The role of

Quality and
productivity in
achieving
world class
competitiveness

Introduction
To achieve long lasting business success, calls for one thing alone,
and that is the world class excellence.
All companies strive to increase productivity, drive costs lower,
and expand business opportunities .
Simply put, being world-class is an indicator that an organization
is performing at the top level in the world for a specific market.
The world class excellence defines the highest business
performance at a global level that stood the test of time.
Thus, a company with a laurel of world class excellence is
expected to offer best quality products and service with total
customer delight, and internally to be able to embrace the best
practices of management techniques such as total quality
management, continuous improvement, motivating and
empowering people, international benchmarking, social
responsibility and etc.

THE PRODUCTIVITYQUALITY CONNECTION

The more we can produce while using fewer resources, the
more productivity grows and the more profitable businesses are.
Productivity : measured as a ratio of outputs to inputs
Quality: A products fitness for use plus its success in offering
features that consumers want
Quality drives productivity
Improved productivity is a source of greater revenues,
employment opportunities and technological advances
PRODUCTIVITY CHALLENGE

Quality declines, demand declines, profits decline

Country that improves its ability to make something out of its
existing resources can increase the wealth of all its inhabitants.

why strive for

world-class
productivity and
world-class
quality?

First, they affect the bottom line. Having worldclass productivity allows projects to be finished in
significantly less time and reduces total cost.
Secondly, they affect the top line. Having worldclass quality improves customer satisfaction and
drives rapid market penetration.
Additionally, having world-class quality will deliver
99% defect free products to an organization's
customers, which will build its reputation and bring
additional businesses.

Techniques of
quality
management
Total quality management (TQM): consists of
organization-wide efforts to install and make permanent a
climate in which an organization continuously improves its
ability to deliver high-quality products and services to
customers.
Quality function deployment(QFD): is a method to
transform user demands into design quality, to deploy the
functions forming quality, and to deploy methods for
achieving the design quality into subsystems and
component parts, and ultimately to specific elements of the
manufacturing process.
Kaizen : Japanese for "improvement" or "change for the
best", refers to philosophy or practices that focus upon
continuous improvement of processes in manufacturing,
engineering, and business management.

Cntd
Six Sigma: is a set of techniques and tools for process
improvement. Six Sigma seeks to improve the quality of
process outputs by identifying and removing the causes
of defects (errors) and minimizing variability in
manufacturing and business processes.
Business process re-engineering(BPR): is a business
management strategy, focusing on the analysis and
design of workflows and processes within an
organization. BPR aimed to helps organizations to
fundamentally rethink how they do their work in order
to dramatically improve customer services, cut
operational costs and become world-class competitors.

Example
McDonald's has a reputation for high-quality service resulting from
its application of established TQM principles.
It provides fresh food promptly on demand, which is essentially an
inventory situation.
Restaurant managers meet with customer groups on a regular basis
and use questionnaires to identify quality "defects" in its operation. It
monitors all phases of its process continuously from purchasing to
restrooms to restaurant decor and maintenance in a total quality
approach.
It empowers all employees to make spot decisions to dispose of
unfresh food or to speed service.
The McDonald's work force is flexible so that changes in customer
traffic and demand can be met promptly by moving employees to
different tasks.
Extensive use is made of IT for scheduling, cash register operation,
food inventory, cooking procedures, and food assembly processes--all
with the objective of faster service.

example
After four years of training and preparation, the QFD system has been used
by Toyota and has reported impressive results.
Upon introducing four new van-type vehicles, Toyota reported 20%
reduction in start-up costs, further a 38% reduction, and a cumulative 61%
reduction in further periods.
Also during this period, the product development cycle was reduced by a
third with a corresponding improvement in quality because of a reduction in
engineering changes.
The QFD system challenges status quo thinking. It requires a shift from
traditional manufacturing quality control to product design quality control.
With QFD, designed-in quality is stressed which means designing quality
into the products and their manufacturing processes so that the products are
produced error free.
It has been seen that typically 80 percent of overall costs occur in the design
phase; the remaining 20 percent are in the implementation/manufacturing
phase.
This is where QFD is so effective at reducing costs.

