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Individual Assignment 2013

Managing Business Page 1





MANAGING BUSINESS
BM027-3-2-MBUS
INDIVIDUAL ASSIGNMENT
NAME: HUSSEIN SAID SEIF
STUDENT ID: TP027639
INTAKE: UC2F1303IT(NC)
HAND OUT DATE:
HAND IN DATE: 23rd May 2013
LECTURERS NAME: DEVIKA A/P NADARAJAH




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Contents
Introduction ............................................................................................................................................. 3
Question 1 ............................................................................................................................................... 4
Question 2 ............................................................................................................................................... 5
Question 3 ............................................................................................................................................... 7
Demings contribution: ....................................................................................................................... 7
Jurans contribution: ........................................................................................................................... 8
Crosbys contribution: ........................................................................................................................ 8
Conclusion .......................................................................................................................................... 9
Question 4 ............................................................................................................................................. 10
PDCA Cycle...................................................................................................................................... 10
Purpose and usefulness of PDCA ................................................................................................. 10
Benchmarking ................................................................................................................................... 10
Purpose and usefulness of Benchmarking .................................................................................... 10
Six Sigma .......................................................................................................................................... 11
Purpose and usefulness of Six Sigma ........................................................................................... 11
Conclusion ........................................................................................................................................ 11
Conclusion ............................................................................................................................................ 11
References ............................................................................................................................................ 12


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Introduction
This Assignment is a coursework for the module Managing Business (MBUS). In this report,
the author will be explaining different Quality approaches and Quality Management tools
including their purposes and usefulness. The author of this report will also focus on a case
study explaining Japans evolution of the rebuilding efforts of their economy after World
War II. However, the author wont miss out on the relationship between Quality and
competitiveness. Nevertheless, this report will also touch on the cost of poor quality together
with its effect on competitiveness.
This assignment is divided into 4 questions, Question 1, Question 2, Question 3 and Question
4. Each question will be focusing on one of the subjects mentioned above.
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Question 1
Quality is the ability of a product or service to meet or exceed customer expectations. It is the
totality of features and characteristics of a product or service that bear on its ability to satisfy
stated or implied needs, as defined by The International Organisation for Standards (ISO).
Competitiveness is the ability of an Organisation or a Nation to provide products and/or
services that meet the quality standards of the market place in order to remain into business or
conquer the market.
It is very important for an Organisation to keep in mind the competition with other firms in
terms of quality of the products and services but also the price of the products. Producing
high quality products is not enough if the products are too expensive to the customers. Hence,
for companies to be competitive, they not only have to offer good products and services but
also the right ones.



















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Question 2
It is clear to us that practising quality costs a lot and therefore increases the production
expenses which lead to expensive products. Well, according to Philip Crosby however,
practicing quality is not costly but non-conformance is.
We can define cost of poor quality that are the costs that would never appear if a companys
quality practice in their products, services, system and processes were perfect or at least at
higher level. Poor quality has a lot of effects in the competitiveness of a company. Therefore,
not practicing quality at the first place is costly rather than offering quality products and
services to the customers.
The cost of poor quality can be obtained through quality failure. Failure costs are the costs
which are caused by defective parts or products discovered during production or after
delivery. However, according to authors understanding, cost of poor quality includes
appraisal expenses and failure expenses.
Appraisal expenses - This is the cost of activities or measures designed to ensure
quality or detect and uncover defects. These expenses/costs would have been avoided
if quality was achieved at the first place. The costs involved in quality appraisal
include testing of the products, inspection, interruption of production.
Although Quality Appraisal is one of the resulting factors of The Costs of quality
itself, it is however worth obtaining by uncovering defects before it results into
quality failure costs. However, as one of Demings 14 points says; Cease dependence
on inspection, which means; if variation is reduced, theres no need to inspect
manufactured items for defects, because there wont be any. Therefore, appraisal cost
can also be included as a cost of poor quality.
Failure costs - These are the costs which are caused by defective parts of products
discovered during production or after delivery. These costs are resulted after failure in
preventing and uncovering defects in the production process. It involves internal and
external failure.
Internal failure - This is the failure which is discovered during the
production or after the production. It has a huge risk of causing extra
expenses during the production due to the need of either reproduce the
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products, rework the production etc. it also bears the risk of lost of
sales due to non-delivering to the market place.
External failure - This is failure which is discovered after the product
has been delivered to the customers. It carries a huge risk of rejection
from customers which can result in lost of sales and therefore loss to
the company. External failure can also result in returns of the products,
recalls, warranty costs and most importantly damage to the
Organisations reputation.
These costs of poor quality will result a huge drop in the competitiveness of an Organisation.
It is always the best practice to achieve quality at the first place despite having to spend more
on quality assurance due to costs of quality prevention and appraisal. Cutting costs by
neglecting quality may actually result in even higher costs. These costs are what known as
Costs of poor quality.













