Operations Management : Project

Operations management traces its origins of the Industrial Revolution. It concerns the passage from a mainly agricultural society to an industrial society. But, in the past few years, operations management has known many significant changes, involving many aspects of its : quality, reduction in invetory and costs, improving delivery and lead times. Firstly, operations management is the way that companies can produce goods and services by using methods, concepts, technics and technologies. More precisely, management is the conversion process which transforms inputs such as raw material and labour into outputs in the from of finished goods and services [1]. Operations management is nowadays, really important for companies. Indeed, when operations management is done in a good way, it can improve productivity, our capability to understand customer needs, and thus, improve the standard of living of the citizens. So, in this project, we are going to focus our explanations on the quality management. Quality is the ability of a product or service to meet customer needs. It is fundamental for improving operations : quality involves a company reputation, the product liability. That is why we are going to deal with its evolution, which tools and methods are used and why.

I- Definition and evolution of the quality A) The beginning of the concept of quality

The concept of quality was developed in the Middle-Ages. This period represents the beginning of the industrialization and the idea of quality[2]. Indeed, Saint Louis asked merchants to write a Book of occupations which explained the obligations concerning quality, and the eventual punishments. Then quality expanded rapidly, during the Industrial Revolution but it is surely since the beginning of the twentieth century that manufacturers began to coordinate quality processes with practice.

B) The quality management with Taylor

This beginning matched the birth of Taylorism, developed by F.W. Taylor. It is a theory of management which proposes to divide the work in tasks[3]. These tasks are easy and repetitive. This theory was quite efficient, particularly for the steel industry. So, in the model of the taylorist production, the concept of quality rather means the quality through inspection, supervision. This concept wasn t

efficient because it focuses on the product itself, and not on the customers needs. Furthermore, this is a source of conflicts, between workers and inspectors.

C) The fordist period

That is why, a few years later, H. Ford invented another theory of management : fordism. The aim is to increase productivity thanks to several principles: division of labour, standardization, increasing the purchasing power. But the application wasn t applied before the World War II. Indeed, when the United States decided to participate physically to the World War II, the country had to proceed from a civilian economy to a military one[4]. At this moment, the United States really needed to control the quality of its products, that means arms, bombs,... Producing unsafe products was impossible at the risk of creating significant problems and finally, losing the war. So, companies realised tests, checked their products, developed new methods to be more productive and more efficient. Indeed, at that moment, they understood that the level of the quality wasn t determined by the company, but by the customers. So, companies proposed a product to a consumer whose behaviour was the same as the majority of consumers. This is the beginning of mass production. So, companies realised more checking processes, birth of quality engineers, preventive arrangements, This concept was an improvement but there were still two main issues : conflicts between workers and inspectors[5] and this concept necessitated a lot of money.

D) The Total Quality Management period

Then, during the 1970 s, American manufacturers were in high competition with Japanese ones. So, to be more effective, they created an approach that concerned the whole organization: the Total Quality Management (TQM). Total quality comes from the fact that it concerns three qualities : Quality of return : the aim is to please shareholders needs. Quality of products and services : the target is to fill the particuler consumers needs. Quality of life (in the private life and in the professional one) : its end is to satisfy the people s needs in the organization

Besides, even if the Total Quality Management was invented by thinking and understanding the manufacturing field, it can be adapated to every industry (services, healthcare, ...). It consists of a control which aim is to obtain an implication of all the company in order to get a perfect quality by reducing waste and improving outputs[6]. This theory is efficient but companies have to carry on their effort: this is continuous improvement. Companies have to continue improving products, services, and processes in order to satisfy customers needs. Nowadays, with this theory, quality is seen as an advantage for the firm : companies consider it as an investment and not as an expense.

II- Tools of the quality management and the main methods A) The seven basic tools and the new ones

Because quality is fundamental, tools were created. They have a significant part when they are used well but their multiplication causes confusion and inefficient uses. Seven tools were invented[7] : Pareto chart : this is a chart in column exposing, problems, causes. Cause-and-effect diagram : (also called Ishikawa chart) it enables to understand causes of a quality defect ; it analyses the link between a problem and all the possible causes. Check sheet : this is a document which enables to produce and collect data. Control chart : a representation of when the cause leads to the damage. Histogram : it is a document that shows how a data is distributed during the process. Scatter diagram : it is a representation by points around a line representing how two variables are associated. Stratification : it is a graphical representation used how each different steps of the process are enchained.

These tools are quantitative methods to control quality. But, in the past few years, other tools appeared to improve this check : Tree diagram : it is a picture where ideas are organized from the most simple one to the most complex one.

Affinity diagram : it is a document where people write ideas and then, they relate them to relationships. Matrix diagram : it enables to understand the link between different groups : roles, L-shaped matrix : it is a complex representation that uses statistics and mathematics. Relations diagram : it is a representation of the link between causes and effects to understand a complicated situation. Arrow diagram : it gives the order of tasks, a scheduling to resolve problems Process decision program chart : it is a document which enables to see where the mistake, in a plan, is. All these tools are essential but they especially use mathematics and statistics. However, there is another type of tools.

