Operations Management and TQM

• Operations management involves administering business activities for higher efficiency through planning, organizing, and supervising operations to reduce costs.
• TQM is a management approach where employees continuously improve their ability to provide valuable products and services on demand
• The "total" implies involvement of all employees, and "management" suggests a focused effort with leadership providing resources and goals.

Functions of Operations Management

• Finance: Ensuring efficient use of funds by preventing waste and allocating resources to meet consumer needs.
• Operations: Planning, organizing, directing, and controlling daily activities for efficiency in achieving goals.
• Strategy: Formulating strategies to optimize resources for a competitive market edge.
• Product Design: Overseeing designs to meet market demands with innovative features and quality.
• Maintaining Quality: Ensuring high product quality through control, defect identification, and corrective actions.

Importance of Operations Management

• Helps achieve organizational objectives by ensuring activities align with plans through continuous monitoring.
• Improves employee productivity by performance checks, measures, training, and education.
• Enhances the organization's goodwill and presence by ensuring quality products for customer satisfaction.
• Focuses on optimum resource utilization by framing strategies and monitoring activities.
• Motivates employees by guiding their roles and providing better atmosphere, remuneration, and rewards.

Scope of Operations Management

• Aims to increase productivity by optimizing production activities efficiency.
• Designs production plans and manages resources, transforming inputs into outputs to raise business productivity.
• Enhances profitability by reducing costs and waste, and ensuring products meet customer needs to attract more customers and boosts revenue.
• Aligns business activities with strategic goals, monitors processes, and implements corrective actions.
• Improves customer satisfaction by ensuring high-quality meet expectations, fostering long-term relationships and loyalty.
• Minimizes additional capital needs by ensuring efficient use of resources, avoiding waste, and maintaing smooth production.
• Improves a business's market position by ensuring high-quality, durable products and excellent customer service.
• Encourages innovation by integrating research, market analysis, and technological advancements into production planning.

History of TQM

• 1930s: Hawthorne experiments showed worker participation in decision-making improves productivity which is now known as the Hawthorne effect.
• Walter Shewhart developed control charts, a statistical method for process control.
• 1950s: Edward Deming taught statistical methods, Dr. Juran taught quality management to the Japanese.
• Armand Feigenbaun wrote Total Quality Control, starting many TQM theories.
• Abraham Maslow created a pyramid of self-actualization needs needing lower levels met before higher.
• 1960s: Douglas McGregor formed Theory X (negative management approach) and Theory Y (workers want to do a good job) leadership models.
• 1970s: Japan shaped Total Quality Control (TQC), a company-wide quality control philosophy, driving Japan to be a world leader.
• 1980s: US Naval Air Systems coined the TQM phrase based on the Japanese Total Quality Control philosophy.
• 1990s: Experts introduced new methods that supported TQM, including Lean Manufacturing and Six Sigma.
• Organizations could become certified to ISO 9001 and the Malcom Baldridge National Quality Award (MBNQA) was created.
• 2000s: ISO revised ISO 9001 to focus more on business planning, quality management and continuous improvement.
• Standards like AS9100, TS16949, ISO 14001, TL9000, and ISO 17025 were created including the ISO 9001.
• 2010s: ISO revised the ISO 9001 including Knowledge management.
• Six Sigma became the prevalent problem solving approach.
• Lean Six Sigma combining Lean thinking, 5S, and Six Sigma formed.

Principles of Total Quality Management

• Customer Focus: Meeting customer needs and expectations by aligning organizational objectives, communicating, measuring satisfaction, which leads to more sales, revenue, loyalty, and positive word-of-mouth.
• Total Employee Commitment: Ensuring all employees understand the vision and goals, and are trained and have resources to reach goals, which increase employee retention, innovation, accountability, and active participation.
• Process Approach: Using process flowcharts to clarify roles and responsibilities, creating visual action plans, and analyzing activities to ensure consistency and speed in production, leading to improvement, consistency, and focus.
• Integrated System: Interconnecting departments and functions with horizontal processes, to understand objective, and continually improve for a competitive edge.
• Strategic and Systematic Approach: Managing multiple processes as a system, providing training and resources, continually improving processes and products, therefore improvements are measurable.
• Continual Improvement: Always improving processes and adapting to customer needs, implement policies to establish product, process, and system improvements as measurable goals.
• Fact-Based Decision-Making: Gathering accurate data to make informed decisions, and understand customers and markets.
• Communications: Ensuring everyone is aware of plans, strategies, and methods, establishing communication lines, involving employees, which boosts morale, cooperation, and accurate measurements.

Traditional Management vs. Total Quality Management

PLAN, DO, CHECK, ACT (PDCA)

• PDCA improvement cycle proposes change, implements changes, measures the results, and then acts.
• The four stages are:
• Plan, determine goals and needed changes.
• Do, implement the changes.
• Check, evaluate the results.
• Act, standardize or begin the cycle again.
• PDCA aims to improve through target setting, implementing improvements, measuring change, and standardizing the method.