant of the existence of special causes. Hartman (2002) argues that an operator can control special causes while common causes require the decision of the top management. An effective quality circle comprising of operators, managers, and supervisors amongst other individuals should be designed in order to ensure that dealing with the common and the special causes (Hartman 2002). The likelihood of operators identifying quality issues is relatively high as compared to managers and supervisors. Despite this aspect, the success with which an organization undertakes quality improvement is dependent on the extent of collaboration between the various groups in the quality circles.

Quality control experts contend that common causes account for approximately 90% of all quality problems encountered by organizations (Hartman 2002). In its pursuit to integrate quality improvement, it is imperative for an organization’s management team to implement an optimal employee-training program. The program should be designed in such a way that it addresses the employee’s and the organization’s needs. Dahlgaard, Kristensen, and Kanji (2006) assert that employee training improves their skills, hence improving the quality of products and services products.

It is crucial for an organization to come up with a quality improvement team. In a bid to create such an environment, the firm’s management team should adopt a participative management style. The team members should be actively involved in making decisions regarding the quality of the firm’s products. The quality improvement teams should cut across functions in nature, which means that they should be comprised of individuals from diverse departments and disciplines such as marketing, engineering, marketing, research and development, and manufacturing.

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Developing a cross-functional team creates an effective and efficient flow of information, hence enhancing the effectiveness with which solutions are made. For example, information on product design should flow between the research and development, designing, and manufacturing departments. Such involvement is critical in creating a positive attitude towards the product being produced. Developing a quality improvement team ensures that employees identify with the product’s quality improvement process. Furthermore, the quality improvement team ensures that the process of improving the quality of the product is in line with the customers’ needs.

The quality improvement team should be developed effectively in order to improve the outcome of the process. Some of the issues that should be taken into account include ensuring that the team leaders and members have sufficient knowledge on quality improvement, for example, the ability to identify quality gaps. Additionally, team leaders should have adequate leadership skills such as motivational and conflict management skills. The team leaders should be creative.

The firm’s management team should consider integrating employees from within and without the various technical and operational areas.

Forming a mixed team enables the management team to develop a broad-based view of the firm’s quality problems. Furthermore, it is also essential for the team leaders to ensure that the team members understand the team’s objectives prior to the quality improvement process. Effective team dynamics should be integrated in order to enhance interaction amongst the members. The management teams should integrate effective quality systems such as ISO 9000 (Hoyle 2009).

Contextual factors in implementing quality improvement

Feasibility study

The success of quality improvement is also subject to the extent to which an organization identifies the various quality gaps. Subsequently, it is imperative for a firm’s management team to conduct a comprehensive feasibility study. The aim of carrying out this study is to enable the organization to assess the effectiveness of the implemented quality improvement policies. Additionally, conducting a feasibility study enables an organization to determine whether the existing quality improvement plan can enhance an organization’s long-term survival.

Customer focus

Idris (2011) argues that the various components of total quality management are focused on nurturing a high level of customer satisfaction. Therefore, an organization’s quality improvement program should be customer-centric. This assertion means that the various components of the program should be focused on achieving at nurturing a high level of customer satisfaction, which can be attained by conducting comprehensive consumer market research. Market research should be focused on understanding consumers’ expectations and demands. Idris (2011) asserts that customer satisfaction enhances the effectiveness with which an organization attains market orientation.

Employee focus

In addition to customer focus, a firm’s management team should ensure that employees are involved in the quality improvement process. Idris (2011) asserts that employees are charged with the responsibility of implementing the quality improvement program developed by an organization. Subsequently, employees must ‘own’ quality improvement initiatives in order to attain the set goals and targets. The employees’ involvement is critical in ensuring that they achieve a high level of job satisfaction, hence improving their productivity. The total effect is that the organization is in a position to achieve a high level of customer satisfaction.

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Analysis of lean operations

Description of lean operations

Oakland (2003) asserts that lean operations are focused on minimizing the resources utilized in an organization’s management process. Therefore, lean management contributes to minimizing or eliminating waste during the production process. Lean operations enable a firm’s management team to identify the various areas of waste some of which include motion, transportation, over-processing, defective products, and over-production. Furthermore, elimination of waste is not only limited to the tangible aspects of the production process but also includes intangible elements, for example, underutilized labor.

Organizations in different economic sectors are increasingly integrating cost-effective operational strategies in their production processes in order to achieve a competitive advantage. One of the aspects that a firm’s management team should consider in its quest to attain lean operations entails nurturing a lean thinking culture amongst employees. Oakland (2003, p.65) argues that the ‘concept of lean thinking requires organizations to eliminate the various activities that do not create value to in an organization’s operations’. Therefore, nurturing lean thinking amongst employees improves the intrinsic value of an organization’s products and services.

In addition to lean thinking, a firm’s management team should ensure an effective and efficient flow of information and materials necessary in an organization’s operational processes. Liew (2009) argues that lean management enhances the efficient flow of information, which minimizes the likelihood of employees engaging in activities that do not contribute to value addition. This aspect improves the effectiveness with which an organization undertakes its production process. McLaughlin and Kaluzny (2006) assert that lean operations enable organizations to develop products and services, which align with the prevailing market demands. Some of the techniques used in achieving lean operations include continuous improvement and Just-In-Time.

Analysis of lean operations [Just in Time]

Callioni, De-Montgros, Slagmulder, Wassenhove, and Wright (2005) define JIT as an inventory and production control system, which enables an organization to develop products and services that meet the customers’ demands. Callioni et al. (2005) assert that JIT ideas have become prominent in organizations’ manufacturing processes over the past two decades. In a bid to achieve a competitive advantage through lean management, firms should consider integrating JIT in their supply chain management. Adopting JIT enables firms to achieve lean operations by improving the effectiveness with which an organization avoids waste.

Adopting JIT enables organizations to minimize the cost of operation by ensuring that it has the right raw materials in their warehouse. Additionally, JIT contributes towards the elimination of throughput, which entails the time taken between when an order is made and when it is delivered. JIT ensures that an organization has the correct brand and amount of resources and at the correct site and moment. This aspect improves the efficiency with which an organization undertakes its production process. Furthermore, lean management contributes to the elimination of idle capacity in an organization’s transportation processes. For example, an organization is in a position to minimize queues encountered during the loading and unloading processes. Moreover, optimal JIT improves the effectiveness with which an organization optimizes its carriage capacity, which is attained through effective scheduling of the shipment process. This aspect minimizes the transportation cost incurred in an organization’s supply chain. The amount of money saved through JIT can be reinvested in other operational processes (Callioni et al. 2005).

Incorporating JIT ensures that an organization’s production process is customized. This assertion means that a firm only undertakes the production process if it is certain of the existence of market demand. However, the implementation of JIT is dependent on the relationship between the firm and suppliers. An organization should have the necessary raw materials in order to ensure that production occurs on time. Furthermore, the JIT technique also requires the integration of effective planning and experience with regard to management.

Both manufacturing and service companies can apply JIT. One of the areas in which service companies can utilize the JIT technique relates to improving their logistics. Service companies such as firms in the hospitality industry can adopt the JIT technique in their distribution processes. Callioni et al. (2005) assert that JIT is a problem-solving management technique, which is aimed at improving an organization’s timelines with regard to supply, production, and distribution. Subsequently, the likelihood of the organization achieving its performance objectives is increased. For example, an organization is in a position to enhance its service delivery process and to cut the cost of operation. Callioni et al. (2005) opine that JIT has played a remarkable role in improving an organization’s productivity by minimizing wastage.

Contextual factors in JIT

Effective implementation of JIT is dependent on a number of contextual factors, which include a body of knowledge and principles. One of these principles relates to the integration of effective cost management strategies. Optimal cost management improves an organization’s performance by noting and obviating tasks that add no value to an organization’s performance hence increasing its productivity. In addition, optimal implementation of JIT is dependent on the effectiveness with which information flows between the various stakeholders involved in the supply chain. Additionally, it is imperative for a firm’s management team to implement effective technologies such as Logistics Information Systems, for example, Value Added Network, and Electronic Data Interchange [EDI]. These technologies enhance interaction between the various stakeholders. In addition to the above, it is critical for a firm’s management teams to ensure a high degree of fit between the internal and the external business environments.

