Operations and suppy chain management report.docx

bmgt20010 operations & supply chain management quality managementdankers furniture ltd quality management caseya qing yangstudent number: 0825821011/9/2010executive summarythe purpose of this report is to provide some suggestions of long term and short term actions to john cardron who want to compile a formal manual in order to implement an effective quality management system within dankers furniture ltd, and possibly achieve iso 9000 quality system standard certification. the specific objectives are to identify key problem within dankers furnitures existing quality management systems and offer recommendations to formalize the quality management system.the problems were found in significant cost occurring and some issues with their business operation that relate to current quality management system. the report suggests that danker adopts more modern quality management methods such as six sigma methodology and give specific detail on how these approaches works to solve current issues to meet the requirements of iso9000 quality system standard.contents pageexecutive summary-2table of content-3 1. introduction-42. an analysis of existing problems-43. the effectiveness of the existing approach-54. recommendations and suggestions -64.1 establishing the responsibility system-64.2 explicitly divided in functions and leadership involvement-64.3 quality assurance and inspection methods-74.4 control non-conforming products-84.5 continuous improvements-85. conclusions-96. reference-101. introductiondankers furniture ltd, a furniture manufacturing company based on co. meath, has a traditional of high-class furniture design which has been passed down in danker family through succeeding generations. because the attractive design arts of furniture, danker become a well established designer and manufacturer of hardwood furniture and gain a high rate of customer satisfactions. however, it has been found that it had a slightly increase of sales volumes in the standard cabinetry line when reviewed operations performance at the end of 2006. based on this review, it was found that the company needs to focus on improving quality management and formalized qualify management system especially relate to internal defects identified and the level of customers returns. john condron was appointed to the post quality coordinator in dankers furniture ltd. after he attended a 3 days course on the iso9000 quality system standard in order to meet his new job demand, when he took up the new position, he worked out the existing problems in operation, he was aware of that it is necessary to consolidate the companys quality management system and compiled a formal manual to document system and outline the specific responsibilities for managers and employees if they were to eventually achieve iso9000 registration. based on the problems that provided by john condron, this paper will begin with a brief overview and analyze the outstanding problems and within dankers furniture quality management system. following this, the strong points of current quality managing system will be identified. then, suggestions for these existing drawbacks will be discussed, recommend advices will be provided. there are include five main ideas can be used to improve quality management system, it include establish responsibility system, leadership involvement, quality assurance, dealing with non- conforming products and continuous improvements. these ideas cam be implementing as the quality management development programme to satisfy the requirement of iso9000 quality system standard.2. an analysis of existing problemscosts issue-according to the operation performance review at the end of 2006 that company had a significant internal and external failure costs on defective product. the external failure costs have happened in the quality defects in the consignment. owing to the defects in the consignment, consignment has to be returned from customers and repaired. to fix a defect like this, there are five major types of costs can be generated, these include the returns transaction costs, the replacement transaction costs, the labor effort to accept in and dispose of returned materials and the necessity to restock inventories to ensure stocks remains at planned level. in addition, the review showed that approximately 4% of overall deliveries are defective product which has been returned by customers. obviously, this might increase customer dissatisfaction. moreover, it also found that there was an increase of internal defects before shipping, and the defective items was replaced by new product. however, the materials from defective items were a significant problem for company, because these materials were hardly used on producing new product.problems in managing quality-excepting the costs issue pointed by reviewing operations performance, there are still has seven existing problems were emphasized by john condron. there are:1) quality management responsibilities it seems that the operations manager play a powerful role in quality management system by providing the necessary resources and supervisory and guaranteeing the overall quality of operational performance. however, the company was shorting in stipulating explicit duties for the whole process of quality management.2) involvement of all functional departmentsit was realized that all the functional departments were hardly taken their own responsibilities for quality management and manufacturing high-quality products. how to let them take cognizance of their obligations and involve them to contribute to the quality management system were the core problems of managing quality.3) quality management datathere are no useful data be worked out to state clearly quality performance although the operations department tries to do routine inspection during the operation. to achieve successful quality management, it is necessary to manage maintenance, supplier relations, material receipt and human resources activities which of them are significantly contribute to quality control.4) inspection activitiesthe existing method of inspecting output is randomly selecting in production line. moreover, inspection is not utilized in other parts of the operation. it is necessary to enforce the inspection of products before shipment and responsible for establishment of standard of product inspection.5) dealing with non- conforming productas the review of 2006 indicated that the defective products were increasing, as a result, those product and materials were abandoned with a “do not use” tag, and were considered as worthless. obviously, whether to control these non-conforming products or reusing them is a significant problem to dankers.6) managing quality improvementowing to the company paying less attention to quality performance and productivity, employees are locking incentive to enhance improvements. consequently, dankers are hard to ensure a continuous improvement in managing quality.3. the effectiveness of the existing approachquality management is a total organization process that necessitates the continuity of quality that starts with the design of the product and it is carried to servicing after delivery. it seems that dankers is a winner of the start of quality management. it also indicated by johns notes that quality of product design is more successful in the whole process of managing quality. as the foundation of product development, the design of the product are utmost important in the whole process. in dankers, both its sales manager and operations manager are taking responsibilities and meeting regular to come to agreements in quality flexible range and using materials, and receive the feedback from sales operation. therefore, it is easy to meet the customers requirements. in addition, the operations manager also work more and accomplish their agreements, as john wrote on his notethe operations manager selects materials suppliers and process tolerances, determines production routings and inspection plans, develop a production control plan and monitors a trial production run. those activities carried by operations manager are essential parts of the quality management process and it will lay solid foundations for improving production quality.4. recommendations 1) establishing the responsibility systemin establishing