Total quality management in operations

TQM

Total Management Quality

Question 1 Company Mission Statements

According to these organization's website's the mission statement of the Marriott-Ritz Carlton Corporation is simply that the consumer or the investor "Look no further," for quality. McDonald's website, although it provides an additional page detailing the wealth of values upheld by the corporation ultimately simply proclaims, "I'm Loving it" as its mission statement. GE, in contrast, has a far more extensive mission statement, proclaiming that: "From jet engines to power generation, financial services to plastics, and medical imaging to news and information, GE people worldwide are dedicated to turning imaginative ideas into leading products and services that help solve some of the world's toughest problems." The UPS website provides even more detail, noting little-known facts how the company was "founded in 1907 as a messenger company in the United States, UPS has grown into a $30 billion corporation by clearly focusing on the goal of enabling commerce around the globe. Today UPS is a global company with one of the most recognized and admired brands in the world. We have become the world's largest package delivery company and a leading global provider of specialized transportation and logistics services. Every day, we manage the flow of goods, funds, and information in more than 200 countries and territories worldwide."

This comparison suggests that the Marriott Ritz Carlton and McDonalds prefers, as service-based organizations directed to the general public, to include their mission statements in simple, pithy terms that are generally variations on their corporate slogans directed towards the general public. In contrast, UPS and GE, which purvey respectively less obvious and consumer-based services and a wider array of products and services, some of which are directed to corporations or to countries, tend to form their mission statements in a more value-based and cohesive manner in a fashion that suggests it is directed at corporations and investors as well as product users.

Question 2 Steps in Strategy Formation of GE

GE deploys one of the most effective strategies of total quality management, applying quantitative concepts to qualitative problems. Six Sigma is a customer-focused, data-driven philosophy that suggests a process must produce no more than 3.4 defects per million opportunities. An opportunity is defined as a chance for nonconformance, or not meeting the required specifications. The steps to Six Sigma involve defining a potential problem quantitatively, determining why something doesn't work, then determining what does 'work,' deploying the solution, instilling quality controls to ensure that the 'solution' is maintained over the course of the company's evolution of the new strategy, and finally to create measures to determine that over the course of time the solution continues to work.

Question 3 Annual Reports

Despite its salutary message about its company's international growth and its adaptation to the 'healthy eating trend,' McDonald's overall performance has been quite disappointing. According to Hoover's, an online analysis service, McDonald's recorded a notably disappointing performance in 2001, System wide sales grew by just 1.1% to U.S.$40.6 billion, whilst revenue growth of 4.4% was much lower than the growth rates of around 7% recorded in the previous years of the review period. The low increases in sales and revenues for 2001 were offset attempts to expand the company's international outreach and adapt to different national palates.

However, although sales in 2003 and 2004 have improved, consumer concerns about beef safety in Europe and Japan, and the strength of the U.S. dollar have hindered further growth.

Question 4 Benchmarking

Conventionally, the most prevalent coverage regarding the off shoring of companies revolves around the negative aspects of this strategy for Americans at home. However, viewed through the lens of benchmarking, a slightly different analysis is achieved. According to the American Productivity & Quality Center (APQC), off shoring has improved or set a new benchmark of excellence for American companies in the informational technology sector.

Before, benchmarking in regards to outsourcing "has focused on inexpensive labor costs in the manufacture of commodity goods. But today, due to technological advancements and cheap skilled labor resources abroad, global sourcing now incorporates services such as back-office functions and knowledge-intensive work such as information technology (IT) applications development and maintenance. A March 2004 survey by the American Productivity & Quality Center (APQC) shows that development, particularly of custom applications, is the most common type of IT-related work under consideration to be sent offshore and currently sent offshore. More than three of every four respondents indicated that they are interested in off shoring as a strategy specifically in the area of applications development and maintenance." (APQC Website, 2004)

In other words, because of the low labor costs, high labor skills, and ability of the company to save money in such an arena, IT companies are setting the benchmark overall for American corporate strategy regarding the outsourcing of jobs abroad. The use of this methodology is particularly important in the IT sector, but through looking at industry not in terms of American jobs lost, as a politician might, and seeing potential attempts to cut costs without sacrificing employee knowledge, benchmarking makes sense.

Question 5 JIT

The paperless strategy of JIT has proved extraordinarily beneficial for inventory control and cash management, but has also proved extremely difficult to implement. One of the most difficult aspects of JIT is eliminating all paper from the manufacturing process which translates into "no more work orders." According to the "The Self-Directed WorkForce" (June 1, 2001), the difficulty of JIT lies in the fact that it "means setting up cellular manufacturing, which is not the traditional way of manufacturing. It means massive cross training of your people. It means setting up physical triggers to tell the various work cells what parts are needed and when. It means totally rethinking your production-control disciplines. And it means developing strong, professional and ethical partnerships with your vendors." In short, there is an absence of traditional modes and modalities of quality control and recording the history of production to refer to the past with an eye on the future. However, with an effective data base and information recovery system, and proper retraining and reorienting of employees -- perhaps, depending on the age of the employees and comfort with technology, the most difficult human element of all -- this can be achieved.

Question

Article Summary

Guttman, Howard. (June 2004) "Effective White Collar Teams: The New Quality Management." Quality Progress. http://www.asq.org/pub/qualityprogress/past/0604/qp0604guttman.pdf

This article by Howard Guttman stresses how quality must be viewed by leaders as an in and out process -- only by putting quality employees and company products into 'team's -- the new buzzword of the millennium, will the desired results or products be achieved. The article thus employs a quality-control strategy towards human relationships and achievements, much along the lines of GE's Six Sigma strategy of making use of human elements or qualitative or subjective controls and putting them through the rigors of statistically styled analysis.