pg1

Table of Contents

TITLE PAGE

Question a)

Title of Contents.......................................................................................................................1
Introduction..............................................................................................................................2
1. Quality control in manufacturing.................................................................................3
a) Toyota, leader of quality production........................................................................4
b) Methods of determining the level of quality............................................................4
c) Quality control of production in the Toyota.............................................................5

2. Quality control in service domain…………………………………………………..6

a) High quality of the German public health service...................................................6
b) "Best service - this is his absence”..........................................................................8
3. Measurement of quality...............................................................................................8
Conclusion...............................................................................................................................10
Reference.................................................................................................................................11
Question b)
Introduction.............................................................................................................................11
1. Supply Chain Management.........................................................................................12
2. Problems of supply chain management and their solutions........................................12
3. Information systems used in the SCM........................................................................14
4. The essence of RFID technology................................................................................16
5. Use of RFID in the supply chain.................................................................................16
6. Information Technology in SCM in the company of Wal-Mart.................................18

Conclusion...............................................................................................................................19
Reference.................................................................................................................................20
 pg2

Question a)

Quality is deemed to be an essential to organization like GE and Citibank, in term of both

service and product quality. Explain with examples how do the dimensions of service quality
differ from those of product quality and why is measuring service quality so difficult?

Introduction 

It is clear that today any company in any industry meet with tremendous pressure of
competition. This increasing rivalry cause new requirements for the quality of products and
services. In this fashion top-management of each company should consider about measuring,
monitoring and managing the level of such important factor. Another force that makes quality
control so important that producing products and services in companies like GE and Citibank
consist of multiple components and stages required to finish the final product or service. Thus
it is rather usual thing when output from one stage becomes the input to the subsequent stage
(Jun & Zhou, 2008). These issues are acceptable for both domains: manufacturing and
services. But in a more narrow view on operations and final outputs of these two spheres of
economical activities there could be disclosed some differences in quality management.
In this paper I will try to show over mentioned differences and reflect their nature on
the examples of Toyota Company and healthcare in Germany.
 pg3

1. Quality control in manufacturing

Quality control could be divided into three types: input control, control of
intermediate product and control of final product (see figure 1).

Figure 1.
Raw material Intermediate product Final product Customer
QC QC QC

Input control – is the process of checking the quality of raw and auxiliary materials
aimed for the production. Continual control of the quality of supplied raw materials allows
eliminate risks of spoilage in production from the beginning and at once affects the suppliers
of raw materials to permanently control of their products.
Quality control of intermediate product covers the entire workflow. This kind of
control is sometimes referred to as technological, or current. The purpose of inter-operation
control is the verification of compliance with the technological regimes, rules of storage and
packaging of products between operations.
Output control is the final control of finished products. The purpose of output control
- establishing that the quality of finished products requirements of standards or specifications,
the identification of possible defects. If all conditions are met, the supply of goods allowed.
A special type of control is the testing of finished product. Test - the definition or
study of one or more characteristics of the product under the influence of the set of physical,
chemical, natural or operational factors and conditions. Depending on the objectives the
following main types of tests are recognized:
- Preliminary tests - tests of prototypes to determine the possibility of acceptance tests;
- Acceptance testing - testing of prototypes to determine the feasibility of their
implementation in production;
- Periodic tests - tests that are carried out 1 time in 3-5 years to test the stability of
production technology;
- Model tests - tests of serial production after making significant changes in design or
technology.
 pg4

As a conclusion of this part we can say that quality control in manufacturing goes
through the whole process of producing goods. Only after many tests it could be offered to
the customer for consumption. But the most important point for this research that in
manufacturing final product could be considered as a final product without any participation
of final consumer. I will try to open the topic on the example of control quality management
in the Toyota Company.

a) Toyota, leader of quality production 

Toyota is constantly improving the quality of its products and services. The most
important policies for the management of the company are: "thorough quality control" and
"maintain and improve quality." This policy, as the main objective should be followed at all
levels of management and production.

