NAME: Carlos Manuel S.

Abalos DATE: October 23, 2017

SUBJECT: BEC102-Total Quality Management SECTION: III-BSBA-H

CHAPTER 7 PROCESS APPROACH

INTRODUCTION

 Problems occur in the organizations, not because of the employees but because of the failure of
management to foresee the importance of a system in the organization.
 Every organization should be a well-knit collection of processes so as to practice TQM and be
competitive and successful. This concept is also advocated by ISO9001:2000 standard
 Japanese perfected a number of process models and derived maximum benefits.

Product and Service Quality Depend on Processes

 Process orientation should be adapted for TQM. Process orientation is the right strategy to be
adopted for practicing quality as well as management of organizations so that the producer can be
certain about the quality of the products or services even before the final inspection.
 A process is nothing but a repeatable sequence of events. An organization should be organized
as a collection of processes

Process Orientation Helps in Finding Defects Early

 Quality should be built into the product or service right from the early stages.
 In product orientation, defects are found only at final stages, whereas in process orientation,
defects could be prevented totally by eliminating the cause of failure in the process.

MODEL FOR PROCESS DEFINITION

 The process model is quite simple. It contains three clearly distinguishable elements, as given
below:
o Inputs to the processes
o Outputs of the processes
o The process or task

Element Consists of
 Bill of materials
 Specification for each material
Input of the process
 Requirements for inspection for incoming materials
 Procedure for receipt of materials
 The products or services to be delivered
 Documents to be delivered
 The specification for all the above
Output of the process
 Method of measurements for verifying conformance to the
specifications
 Criteria for acceptance/rejection
Value Addition in the Process

 Every organization attains profit only through value addition to its processes. Therefore, the
primary goal of the organization is value addition. It, in turn, applies to every process in the
organization. Each process should help in value addition at the lowest cost, without any defects or
hassles. In fact, the organization should not have any process, which does not add value.

ETX MODEL

 It is the most popular process model. It stands for entry, task and exit. It is a refined model of the
process model. The entire organization should be depicted as an unbroken chain of processes
expressed in the ETX form
 The value adding process is called Task.
 Entry – conditions to be satisfied before the task is undertaken
 Exit – conditions to be fulfilled before the task is considered as completed

Training for Process Orientation

 The most important requirement for transforming the employees from product orientation to
process orientation is training and coaching.

Measure Process

 Steps in measuring process outlined:

o Process parameters should be studied and statistical analysis made
o Results of process studies should be displayed
o Process owner should take responsibility for the control of process
o Monitoring the process parameters

Improve Process Continuously

 In line with the TQM philosophy, the processes should be improved continuously. Efforts should
be put in for continuous process improvement. This will help manufacturing or service organization
to achieve much higher yields.

SUBBURAJ’S 6S MODEL FOR PROCESS IMPROVEMENT

 Since 1991, the author has been heading ETDC, Chennai which is a testing and calibration service
provider, offering services to more than 700 organizations in a year. The Center has 50 employees.
The author declared the year 1993 as a TQM Year for the organization. As part of TQM journey,
the author developed and practiced 6S model for process improvement.

Phases Definition and Tasks

It means that the current performance level has to be measured and
Study
documented.
It means that the process should offer the least resistance to motion
Streamline
in the organization
Simplify This is a constant quest for simplifying the processes
It essentially permits performing the process in the same way by
Standardization
every employee at all times. It requires a documented procedure.
 During this phase, the documented procedure of the new approach
have to be formulated and issued formally under the umbrella of the
quality system
Interaction of processes with at least two other processes – customer
and supplier processes. During this phase, a perfect synergy is
Synergize worked out between this process and other processes interacting with
it. This may call for modification in the other processes also. It may
lead to fine tuning of the modified processes in some cases.
During this phase, a number of activities are carried out:
 Educating and convincing the process owners, their customers and
suppliers
 Periodic counseling and assuring that the new process will perform
Strengthen
better than the old process
 Monitoring the results and confirming that the process transition
has occurred, the employees confident and that the process is
practiced and documented

