FATHER SATURNINO URIOS UNIVERSITY

ACCOUNTANCY PROGRAM
San Francisco, Butuan City

Operation Management & Total

Quality Management

In Partial Fulfillment of Outcome Based Education (OBE)

For Operation Management & TQM (MACC 213)

Submitted By:

Camarin, Marjorie Franz

Dimas, Jezeil
Luneta, Mecca Del Cielo
Orellanida, Richard
Sigue, Eliza Marie

Submitted To:

Ms. Krishelle Mae Mordeno, CPA

October 2019
 TABLE OF CONTENTS

Title page

Chapter 1
1.1 Company Profile
1.2: Mission
1.3: Vision
1.4: Values
1.5: Objectives

Chapter 2
2.1: Introduction

Chapter 3
3.1: Review and Related Literature

Chapter 4
4.1: Assessment of Operation

Chapter 5
5.1: Recommendation

Chapter 6
6.1: Conclusion

Chapter 7
7.1: Bibliography

Chapter 8
8.1: Appendices
 CHAPTER 1

1.1 COMPANY PROFILE

Company Profile

JRC Shoe Shop, established in the year 2010, is the only one
leather shoe company engaged in the manufacturing and supplying of
industrial safety shoes under 1 Brand with having its unique
quality.

Their safety shoes are being widely appreciated by the clients

in the Philippines. These are manufactured as per the industrial
standards and are well known for their high quality and durability.
The various devices they offer to their clients are industrial
safety shoes, protective industrial shoes, foot safety shoes,
safety industrial shoes, industrial safety boots, protective
industrial boots, foot safety boots and safety industrial boots.

They have made a continuous progress in the industry and

deliver quality based technology. By providing their clients with
excellent and timely services, they are able to offer a wide range
of shoes for different purpose as per the international standards,
thus making themselves a total industrial solution provider.

Purchase or individual, they offer to their customers safety

shoes at a very affordable price, suiting as per to their client
needs.
GENERAL INFORMATION

Primary contacts Manager/Owner:

for sales Jose Curilan
Mobile #:
0948 973 2733

Facebook link https://www.facebook.com/pg/JRC-SHOE-SHOP-

426773261152915/about/?ref=page_internal

Forms of Sole Proprietorship

Organization

Types of Business Manufacturing/Merchandising

No. Employees 4-6

1.2 MISSION

TO FULFILL OUR CLIENTS DREAMS, DESIRES AND EXPECTATIONS, WITH

MOTIVATED AND SATISFIED STAFF, GENERATING RESULTS WITH
SUSTAINABILITY

1.3 VISION

TO BE A BENCHMARK IN THE MARKET, WITH BRANDS THAT ARE

ADMIRED AND FAVORED IN OUR SECTORS.

1.4 OUR VALUES

 WORK

 RESPECT FOR PEOPLE

 INTEGRITY

 ENTREPRENEURSHIP

 BUSINESS LONGEVITY

1.5 OBJECTIVE

Their objectives are to assist the customer to their needs by

making shoes with high quality and they also repair shoes from the
customer.
 CHAPTER 2

2.1 INTRODUCTION

A primary focus of TQM and most Quality Management Systems is

to improve customer satisfaction by having a customer focus and
consistently meeting customer expectations. Customers are almost
always satisfied when their expectations are met. When they expect
a certain product or service, and you delivered it without problems
and at a fair price, you’ve built a solid customer
relationship. Happy, satisfied customers become repeat customers
and they provide word-of-mouth marketing – the most powerful kind.
(MIT 2010)