B) Other ways to check quality : quality methods

So, these tools are procedures that companies have to follow to get a high level of quality.

1. Quality Standards

If strategies are really useful to improve quality, people needed to create tools to measure their effectiveness; so, they are two international quality standards : ISO 9000 and ISO 14000. ISO 9000[8] means the set of standards linked to quality established by The International Organization for Standardization. Seven years ago, ISO 9001 was divided in three sections : - ISO 9001 - ISO 9002 - ISO 9003 But, the Organization decided to take off these three standards and to put them together into 9001:2000. The aim is to establish quality management procedures that companies must follow. So, the first one is ISO 9001. It concerns the conception, production, after sales services The second one is ISO 9004. It

deals with procedures to follow and improve performance. To finish, the last quality standard is ISO 14000[9] which is about how to do quality while protecting environment. Besides, quality executives have decided to establish a price to award the best organizations. Every year, the President of United States rewards organizations that do very good results and improvements in quality; it concerns manufacturing, service company, small business, education, healthcare and non-profit. The Japanese have the same award called, The Deming Prize.

2. Quality techniques and quality methods

By this word, we mean a set of processes used in a particular context to fulfil an aim. It s more than a simple tool because it is composed of several smaller tools. So, firstly, Walter Shewart has developed a cycle model, in the continuous of the Total Quality Management, called the PDCA cycle. It is separated in four sections : Plan, Do, Check, Act[10]. So, firstly, the manager has to define its targets and that is why he needs to establish a plan of action. This phase is fundamental because it is a determining factor to succeed the project. After that, he has to apply his plan which is determined before and check if they enable to have the anticipated results. To finish, the manager has to react when seeing the results, find corrections and standardize the best process. But, by the 1980 s, a new technique to improve quality is Six Sigma. It was experienced in the Motorola Company, but it became famous during the 1990 s when General Electrics decided to apply and improve it. This method is based on the use of statistics tools to analyse the process. Its aim is to reduce defects to help lower costs [11] in order to get the best results as far as they can. By using this method, companies want to satisfy customers, involve the organization and most often improve its image. This method showed its advantages from the start. Indeed, the Motorola company carried through its objectives and now six sigma is used, even for services, education, ... Six Sigma is focused on the customers needs which are measurable, statistics tools to analyse how a company can improve its performance. The idea is quite the same than for the PDCA cycle[12] : the manager has to find problems, establish a plan of action, find solutions, apply them, and after that see if the anticipated solutions are efficient. There are five steps, defined by DMAIC : Define, Measure, analyse, Improve and Check. To start, the manager defines SIPOC (Supplier Input Process Output Customer), measures by using Ishikawa scheme, analyses by doing tests for example, and then he needs to improve by creating plan of experience and control it.

All these measures are applied to improve working conditions and the moral of staff, reducing expending and accident risks, and improving the quality of the production

Conclusion :

During the twentieth century, and especially during the second part, the concept of quality has totally improved. Indeed, from a logic of inspection with Taylor or Ford to a more elaborated concept through the Total Quality Management. Each step was important because it enabled the establishment of a kind of perfect concept. Today, Total Quality Management is focused on four important parts : giving priorities to customers satisfaction and needs, improving the quality management process, reducing waste and controlling costs, and to finish, making everybody take part in the organization, workers and executives. Succeeding in reconciling these objectives, particularly nowadays when the competitiveness is international and significant, can be realised by using tools. They can be based on the exploitation of statistical data or methods, rules, which enable to fulfil an aim. In response to customers wants and the competitiveness, establishing standards complete the previous means. It gives exactness to the company in its quality management. Nevertheless, quality needs to be constantly updated : indeed, the environmental issues urge to take into account the new expectations.

----------------------[1] Fundamentals of operations management, R. Chase, M. Davis, N. Aquilano, 1999, p.5 [2] Management de la production, Concepts-Mthodes-Cas, A. Gratacap, P. Mdan, 2001, p.355 [3] Scientific Management, F.W. Taylor, 1997, p.38 [4] http://en.wikipedia.org/wiki/fordism [5] http://training.itcilo.it/actrav/library/english/fordism/C_TextVersione%20finale.ok.doc [6] http://www.union-network.org/uNIsite/Sectors/IBITS/Business_Services/Publications/TQM-f.pdf [7] Quality Management, G. Vorley, F. Tickle, section 4 : Analysis and Mapping techniques, 2002 [8] ISO 9000 Quality Systems Handbook, D. Hoyle, 2005, p.99-103

[9] Strategic Environmental Management, G. Wever, 1996, p.168 [10] http://en.wikipedia.org/wiki/PDCA [11] Operations Management, J. Heizer, B. Render, 2006, p.99 [12] Six Sigma Spc and Tqm in Manufacturing and Services, G. Tenant, 2001, p.9-10