Quality management includes all the activities that business use to strive for and achieve quality and covers quality control, assurance and improvement. There are three main strands to quality management -quality control: is a feedback control. It is a review process whereby everything that is involved in the operations process of production is reviewed.
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The QC process is undertaken to ensure that a predetermined or minimum level of quality in a good or service has been achieved during operations. quality assurance: involves monitoring and evaluation of the various processes of a project, service or facility to ensure that minimum levels of quality are being achieved by the production process. -quality improvement: is a process which aims to reduce the rate at which mistakes occur in the production process. It involves analysing what has happened in the operations processes and what actions will be taken to improve performance.
In today’s technological society the pace of change is rapid and businesses need to keep up with new processes, applications and ideas. Reasons for resistance of change: resistance to change is the perception that a change will threaten an individual or group. Managers often view resistance to change by stakeholders as a negative factor in the change process. The main reasons for this resistance include: Financial costs: organisational change may cause large financial costs. These include costs of, purchasing new equipment, redundancy payouts, retraining and reorganising plant layout.
Business managers may defer change because the benefits of the change do not outweigh the financial costs of the proposed change and may negatively impact on profit levels and return on equity for investors. Purchasing new equipment: rapid changes in technology increase the ongoing requirements to update equipment. Existing equipment is often still working despite the fact that is it out of date. Mangers may resist the purchase of new equipment when assessing the costs or purchase against the return on the investment.
Redundancy Payouts: introducing any change that aims to improve efficiency, such as new technology, flatter management structures, outsourcing or relocating overseas. Often creates surplus workers in business, making them redundant. These changes will involve costly redundancy payouts to these workers. A business may defer changes in order to avoid such large outlays of money. Retraining: changes such as new systems and procedures, flatter management structures and the use of new technology create a need for staff retraining.
This is costly as operations are interrupted while the workers learn and practise the required skills. There may be a decline in productivity and an increase in errors as the workers try to become more proficient in the newly acquired skills. Reorganising plant layout: the plant layout is how a business is physically organised. New technologies such as robotics and CAD AND CAM software, changes in production process, flatter management structures and other internal and external influences often make it necessary to reorganise the plant layout. This may be a resistance factor due to the cost.
Inertia: means the tendency for things to remain in their existing state of rest. Business owner and managers may resist change as they may be cautious or slow in their decision –making or feel that change is pointless as the business is operating successfully with reasonable profits and few problems without the change. A supply chain is the sequence of activities and organisation involved in producing a good or service. Supply chain management is a process used by a business to ensure that its activities and organisation involved in producing good or service is efficient and cost effective.
Logistics: involves a business managing the flow of materials, information and other resources between the point of supply and the point of consumption in order to meet customers’ requirements. It requires integration of information, transportation, inventory, warehousing, materials handling and packaging. Logistics ensures that a business has the materials, information’s and any other resources when it needs them and where it needs them. E-Commerce: is business conducted on the internet.
It refers to the electronic buying and selling of goods and services where there is a binding commitment to exchange the goods and services for an electronic transfer of funds. E- Commerce gives businesses the ability to source inputs quickly, efficiently and at low costs. The advantages of e-commerce is greater availability of information, speed, time saving, easier and cheaper access to global markets, easier management of date etc. Global Sourcing: is an operation strategy where a business will acquire the inputs it needs for production across the borders of a number of countries.
There are a number of reasons that a business will become involved in global sourcing e. g. exchange rate, reduced costs, expertise overseas , delivery is quicker etc. VALUE CHAIN ANALYSIS Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. A value chain is a chain of activities for a firm operating in a specific industry. Products pass through all activities of the chain in order, and at each activity the product gains some value.
The chain of activities gives the products more added value than the sum of the independent activities’ values. Involves systems and processes that identify the quantity of goods or material to be ordered and the timing of delivery of those goods or materials. The management process includes the stockpiling and storage of these good so the production process can be continued smoothly and customer demand satisfied. Jit (just in time): it means that products or materials that are required for operations processes are delivered to a business exactly when needed, not before or after the need will occur.
Lifo (Last in first out): this means that products that are relatively old stock are put on sale before newer products. Fifo (First in first out): it is sometimes referred to as the first comes first served system and is essentially a queuing system. Those that enter the queue first will usually be admitted first. This means that products that were purchased and stocked first will be displayed to be sold before stock purchased more recently Holding stock: (just in case) stock, the stock that is held for purposes where they have nothing left and have this as a back-up.
Hen considering the production process a business needs to make a decision about whether it should make or buy its inputs. If the business decides to make the inputs it will embark on a process of vertical integration. Vertical integration means that the business expands its operations to make or provide its own required raw materials and component inputs. Onshore outsourcing (also called domestic outsourcing) is the obtaining of services from someone outside a company but within the same country. Offshore outsourcing is the obtaining of services from people or companies outside the country.
Operations process make up the core business of an enterprise. The business acquires inputs and adds value to (or transforms) these inputs by transforming them into goods and services which become part of the output for the business. inputs: are more than the physical raw materials and components used to make a good or the skills, creatively or knowledge to provide services. Inputs are complex and have links with the other key business functions: marketing, finance and human resource. Inputs can be classified as materials, people or physical resources and further categorised as transformed or transforming esources. There are also intangible inputs such as time and money.
Transformed resources: these are the inputs that are changed and converted into something else such as component or finished good or service. Businesses use a combination of materials, information and customers. Materials: are the raw ingredients, components, parts and supplies used up in operations. Information: is used to make plans, execute operations and keep controls over materials inputs they are stored in files, in computer programs and in databases.
Customers: customers as transformed resources refer to the customer as a resource in the production process. It is their needs and desires that drive the operations of a business. outputs: good/services, customer service and warranties. Transforming resources: these are the resources that remain in the business and are applied to the inputs to change them to add value. Human resource: people are the greatest asset, because the skill, knowledge, capabilities is applied to materials to convert them into goods and services.