Every business owner and manager know the importance of

satisfied customers, and how expensive it is to find new customers
compared to keeping current customers. Business research clearly
shows that there is a direct correlation between satisfied
customers and revenue. If your business doesn’t have a clear path
to creating satisfied customers, then it can benefit from TQM. In
this matter the JRC Shoe Shop, a company that manufactured a
leather shoes with its good quality and offer services to the
customers like repairing shoes. They were good in dealing with
their customers, even though the JRC Shoe Shop is a sole-
proprietorship still they manage their business well. According to
Jose Curilan, The JRC Shoe Shop applied Operation Management to
their business and it is important, to improve the overall
productivity. The ratio of input to output is termed as
productivity. It gives a measure of the efficiency of the manager
as well as the employees. Since the discipline focuses on using
the available resources in the best possible way to achieve end
goals, so it improves the overall productivity.
 In this study, the researchers want to conduct a study that
will give helpful information for the guidance of having a shoe
business. By that, it could help them by providing credible
readings and literatures which will help them and others about
shoe business.

CHAPTER 3

3.1 REVIEW AND RELATED LITERATURE

Operation Management

These are some definitions of operational management, based on

experts:

1. According to Jay Heizer and Barry Render (2006, p4), operations

management is the set of activities that creates value in the form
of goods and services by transforming inputs into outputs.

2. According to Evans and Collier (2008, p5), operations

management is the science and art of ensuring that goods and
services are created and delivered successfully to customers.

3. According to Russell and Taylor (2011, p2), operations

management is the design, operation, and improvement of productive
systems.

4. According to Krajewski, Ritzman, Malhotra (2007, p4),

operations management refers to the systematic design, direction,
and control of process that transform inputs into services and
products for internal, as well as external, customers.

5. According to Stevenson (2010, p4), operations management is the

management of systems or processes that create goods and/or provide
services.
Inventory

According to Krajewski, Ritzman, Malhotra (2007, p444),

inventory management is the planning and controlling of
inventories in order to meet the competitive priorities of the
organization, is an important concern for managers in all types of
businesses. And according to Evans, Collier (2008, p481),
inventory is any asset held for future use or sale. Chase, Jacobs
(2011, p594), inventory is the stock of any item or resource used
in an organization. An inventory system is the set of policies and
controls that monitor levels of inventory and determine what levels
should be maintained, when stock should be replenished, and how
large orders should be. Stevenson (2010, p549), inventory is a
stock or store of goods. Inventory management is a core options
management activity. Rusell and Taylor (2011, p557), inventory is
a stock of items kept by an organization to meet internal or
external customer demand. 6. According to Chase, Aquilano, Jacobs
(2003, p513) the basic purposes of inventory analysis in
manufacturing and stock keeping services is to specify when items
should be ordered and how large the order should be. Many firms
are tending to enter into longer - term relationship with vendors
to supply their needs for perhaps the entire year. This changes
the "when" and "how many to order" to "when" and "how much to
deliver".
Forecasting

These are some definitions of forecasting, based on experts:

1. According to Jay Heizer and Barry Render (2006, p104),

forecasting is the art and science of predicting future events. It
may involve taking historical data and projecting them into the
future with some sort of mathematical model.

2. According to Russel and Taylor (2011, p496), forecast is

a prediction of what will occur in the future.

3. According to Stevenson (2010, p72), forecasts are a basic

input in the decision processes of operations management because
they provide information on future demand.

4. According to Chase, Jacobs (2011, p520), forecasting is

the basis of corporate long run planning. In the functional areas
of finance and accounting, forecasts provide the basis for
budgetary planning and cost control.

5. According to Krajewski, Ritzman, Malhotra (2007, p504),

a forecast is a prediction of future events used for planning
purposes.

Operational Management Strategy

According to Jay Heizer and Barry Render (2006, p32), firms

achieve missions in three conceptual ways:

1. Competing on Differentiation is concerned with providing

uniqueness. A firm’s opportunity for creating uniqueness are not
located within a particular function or activity, but can arise in
virtually everything that the firm does. Moreover, because most
products include some service, and most services include any
product, the opportunities for creating this uniqueness are
limited only by imagination.
2. Competing on Cost Low-cost leadership entails achieving maximum
value as defined by your customer. It requires examining each of
the 10 operations management decisions in a relentless effort to
drive down costs while meeting customer expectations of value. A
low-cost strategy does not imply low value or low quality.

