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Considers how quality management is influened by a customer and business perspective, and how quality management is used in a typical value chain.
Quality Management Introduction For many years companies have been challenged to provide the level ofquality that their customers expect while maintaining a profitablefinancial position Initiatives such as the Baldrige Quality Award totalquality management quality circles just-in-time inventory and many othershave promised organizations the secret to mastering the quality issue However there are different definitions as to what quality means andwhether a single quality approach is appropriate to every customer in everysituation Some consumers might be willing to sacrifice quality for pricewhen buying
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Nature vs. Retrieved 21 Jan 2 1 : .What is supply chain management? This commitment needs tobe augmented by providing the necessary resources to implement a qualityprogram. Retrieved 21 Jan 2 1 : .Principles of TQM. R. There is also widespread belief that following processeswill result in overall improved customer satisfaction ("What do you need,"2 6). Singapore Management Review. (2 2, December). Government officialsand businesspeople may seek out ISO-branded suppliers because of theimplied rigor associated with the ISO brand. Products which meet the needsof most consumers are considered high quality, while goods which do not arelower quality ("What is?" n.d.). Supply chain management isthus one of the areas in which metrics management has taken root and proved-to many analysts-its value as a way to manage enterprise-wide quality(Singhal & Hendricks, 2 2). (2 9). (2 6). Quality plays a key role in shaping customer satisfaction. Individuals benefit from recognizing that ISO-branded products andservices are developed with some standards in mind, even when thosestandards are developed by the companies themselves. A., Taghavi, A. (2 2, June). The Strategic value of ISO. Ifmanufacturers are unable to receive deliveries on-time, they cannot meettheir own production schedules. Chief Executive (US), pp. Industry Week, 252, pp. Takentogether, these companies and organizations are known as the supply chain.Traditionally, companies have focused their quality initiatives on theirown organizations and the activities that they control directly. What is Quality? Retrieved 21 Jan 2 1 : .Dalgleish, S. Companies that meet ISO 9 qualification, which covers managementprocesses, are not meeting a specific ISO standard, but are certifying thatthey have established standards per ISO guidelines and are meeting theirown internal standards through the audit process (Spearin, 2 2). Companies are turning to supply chain management in order to implementcomprehensive metrics programs since the supply chain encompasses themajority of a company's operations from procurement through customerdelivery, and ISO audits are proving an effective way to monitor supplychain performance ("How To," 2 7). Qualityis thus a complex issue that has other intangible characteristicsassociated with it, such as the satisfaction of wearing a designer label,the need to have good meet a particular delivery schedule, and similarissues. Business Excellence. Today, hand tools suchas nails and screws use common measurements; that was not the case even 2 years ago when such tools were custom made and could not be used from oneworker to another, let alone from one manufacturer to another.Standardization made the industrial revolution possible and with it, theglobalization that characterizes today's commercial environment. Supply Chain Management Review, 6, pp. An ISO primer. However, the greater benefit tocompanies is that ISO standards-and particularly ISO 9 X standards-forcecompanies to evaluate their internal processes. Under thetranscendent view, there is an enduring and timeless aspect to quality, anessence that rises above changes in tastes or style. Initiatives such as the Baldrige Quality Award, totalquality management, quality circles, just-in-time inventory and many othershave promised organizations the secret to mastering the quality issue.However, there are different definitions as to what quality means, andwhether a single quality approach is appropriate to every customer in everysituation. Some consumers might be willing to sacrifice quality for pricewhen buying some goods, but not others. Some supply chains are relatively small, with a few suppliers feedingraw materials to a manufacturer, who might use a small number ofdistributors to sell directly to customers or to sell to retailers. 4 -44.Overview. Relationship between supply chain quality management practices and their effects on organisational performance. The most immediate benefit of ISO may accrue to organizations.Companies that are ISO-registered or ISO-certified may enjoy some advantagewhen selling to Europe, for example. From this standpoint, alloperations of a company are included in the quality program, from humanresources (hiring the right people with the right skills) to manufacturing(reducing the number of product defects) to paying vendors on time (takingadvantage of discounts and building strong relationships with strategicpartners) (Azar, et al, 2 9). nurture: Unique arrangements help manufacturers break from the traditional adversarial union-management relationships to improve both business performance and company morale. Similarly, if retailers cannot receivefinished goods on-time, they are unable to meet their customers' demand andlose sales. Geneva, Switzerland: ISO. Once a design or specification has beenestablished, deviation from that design or specification implies areduction in quality. Similarly, supply chain management software can be usedto show the financial performance improvement that can be realized ifdelivery times are shortened, or if