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Question 3
Following the World War II, Japan has undertaken several efforts in the rebuilding of their
economy and market identification. In doing so, Japan has focused mostly on Quality of
products rather than quantity of the production. Teams were formed and efforts were taken to
achieve this.
Japanese teams went abroad to visit foreign countries and learn how they could manage
quality. They invited experts from foreign countries to help Japan on quality management.
These experts have played an important role in the improvement of quality products in Japan
as well as the rebuilding efforts. The three experts invited by Japan to help on quality
management issues were Quality gurus Edward Deming, Joseph Juran and Philip Crosby.
Demings contribution:
In 1947, the U.S State Department sent Deming to Japan to help the war-devastated Japanese
manufacturing plants, hence their economy. As Japan also invited Deming over, he
introduced several methods, techniques as well as theories to the Japanese manufacturing
plants. He introduced statistical process control methods during his time of lecturing on
statistical methods. The Japanese appreciated Demings ideas and utilised them readily as
they also found him charming and considerate. Japanese personal ideas of employees
working together towards quality had fit very well to that of Deming and he then encouraged
building quality into the products at all stages as his philosophy went beyond just statistical
quality control.
Deming also developed an Economic chain reaction which states; as quality improves, costs
go down and productivity goes up; this leads to more jobs, greater market share and long
term survival.(Referenceforbusiness.com). Most importantly, Deming came up with his
theory that Everything is the fault (or credit) of the management as he also came up with
the pride and joy at work for the employees.
Together with all the above, Deming didnt just stop there, he introduced 14 points for
management where by one among the points states that Adopt the new philosophy which
means, the implication of quality should adopt his philosophy. Deming also came up with the
PDCA cycle as well as the Seven Deadly diseases in management.
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According to referenceforbusiness.com, the GDP in Japan rose steadily from 1960 by more
than 10 percent a year and by 1951, the Japanese had named their quality prize in honour of
Deming.
Jurans contribution:
Just like Deming, Joseph Juran went to Japan in 1954 to assist the Japanese in their mission
to achieve quality. He developed basic steps that companies in Japan should take in order to
achieve quality. He also focused on management just like Deming did. According to him
(juran), It is important that top management be Quality-Minded. In the absence of sincere
manifestation of interest at the top, little will happen below.
Juran came up with the Pareto Principle, which is also called the Juran 80/20 rule. This
principle (rule) states that; 80 percent of the trouble comes from 20 percent of the problems.
This can be expressed as; concentrate on the vital few sources of the problems, dont be
distracted by less important problems. This rule was named for Vilfred Pareto, an
economist, but Juran applied the idea to management.(referenceforbusiness.com).
Joseph Juran prescription focus on 3 major quality processes called Quality Trilogy which
involves Quality planning, Quality control and Quality improvement. He also came up with
10 steps to Quality improvement in addition to the Quality Trilogy and Pareto Principle.
According to referenceforbusiness.com, the Union of Japanese Scientists and Engineers
(JUSE) considered Jurans vision of top-to-bottom quality management even more important
to their quality turnaround than Demings insights.
Crosbys contribution:
Philip Crosby also focused on management but he emphasized mostly in focusing on
prevention rather than correction. His claims were that poor quality costs could be avoided by
using good quality practices at the first place. Among his concepts were, Quality is free
and zero defects. He also came up with three steps to Quality Vaccine which are;
determination, implementation and Education.
Philip Crosby nonetheless, had 14 points for management just like Deming but the points
were not the same.


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Conclusion
Japan has adopted the theories and teachings of all these quality Gurus. They have also using
different awards to a person or group of people who have advanced the practice and furthered
awareness of Total Quality Control. Deming Award has remained the most prestigious award
in Japan for Quality.


