According to Heizer J. & Render B. (1996) operations management is concerned with the way a firm produces goods and services. As production is creation of goods and services, Productivity is the enhancement of the production process. According to Slack N. Chambers S. and Johnston R. (2009) the operation function plays three roles in any organization:
Operations should be the implementer of business strategy;
Operations should be a supevent management to business strategy;
Operations should be the driver of business strategy.
The throat cut competition has thrown a challenge to operators’, who constantly have to learn to understand and satisfy the ever changing needs of their customers. Slack N. Chambers S. and Johnston R. (2009) says that strategy is the total pattern of decisions and actions that positions the organizations in its environment and that are intended to achieve its long-term goals.
According to Allyn and Bacon (2008) an operation strategy is a fundamental pattern of present and planned objectives, resource deployments, and interactions of an organization with markets, competitors, and other environmental factors.
According to Johnson and Scholes (2009) operation strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations”.
How to Implementation Strategy:
After analysis and selection of a strategy the next task is to translate it into action in the working of company. According to Hooper and Potter (2009) developing a vision of the future, crafting strategies to bring that vision into reality and ensure that everybody in the organization is mobilizing their energies towards the same goal, the most difficult challenges facing leaders today are making sure that people in the organization can adapt to change and that leaders can envisage where the organization is currently placed in the market and where it should be in the future.
An organization can be successful when all the employees work together to achieve the goals. And the best way to do is to clarify performance goals and provide rewards for the subordinates. If the strategy and the vision are unclear, the organizational goals will be unclear as well and the subordinates won’t be able to perform well.
Causes to the problems
AS per the Vice-President of Global Marketing, Plastix international Plc:
The Poor level of service in the hotel.
Faulty video projection to shortages of cups at coffee breaks.
Final conference dinner was in mess as the cocktail reception was a farce.
The choice of non-alcoholic drinks that we specially ordered didn’t appear until the last minute.
The President’s wife is teetotaler but was served alcoholic drinks.
A split tray of snacks was not cleared up quickly and
Several guests got food all over their shoes and dresses.
The dining room wasn’t properly prepared. Some of the tables were without flowers; even the flowers that were there were the wrong variety and looked as if they had been on the tables since yesterday.
The meal was the worst. The starter was dried up and chewy, and the sweet soufflés were flat and rubbery. And we couldn’t believe that anyone could mess up a simple entrée. We were served the cutlets and potatoes, but the sauce and vegetables didn’t appear until I’d nearly finished mine.
And what happened to the microphones on the top table? The photographer didn’t turn up either, which is perhaps a blessing, as the tables weren’t cleared completely after the sweet, and I’m sure that everyone would have looked in a bad mood after all the mess-up! I can tell you straight – we won’t be paying all your exorbitant charges for his banquet and I expect a written apology for all the upset we have been caused. The President must think I am an idiot to have chosen this hotel, and I think he has a point’
According to the Manager of Aalsmeer Electronics:
The public address system had to be set up by 7:00pm. We often do jobs of this type, and two hours is more than enough, so we allowed an extra half-hour and started at 4:30pm. Your staff wouldn’t let us get to the tables to wire them, and we had to wait until they cleared them off for usâ€¦’
According to Hotel Service Manger:
‘It has always been agreed that we must wait until the cutlery has been laid before we set out he flowers, and yesterday we simply weren’t given enough time to see to all the tables. As for the types of flowers, we were never told that client wanted red and pink arrangements. I would have recommended other colors anyway, as reds would not look good against the dining room décor. Unfortunately, the electricians moved our arrangements out of the way against a heating outlet, so by the time we got to them; the flowers looked a bit beyond their best condition. I suppose that’s what happened if you allow contractors to interfere with our operation.’
According to Conference Manager:
‘We were never told that the client wanted to use the video equipment, which was scheduled for repairs next weekend. Had I known, we could have hired in another projector, but we never got the conference checklist back from the client. If we had got that, it would also have indicated that there were an extra 10 delegates here just for the morning to make some sort of presentation to the conference. These problems are all down to the client: if they don’t follow our system, it’s their fault if things go wrong.’
According to the Head Chef:
‘â€¦I always get a detailed schedule from the head waiter. I get the fish, the sauces, the vegetables and the desserts ready according to that schedule – if things run as late as they did last night, you can expect a few problems. Cooking is an art. All the chefs know how to cook to perfection every time, but if we can’t serve the food when it’s ready, it will be messed up. I can tell you that if you think the customer was angry, you should have come into the kitchen. Some of the conference delegates were rude to the waiters, who came back into the kitchen and told that chefs, refused to start on the cutlet sauce until the fish course was cleared.’