the number of delinquent accountsreceivable is reduced. In the latter part of the twentieth century, new initiatives, suchas JIT inventory, were introduced that made suppliers upstream andconsumers downstream more integral to the business process. In many cases, thisexercise can result in devising improved methodologies that can reduce costand improve quality and result in greater customer satisfaction as aresult; thus a process focus can result in increased quality levels at thecustomer level (Williams, 2 3). Here, quality is defined interms of cost and price. If employees are invited to be involved in theinitiative but then their ideas are never seriously considered orimplemented, the organization will fail to accomplish its objectives, andinjure the culture and morale of the company ("Principles of," 2 9). If it is easy to place an order, andif the order is delivered on time and in the correct quantity, if thebilling process is smooth, and if questions before and after thetransaction are handled professionally, then customers are likely to besatisfied. Thus ifa supplier is chronically late with deliveries, or if there are significantamounts of rework associated with a particular supplier, these metrics canindicate the amount of rework and the financial impact of that rework onthe organization. It is both absolute and universally recognizable, amark of uncompromising standards and high achievement. Typical supply chain metrics are used not only to identify problemsand areas for improvement in the supply chain, but are also used to showhow such problems affect the organization's financial performance. Retrieved 21 Jan 2 1 : .Williams, M., Griffin, M., & Attaway, J. Importance of Participatory Management to Quality Participatory management can be an important factor in any qualityprogram. (2 6, Spring/Summer). In some cases, however, companies can meet their internalprocesses but leave a customer dissatisfied, perhaps because following theprocesses resulted in time delays for an exceptional situation.Nonetheless, many companies have embraced process-oriented quality programsbecause they are easier to manage and quantify in most cases than customer-focused programs. (n.d.). This is one of the coreprinciples of total quality management, and is key to the long-term successof any quality initiative. (2 1, October). Product-based quality is precise and measurable. S12-S16.What are ISO standards? Qualitymanagement views groups within the company as customers just as those whopurchase products or services are customers. Conclusion Quality is a cornerstone of successful businesses, but as business hasbecome more complex, companies are recognizing that their success dependsnot only on the quality produced by them, but on the quality of the entiresupply chain. CircuiTree, 16, p. (2 3, July). Retrieved 21 Jan 2 1 : .Jusko, J. People who shop at dollar storesare willing to give up some quality for less expensive goods, but it isunlikely that they would choose a surgeon based solely on price. (2 9, December 31). The organization's main purpose is to facilitate thedevelopment of international standards. Significantly more resources canbe required to attract new customers than to retain existing customers, andso customer satisfaction has become paramount in many organizations. Vanderbilt University. Customer-Driven Quality Customer-driven quality is, as its name implies, focused on therelationship between the customer and the company. (2 2, October). 58.Teuke, M. Intoday's global business environment, the challenge of customer satisfactionin the manufacturing sector is particularly acute since many countries mayvie for manufacturing facilities and companies can move facilities from onecountry to another in search of lower costs and higher quality (Abu-Shalback, 2 2). (2 2, Jan-Feb). Thisrequires having a strong understanding of the customer needs for aparticular product in that the same item, such as an automobile, can havedifferent price levels and different quality levels that are satisfying todifferent types of customers. Differences inquality therefore reflect differences in the quantity of some ingredient orattribute. B. When companies address the issue of "quality," it is assumed thateveryone agrees on what quality is for that organization. 3B.What is quality? Managing the supply chain can be difficult, but third-partyorganizations that set standards can assist companies to work withorganizations that at least recognize quality as an important part of theirbusiness. When the customer perspective is used, theentire supply chain is focused on providing the customer with the highestlevel of satisfaction from the materials used to the delivery schedule tothe final point of purchase and even after-service support (Azar, et al,2 9). Inthis case, there can be communication among the various participants toensure that each is familiar with the level of quality and the focus thatwill make the supply chain successful. Recognizing customers also means recognizing internal aswell as external customers, and developing an orientation that understandsthe level of quality and which issues of quality are most important tothose customers. Yet if their distributorsare unable to operate effectively and efficiently-if, for example, they arenot able to move the finished goods to retailers on-time and withoutdamage, then the retailers may well seek different manufacturers in thefuture although the fault was with the distributor. Quality Magazine. There aremembers representing more than 15 nations, and while these representativesare not necessarily government-affiliated, they often have governmentinfluence and may even have specific goals and objectives that thegovernment would like included in the standards. A Digital dynasty. Customer and Process Perspectives Typically, quality programs take either a customer perspective or aprocess perspective. Participatory