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Question 4
PDCA Cycle
PDCA Cycle is an iterative four-step problem solving process used in business process
improvement. It is also known as the Deming wheel or Plan-Do-Check-Act. It is a primary
tool that is used to implement changes and make improvements in all type of businesses.
Purpose and usefulness of PDCA
i. PDCA is used to help implementing Kaizen. That is used as a model to help towards
continuous improvement. The cycle is a never ending process as it is repeated again
and again as areas of improvement are sought and solved.
ii. PDCA is also used to identify new solutions and improvement to processes that are
frequently repeated over and over.
iii. To search a variety of possible new solutions to several problems as well as trying
them out and testing them in a controlled way before fully implemented.
iv. It is also used to avoid a huge wastage of resources that comes after a full scale
implementation of changes or improvements or poor solutions. PDCA helps to
minimise those wastage by testing the solutions before implementing them.
v. PDCA is also used when starting a new improvement project. It helps and enable
teams to plan the new improvement and changes, to do and implement the changes,
check the changes for faults and act on the changes for better results.
Benchmarking
Benchmarking is the process of comparing one Organisations performance to other
Organisations. It is a way of discovering the best performance achieved whether by a
competitor or a leader in a particular industry or even a different industry. In the pursuit for
increased competitiveness, it is important for companies to examine their own operations and
compare them to their competitors and/or leaders in that particular field.
Purpose and usefulness of Benchmarking
i. The main purpose of benchmarking is to improve the competitive position of a
company through knowing themselves, their industry leaders and competitors,
incorporating the best and gaining superiority.
ii. Benchmarking provides an objective evaluation of a companys business processes
against similar processes in other organisations. It helps to identify the good and the
bad/worst of the Organisation to either maintain (the good) or improve (the bad and
the good) to better.
iii. It is serves a medium to basis of improvement of ideas obtained from other
organisations. Ideas obtained from learning other organisations can be used to
improvement ones own Organisation.
iv. Benchmarking as well, broadens an Organisations experience and understanding by
providing insights into system and methods that work and those that dont. Hence, it
supports the concept a learning organisation. (www.argi.com)
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Six Sigma
Six Sigma is business improvement approach that seeks to find and eliminate causes of
defects and errors in manufacturing as well as service processes. It focuses on outputs which
are critical to consumers. It is a methodology which is used into businesses quality
improvement.
Purpose and usefulness of Six Sigma
i. Six Sigma is used to improve customer satisfaction by identifying defects, variation
and errors in the manufacturing process and/or service providing. It is used to measure
and eliminate the defects as well as increasing efficiency of the processes, say
manufacturing or services.
ii. Standardisation of business development is another purpose and usefulness of Six
Sigma methodology. Leaders in Organisation can choose to define, measure, analyse,
improve and control their results or they can choose to develop entirely new products
and services by doing the same, defining, analysing, measuring and verifying their
plans.
iii. Sig Sigma is also used to ensure Industry and Government compliance. By
eliminating defects, Organisations can maintain large contracts from government or
even from other Organisations. This leads to better business opportunities.
iv. Organisations also use Six Sigma to develop career opportunities. Employees can get
professional development opportunities by helping their employers adopt Six Sigma
methodology.
Conclusion
Quality management is a never ending an ongoing process which is dedicated towards
continuous improvements. PDCA cycle, benchmarking and Six Sigma as explained above
play a very important role as tools used in the Quality Management process.
Conclusion
From the research done to accomplish this report, as a reader, you can come up with several
conclusions from your own perspective. However, it is clearly seen as explained from above
writing that Quality is a very important tool towards successful business and competitiveness
in the World Market. One has to focus on quality in order to manage and remain into market
from the competition available today.

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References
College of Engineering & Computing, Florida International University, Miami, Florida,
Quality and Global Competitive [Online]. Available from:
<http://www.scribd.com/doc/88680216/1-Quality-Global-Competitiveness-Ch-2> [Accessed
6th May 2013].
Huff Post, What is Competitiveness [Online]. Available from:
<http://www.huffingtonpost.com/gerald-bracey/what-is-competitiveness_b_77532.html>
[Accessed 6
th
May 2013].
SixSigma.com, Cost of poor Quality [Online]. Available at:
<http://www.isixsigma.com/dictionary/cost-of-poor-quality-copq/> [Accessed 7
th
May 2013].
Reference for Business, Quality and Total Quality Management [Online]. Available at:
<http://www.referenceforbusiness.com/management/Pr-Sa/Quality-and-Total-Quality-
Management.html> [Accessed 7
th
May 2013].
Process Improvement Japan, Japans Quality Improvement Process, Total Quality Control
and employee engagement [Online]. Available at: <http://www.process-improvement-
japan.com/quality-improvement-process.html> [Accessed 13
th
May 2013].
Mind Tools, Plan-Do-Check-Act (PDCA) [Online]. Available at:
<http://www.mindtools.com/pages/article/newPPM_89.htm> [Accessed 16
th
May 2013].
ASQ, Plan-Do-Check-Act (PDCA) cycle [Online]. Available at: <http://asq.org/learn-about-
quality/project-planning-tools/overview/pdca-cycle.html> [Accessed 16
th
May 2013].
Argi.com, What is Benchmarking [Online]. Available at:
<http://www.argi.com.my/whatispage/benchmarking.htm> [Accessed 17
th
May 2013].
Management Analysis & Development, What is Benchmarking [Online]. Available at:
<http://www.mad.state.mn.us/benchmarking> [Accessed 17
th
May 2013].
Bright Hub PM, Six Sigma, What is the purpose of Six Sigma [Online]. Available at:
<http://www.brighthubpm.com/six-sigma/2947-what-is-the-purpose-of-six-sigma/>
[Accessed 20
th
May 2013].
Systems Quality Consulting, Six Sigma, What is Six Sigma [Online]. Available at:
<http://www.systemsquality.com/id33.html> [Accessed 20
th
May 2013].

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