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Chapter 7

Productivity and Quality Improvement. Chapter 7. Learning Objectives. Describe the current status and future directions of management efforts to improve productivity and quality.

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Chapter 7

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  1. Productivity and Quality Improvement Chapter 7

  2. Learning Objectives • Describe 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, and identify the steps in total quality management. • Explore the strategic intent, organization, and training efforts in a total quality management program. • 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. • Explore how to develop your own brand as an employee.

  4. Productivity Typically measured by the formula: output input

  5. Total Quality Management Total Quality Management seeks to increase customer service and reduce cost. The 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 job. • The thinking that quality is “good enough” must be replaced by the belief that quality must be continually improved. • Work can often be done faster without any loss in quality. • Everybody 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 • Formulating of strategic intent • Designing of organization structure and training efforts • Using common tools and techniques • Focusing on customer value added • Using benchmarking and continuous improvement • Measuring performance results

  8. TQM Tools and Techniques A Pareto chart is a vertical bar graph used to identify and rank-order problems. A cause-and-effect diagram is designed to help identify reasons for a problem.

  9. Figure 7.1 – A Pareto Chart of Customer Complaints

  10. Benchmarking … is an ongoing process of measuring products, services, and practices against those of competitors and industry leaders.

  11. Figure 7.3 - The Benchmarking Process

  12. Benefits of Incremental, Small Improvements • Increased quality of output • Greater competitiveness • Higher profitability • A lower operating break-even point • The opportunity to use a participative management approach that allows employees to play a role in decision making • A way of learning from past experiences and using this information to set realistic, attainable goals

  13. Participative Management Approach - Alternative Work Schedules • A compressed workweek has longer individual workdays. • Flextime allows workers to decide when they want to stop and start their workday. • Shift work is assigned on the basis of time shifts such as 8 a.m. to 5 p.m.

  14. Participative Management Approach - Empowerment The process of giving workers autonomy over the way their jobs are performed and holding them accountable for the results.

  15. Intrapreneur An intrapreneur is an entrepreneur who works within the confines of an organization. • Innovation • Calculated risk taking • Creativity

  16. Productivity Total quality management (TQM) First principle of TQM Strategic intent Quality council Pareto chart Cause-and-effect diagram Customer value added Benchmarking Compressed work week Flextime Shift work Empowerment Intrapreneur Brand Key Terms in the Chapter

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