management also requires that managers receive trainingin quality management, as well. Metrics can be implemented at each ofthe points in the supply chain, and the links between various supply chaincomponents can be easily mapped out and understood. Risk Management, 48, p. They may demand a credit or refund, and arelikely to spread the word among other potential customers that a particularcompany does not meet their expectations. North Carolina University. Retrieved 21 Jan 2 1 : .What do you need to know about SCM? Of course, there are alsosituations where companies or industries may have more rigorous standardsthan those imposed by ISO, in which case individuals and society mayactually lose protection when ISO standards are followed (Dalgleish, 2 2). This is because decision makers mustcomprehend the issues that form the foundation of quality management, andalso may have to reconsider the way they interact with their subordinates.Rather than dictating their decisions and strategy on subordinates,decision makers learn to invite and encourage suggestions of employees onareas where positive changes can be made. Computer systems havebeen developed which can track the metrics automatically, and executivesare able to receive reports that distill the key information that wouldhave been impossible to generate ten years ago. Goods can be ranked according to the amount of the desiredattribute they possess. Thusmanufacturers focus on zero product defects and shipping their orders ontime. Providence Business News, 15, p. (2 2, February). Instead, this type of quality management iscommitted to looking at the business from the customer's point of view, andensuring that every point of contact between the company and the customerhas a high level of quality associated with it (Williams, Griffin &Attaway, 2 1). ISO 9 . Schedulescan be made tighter because the increase in quality means that delays dueto poor workmanship are minimized or eliminated. The organization is most oftenassociated with quality control issues with a process rather than customerperspective. Companies that are ISO certified, such as those that are ISO 9 certified, undergo audits every six months and recertification every threeyears. 64.Goldstein, J. Quality management might useapproaches such as just-in-time inventory (JIT) strategies to increaseproductivity and reduce the number of problems in production. Product-based definitions of quality sometimeslead to the implication that durability can be equated with quality. In service settings, quality is associated withaccuracy and timeliness. (2 9). Five principalapproaches to the issue of quality itself have been defined: transcendent,product-based, user-based, manufacturing-based and value-based ("What is?"n.d.). (2 , September 4). Appliance, 59, pp. ISO, Standardization and Business PRocesses The International Organization for Standardization (ISO) developsstandards for a wide variety of industries and a broad spectrum ofactivities within those industries. R., & Hendricks, K. 32-33. ISO 9 1: 'Say what you do, do what you say. Such standards tend to be process-oriented rather than customer-oriented, and this can require additional customer focus as the companieswork together. These definitions are concerned with engineering andmanufacturing practices. Quality and the Supply Chain Companies have long recognized that they are dependent on the qualityof those organizations that come before them in the supply chain. The focus here is onefficiency and effectiveness of processes, and ensuring that the process ismet in all instances. If governments choose todeviate from the international standard, they at least have a guideline asto what those standards are, and understand how those standards weredeveloped and the goals that those standards were developed to meet("Overview," 2 5). What has been less clear is the dependence on thoseparticipants in the supply chain that come after an organization.Manufacturers have not always considered the quality of their distributorsas important as the quality of their suppliers. 18-24.Spearin, J. How supply chain glitches torpedo shareholder value. Quality, 41, p. The Customer connection. But theunderstanding of quality varies from company to company, and even fromdepartment to department within the same company. North Carolina University. User-based definitions of quality are based on the idea that eachindividual has a different approach to quality, and what one individualperceives as quality is not what another perceives. In addition, as ISO extendsthe purview of its standards-as it has with regard to environmentalstandards-individuals benefit as companies and others adhere to thestandards established by the organization. The process perspective, as the name implies, focuses not oncustomer value, although that may be a by-product, but rather on theprocesses involved in bringing the product to market. LG-3 - LG-5.Azar, A., Kahnali, R. Whilethe emphasis of these third-parties is typically on process, there is somebenefit that accrues to customers, as well (Goldstein, 2 6). A customer perspective seeks to maximize customersatisfaction by providing the product that the customer wants at the pricethey expect with the level of quality that they find acceptable. ISO standards benefit government by providing an internationalstandard which can be used when governments set out to devise their ownstandards for environmental issues, for example. (2 6). A quality product is one that providesperformance or conformance at an acceptable price or cost ("What is?"n.d.). According to the transcendent approach, quality can be associated withinnate excellence. Manufacturing-based definitions of quality focus on supply as opposedto demand. The transcendentapproach can lead adherents to reject mass production in favor of finecraftsmanship, but more often, those who follow this definition of qualityfind it