According to the Head Waiter:
‘We weren’t told that electricians would have to wire the tables. They worked setting up the loudspeakers and amplifiers while we were setting the tablecloths and laying the place settings. Their foreman then told us that the tables would have to be cleared for them, so you can imagine the problems that caused. I think we did very well to put everything right in under half-an-hour.’
According to the photographer:
‘We were booked for 10:00 pm and the Conference Manager told us that, according to the customer, we would only be needed for half-an-hour during the speeches. When we arrived they were still in the middle of the meal, and so I waited a bit, but we had another booking at the Concert Hall at the end of a performance at 11:00 pm, so I had to rush off. If we’d known earlier I could have arranged for a partner to come along’
At its conception TQM was mainly concerned with the monitoring of manufacturing processes in a statistical fashion but it has in more recent times widened to a client- based process of continuing improvement that concentrates on delivering the product or service at a high quality and on time.
Prior to TQM being adopted most companies looked upon the improvement of quality as being an additional cost, whereas now it is realized that quality can save money.
Production volume was looked upon as more important than quality; and this resulted in high stock levels being maintained in order to cover for any shortages due to inferior quality at a previous stage of production. Extra costs were also being incurred in areas such as inspection, repairs and scrap. Companies now realize it is more economical to produce the correct amount of product/service the first time thus avoiding these additional costs.
Cost of Quality Reports
It is recognized that future accounting systems will have to acknowledge and emphasize the need for organizations to achieve their quality goals. This will be attained by the production of reports that will evaluate and motivate manager’s efforts in the improvement of quality.
It is not an easy task for any organization to assess how much they are spending on quality. Cost of quality reports should highlight the following key areas:
These are costs that are undertaken to avert products or services being produced that do not meet the desired quality criteria.
There is expenditure that is undertaken to assure products or services meet the desired quality criteria. Such costs include the inspection of bought-in parts, work-in- progress and finished goods. The expense of quality audits is also an appraisal cost.
Internal Failure Costs
These are charges associated with materials and products that fail to meet the desired quality criteria. They are costs that are incurred prior to the product being delivered to the customer. Such amounts include scrap, repairs and/or idle time arising out of defective material.
External Failure Costs
These are sums incurred as a result of inferior products or services delivered to customers. Such expenditure includes the cost of dealing with customer’s complaints, replacements, repairs but most of all the cost due to the marred reputation of the supplying company.
A cost of quality report should bring to the management’s attention the money being spent on quality related expenses. The report should also indicate how reallocating the expenses amongst the four categories, indicated above, could reduce the cost of quality. For example, by spending more on prevention costs, the internal and external failure expenses could be reduced. Quality measures should include other areas apart from manufacturing. The performance of suppliers and the measurement of customer satisfaction are two other examples.
Behavior Consistent with TQM
Existing management accounting systems can encourage behavior that is inconsistent with TQM systems. As mentioned earlier, in these situations many managers are led to concentrate on output rather than quality, which can result in favorable efficiency and volume variances. Purchasing managers can be influenced by the material price variance to the extent that they move business to lower quality suppliers in order to achieve favorable price variances.
TQM endeavors to improve customer satisfaction, it achieves this by identifying the factors that limit or restrict current performance. The TQM approach highlights the need for a customer oriented approach and in some instances this can result in the cessation of current practices.
Factors Determining Success of TQM
The practice on the production line has been centered on the involvement of the employees and a similar approach is adopted in service industries. For TQM to be a success certain fundamental features are needed:
Quality has to be part of the culture, and training must be provided to ensure that employees’ perceptions of quality are those of the organization. Quality must be an integral part of everyone’s job.
There has to exist a commitment to TQM and this must start at the top of the organization’s structure. If this total commitment does not exist failure is inevitable.
Customer needs are the paramount issue and should be the driving force behind TQM. However it must be emphasized that when reference is made to customers this covers both the external and the internal customer.
Procedures and documentation have to be available to ensure the control function is operational. If these are not in place any improvements cannot be monitored nor can any inefficiency be tackled.
The most important requirement is that TQM is seen as an ongoing process.
There will always be room for improvement, no matter how small.
Implementation of a TQM System
The implementation of TQM must not be seen as a quick fix solution; all options should be evaluated and the potential consequences closely examined. Remember that it is rare for any problem to exist in isolation and the link to other dependant events must also come under scrutiny. Preference should be given to the tackling of these problems by a team approach and methods used can be brainstorming sessions, lateral thinking and a variety of other management tools and techniques. Although most employees see tile benefits of TQM, its implementation tends to be more problematic due to behavioral issues.
Stages in the Implementation Process
The implementation of a TQM system can be described in the following steps: