Subject: Operations Management (TQM)

Course: BSBA
Instructor: Mr. Ariel S. Dulay

Chapter I: Introduction to Total Quality Management (TQM)

Operations Management (OM)

Operations Management is the area of management concerned with designing, controlling, and
improving the processes involved in producing goods and services. It ensures the efficient and
effective use of resources (such as labor, materials, and equipment) to meet organizational goals
while delivering value to customers.

Key Objectives of Operations Management:

1. Efficiency: Minimize resource wastage while maximizing output.

2. Quality: Ensure that products and services meet customer expectations.

3. Productivity: Optimize the use of resources to achieve high output levels.

4. Flexibility: Adapt operations to changing customer demands or market conditions.

5. Customer Satisfaction: Deliver products and services that align with customer needs.

Role of Operations Managers in Organizations

Operations Managers play a critical role in ensuring that organizational operations run smoothly,
efficiently, and align with strategic objectives. Their responsibilities span across various functions:

1. Process Design and Improvement:

o Develop efficient workflows and optimize existing processes.

o Implement methodologies such as Lean, Six Sigma, or TQM to improve

performance.

2. Resource Management:

o Manage and allocate resources, including manpower, materials, and equipment.

o Ensure optimal utilization of assets to reduce costs and increase efficiency.

3. Production Planning and Scheduling:

o Plan production schedules to meet demand forecasts.

o Coordinate activities to minimize delays and ensure timely delivery of products or

services.

4. Quality Assurance:

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 o Oversee quality control processes to ensure products meet required standards.

o Address customer complaints and implement corrective actions to improve quality.

5. Supply Chain and Inventory Management:

o Collaborate with suppliers to ensure a steady flow of materials.

o Maintain optimal inventory levels to balance costs and availability.

6. Cost Management:

o Monitor budgets and control operational costs.

o Identify areas where efficiency improvements can reduce expenses.

7. Team Leadership:

o Manage and motivate teams to achieve operational goals.

o Provide training and development opportunities to enhance workforce capabilities.

8. Risk Management:
o Identify potential risks in operations and develop mitigation strategies.

o Ensure compliance with safety and regulatory requirements.

9. Technological Integration:

o Leverage technology to automate processes and improve operational efficiency.

o Stay updated on industry trends and innovations to maintain competitiveness.

Importance of Operations Managers in Organizations

Operations Managers are vital to achieving organizational success because they:

• Bridge Strategy and Execution: Translate strategic goals into actionable operational plans.

• Ensure Efficiency: Reduce costs and waste while maximizing productivity.

• Drive Customer Satisfaction: Ensure high-quality products/services are delivered on time.

• Foster Innovation: Introduce new processes and technologies to enhance competitiveness.

By effectively managing operations, they contribute to improved profitability, customer

loyalty, and long-term organizational growth.

1.1 Definition of Quality

Subject: Operations Management (TQM)
Course: BSBA
Instructor: Mr. Ariel S. Dulay
Quality, in the context of Total Quality Management (TQM), refers to the degree to which a set of
inherent characteristics of a product, service, or process meets or exceeds customer requirements
and expectations. Quality is not merely about meeting specifications but also about providing value
and ensuring customer satisfaction.
Key Perspectives on Quality:

1. Customer Perspective: Quality is defined by the customer’s satisfaction and perception.

For example, a mobile phone with excellent battery life may be considered of high quality
by consumers.

2. Producer Perspective: Quality is about producing goods or services within specified

standards and minimizing defects. For instance, a car manufacturer ensures that all parts
meet rigorous specifications before assembly.
3. Value Perspective: Quality involves providing the best combination of performance,
features, and price. For example, a budget-friendly laptop that efficiently meets basic user
needs offers good quality.

Examples:

• Product Example: A durable pair of running shoes that provides comfort and longevity
reflects quality.

• Service Example: A hotel that delivers timely room service and maintains cleanliness
demonstrates quality in service.

1.2 Foundations of Quality Management (6’s - ISO Procedures)

The foundations of TQM lie in structured methodologies and standards aimed at improving
processes, products, and services to achieve consistent quality. Two major components in this
foundation are the Six Sigma Methodology and ISO Standards.

Six Sigma (“6”): Six Sigma is a data-driven approach focused on reducing process variation and
eliminating defects. It aims to achieve near-perfection in delivering quality.

Key Principles of Six Sigma:

• Define: Identify the problem and customer requirements.

• Measure: Collect data to understand current performance.

• Analyze: Investigate root causes of defects or inefficiencies.

• Improve: Implement solutions to address root causes.

• Control: Maintain improvements to sustain quality.

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Example: A manufacturing company uses Six Sigma to reduce defects in a production line,
improving yield from 95% to 99.9997%.

ISO Standards (International Organization for Standardization): ISO standards are

internationally recognized frameworks that provide guidelines for achieving consistent quality
management practices across organizations.

Common ISO Standards:

1. ISO 9001: Focuses on quality management systems (QMS), ensuring organizations meet
customer and regulatory requirements.

2. ISO 14001: Concentrates on environmental management systems.

3. ISO 45001: Deals with occupational health and safety management.

Example: A software development company implements ISO 9001 to streamline processes,
document workflows, and enhance customer satisfaction.

Comparing Six Sigma and ISO Procedures:

• Focus: Six Sigma targets defect reduction, while ISO emphasizes standardization and
process consistency.

• Tools: Six Sigma uses statistical analysis; ISO employs documented procedures and audits.

Conclusion: Understanding the definition of quality and the foundational frameworks like Six
Sigma and ISO standards are essential to implementing effective Total Quality Management
practices. These tools and methodologies ensure that organizations consistently meet or exceed
customer expectations while enhancing efficiency and competitiveness.