MBA SEMESTER II MB0044 Production & Operations Management - 4 Credits

ASSIGNMENT-01

Name : MORRIS RATAN ANEPY Registration No. : 511125471 Learning Center : Arihant College of Management And Information Technology Learning Center Code: 02860 Course : MBA Subject : Production & Operations Management Semester : II Module No. : B1133 Date of submission : 13-01-2012 Marks awarded :

Directorate of Distance Education Sikkim Manipal University II Floor, Syndicate House Manipal 576 104

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Master of Business Administration - MBA Semester II MB0044 Production & Operations Management - 4 Credits (Book ID: B1133) Assignment Set- 1 (60 Marks)
Q1. Explain in brief the origins of Just In Time. Explain how JIT is implemented. Ans. 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. Just-intime production method is also called the Toyota Production System. To meet JIT objectives, the process relies on signals or Kanban between different points in the process, which tell production when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT focuses on continuous improvement and can improve a manufacturing organization's return on investment, quality, and efficiency. To achieve continuous improvement key areas of focus could be flow, employee involvement and quality. Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstood. For instance, its effective application cannot be independent of other key components of a lean manufacturing system or it can "...end up with the opposite of the desired result." In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning, however some research demonstrates that basing JIT on the presumption of stability is inherently flawed. The Just-in-Time inventory system focus is having the right material, at the right time, at the right place, and in the exact amount -Ryan Grabosky

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JIT is implemented by eliminating seven types of wastes : 1. Over Production Over production is to manufacture products before it is actually needed. If the demand for that product decreases, the extra parts or products produced may not be useful or needed. Also overproduction results in high storage costs and is also difficult to detect defects. So, over productions is considered a waste. 2. Inventory Excess procurement or production builds up stock of materials which are not immediately use, this locking space and fund carrying heavy cost. 3. Waiting Time Waste of time happen when goods are not moving or being processed. The operator, the machine or the part will either be not working or be worked upon. The duration is can be said to be unproductive and may create more serious consequences. 4. Movement Any unnecessary movement is a waste of energy; it causes blockages, disrupting movements and delaying the flow of other items creating delays. 5. Effort The people, who work, do not make a study as to how the products on which they are making are utilized and do not realize the purpose for which they are made. This lack of education will lead to waste of resources. Finally, they end up in shortage of resources when needed. 6. Defective products The defective products lead to a tremendous loss to the company. This is because they use up the same equipments, workmen and the time that would be used to make good products. Thus defective products use up resources and result in losses. 7. Over Processing Some steps like unnecessary processing or production do not add value to the final output. As a result, it is waste of all the inputs that go into the process.
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Based on a diagram modeled after the one used by Hewlett-Packards Boise plant to accomplish its JIT program. 1) F Design Flow Process F Redesign/relayout for flow L Reduce lot sizes O Link operations W Balance workstation capacity M Preventive maintenance S Reduce setup Times

2) Q Total Quality Control C worker compliance I Automatic inspection M quality measures M fail-safe methods W Worker participation 3) S Stabilize Schedule S Level schedule W Establish freeze windows UC Underutilize Capacity 4) K Kanban Pull System D Demand pull B Backflush L Reduce lot sizes 5) V Work with Vendors L Reduce lead time D Frequent deliveries U Project usage requirements Q Quality expectations 6) I Further Reduce Inventory in Other Areas S Stores T Transit C Implement carrousel to reduce motion waste

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 C Implement conveyor belts to reduce motion waste 7) P Improve Product Design P Standard production configuration P Standardize and reduce the number of parts P Process design with product design Q Quality expectations