Over the past decade, the Japanese have successfully used qualitative methods and
strategies. It was a successful way to become a leading country in production of various
electronics, automobiles and other products. The last sixty years Japan has been very good at
producing high quality goods, and but still the quality level is improving. Many U.S.
companies are using Japanese equipment and products, because they appreciate it. 
Toyota-is the largest multinational corporation, the world's largest automaker, with
headquarters in Japan. We see success as an example of the level of quality on the example of
automobile industry. Toyota Company for design and quality of the Lexus brand took the
example of some of the leading automobile manufacturers in the world, such as Mercedes,
Jaguar and BMW. It was a great idea to make a luxury car from their point of view. The chief
engineer decided that they can get better quality, design, characteristics, with different
models of luxury. They made a very popular and best-selling car in the world. After some
research, Toyota has made improvements to 11 parameters. At the end, they found a more
perfect result than other cars in the luxury level. It was like total weight, fuel-efficient
engines and safety technology damper.

b) Methods of determining the level of quality

  They started to use method to determine the level of quality of the new car in the first 90
days of use. The purpose of information to meet with more than 80 000 customers and
tenants in the 2009 model cars. Research has 228 reasons to 8 main divisions: the driving
 pg5

experience, front, character/control/display, audio/entertainment/navigation, climate control,

seats, engine, transmission and interior. To assess the quality they use a special system called
"problems per 100 vehicles Auto" (PP100). Low level of PP100 shows good quality, high
level of PP100 result of low quality. It shows the quality management as the main instrument
of production. But the whole industry showed IMPROVED, for example, reduced quantity of
problems with 118 in 2008 to 108 in 2009 for every 100 vehicles.

 
c) Quality control of production in the Toyota

Quality control of production at Toyota plants is a particular philosophy. Here, quality

control differs from the European system of control. If in Europe the factories quality
vehicles checked at the end of the assembly, then in Japan this quality control is carried out at
each stage of the production process. "It is better to prevent the emergence of defect and fix it
at the beginning of production, than after spending time and money," - says Quality
Assurance Manager of the company (T. Ishikawa, 2004). 

The high quality of Toyota products, the result of the skilful integration of robots and
labour rights. But the high level of automation plays a huge role. Here is a system of mutual
control the quality of robots and vice versa. For example, in factories Toyota has a special
automatic device, which does not allow defect. If an employee makes a mistake in the work,
the robot locks the production process until the problem is fixed.

In the competition, the company Toyota has raised the level of consciousness and
skills of all staff. Product quality begins with the preparation. The company pays great
attention to staff training.

In Japanese, there is the concept - "Kaizen", which means "continuous improvement".

"Yes, our cars are good, but we should make them even better" - says managing director
I.Yoshimasa.

Finally, in this chapter on the example of Toyota, we clearly see that the level of
product quality can be measured in the production process, before the goods will be delivered
to the consumer. Toyota - the worldwide legislator of the high quality.
 pg6

2. Quality control in service domain

Rate the quality of services is much more complicated than the quality of goods.
Because customer here not only the consumer of service but also the participant of service
providing.
A typical difference service quality measuring is the fact that many processes are not
well-defined or standardized. For example, if you ask several underwriters how they decide
whether to approve an insurance application, they may have trouble agreeing on a specific set
of steps in this decision-making process. They will all likely look at the same data but may
not do so in exactly the same way. A similar situation might occur if you asked several
surgeons how they decide whether a patient needs back surgery. The lack of a common
decision-making process is one reason most managed health care plans require a second, and
perhaps third, opinion prior to major surgery. The point is not to criticize underwriters or
surgeons as there are many other examples. Rather, the point is that many important service
processes have not been well-defined and standardized (Snee & Hoerl 2009). So we can say
that process of rendering services not so clearly visualized as manufacturing process. To
illustrate this statement we can look trough the German healthcare system.

a) High service of the German health care as a result of the quality of medical
services

Germany medicine has made great strides in the development of quality measurement
in hospitals and basic medical insurance system. Germany medicine has made great strides in
the development of measuring quality of care in hospitals and a leader in the management of
medical quality.

Over the past ten years, as the measurement, control and monitoring of Germanic
clinics have been significant changes. This includes a number of measures, including through
national benchmarking figures 194 exercises. Through a more careful coordination of
diagnostic procedures, as well as demographic data developed two tools: Measuring quality
with the supplier, determines the level of use of administrative data, as well as long-term
results of measurements with the use of administrative data for each level of the payer. The
final result of each level has its advantages and disadvantages (R. Buss, 2007).
 pg7

In the German health system, compulsory medical health insurance is an important

element. Obligate membership in one of the 200 Germanic "sickness funds " is mandatory for
all segments of the population (the unemployed, pensioners, farmers, artists and students).
Contributions can be set as a percentage of income. 86% of the population are members of
the SHI. In the SHI system includes the following subjects: (1) the federal association health
insurance funds, central organization formed in 2008. (2) The Federal Chamber of
Physicians, are responsible for qualified professionals. (3) Federal Association of Physicians
SHI, of all physicians associated with the health insurance fund. (40) German hospital
association of state revenue and non-profit clinics. (5) The omnibus committee, the supreme
body shall decide SHI system and responsible for quality standards for medical services. (6)
Institute for the quality and effectiveness of aid dressings, focuses on the collection of
scientific reports, statements and opinions on the effectiveness and quality of service. (7) The
Federal Office for Quality Assurance, focuses on measuring the quality of hospitals. 

In medicine, ways of assessing quality were reasons based on the data collection
processes established for specific diseases or procedures. Since 1970 the German system of
quality assurance in medicine accumulated experience.

In this study, I use Germany as a state entity, the system of healthcare as an object.
BQS organization responsible for determining the procedures or diseases. They are the
subject of measures to improve the quality, the definition of the relevant data for the sampling
and quality indicators derived from these data. In 2007, the BQS published data, which
determine the quality of the information collected as 26 modules with 194 figures. For
example-hip replacement, cholecystectomy, some types of heart surgery or pacemaker
implantation, some based on diagnosis-community-acquired pneumonia. This is the world's
largest system of quality control. All this complicated health care system in Germany aims to
increase the quality of care. Processes that use was not running not for obtaining information
about hospitals and doctors for determining their position on the standard treatment
processes. Given the time scale of the development process in the scientific world is seen as
"measuring the quality of" first generation. Pluses of this process is that doctors can identify
any measure of quality, since all information is collected and doctors in a position to examine
the results of the procedure in the processes that use data collection. Disadvantages of the
process is the overflow of excess data, inaccurate information in order to conceal the level of
quality.
 pg8

b) "Best service - this is his absence”

In the process of studying the materials, I stumbled on the concept of "best service -
this is his absence" (Price & Jeff, 2009). At first glance, these words are contrary to all
allegations. But here the zest that the problem must be sought in the opposite direction. The
concept of interpretation as to release clients from treatment in our service department, how
to make customers happy, while controlling costs. For example, if you receive the pleasure, if
you need to solve the problem, and we should call the bank! The concept says that
management should be adjusted so that the client does not need to contact the service centre,
since no problems.  The basis of all - is high quality with the original.

3. Measurement of quality

Assessment of quality of services includes the following steps: 

1. Forming a list of indicators of quality of services. The main indicators of the quality
of generalized services are: (1) reliability - implementation services just in time; 
(2) accessibility, willingness of staff to help the customer, speed of execution services
at a convenient time for the customer, continuous fulfilment of orders; 
(3) competence - possession of personnel service company the necessary knowledge
and skills; (4) Understanding - a sincere interest to the buyer, the knowledge of its
needs, the flexibility of order fulfilment services.; (5) tangibility - is the physical
environment, which provides services (interior firms, equipment, information
materials, appearance of personnel, etc.).
2.  Determining the relative importance of each indicator for the formation of a common
assessment of the level of quality services and give them the appropriate coefficients.

The most important indicator is usually a reliable service. Next come the responsiveness,
competence, understanding, tangibility. However, the relative importance of individual
parameters can vary in each situation.

The main difficulty in assessing the quality of services lies in the fact that most of the
parameters cannot be measured quantitatively. For example, competence, understanding,
tangibility. 
 pg9

To create a system of quality services use different methods. One alternative use of
quantitative indicators to describe the quality of service is shown below.

