Presentation on theme: "Productivity and Quality Improvement"— Presentation transcript:
1 Productivity and Quality Improvement Chapter 7Productivity and Quality Improvement
2 Learning ObjectivesDescribe the current status and future directions of management efforts to improve productivity and quality.Discuss how total quality management programs are increasing productivity and quality.Identify the steps in TQM programs and briefly describe each step.Explain how Pareto chart analysis, cause-and-effect diagrams, customer-value-added programs, and benchmarking reduce errors and increase quality.
3 Learning Objectives (contd.) Relate the value of alternative work arrangements and empowerment to increased productivity and quality.Define the term intrapreneurship and relate its value to improved organizational productivity and quality.Explain the importance for developing intrapreneurship strategies.
4 ProductivityTypically measured by the equation: output/input
5 Total Quality Management Total Quality Management seeks to increase customer service and reduce costThe first principle of TQM is:Do it right the first time
6 New Beliefs About Quality The quality output of goods and services is everyone’s jobThe thinking that quality is “good enough” must be replaced by the belief that quality must be continually improvedWork can often be done faster without any loss in qualityEverybody associated with the organization needs to be part of the quality effort, including top managers, low-level workers, outside suppliers, and customers
7 Steps in Implementing a TQM Program Formulation of strategic intentCareful design of organization structure and training effortsUse of common tools and techniquesEmphasis on use of customer value addedUse of benchmarking and continuous improvementCareful measurement of performance results
8 TQM Tools and Techniques A Pareto chart is a vertical bar graph used to identify and rank-order problemsA cause-and-effect diagram is designed to help identify reasons for a problem
9 Benchmarking… is an ongoing process of measuring products, services, and practices against those of competitors and industry leadersType of BenchmarkingActivity PerformedImprove-ment (%)InternalCompetitiveFunctionalGenericCompare similar process. within comp.Specific competitor-to-comp. compar.Compare similar func. to ind. leadersCompare unrelated practices/processes102035>35
10 Figure 7.3 The Benchmarking Process Identify the processes to be benchmarkedDetermine the competitor to benchmark againstDecide how the benchmarking data will be collectedCompute the “gap” that exists between the competitor’s performance and your own performance
11 Feedback Figure 7.3 (Contd.) Create a plan for eliminating this “gap” Implement the planMonitor the progressDecide what, if any, additional steps now need to be taken
12 Benefits of Incremental, Small Improvements Increased quality of outputGreater competitivenessHigher profitabilityA lower operating break-even pointThe opportunity to use a participative management approach that allows employees to play a role in decision makingA way of learning from past experiences and using this information to set realistic, attainable goals
13 Alternative Work Schedules A compressed workweek has longer individual workdaysFlextime allows workers to decide when they want to stop and start their workdayShift work is assigned on the basis of time shifts such as 8 a.m. to 5 p.m.
14 IntrapreneurAn intrapreneur is an entrepreneur who works within the confines of an organization
15 Key Terms in the Chapter ProductivityTotal quality management (TQM)First principle of TQMStrategic intentQuality councilPareto chartCause-and-effect diagramCustomer value addedBenchmarkingCompressed work weekFlextimeShift workEmpowermentIntrapreneur