Q2. Bring out the historical background of Value Engineering. Elucidate three companies which have incorporated VE with brief explanation. Ans. Value engineering or value analysis had its birth during the World War II and Lawrence D. Miles was responsible for developing the technique and naming it. Value analysis is defined as an organized creative approach which has its objective, the efficient identification of unnecessary cost-cost which provides neither quality nor use nor life nor appearance nor customer features. Value analysis focuses engineering, manufacturing and purchasing attention to one objective equivalent performance at a lower cost. It is concerned with the costs added due to inefficient or unnecessary specifications and features. It makes its contribution in the last stage of product cycle, namely, the maturity stage. At this stage, research and development no longer make positive contributions in terms of improving the efficiency of the functions of the product or adding new functions to it. Value is not inherent in a product, it is a relative term, and value can change with time and place. It can be measured only by comparison with other products which perform the same function. Value is the relationship between what someone wants and what he is willing to pay for it. In fact, the heart of value analysis technique is the functional approach. It relates to cost of function whereas others relate cost to product. It is denoted by the ratio between function and cost. Value = Function
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Cost Value Engineering has gained popularity due to its potential for gaining high Returns on investment (ROI). This methodology is widely used in business re-engineering, government projects, construction, assembling and machining processes, health care and environmental engineering, and many others. Value engineering process calls for a deep study of a product and the purpose for which it is used, such as the raw materials used; the processes of transformation; the equipment needed, and many others. It is also questions whether what is being used is the most appropriate and economical. This applies to all aspects of the products. 1. General Electrical Corporation (GEC) The concepts of value engineering originated in 1947 in General Electricals corporation (GEC) When a substitute for asbestos for flooring had to be found. Specialized dealers could provide an equally good material at a lesser price. Initially, the practioners were the people in charge of purchasing who tried to locate substitute material which would be equally good, if not better, at a lower price. This is the first and basic approach to value engineering. The concept percolated to the manufacturing departments, engineers applied the same principles and found that, they could use alternate materials, which were cheaper giving the same performance. It was also fund that dimensions and tolerance could be altered without affecting the performance of the part or the product. The investigations took them on the path of eliminating some operations. The focus was on the value of each bit materials, each operation. This approach led to the design stage. 2. Navsea Warfare Centers, Crane In implementation of VA, Traveling Wave Tube . 3. TVS T.V. Sundaram Lyenger (TVS) Limited is one of the largest automobile distribution Doubled TWT Life Reduced Supply Demand by 190 Units per Year Estimated Cost Avoidance of $ 2.8 M/Yr

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companies in India. During the mid 1940 to 1960s, TVS based in Madurai was ranked as the best bus transportation system in India. It could manage to run the fleets for about 96% of the time. TVS used the VE approach to restore the mobility of buses that had broken down. They stocked their garage with some critical assemblies of a bus. Whenever, a part or an assembly failed of a bus, they replaced it immediately with a new one, thus restoring mobility within a couple of hours. When compared to the traditional method, this approach has gained much more benefits to the company, it helped to save time, reduce cost, efficient, quicker, and competitive. Q3. Explain the key elements of Quantitative modelling. What is work study and motion study. Ans. Whenever we have to make decisions in management, we have two approaches to arrive at a decision. One approach is to consider the available facts, identify various options for action and the likely consequences, and evaluate all the options based on the experiences we had and the gut feeling as to what might happen and take a decision. In this approach, the quality of the decision depends on the individuals knowledge, analytical capability, and judgment. However, this approach is useful when the matter concerned is small or personal in nature, as the consequences are not very serious. If the decision involves complex issues, we choose the second approach. The second approach involves complex issues and complex decision makings skills. In this approach, the factors of different fields have different impacts on the result. We try to quantify data, devise some models for predicting the likely consequences, and some techniques to arrive at decisions. Historical data guide us to formulate the relationships between the variables. Uncertainties about the activities and results can be anticipated based on probabilities and choices made. There are different quantitative models, whose details are as follows: 1. Linear Programming: Linear programming technique is often used for optimizing a given objective like; profit or