One of the fastest growing methods of measuring the quality of service is Mystery
Shopping. This measurement tool successfully used by retail chains, banks, hotels, car
dealerships, airlines, movie theatres, private clinics, amusement parks and etc. Retailers
estimate that Mystery Shopping is cheaper and 5 times more efficient than other methods
(D. Ryabykh, 2003).
 pg10

Conclusion

Overall, the quality of service and quality products is essential as a whole, not
separate. We investigated that the only path to success of small businesses or large
Multinational Corporation is the best service, quality products, integration. The last decade
businesses have some experience in research customers to learn what they need as they need,
and how we can do it. Only within these three issues, which we can find the major part of my
research. These aspects of quality service and product quality, the example of Toyota and
German health system.

"Quality, not quantity - that's my measure" (D. Dzherrld). One of my considerations,

the fundamentals of business, success, and growth is the quality of service and products.
However, each company has its own ways of achieving the desired results. And if at least
cost, in the shortest time achieved a high level of quality, this is a business success!
 pg11

Question b)

Discussion about implementing supply chain management (SCM) initiatives tends to focus
upon information technology (IT) solutions-sometimes to the exclusion of other
considerations. IT providers and the consultants who help facilitate their solutions often lead
people to believe that technology is the critical enabler in realising the abundant benefits of
supply chain management implementation. How true is this statement? Discuss and provide
examples where appropriate.

Introduction

To date, one of the vulnerable links in the company is supply chain management (SCM).
In a competitive environment companies need to address this complex tasks associated with
managing the supply chain. And that is: to reduce the cost of transportation and distribution,
optimizing prices, reduced stocks are not tradable goods and reducing the costs of storage. In
view of the requirements of modern market offer large companies pay attention to the SCM-
solutions. In the study, we consider the system for supply chain management as one segment
of information technology based on RFID. Characterize the companies used information
technology to solve existing problems. Identify areas of supply chain management, where
companies can use RFID technology.
 pg12

1. Supply Chain Management

Supply chain diagram reflects the relationship of organizations at different levels. To

date, no organization is able to control the entire supply chain, from extraction of raw
materials to selling finished products to the end consumer. A surprising number of
organizations involved in it as partners, where this cycle is divided into various stages. Supply
chain management - is one of tools optimize production processes, marketing. It consists of
the production, marketing, logistics, warehousing management, delivery of goods and
services to customers, and management of all processes. And also serves as the organization
of interaction processes that use of participants: company divisions, suppliers, resellers and
clients.
Supply chain can be divided as two functions: physical and mediation. Physical - the
materials are transformed into parts and components into finished products. Mediation - to
market in time comes to what consumers want (M. Ramzaev, 2002). 

Supply Chain Management with concentration on the following major areas:

production, supply, location, inventory, transportation, information. On the basis of all thanks
to the coordination of the following: the formation of logistics infrastructure, transportation,
information exchange, warehousing, inventory management, materials handling and
packaging efficiency is achieved in the logistics chain.         

It is these companies usually use those information systems that allow for enterprise
resource planning (MRP). The software used for these purposes, you can manage orders,
production and supply. Thus, to reduce inventories throughout the supply chain and increase
production efficiency. The most important in such cases, the information - is information
about the events just in the supply chain, which enables suppliers, manufacturers and sellers
to coordinate their actions in order to meet the foreseeable demand at the lowest possible
costs.

  2. Problems of supply chain management and their solutions

Currently, producers are concerned about the issue of how to improve flexibility and
efficiency of their supply chains. One of the main challenges in managing the supply chain is
due to the following reasons: the optimal inventory management and transport issues. Not
thoughtful inventory management can lead to shortages of goods or damage in connection
with the downtime. In the transport industry sales activity outstripping the ability of carriers. 
 pg13

   All this is due to the lack of folded data collection and analysis or information. But
information management as a problem of supply chain management is an important task.
Hence come two areas - information and knowledge about what to do with it. 
Important role in supply chain management is to achieve maximum accuracy. Despite
advances in information technology, most of the processes occurring inside the chain require
human intervention. By these processes, we can include: managing the remnants of a
warehouse for perishable goods, tracking of controlled goods, the implementation of
individual requirements of retailers.    