CUSTOMER SUPPLIER CHAINS

Increased Inspection Adds Cost, not Value

 It should be the aim of every organization to reduce the inspection to the least possible and still
should be able to have control over the quality of the products or services. This can be achieved
through establishing customer supplier chains in the organization

Identify Internal Customers and Suppliers

 The fundamental requirement for building quality into the process is having a continuous control
over the quality of the processes so that quality is ensured at all stages in the process.
 Continuous control over the quality of the processes is achieved by establishing customer supplier
chains in every enterprise
 Establishing customer supplier chains involves dividing the process into a number of sub-
processes using the ETX model discussed in the previous section and forming customer-supplier
chains in the organization
 A “divide and conquer” approach is advocated in customer supplier chains which is suitable for
solving quality problem or for that matter any scientific problem,
 The key to building quality in the process is to identify internal and external suppliers

Customer-supplier Chains

 Customer-supplier chain is nothing but dividing the entire process of manufacturing or providing
services starting from external supplier and ending at the external customer into a number of clearly
defined sub-processes in the organization
 In customer-supplier chain, each sub-process has an owner, who is actually responsible for giving
an output to internal customers after receiving the right inputs from internal suppliers and adding
value.
  All sub-processes are linked in a chain. Some sub-processes would terminate at the internal
customer. Some sub-processes would have external suppliers. No sub-process will stand alone. All
sub-processes will be connected.

Educate

 The sub-processes, its owners, customers and suppliers should be documented and the employees
should be coached and motivated to practice customer-supplier chains. This should be overseen by
the management. The management’s task is to make the customer-supplier chain work for the
successful implementation of TQM.

Customer Orientation Includes Internal Customers

 It is the responsibility of the process owner to educate the internal customers so that there is no
communication problem. This will also increase the responsibility of the process owner as well as
the supplier and the customer to enable practicing quality in all activities of the organization as well
as building a product or a service.

Advantages of Customer-Supplier Chains

 It improves communication within the organization

 It reduces communication cap
 It helps in documenting the process flow
 It helps in defining the specifications not only for the overall input and output, but also for the
process
 It helps in finalizing verification methodology throughout the process with clear accept/reject
criteria
 It facilitates immediate feedback from colleagues rather than time lapsed feedback from
customers through the channel of hierarchy.
 The management can easily identify problem areas clearly, easily and deal with them specifically,
instead of going for global solution across the organization
 It helps in building quality throughout the organization
 It enables the management to understand its own organization and operations better, leading to
effective planning, management and improvement.

SUPPLY CHAIN MANAGEMENT

Supply Chain

 A supply chain is the series of links and shared processes that exist between the suppliers and
customers. It encompasses all activities and processes to supply a product or service to the ultimate
customer. It may consist of different divisions in an organization and more than one organization.
It is the Customer-supplier Chain, where the customer can be a supplier to another customer and
hence the total chain can have a number of customer-supplier relationships
 We can call the flow of a product from supplier to customer as down-stream and the demand of
information from customer to supplier as up-stream.
Supply Chain Management (SCM)

 Supply Chain Management is a task of optimizing all activities throughout the supply chain, so
that the products and services are supplied in the right quantity, right quality, to the right customer,
at the right time and at the optimal cost.
 It involves the following activities:

Activity Definition
It is a planning process to predict the demand of products and services
based on forecasts. Accurately forecasting customer demands
Demand Planning
improves customer service while decreasing costs by reducing
demand uncertainty
It is a planning process that optimally schedules manufacturing
orders with production capacity. This is performed by combining
Manufacturing Planning and
Material Requirements Planning (MRP) and Capacity Requirements
Scheduling
Planning (CRP) to create optimized and constrained production
plans.
It is a process that meets customer demand based on available
inventory and transportation resources, this includes Distribution
Supply Planning
Requirements Planning (DRP), which determines the need to
replenish inventory at branch warehouses.
It is a planning process to optimally schedule, load, and deliver
Transportation Planning shipments to customers while considering constraints, such as
delivery date, mode of transportation, carrier, etc.