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revenue maximization, or cost outgo minimization. Distribution of the revenues is the critical issue, when there are limited resources and they have to meet competing demands. 2. Transportation Model: Transportation model is concerned with goods from manufacturing center or warehouses which have to be supplied to depots or retails outlets. The demand and supply position of the places where they are required or produced and the cost of transportation are considered in the model. We use this model to economize. 3. Assignment Model: Allocating jobs or persons to machines, awarding different projects to contractors is done so that maximum returns occur or less expenses are incurred. Hence, calls for the use of this model. 4. Inventory Control Model: Inventory control model considers the: a. Frequency of placing orders. b. Quantities per order considering the cost of placing an order. c. Number of pieces that are to be kept in reserve. d. Rate of consumption. e. Lead time required for the supplier. f. Cost involved in storage. We have different models which give solutions to optimization depending upon the probabilities of consumption and supply. 5. Waiting Line Models: Queues are formed when the rate of services is at a variance with the rate of arrival. They are formed when the rate of production is less at particular points compared to the previous one. Sometimes we see multiple service points and a single queue are formed for feeding them. Number of items which includes the following is studied with some special techniques.
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a. People to be serviced. b. Rate of service c. Type of queue discipline that is intended to be followed. d. Policy of priority e. Tolerable amounts of waiting f. Others. 6. Simulation Models: Simulation models are used when we will not be able to formulate mathematical model. So, we develop a model which resembles a real life situation. Based on this pattern, we predict and plan our procurement, production, delivery and other actions. 7. PERT (Project Evaluation And Review Technique) And CPM (Critical Path Method) Models: When projects are undertaken with a number of activities, some happens in sequence, with gaps of weeks or months and some happens simultaneously. It is important to estimate the time required for completion of the project. A lot of coordination is needed while supplying the resources. It is also equally important to identify the bottlenecks and smoothen resources so that time schedules are maintained. Delayed completion may entail penalties. In this model, we adopt special methods to make the system. Difference between Work Study and Motion Study Work study Motions study 1. We can say that work study is be1. Method study is on studying the ing method currently being used and conducted when analysis of work developing a new method of methods is conducted during the performing the task in a better way. period when a job is done on a machine or equipment. 2. The study helps in designing the 2. Operation flow charts, motion optimum work method and charts, standardization of the work method. flow process charts, which are the elements of the task are studied to find the purpose of each activity, the

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sequences in which they are done, and the effect of these on the work. 3. The study enables the methods 3. The study may help in changing engineer to search for better methods some for higher utilization of man and of them and even eliminate some of machine and accomplishment of them to effect improvements higher productivity. 4. The study gives an opportunity to 4. The new method should result in the saving of time, reduced motions and workmen to learn the process of simpler activities. study thus making them able to offer suggestions for improved methods.

Q4 What is Rapid Prototyping? Explain the difference between Automated flow line and Automated assembly line with examples. There are several ways to manufacture a component. Manufacturing is turning raw materials to finished products to be used for various purposes. The demand of a product depends on its performance by way of desirable exotic properties like resistance to high temperature, higher operating speeds, extra loads, economics and the surface finish. To be viable in the modern environment, a product has to be competitively priced besides having the functional and aesthetic appeal. This requirement shows the necessity for the engineer to give a proper thought to various aspects of manufacturing. Manufacturing processes can be classified into three types: material adding process-RP comes under this category, material subtracting processwhich include turning, drilling, and shaping e.t.c., neither adding nor subtracting material-which include processes like forging, extrusion, coining, wire drawing, other sheet metal operations. The competition in the world market for manufactured products has intensified tremendously in recent years. It has become important, if not vital, for new products to reach the market as early as possible, before the competitors. To bring products to the market swiftly, many of the processes have been squeezed, both in terms of time and material resources. The efficient use of such valuable resources calls for new tools and approaches in dealing with them, and many of these tools and approaches have evolved. They are mainly technology-driven, usually involving the computer. This is mainly a result of the rapid development and advancement in such technologies over the last few decades.

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In product development, time pressure has been a major factor in determining the direction of the development and success of new methodologies and technologies for
enhancing its performance. These also have a direct impact on the age-old practice of prototyping in the product development process. One such development is Rapid Prototyping (RP).

Prototyping is a process by which a new product is developed in small numbers. Prototyping is helpful to: Determine the suitability of the materials Study the various methods of manufacture Determine type of machinery required Develop techniques to overcome problems that may be encountered when full scale manufacturing is undertaken. Prototypes do meet the specification of the components that enter a product and performance can be measured on those. It helps in confirming the design and any shortcomings can be rectified at low cost. If serious defects or problems arise during manufacturing, a thorough change in design or even its replacement may be considered. Toa arrive at decisions and to make use of the advantageous stated above, it is important that the prototypes are made within the shortest possible time, Rapid prototyping facilities this. During the last decade a class of technologies has emerged by which a computer aided (CAD) files of an object can be converted into a physical model through special sintering, layering (or) deposition techniques etc, called Rapid prototyping (or) Solid Free- form fabrication. The term rapid prototyping (RP) refers to a class of technologies that can automatically construct physical models from Computer- Aided Design (CAD) data. These three dimensional printers allow designers to quickly create tangible prototypes of their designs, rather than just two-dimensional pictures, such models have numerous uses. They make excellent visual aids for communication ideas with co-workers or customers. In addition, prototypes can be used for design testing. For example, an

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aerospace engineer might mount a model airfoil in a wind tunnel to measure lift and drag forces. Designers have always utilized prototypes; RP allows them to be made faster and less expensively. In addition to prototype, RP techniques can also be used to make tooling (referred to as rapid tooling) and even production-quality parts (rapid manufacturing). For small production runs and complicated objects, rapid prototyping is often the best manufacturing process available. Of course, rapid is relative term. Most prototypes require from three to seventy- two hours to build, depending on the size and complexity of the object. This may seem slow, but it is much faster than the weeks or months required to make a prototype by traditional means such as machining. These dramatic time savings allow manufacturers to bring products to market faster and more cheaply. The advanced Rapid Prototype Modeling Processes are: 1. Computer Aided Design (CAD) 2. Selective Laser Sintering (SLS) 3. Fused Deposition Modeling (FDM) 4. Lamination Object Manufacturing (LOM) 5. Electronic Beam Melting (EBM) Advantages of RP Todays automated, tool less, pattern less systems can directly produce functional parts in small production quantities. Parts produced in this way have accuracy and surface finish inferior to those made by machining. However, some advanced systems are able to produce near tooling quality parts that are close to or are the final shape. The parts produced, with appropriate post processing, will have material qualities and properties close to the final product. More fundamentally, the time to produce any part once the design data is available will be fast, and can be categorized into direct and indirect benefits. Difference between Automated Flow lines and Assembly Flow line. AUTOMATED PRODUCTION SYSTEMS The technology of automation has indeed spawned newer and non-sophisticated machines. Increasingly ,these machines are getting lined up for broader purposes .Four

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categories of machines are discernible : automated flow lines, automated assembly systems ,flexible manufacturing systems, automated storage and retrieval systems. Automated Flow Lines : In this, several automated machines are linked together by automated parts transfer and handling machines. The individual machines on the line, use automated raw materials feeders and automatically carry out their operations without the need for human intervention .As each machine completes its operations ,partly completed parts are automatically transferred to the next machine on the line in a fixed sequence until the work of the line is finished .These systems are generally used to produce an entire major component ,for example ,rear axle housings for trucks. They are common in the automobile industry. Automated flow lines are also called as fixed automation or hard automation in as much as the lines of machines are designed to produce one type of component or product. These demand high investment and are highly inflexible. Hence, these machines are justified when demand for the product is high, stable and predictable .But the demand is never stable Shortened product life cycles and changes in production technology render the fixed automation lines unpopular and call for flexible manufacturing systems. Automated Assembly Lines : Here ,the automated assembly machines are linked together by automated materialshandling equipment .Materials are automatically fed to each machine ,which is some type of robot, which joins one or more materials, parts, or assemblies. Then the partcompleted work is automatically transferred to the next assembly machine. This process is repeated until the whole assembly is completed. The purpose of these systems is to produce major assemblies or even completed products. Product-design modifications are essential to make the automated assembly system successful Table below show the principles to be observed while redesigning products for automated assembly. Principles of Product Redesign 1. Reduce the amount of assembly required

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2. Reduce the number of fasteners required. 3. Design components to be automatically delivered and positioned 4. Design products for layered assembly and vertical insertion of parts. 5. Design parts so that they are self-aligning. 6. Design products into major modules for production. 7. Increase the quality of components. Three advantages are claimed in favor of automated assembly systems. First, these systems can provide manufacturers with low per unit production costs improved product quality and quicker production rates. Second, because some of the machines tend to be standard robots are available at competitive rates, initial investment is not high. Third, these robots can be reprogrammed to other products and operations, thereby reducing the dependence on stable product demand. The difference between Automated Flow lines and Assembly Flow Lines can be briefly explained as follows: Automated Flow Lines 1. Several Automated machines are linked by a transfer system. 2. Handling machine have main role to move semi finished product to the next stage. 3. Semi-finished products are the main core activities. 4. Here raw materials are achieving to get required shapes and acquire special properties. Assembly Flow Lines 1. All equipments are needed to in automated Assembly line 2. All equipments make role of making sub-assemblies put together and fitted. 3. Here Sub-assemblies products are the core activities. 4. Here intermediated products are achieving to get finished product.

5. Here All parts or sub-assemblies 5. The materials are needed to be are moved, fitted to enables the product to be in held, rotated, fitted and positioned for readiness to perform the function it completing different operations. was designed to. This process is called assembly. 6. Human intervention may be need6. No human intervention is needed, ed to methodologies are framed to achieve verify that the operations are taking the final result, basic principle is to fit place according to standards. parts together and ensure linkages so that the functions are integrated and
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give out the desired output. Q5. List different methods for selecting a suitable plant location and explain any two. A) Plant location or the facilities location problem is an important strategic level decision making for an organization. One of the key features of a conversion process (manufacturing system) is the efficiency with which the products (services) are transferred to the customers. This fact will include the determination of where to place the plant or facility. The selection of location is a key-decision as large investment is made in building plant and machinery. It is not advisable or not possible to change the location very often. So an improper location of plant may lead to waste of all the investments made in building and machinery, equipment. Before a location for a plant is selected, long range forecasts should be made anticipating future needs of the company. The plant location should be based on the companys expansion plan and policy, diversification plan for the products, changing market conditions, the changing sources of raw materials and many other factors that influence the choice of the location decision. The purpose of the location study is to find an optimum location one that will result in the greatest advantage to the organization. Various models are available which help to identify the ideal location. Some of the popular models are: 1. Factor rating method 2. Weighted factor rating method 3. Load-distance method 4. Centre of gravity method 5. Break even analysis Factor Rating Method: The process of selecting a new facility location involves a series of following steps: 1. Identify the important location factors. 2. Rate each factor according to its relative importance, i.e., higher the ratings is indicative of prominent factor. 3. Assign each location according to the merits of the location for each factor.

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4. Calculate the rating for each location by multiplying factor assigned to each location with basic factors considered. 5. Find the sum of product calculated for each factor and select best location having highest total score.

For better understanding a small illustration can be taken ILLUSTRATION 1: Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, factor rating and scores for two potential sites are shown in the following table. Which is the best location based on factor rating method? Sl. No 1. 2. 3. 4. 5. Factor Rating 8 5 6 3 5 Rating Location Location 1 2 3 5 4 3 4 5 1 2 5 3

Location factor Facility utilization Total patient per month Average time per emergency trip Land and construction costs Employee preferences

SOLUTION: Sl. No 1. 2. 3. 4. 5. Location factor Facility utilization Total patient per month Average time per emergency trip Land and construction costs Employee preferences Factor Rating (1) 8 5 6 3 5 Location 1 Rating (2) 3 4 4 1 5 Total Total = (1) X (2) 24 20 24 3 25 96 Location 2 Rating (2) 5 3 5 2 3 Total Total = (1) X (2) 40 15 30 6 15 106

The total score for location 2 is higher than that of location 1. Hence location 2, is the best

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choice. 2Weighted Factor Rating Method In this method to merge quantitative and qualitative factors, factors are assigned weights based on relative importance and weightage score for each site using a preference matrix is calculated. The site with the highest weighted score is selected as the best choice. ILLUSTRATION 2: Let us assume that a new medical facility, Health-care, is to be located in Delhi. The location factors, weights, and scores (1 = poor, 5 = excellent) for two potential sites are shown in the following table. What is the weighted score for these sites? Which is the best location? Sl. No 1. 2. 3. 4. 5. Location factor Facility utilization Total patient per month Average time per emergency trip Land and construction costs Employee preferences Weigh t 25 25 25 15 10 Scores Location 1 3 4 3 1 5 Location 2 5 3 3 2 3

SOLUTION: The weighted score for this particular site is calculated by multiplying each factors weight by its score and adding the results: Weighed score location 1 = 25 3 + 25 4 + 25 3 + 15 1 + 10 5 = 75 + 100 + 75 + 15 + 50 = 315 Weighed score location 2 = 25 5 + 25 3 + 25 3 + 15 2 + 10 3 = 125 + 75 + 75 + 30 + 30 = 335 Location 2 is the best site based on total weighted scores. These are the two models which are available that help to identify the ideal location. Q6. Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List out Demings 14 points.
Ans: JURANs Quality Triology

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Juran uses his famous universal Breakthrough Sequence to implement quality programmes. The universal break through sequences are; Proof of need: there should be a compelling need to make changes. Project identification: here what is to be changed is identified. Specific projects with time frames and the resource allocation are decided. Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project. Diagnostic journey: Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty. Remedial Action: This is the stage when changes are introduced. Inspection, testing, and validation are also included at this point. Holding on to the gains: the above steps results in beneficiary results. Having records or all actions and consequences will help in further improvements. The actions that results in the benefits derived should be the norm for establishing standards.

JURAN has categorised cost of quality into four categories: 1. Failure CostsInternal: These are cost of rejections, repairs in terms of materials, labour, machine time and loss of morale. 2. Failure Costs-External: These are cost of replacement, on-site rework including spare parts and expenses of the personnel, warranty costs and loss of goodwill. 3. Appraisal Costs: These are cost inspection, including maintenance of records, certification, segregation costs, and others. 4. Prevention costs: Prevention cost is the sequence of three sets of activities, Quality
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planning, Quality control, and Quality improvement, forming the triology to achieve Total quality management. JURANs argument says that; Quality is the result of good planning consideration the needs of both internal and external customers and develops processes to meet them. The processes are also planned to meet them. Quality is built into the system of manufacture, inputs and processes that are on stream like raw material, spare parts, labour, machine maintenance, training, warehousing, inspection procedures, packaging, and other. All these have to follow standards and control exercises to make sure that mistake do not occur often and that if mistakes do occur then they are corrected at the source. Quality improvement measures are essential to keep the quality culture alive. Newer methods will be found, some operations can be eliminated, improved technology available. In short, as experience is gained things can always be done better. IT is for the management to take the initiative and encourage the employees to be on lookout for opportunities for improvement. CROSBYS Absolutes of Quality Like Deming, Crosby also lays emphasis on top management commitment and responsibility for designing the system so that defects are not inevitable. He urged that there be no restriction on spending for achieving quality. In the long run, maintaining quality is more economical than compromising on its achievement. His absolutes can be listed as under:

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 Quality is conformance to requirements, not goodness Prevention, not appraisal, is the path to quality. Quality is measured as the price Paid for non-conformance and as indices Quality originates in all factors. There are no quality problems. It is the people designs and processes that create problems. Crosby also has given 14 points similar to those of Deming. His approach emphasizes on measurement of quality, increasing awareness, corrective action, error cause removal and continuously reinforcing the system, so that advantages derived are not lost over time. He opined that the quality management regimen should improve that overall health of the organization and prescribed a vaccine. The ingredients are. 1. Integrity: Honesty and commitment help in producing everything right first time, every time. 2. Communication: Flow of information between departments, suppliers, customers helps in identifying opportunities. 3. Systems and operations: These should bring in a quality environment so that nobody is comfortable with anything less than the best. Deming Wheel Demings approach is summarized in his 14 points. 1) Constancy of purpose for continuous improvement 2) Adopt the TQM philosophy for economic purposes 3) Do not depend on inspection to deliver quality 4) Do not award any business based on price alone 5) Improve the system of production and service constantly 6) Conduct meaningful training on the job 7) Adopt modern methods of supervision and leadership 8) Remove fear from the minds of everyone connected with the organisation 9) Remove barriers between departments and people 10) 11) 12) 13) Do not exhort, repeat slogans and put up posters. Do not set up numerical quotas and work standards Give pride of workmanship to the workmen Education and training to be given vigorously

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14) tivity

State and exhibit top managements commitment for quality and produc-

Using the above principles, Deming gave a four step approach to ensure a purposeful journey of TQM. Plan means that a problem is identified, processes are determined and relevant theories are checked out. Do means that the plan is implemented on a trial basis. All inputs are correctly measured and recorded. Check/Study/Analyze means that the trials taken according to the plan are in accordance with the expected results. Act When all the above steps are satisfactory regular production is started so that quality outcomes are assured An elaborated study of Demings 14 principles Constancy of purpose: Create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs. The new philosophy: Adopt the new philosophy. We are in a new economic age,

created in Japan. We can no longer live with commonly accepted levels of delays, mistakes, defective materials and defective workmanship. Transformation of Western management style is necessary to halt the continued decline of business and industry. Cease dependence on mass inspection: Eliminate the need for mass inspection

as the way of life to achieve quality by building quality into the product in the first place. Require statistical evidence of built in quality in both manufacturing and purchasing functions. End lowest tender contracts: End the practice of awarding business solely on

the basis of price tag. Instead require meaningful measures of quality along with price. Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation. This may be achieved by moving toward a single supplier for any one item, on a long term relationship of loyalty and trust. Purchasing managers have a new job, and must learn it.

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Improve every process: Improve constantly and forever every process for plan-

ning, production, and service. Search continually for problems in order to improve every activity in the company, to improve quality and productivity, and thus to constantly decrease costs. Institute innovation and constant improvement of product, service, and process. It is management's job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, training, retraining). Institute training on the job: Institute modern methods of training on the job for

all, including management, to make better use of every employee. New skills are required to keep up with changes in materials, methods, product and service design, machinery, techniques, and service. Institute leadership: Adopt and institute leadership aimed at helping people do a

better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity. Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality. Drive out fear: Encourage effective two way communication and other means to

drive out fear throughout the organization so that everybody may work effectively and more productively for the company. Break down barriers: Break down barriers between departments and staff areas.

People in different areas, such as Leasing, Maintenance, Administration, must work in teams to tackle problems that may be encountered with products or service. Eliminate exhortations: Eliminate the use of slogans, posters and exhortations

for the work force, demanding Zero Defects and new levels of productivity, without providing methods. Such exhortations only create adversarial relationships; the bulk of the causes of low quality and low productivity belong to the system, and thus lie beyond the power of the work force. Eliminate arbitrary numerical targets: Eliminate work standards that prescribe

quotas for the work force and numerical goals for people in management. Substitute

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aids and helpful leadership in order to achieve continual improvement of quality and productivity. Permit pride of workmanship: Remove the barriers that rob hourly workers, and

people in management, of their right to pride of workmanship. This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of Management by Objective. Again, the responsibility of managers, supervisors, foremen must be changed from sheer numbers to quality. Encourage education: Institute a vigorous program of education, and encourage

self improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Advances in competitive position will have their roots in knowledge. Top management commitment and action: Clearly define top management's permanent commitment to ever improving quality and productivity, and their obligation to implement all of these principles. Indeed, it is not enough that top management commit themselves for life to quality and productivity. They must know what it is that they are committed to-that is, what they must do. Create a structure in top management that will push every day on the preceding 13 Points, and take action in order to accomplish the transformation. Support is not enough: action is required

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