3. Competing on Response The response is often thought of as

flexible response, but it also refers to the reliable and quick
response. Indeed, we define response as including the entire range
of values related to timely product development and delivery, as
well as reliable scheduling and flexible performance.

Location Analysis

A business seeks to build, develop, and continue

relationships with their customers, suppliers, employees, mentors,
and investors. The quality of their environment and the people
within them, may lead a business to succeed or fail. (Cohan, 2013)
One’s business location is necessary for successful operations and
overall growth. When choosing a business location, one must
consider company needs, customers, employees and equipment needed
to complete the services. (Smallbusiness.chron.com)

Work design And Measurement

The definitions in this section are essentially an update of

those in the 1989 volume. Work measurement concepts and practices
have changed little in the past ten years. Use of the techniques
is on a plateau. As industry and commercial organizations mechanize
their operations, less attention is given to individual workplace
productivity measurement. (Mitchell Fein, P.E., C.M.C. 2011)

Increased use is being made of techniques to measure groups and

even entire organizations. As traditional measurement practices are
converted to measuring groups, the terminology employed requires few
changes to accommodate macro-measurement concepts. Many of the
traditional terms are used in organization-wide measurement
programs. With the increased encouragement of employees by industry
and commercial firms to become involved with management to raise
productivity and reduce costs, there is less need for management to
rely on work measurement and so-called fair day's work standards. As
human resources concepts improve relations between employees and
management, there is less reliance on work measurement to improve
productivity. Traditional work measurement will continue to be used
in planning and managing operations, and in incentive programs. (Alan
V. Owen 2012)

To achieve high levels of employee productivity,

organizations must sure that the physical environment is conducive
to organizational needs, facilitating interaction and privacy,
formality and informality functionality and cross-disciplinarily.
Consequently, the physical environment is a tool that can be
leveraged both to improve business results (Mohr, 2015) and
employee well-being (Huang, Robertson and Chang, 2009).
Supply Chain Management

SCM has been interpreted by various researchers. Based on the

relatively recent development of the supply chain literature, it
is not surprising that there has been much debate as to a specific
SCM definition. According to Ganeshan and Harrison (2015) has
defined SCM as a network of facilities and distribution options
that performs the functions of procurement of materials,
transformation of these materials into intermediate and finished
products, and the distribution of these finished products to
customers. Also, Lee & Corey (2014) stated that SCM consists of
the integration activities taking place among a network of
facilities that procure raw material, transform them into
intermediate goods and then final products, & deliver products to
customers through a distribution system. While Christopher defined
the supply chain as the network of organizations that are involved,
through upstream and downstream linkages, in the different
processes and activities that produce value in the form of products
and services in the hands of the ultimate customer. SCM is the
"strategic and systematic coordination of the traditional business
functions and the tactics across these business functions within
a particular firm and across businesses within a supply chain, for
the purposes of improving the long-term performance of the
individual companies and the supply chain as a whole". While the
separation of supply chain activities among different companies
enables specialization and economies of scale, there are many
important issues and problems that need to be resolved for
successful supply chain operation – this is the main purpose of
SCM.
 CHAPTER 4

4.1 ASSESSMENT IN OPERATION

Operational assessments focus on mitigating inherent process

design and execution risks through the use of controls. Controls
are employed to reduce the organization’s residual risk, or risk
after control implementation, to a tolerable level.