the responsibility system, it must be defined various duties and assign to departments and persons and it should be start from senior level executives to base level individual employee. before to separate responsibility to each staff, it is significantly important to understand an approach-six sigma methodology six sigma methodology is a business improvement methodology that focuses an organization on understanding and managing customer requirements, aligning key business processes to achieve those requirements, utilizing rigorous data analysis to understand and ultimately minimize variation in those processes, and driving rapid and sustainable improvement to business process (cecilc. bozarth, p61). the overall performance by using six sigma methodology is carried by project teams. about these teams, six sigma also set up a hierarchy and identifies several key roles for its successful implementation which include champion, master black belts, black belts, green belts, and team members. everyone has their own specialized roles within project teams. dankers ltd also can introduce this method into their business operation systems. for instance, the champions are the senior-level executives who “own” six sigma projects and have the authority and resources to needed to carry them out (cecilc. bozarth, p61). the dankers operations can be treated as a whole project; therefore, the operations manager in dankers project can be regarded as the champions in six sigma project. according to this method, it is obviously to see that everyone within dankers operations will has their specialized roles and with unambiguous responsibilities.2) explicitly divided in functions and leadership involvementto take the whole dankers ltd as a project to adopt six sigma methodology, it also can identify the certain functions of individual department. however, how to ensure every department to assume their responsibility to enhance the efficiency of overall performance especially of improving quality management is a significant problem for dankers. to solve these kinds of situation, six sigma has a role- executive leadership which consists of the ceo and other members of top management. these top leaders focus on the implementation of six sigma within the business organization and supervise the performance of each department.to successful implement six sigma methodology within the organization and to ensure every functional department adopt it to producing high-quality products; top manager team should to achieve several following things. firstly, executives need to clearly demonstrate consistency of purpose toward product improvement and establish the rules for how your six sigma process will operate. secondly, executives need to set short term and long term goals to each department to motivate them to contribute to overall quality management. for example, marketing department should provide investigation data of market at different period to analyze customer expectations and to make a further improvement on the quality. thirdly, departments must be explicitly divided in their functions and have clear responsibilities and concrete work-division. they shall be made to dovetail with each other and not overlap. fourthly, communication is essential to keep everyone involved and properly informed in six sigma program and managers need to institute a supervisory mechanism. finally, top leaders should work on remove barriers between departments. close cooperation relationship of departments can enhance the possibility of mutual communication. for instance, more customer feedbacks from sales department are transfer to operational department will more chance to exceed customer expectations.3) quality assurance and inspection quality assurance refers to the specific actions a firm takes to ensure that its products, service, and processes meet the quality requirements of its customers (cecilc.bozarth, p90). to achieve high level quality management, quality assurance should be implemented in different aspects of operation process including the quality of raw materials, assemblies, products and components, services related to production, and management, production and inspection processes. there are several approaches such as quality function deployment and statistical quality can be used to manage quality assurance, and most of them also can be used within dankers. for example, quality function deployment 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.” as described by dr. yoji akao who originally developed quality function deployment in japan in 1966. the technique of quality function development focuses customers satisfactions and transfer consumers needs to business operation. dankers can adopt this technique to ensure the quality demand in each stage of product development.most importantly in quality management system, inspection is a key to segment before the product is delivery to customers. as it is maintained before that in dankers every employee will have specific responsibility in quality management that also including the people who take the duty of inspection. in addition, in order to meet iso 9000 standards, dankers should follow the demand of iso 9001 section 4.10 inspection and testing, and the inspection should not limited in testing final products, but also need to move to test the components which is used for producing goods.4) control of non- conforming product in iso9000 standard points out that when one or more characteristics of a product fail to meet specified requirements, it is referred to as a non-conforming product. when a product deviates from specified product requirements, it fails to conform. nonconformity products must be identified and controlled to prevent unintended use or delivery. managing non- conforming product is a fundamental quality control discipline. however, in dankers, they have a mass of defective products and the materials of these products still can be used on other product to meet customers need. therefore, these materials cannot be identified as non- conforming.non conforming products cannot be used to satisfy customers needs, but they still can be used in other way. for example, these non-conforming materials can be used to training new employees as part of their exercise and reduce error rate in the practical work which in turn can reduce the costs of defective products.5) continuous improvementscontinuous improvement is a process of endeavoring in increasing customer satisfactions by continuous and incremental improvements. while how to ensure that quality of product is future develop and promote need to be deeply assessed. based on the methods that be maintained above, companies need to introduce more modern approach to support achieving continuous improvement. if dankers apply for six sigma methodology in their business operation, the six sigmas dmaic (define-measure- analyze-improve-control) project methodology which is always used to improve an existing business process will be extremely useful on continuous improvements. dmaic project methodology has five steps to achieve a goal. a. define the problem that exist in processb. measure key aspects of the current process and collect relevant datac. analyze the data to investigate and verify cause-and-effect relationshipsd. improve or optimize the current process based upon data analysis using techniquese. control the future state process to ensure that any deviations from target are corrected before they result in defects. implement control systems and continuously monitor the processapplying for dmaic project methodology to consider the situation of dankers, the existing problem in current quality management system is shorting of supervision and motivation. although workers are promoted in business process, there still insufficiency specific incentives and steps to measure their performance. moreover, quality performance and the overall productivity should be supervised in order to strive for more chances for quality improvement. at the same time, this is also a method to supervise employee performance individually. to solve these problems and control the continuous improvement, dankers need to implement a long term motivation and supervision system. 5. conclusionsto acquire iso9000 quality system standard certification, dankers should set up short-term and long