to be simple and something that cannot be precisely defined, butrecognized only through experience ("What is?" n.d.). This should be reflected in the development of amission statement for the company as a whole, and supported by missionstatements for various departments and divisions. These representatives aretypically the most prominent standards organizations in the individualnations; they work collectively on the technical committees and workinggroup to develop the eventual ISO standards ("What Are," 2 ). Productquality--that a product performs as expected and lasts as long as expected--is the first level of quality that many customers cite as being critical,but the level of quality service customers receive earlier in the processalso affects customer satisfaction. These resources can include training programs, new equipment, anda shift in the relationship between employees and managers in order toemphasize increased employee involvement. This interdependenceexists throughout the supply chain, and thus each participant in the chainhas an interest in the quality of the other participants in order to meettheir own quality objectives (Azar, et al, 2 9). In most cases, this can reinforce customersatisfaction since there is an emphasis on zero defects and on-timedelivery. The Principles of quality. Each of these components has a quality issue to it (Teuke,2 2). Supply Chain Management Nearly every product or service that is provided to a customer relieson several or many different suppliers to bring the product to market.These can include the production of the raw material to the building of theproduct to the distribution to retailers and to the retailer itself. Detroiter, 24, p. Quality Management Introduction For many years, companies have been challenged to provide the level ofquality that their customers expect while maintaining a profitablefinancial position. Managing the supply chain thus becomes aninterrelated process whereby purchasing, manufacturing, accounting andfinance use integrated software to provide both a macro- and micro-view ofthe company's overall performance, and the performance of key suppliers andother participants. The standards issued by ISO are actually developed through the workinggroups and technical committees that form the organization. (2 3, January). Without the commitment fromsenior management, most quality initiatives will fail to achieve theirobjectives. (2 7, March 1). Althoughstandardization is taken for granted in many instances, there was a notablelack of standardization for most of human history. This type of qualityprogram includes production quality issues to the extent that these issuesaffect customer relationships, but physical product quality beyondproviding key customer benefits are not typically within the realm ofcustomer-driven quality. This is particularly critical intoday's global environment where goods and services may be produced in onecountry for sale in another by a company based in a third nation. An effective quality management program begins with a commitment fromthe top level of the organization that quality management will become anoverriding philosophy of the organization and include participatorymanagement techniques. Value-based definitions of quality move themanufacturing-based definition a step further. This research considers the issue of quality with particularrespect to the supply chain, and seeks to understand how quality can bemanaged within organizations as well as within the larger supply chainthrough the use of standards developed by third-parties that attempt tostandardize quality. Goods that satisfyeach individual's preference are held to be of high quality for that user.This definition of quality renders the subject ambiguous and subjective.In economics, this definition is used to suggest that quality differencesare reflected by shifts in the demand curve. Customer Satisfaction If customers are not satisfied with a product or service, they willnot be repeat customers. Expandedoutward, this became supply chain management where the focus is not just onthe internal operations of a single company, but on the interrelationshipsbetween and among all of the participants in the supply chain ("What IsSupply," 2 6). ReferencesAbu-Shalback, L. By empowering employees to make decisions farther "down" in theorganization than in a hierarchical structure, and by inviting input fromemployees who have direct customer contact, companies are learning tomanage their operations with the customers' interests as a key priority.Customer service organizations, such as call centers, can especiallybenefit from this approach since employees can make decisions while theyare in direct contact with customers in order to maximize the customer'ssatisfaction while not jeopardizing the company's long-term performance(Jusko, 2 3). Thisis because durable goods provide a longer stream of service, so thatquality differences could therefore be treated as differences in quantity("What is?" n.d.). Prove that you have done it!' Reverse Logistics Magazine. However, many supply chains can bequite intricate; this is the case with the automobile industry, forexample, where the supply chain is global and where each participant, whiledependent on those above and below them in the chain, cannot realisticallymeet with all supply chain participants to evaluate their qualityprocesses. Retrieved 21 Jan 2 1 : .Singhal, V. 5 Williams, S. Quality Management Quality management seeks to increase quality at a company. Retrieved 21 Jan 2 1 : .How to avert your next supply chain quality failure. In these situations, supply chain participants have soughtthird-party analysis, evaluation and standards of the quality process sothat if supply chain participants meet these standards, there is a highprobability that the chain's overall standards will also be high.
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