JRC Shoe Shop

Topic Subtopic Procedure

I  Categorization  JRC Shoe Shop didn’t use any

N of the approach in categorizing their
V Inventory inventory. This means that they
E are not applying any technique
N in determining the category of
T
O
the value of each item.
R
Y

M
A
N  Method of
A inventory  The JRC used the method FIFO,
G in order to preserve the
E quality of the product.
M
E
N
T

F  Time series  The business predicted that

O  SEASONAL their forecasting is that they
R
E have a high sale during summer
C based on their experience.
A
S
T
I
N
G
  Raw Material  Rubber seal
 Rugby
 Thread
 Wooden heel
L  Swelas
O
C  Shoe tags
A  Leather
T
I  Textile
O  Synthetic
N
 Rubber
A  Foam
N
 Insole
A
L  Eyelet
S  Buckle
I
S  Shoe lace
 Lining
 Sewing machine
 Grinder
This are the location of the
supplier of the JRC Shoe Shop,
LUZON (CALOOCAN-PINGPING SHOE
SUPPLY CORPORATION, BULACAN HJR
COMPANY)
VISAYAS (CEBU-PROGRESS MARKETING)
MINDANAO (CAGAYAN-BALITA MARKETING,
DAVAO-MJT UPHOLSTERY SHOP)

The JRC SHOE SHOP does not have a

branch yet, their business location
is only in San Francisco Street,
Butuan City, 8600 Agusan Del Norte
W  Working  The JRC Shoe Shop has a good
O Condition working conditions they have
R workplace rules, employee’s
K health and safety standards,
safe working environment,
D enforcement of workplace
E contracts that employers may
S provide workers with specific
I accommodations or work
G conditions that are specified
N in an employment contract,
working schedule
A and the demand of the job.
N
D  Rewards and  The JRC Shoe Shop uses rewards
recognition and recognition to encourage,
M motivate their employee’s and
E inspired them at work. Rewards
A and recognition may be
S monetary (bonuses) or non-
U monetary(certification).
R
E  Specialization  Every worker have a
M of Job specialization and they were
E divided according to their
N skills and job description.
T

M
A  Quality  The business does maintain the
N Control standards of their product by
A testing a sample of the output
G
and checking the quality of
E
M
the product. They review the
E quality before it sells to
N consumers.
T
 Quality  JRC Shoe Shop uses the term
Q improvement control for maintaining
U standards and the term
A breakthrough for achieving new
L standards.
I
T
Y
SWOT ANALYSIS

o STRENGTH

 Existence of more than sufficient productive capacity in

tanning.
 Easy availability of low cost of labour.
 Exposure to export markets.
 Managements with business background become quality and
environment conscious.
 Presence of qualified leather technologists in the
field.
 Comfortable availability of raw materials and other
inputs.
 Massive institutional support for technical services,
designing, manpower development and marketing.
 Exporter-friendly government policies.

o WEAKNESSES

• Low level of modernisation and upgradation of technology,

and the integration of developed technology is very slow.
• Low level of labour productivity due to inadequate formal
training / unskilled labour.
• Horizontal growth of tanneries.
• Less number of organised product manufacturers.
• Lack of modern finishing facilities for leather.
• Highly unhygienic environment.
• Unawareness of international standards by many players as
maximum number of leather industries are SMEs.
• Difficulties in accessing to testing, designing and
technical services.
• Environmental problems.
 o OPPORTUNITIES

• Abundant scope to supply finished leather to multinationals

setting up shop in India.
• Growing fashion consciousness globally.
• Use of information technology and decision support software to
help eliminate the length of the production cycle for different
products
• Product diversification - There is lot of scope for
diversification into other products, namely, leather garments,
goods etc.
• Growing international and domestic markets.

o THREATS

• Entry of multinationals in domestic market.

• Stiff competition from other countries.(The performance of
global competitors in leather and leather products indicates that
there are at least 5 countries viz, China, Indonesia, Thailand,
Vietnam and Brazil, which are more competitive than India.)
• Non- tariff barriers - Developing countries are resorting to
more and more non – tariff barriers indirectly.
• Improving quality to adapt the stricter international standards.
• Fast changing fashion trends are difficult to adapt for the
Indian leather industries.
• Limited scope for mobilising funds through private placements
and public issues, as many businesses are family-owned.
OPERATION STRATEGY

Marketing Mix (The Four P’s)

PRICE

The prices for JRC Shoe Shop products they follow the
international minimum price of a leather shoes with good
quality. Price varies from men and women footwear. The
minimum price of their product is 850 pesos.

