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Mindmap

Quality and time

Abbie Goffin Accounting and finance Englisch

Inhalt der Mindmap

Quality and time

  1. Dimensions of quality

    • Design quality: The extent to which designed specifications address clients' expectation
      • Customer-focused
      • Designing to create waste
    • Conformance quality: Evaluates the extent to which the actual characteristics of the product match design specifications
      • Product-focused
  2. Managing time to create value

    • Time is a competitive factor
    • Outsourcing can reduce development time
    • Extend focus on reducing manufacturing cycle time and the internal focus of reducing order to delivery time to include 'need to satisfaction' time of customer
      • Customer experience begins before an order is placed and ends after receipt of products
        • Firm must ensure product info on website is up-to-date to assist customer purchasing decisions
        • Minimal steps in online ordering to reduce time taken to order, improving customer satisfaction
        • Early delivery can be negative so focus on on-time delivery
  3. Introduction

    • Two value propositions desired by customers
    • Traditionally seen as in opposition to each other
      • Increasingly recognised as mutually necessary and reinforcing
        • Time requiring and improving quality
        • Quality requiring and improving successful time management
      • Haste makes waste
  4. Total Quality Management (TQM)

    • Originated in Japan
    • Permanent and integrated efforts across organisation to excel in all customer-relevant quality dimensions
      • Employees must do everything right first time, everytime
      • Focus is customer satisfaction
        • Delivering both dimensions of quality
    • Rust et al
      • A certain level of lack of quality may product higher return
        • Costs of some quality improvement initiatives may exceed expected benefits
          • Quality is not free
          • Optimal point where total cost of quality reaches the minimum
    • Cost of quality report provides the necessary level of transparency of activity costs
      • Shows % of sales to account for size, providing visibility as to whether they are incurring the desired type of cost
        • Can compare to previous periods and other organisations
    • Categories of quality costs
      • Conformance costs
        • Incurred to ensure conformity with specifications
        • Prevention costs
          • Prevent production of products that don't conform
          • e.g. quality planning, training
          • If these increase, other costs should decrease with the savings more than offsetting the increase in prevention costs
          • Cheapest, most beneficial results in minimising total quality costs
        • Appraisal costs
          • Incurred to ensure materials and products meet standards
          • e.g. costs of inspecting
      • Non-conformance costs
        • Incurred when there is a failure to meet specifications
        • Internal failure costs
          • Associated with materials and products that fail to meet quality standards before being dispatched to customers
          • e.g. repair, cost of scrap
        • External failure costs
          • Incurred when products fail to conform after being delivered
          • Most expensive
            • Reputation affected
            • Opportunity costs from loss of sales / contribution
          • e.g. cost of handling complaints, reputation, warranty
    • Plan-do-check-act (PDCA) cycle
      • Systematic, interactive approach to continuous improvement and problem-soling based on facts
      • Plan: team examines facts to determine cause of problem and propose solution
      • Do: Solution is tested
      • Check: Results examined
      • Act: + result = solution implemented, - result = return to plan
    • Zero-defects policy
      • Necessary if things are to be done right first time
      • More effective if success of policy is measured using ppm
    • Statistical quality control charts
      • Monitor quality targets
      • Graph of a series of successive observations of operations taken at regular intervals to test whether a batch of items is within the pre-set tolerance limits
      • Control limits set 2sd from mean; investigate if over this
      • Estimated population mean and sd using past observations of a process when it was working effectively
    • Non-financial quality measures
      • More appropriate than financial measures in measuring quality improvements
      • Number of employees trained
      • Number of late deliveries
      • Number of defective products
  5. Just-in-time (JIT)

    • Integrates activities to obtain high-volume production while removing inventories, reducing waste
      • Only producing required items at the required quantity and time
    • Pull system: responds to demand so no longer stock up to prepare for demand
      • Production commences when there is demand
    • Elimination of non-value-added activities
      • Manufacturing time shortened
      • Only process time adds value
        • Process time less than 10% of manufacturing time so lead time needs to equal process time
          • Adopt JIT manufacturing
            • Cellular approach
            • Reorganise production process in a product flowline instead of batch production layout
              • U-shaped flow line layout to enable operatives to access several machines
                • Higher visibility behind ensures smooth running
                • Can undertake routine preventative maintenance
            • Products grouped into families or similar products, manufactured in a well-define production cell to reduce moving time and manufacturing time
            • Any worker can stop production line if fault occurs
              • Employee empowerment
              • Prevent production of defective products early
            • Visibility signalling system kanban implements pull system
              • Empty containers indicate need for production
    • Batch size of one
      • Reduces set-up times so there is no advantage of producing batches
      • Firm can adapt to market demand and respond to customer requests
    • JIT purchasing
      • More frequent deliveries because they do not carry stocks of raw materials
        • Eliminate cost of inspection
        • Substantial reduction in raw material stocks to save factory space
        • Increased labour productivity
      • Place LT purchase orders to convince suppliers to guarantee quality, providing assurance
        • Reduction in paperwork if LT purchase orders placed
    • JIT manufacturing + purchasing + TQM (to emphasise quality and reduce waste) + respect for people = JIT philosophy
    • Limitations (not an overnight process)
      • Culture change: emphasis on continuous improvement and elimination of non-value-added activities
      • Employee empowerment some employers aren't comfortable with
      • Organisation relies on suppliers delivering as and when required; must be reliable
    • Price variance may be redundant because LT orders may be in place, so prices are agreed before start of period
      • Standard price = actual price
  6. Environmental cost management

    • Increasingly important, with large costs for some industrial sectors
    • Huge fines for non-compliance have increased
    • Environmental costs traditionally hidden within OHs and not allocated to cost objects
      • Lack of visibility and inaccurate
    • 4 categories of environmental costs
      • Prevention: preventing production of waste that could cause environmental damage
      • Detection: incurred to ensure conformance to regulatory laws
      • Internal failure: reduce waste before discharged
      • External failure: activities performed after discharging waste
    • Environmental cost report directs attention on these costs and identifies areas for potential cost-reduction
    • Limitation: doesn't include costs caused by externalities e.g. caused by firm but borne by society

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Beschreibung
Accounting and finance Mindmap am Quality and time, erstellt von Abbie Goffin am 12/05/2022.
Erstellt von
Abbie Goffin
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