Conclusion

This paper has cited market changes as one of the major challenges facing the organization’s ability to attain long-term competitiveness. Despite this aspect, a firm’s management team has an obligation to ensure that the various stakeholders are satisfied. In a bid to survive in such an environment, it is imperative for the firm’s management team to implement optimal operational and strategic management practices. Strategic management plays a fundamental role in an organization’s efforts to improve its performance, and hence the likelihood of achieving the set goals and objectives. An organization can integrate different management practices in its effort to attain long-term performance. Some of these practices relate to quality management and lean management.

Quality management enables an organization to produce high-quality products and services, which promotes the rate of market acceptability of its products and services. Subsequently, the likelihood of the firm achieving its profit maximization objective is enhanced. However, managing quality is a sophisticated undertaking, which entails a number of components such as quality control, quality assurance, quality planning, and quality improvement. Furthermore, the quality management process must involve both internal and external stakeholders.

The success with which an organization undertakes quality improvement is dependent on the extent to which the organization’s managers, operators, and other internal stakeholders can identify the common and special causes. Furthermore, all employees must be involved in the quality improvement process. Therefore, it is imperative for the firm’s management team to communicate its quality policy to employees. The effectiveness with which quality improvement contributes to the improvement in an organization’s long-term performance is subject to the extent, which the quality improvement program is customer and employee-focused.

The paper also identifies lean operations as another major factor that can enhance an organization’s long-term performance. Lean operations enable organizations to minimize and eliminate wastage. The adoption of effective lean operation techniques such as the just-in-time technique enables organizations to achieve efficiency in their production and supply chain processes. The resultant effect is that an organization can undertake its production processes efficiently and effectively. Subsequently, the organization can deliver products that satisfy the prevailing market demands. In summary, one can assert that the adoption of effective quality management and lean operations practices can promote an organization’s competitive advantage, hence its long-term success.

Reference List

Bauer, J, Duffy, G & Westcott, R 2006, The quality improvement handbook, ASQ Quality, New York.

Bissoondoyal, U 2006, Total quality management: a practical approach, New Age International, London.

Calling, G, De-Montgros, X, Slagmulder, R, Wassenhove, L & Wright, L 2005, ‘Inventory driven cost’, Harvard Business Review, vol. 83 no. 3, pp. 135-141.

Chao, S 2007, Advancing quality improvement research: challenges, opportunities-workshop summary, National Academies Press, Washington.

Charantimath, C 2007, Total quality management, Pearson Education, Sydney.

Dahlgaard, J Kristensen, K & Kanji, G 2006, Fundamentals of total quality management: a process analysis and improvement, Routledge, London.

Evans, J & Lindsay, W 2008,The management and control of quality, Thompson South Western, New York.

Hartman, M 2002, Fundamental concepts of quality improvement, ASQ Quality Press, New York.

Hoyle, D 2009, ISO 9000 quality systems handbook. updated for the ISO 9001:2008 standard: Using the standards as a framework for business improvement, Butterworth-Heinemann, London.

Idris, F 2011, ‘Total quality management and sustainable company performances; examining the relationship in Malaysian firms’, International Journal of Business and Society, vol. 12 no. 1, pp. 31-52.

Liew, J 2009, Employee training: a study of education and training department in various corporations, General Books, Sydney.

McLaughlin, C & Kaluzny, A 2006, Continuous quality improvement in health care, Jones and Bartlett Learning, Oxford.

Oakland, J 2003, Total quality management: text with cases, Butterworth-Heinemann, London.

Pfeifer, T 2002, Quality management, Hanser Verlag, London.

Shim, J & Siegel, J 2009, Operations management, Barron’s Education Series, London.

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