PRODUCT

 The product of JRC Shoe Shop is all kind of leather

product but their main/majority product is leather
shoe.

PLACE

 JRC SHOE SHOP is located at San Francisco Street,

Butuan City, 8600 Agusan Del Norte

PROMOTION

 The JRC didn’t have any trading system.

Product Implementation

Advertising

 The JRC Shoe Shop already engaged in the

modernization through using social media to promote
their business.
 CHAPTER 5

6.1 CONCLUSION

JRC Shoe Shop didn't utilize any methodology in arranging

their stock. This implies they are not applying to the current
situation any technique in deciding the class of the estimation of
everything. The business gain a high sale in the month of March to
May, their forecasting was based on their experiences that every
summer their product is in demand. The location of their business
is only in San Francisco Street, Butuan City, 8600 Agusan Del Norte
and they have no other branch yet of their business but the owner
is already planning that to have a branch of their business. The
JRC Shoe Shop has a decent working conditions they have working
environment runs, representative's wellbeing and security
measures, safe workplace, authorization of working environment
gets that businesses may furnish laborers with explicit lodging or
work conditions that are indicated in a work contract, working
timetable furthermore, the interest of the activity. The JRC Shoe
Shop uses prizes and acknowledgment to empower, propel their
worker's and roused them at work. Prizes and acknowledgment might
be fiscal (rewards) or non-monetary (certification). Each laborer
have a specialization and they were separated by their aptitudes
and set of working responsibilities. The business maintains the
measures of their item by testing an example of the product and
checking the nature of the item. They check the quality before it
offers to shoppers. JRC Shoe Shop utilizes the term control for
keeping up models and the term leap forward for accomplishing new
norms.
 Therefore, the JRC SHOE SHOP satisfied the customer’s wants
when it comes to the quality of the product. Their strategies are
all reliable on their decision making. They used many strategies
in order to meet the demand of their customers and made the
customer satisfied. They still manage to produce the exact order
of their customers even though they have a lack of employees.

CHAPTER 6

5.1 RECOMMENDATION/SUGGESTION

JRC SHOE SHOP must expand the area for their

operations so that it can be more convenient to them and to the
customers to have spacious place. And they should hire additional
workers for them to be more efficient and productive as well. One
of their advantages is they don’t have any competitors here in
Caraga, it is important to open a new branch to cater more
customers especially to their business. Furthermore, they should
adopt new trends in designing their product to attract customers
that prefers to their taste.
 CHAPTER 7

7.1 BIBLIOGRAPHY

Heizer, J., & Render, B. (1999). Operations management. Upper

Saddle River, N.J: Prentice Hall.

Evans, J. R., & Evans, J. R. (2011). Quality and performance

excellence: Management, organization, and strategy. Mason, OH:
South-Western Cengage Learning.

Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2007).

Operations management. Upper Saddle River, N.J: Pearson Prentice
Hall.
Marewski, J. N., Gaissmaier, W., & Gigerenzer, G. (2010). Good
judgments do not require complex cognition. Cognitive Processing,
11, 103–121. doi:10.1007/s10339-009-0337-0

Chase, R. B., Aquilano, N. J., & Jacobs, F. R. (1998). Production

and operations management: Manufacturing and services. Boston,
Mass: Irwin/McGraw-Hill.

Russell, R. S., & Taylor, B. W. (2009). Operations management:

Creating value along the supply chain. Hoboken, NJ: John Wiley &
Sons.

Richardson, J. (1980). Opinion: Thompson v. County of Alameda. 27

Cal.3d 741. SCOCAL.