example
The philosophy of kaizen is one of Toyotas core values.
The Toyota Production System invites team members to
think about the process and make timely decisions in order to
keep it running smoothly, rather than merely operating like
machines.
This involvement creates responsibility for the success of the
process, increasing both morale and quality.
Every morning a meeting is held to discuss quality deviations
and eliminate their causes.
Kaizen involves everybody, relying on the extensive
knowledge, skills and experience of the people working
directly in the process.
And at Toyota Material handling Europes production
sites, about 3,000 proposals for improvements are made each
year.

example
Samsung Electronics Co. (SEC) of Seoul, Korea, is perfecting
its fundamental approach to product, process and personnel
development by using Six Sigma as a tool for innovation,
efficiency and quality.
To achieve the goal of efficiency and timeliness, SEC has
integrated Six Sigma into its entire business process.
SEC saw the universal adoption of Six Sigma throughout the
companys 16 businesses worldwide as the way to perfect its
fundamental approach to product, process and personnel
development.

example
Taco Bell as a part of BPR created the K-Minus program
(Kitchen less restaurant) based on their belief that they are a
retail service company, not a manufacturing company.
In the new process, meat, beans, corn shells, lettuce, tomatoes
and cheese for their products are prepared outside of the
restaurant in central commissaries.
At the Taco Bell restaurants, the food ingredients are prepared
when ordered for customer consumption.
Taco Bell cites the following results: greater quality control,
better employee morale, fewer employee accidents and injuries,
big savings and more time to focus on the customer business
processes.
Currently they are redefining how to deliver their food services,
by taking their food service to places where people gather such
as dining centers, schools, universities, airport, and stadiums.

Techniques of
production
management
Just in time (JIT): is a production strategy that strives
to improve a business return on investment by
reducing in-process inventory and associated carrying
costs.
Lean manufacturing : is a production practice that
considers the expenditure of resources for any goal
other than the creation of value for the end customer to
be wasteful, and thus a target for elimination.
Material requirements planning (MRP): is a
production planning and inventory control system used
to manage manufacturing processes.

example

JIT helps to reduce waste and add value, as well as helps to improve
business return on investment by reducing in-process inventory and
associated carrying costs.
Dell Computer Corporation has tuned its Just-in-Time system so that an
order for a customized personal computer that comes in over the internet at
9 AM. can be on a delivery truck to the customer by 9 P.M.
In addition, Dell's low cost production system allows it to under price its
rivals by 10% to 15%.

example
Lean, a concept that designs, manufactures, delivers and supports
products more efficiently and at lower costs while systematically
identifying and eliminating waste all the way through the product
life cycle.
It uses a "just-in-time" system that gives internal and external
customers what they want, when they want it, and at the lowest
possible cost.
At its root, Lean is about remaining competitive in a rapidly changing
global marketplace.
In order for Boeing to survive as an aerospace leader, continue
winning new business across the enterprise, and create and sustain
jobs, it constantly finds ways to make its products cost-competitive.
The implementation of Lean tactics across Boeing isn't merely a costcutting strategy, but a philosophy of growth. And it's one that requires
a seismic culture shift away from the old ways of designing and
manufacturing products, executing business processes and of
managing and developing people.

example
Asian Paints is India's largest paint company. It operates in 18
countries and has 26 paint manufacturing facilities, servicing
more than 65 countries.
In order to ensure optimum raw materials selection across its
complex, multi-site manufacturing operations, Asian Paints
needed an integrated solution that would address variable
demand and determine which products should be produced at
which manufacturing plants, for which they used the technique
of MRP wherein they could do production planning and
inventory control.
Business Benefits
Reduced finished goods inventory from 56 days to 30 days
Achieved 87-90 percent service levels for sales at the location level
Dramatically improved debt-to-asset ratio

The name of the game is

competition. The playing
field is global. Those
who understand how to
play the game will
succeed; those who
dont are doomed to
failure