 There are software systems available for Supply Chain Management. Although the software is
related to Enterprise Resources Planning (ERP), Supply Chain Management focuses on planning
and ERP is focused on execution
 The performance of Supply Chain Management is to specifically integrate suppliers, warehouses
and retailers so that the products are produced and distributed efficiently at optimal costs. It also
plays an important role in satisfying the customers
 Supply Chain Management systems provide decision support for those decisions that must be
made prior to execution of manufacturing. It performs the planning required to allow ERP systems
to execute the plan.
 The primary function of an ERP system is to control the flow and execution of transactional
information across the supply chain
 For greater advantage, organizations must implement the closed-loop Supply Chain Management
that interacts with its ERP system. Thus success lies in integrating ERP with Supply Chain
Management.

Benefits of SCM

 Improved customer service: having the right products, available for delivery when requested at a
good price
 Reduction of costs across the supply chain and more efficient management of working capital.
 More efficient management of raw materials, WIP, and finished good inventory.
 Increased efficiency in the transactions between supply chain partners
  Better manufacturing resource management
 Optimized manufacturing schedules
 Optimal distribution of existing inventory across the supply chain
 Enhanced customer value, often in the form of lower prices.

JUST-IN-TIME MANUFACTURING

Definition

 Just-In-Time manufacturing is defined as a philosophy that focused attention on eliminating

waste by purchasing or manufacturing just enough of the right items Just-in-Time.
 Zero Inventories are a synonym to Just-In-Time
 Just-In-Time philosophy is based on two principles:
o Production and supply of required number of parts where needed
o JI DOKA (self-actualization), which means utilizing the full capacity of the
workforce
 JIT is also known as Zero Inventories Program. This means that no surplus inventory of materials
sub-assemblies or product exist at any time in the organization. This requires a perfect work culture
with Zero defects and excellent suppliers, machinery and infrastructure.

Objectives of Just-In-Time

 Development of optimal process and be competitive

 Streamlining of operations and eliminating unwanted processes
 Continuous improvement
 Reducing the levels of wasted materials, time, and effort
 Increasing efficiency of production process

Concepts related to Just-In-Time

 Kaizen
 Team Work
 Multi-function workforce
 Optimizing plant layout
 Eliminating wastages
 Reduced set-up time
 Kanban
 Material requirements planning
 Manufacturing resources planning
 Involvement of people
 Plant optimization

Benefits of Just-In-Time

 Reduction of wastes
 Reduction of work-in-progress
 Establishing proper customer-supplier relationship
 Reduction in lead time
 Less inventory of raw materials
  Improvement in flexibility
 Lower cost and high productivity
 Enhanced customer satisfaction due to lower price owing to elimination of wastes
 Improved employee morale owing to a perfect system without waiting
 Improved satisfaction of shareholders due to higher profits
 Reduced space requirements on account of total elimination of WIP and buffer st3ock of
materials, sub-assemblies, and products
 Improved productivity and improved quality.

Not following JIT Increases Cost

 JIT does not mean that the products are made when needed, but that no materials are stocked for
years waiting to be used. In fact, the reason for JIT is to reduce inventory costs

Requirements for JIT

 Practicing TQM
 Documented system
 Trustworthy suppliers who also practice TQM
 Efficient customer handling processes to know the demand just in time
 People are educated, trained and coached continuously
 Competitive people at all positions in the company
 Machinery which are maintained periodically and updated continuously
 Proper operating environment for machinery and people
 Excellent system of support and infrastructure
 Proper layout of machinery and manufacturing
 Housekeeping, which reduces the confusion
 Identification of an item should be as fast as possible
 Employees should be sure about the quality of the material and the process
 They should be able to know when the machinery has to be taken out of service for maintenance
 They should be thorough with routing and preventive maintenance schedules of the machinery
 They should be thorough with the process
 They should be familiar with process parameters ad how to inspect the materials, sub-assemblies
and in-process measurements
 The employee should know the quality requirements of the product or service
 Support of good information technology infrastructure
 Reordering of materials should be automatic when the inventory level goes down
 The company needs to automate the delivery process.

LEAN MANUFACTURING