Montgomery, D. (2013). Introduction to statistical quality

control. Hoboken, NJ: Wiley.
Kasper, D. L., Fauci, A. S., Hauser, S. L., Longo, D. L. 1.,
Jameson, J. L., & Loscalzo, J. (2015). Harrison's principles of
internal management (19th edition.). New York: McGraw Hill
Education.

Smallbusiness.chron.com. (2017). Methods for Collecting Customer

Feedback

Yapa, S. (2012). Total quality management in Sri Lankan service

organizations. The TQM Journal, 24(6), pp.505-517.

Zairi, M. (1991). Total quality management for engineers.

Cambridge, England: Woodhead Pub.

Zairi, M. (2013). The TQM legacy – Gurus’ contributions and

theoretical impact. The TQM Journal, 25(6), pp.659-676.

Ashok Sarkar, S., Ranjan Mukhopadhyay, A. and Ghosh, S. (2013).

Root cause analysis, Lean Six Sigma and test of hypothesis. The
TQM Journal, 25(2), pp.170-185.

Shim, J. and Siegel, J. (1999). Operations management. Hauppauge,

NY: Barron's Educational Series.

De Knop, P., Hoecke, J. and De Bosscher, V. (2004). Quality

Management in Sports Clubs. Sport Management Review, 7(1), pp.57-
77.
 Chapter 8
8.1: Appendices

INVENTORY MANAGEMENT:
 WHAT METHOD OF INVENTORY DO YOU USE IN YOUR COMPANY?
FORECASTING:
 HOW MANY SHOES DO YOU PRODUCED IN ONE DAY?
 BASED ON THE PAST EXPERIENCE, WHEN WILL YOU GAIN A HIGH
IN SALES?
LOCATION ANALYSIS:
 DO YOU HAVE ANY BRANCH OF YOUR BUSINESS ASIDE HERE IN
BUTUAN?
 WHERE DO YOU PURCHASE YOUR MATERIALS FOR YOUR PRODUCT?
WORK DESIGN AND MEASUREMENT:
 IS IT SAFE IN YOUR WORK PLACE?
 IF SOMETHING HAPPENED TO THE EMPLOYEE DURING THE
OPERATION, WHAT ARE THE INCENTIVES THEY WILL GET?
 WHAT ARE YOUR WAYS TO INSPIRE OR ENCOURAGE YOUR EMPLOYEES
IN WORKING?
 IN TERMS OF JOB SPECIALIZATION, DOES YOUR EMPLOYEE
ALLOWED TO DO A WORK EVEN THOUGH IT’S NOT HIS/HER FIELD?
QUALITY MANAGEMENT:
 DID YOU FOLLOW ANY STANDARDS WHEN IT COMES TO THE QUALITY
OF YOUR PRODUCT?
 HOW DO YOU IMPROVE YOUR PRODUCTS QUALITY?
 FATHER SATURNINO URIOS UNIVERSITY
ACCOUNTANCY PROGRAM
San Francisco, Butuan City

Mr. Jose Roy Curilan

Owner/Manager

Dear Sir,

ings!

We are 2 year students from the Accountancy Program of this university. As a part of our
nd

curriculum, we are required to conduct research in relation to Outcome-Based Education project

for our Operations Management and Total Quality Management subject that is required for
accomplishment of this course.

In connection to the aforementioned situation, we humbly ask your permission to allow us

to have an interview in relation to our study, to ask you questions with regards to the operations of
the company and to observe it as well.
You may contact us through the mobile phone number 09276613589 or through the email
address meccadelcielo.luneta@gmail.com.
We are hoping for your approval of the subject matter. Rest assured that the information
you will be providing will be used appropriately and with confidentiality. Thank you and may God
Bless you!

Respectfully yours,

Ms. KRISHELLE MAE MORDENO, CPA MECCA DEL CIELO O. LUNETA

Instructor Group Representative

DR. EVANGELINE P. JAMILI, CPA

Program Dean
JRC SHOE SHOP
San Francisco Street,
Butuan City, 8600 Agusan Del Norte