         The problem of production costs, losses and defects. About 20% of production declined
due to deterioration in supply chains. Global losses associated with damage to the goods
create a compelling cost $ 60 billion. 
According to research Eyefortransport 97% of companies surveyed said that to solve
the problem in supply chain management, their companies are going to introduce advanced
technology. (Figure 1) 

(Figure 1) Means of overcoming problems in the supply chain. 

120%

100% 97%
85% 82%
80%
66%
60% 57%
44% 42% 43%
40% 37% 34%

15% 18% 18% 18%

20%
3%
0%
IMPROVED Creating a common IMPROVED New ports and Outsourcing of
technology  information space  relationship with routes  supply chain
freight forwarders  management

Very important Topical irrelevant

 Drawing from the study Eyefortransport, 06.2005, (http://www.rfid-news.ru) 

 pg14

According to the survey was to identify the need for IMPROVED supply chain
management to improve technology, to create a common information space, to increase the
level of confidence at the level of carriers.

New technologies include tools such as RFID, TMS, and WMS. At the conclusion of
the chapter focus attention on the fact that in the modern world to address global issues of
optimization of supply of goods on time, minimizing the damages and costs, saving time and
resources are being introduced increasingly sophisticated information technology.

2. Information systems used in the SCM 

There are two groups of information systems that are used for supply chain
management: a system for strategic and tactical planning (SCP) and the system for
performance management in real time (SCE) (Figure 2).
  (Figure 2), Information systems in SCM 

Information systems strategic and tactical Information system performance

planning  management in real-time
(Supply Chain Planning) (Supply Chain Execution)
1. IT extended planning and schedules  1. Systems for warehouse management,
(Advanced Planning and Scheduling) technology, bar-coding (Warehousing
Management Systems)
2. IT joint forecasts 2. Systems for warehouse management,
technology, bar-coding (Warehousing
Management Systems)
3. IT strategic planning structure of the 3. Systems for management of orders
supply chain (Order Management Systems)
4. MES-system (Manufacturing
Execution System)
Composed on the basis of research Turchin, 23.10.2001 

The first subgroup consists of the APS-system, based on information on demand

forecasts, stock levels, and delivery times, on relative trading partners to develop time
schedules for the replenishment of all nodes in the supply chain, the formation of the
requirement for production and transportation of essential goods. APS-system allows reacting
 pg15

promptly when you change this information. So when you receive new orders it is possible to
quickly learn them to carry out the production and transportation.

Systems for the joint development of projections oriented partnership supplier and
buyer for exchange of information. The basis of this system - standard collaborative planning,
forecasting and replenishment.
In the subgroup of SCE - identified three types of systems software products.
Warehouse management system allows (WMS) to control the filling of storage space, define
rules for sorting, packing and storage of goods, to assess the status of stocks in real time. The
concept of WMS - understood as the hardware of Software, it allows you to effectively
manage the goods at the warehouse, optimize routes for cargo-handling equipment. 
From the material we understand that these information technologies allow managers to
monitor the process and improve the management and control of problematic situations. This
system allows a mistake to place the goods and unacceptable misuse of acquisition order. The
entire process is carried out by means of radio and mobile computers. Executing the job the
employee confirms scan the barcode label. They marked all the places of storage and
received at the warehouse goods.
Bar-coding is one of the most successful examples of introducing the world of
automatic identification. Each type of product is assigned a separate number. Based on these
numbers is identified by type of goods, the party changed, and collect other necessary data.

System for transport management (TMS) can generate an optimal plan for the
transportation of goods and materials, to prepare an optimal scheme of loading vehicles and
tracking of goods in transit.
Order Management Systems - OMS, helps the buyer to form an order in view of its
individual requirements. Sometimes the OMS system transmits information to the APS-
system for the estimation of the order. Manufacturing Execution System, allows you to
monitor the status of orders in production.
In concluding this chapter, we note that at the dawn of the century consumption,
companies are looking for ways to improve the quality of care, reduce costs, optimize
workflow. It uses advanced innovations in information technology. More and more vendors
offer solutions for supply chain management based on the Web and more companies are
actively using the Internet in their work. Without them, the development of processes that use
would look bleak.
 pg16

4. The essence of RFID technology 

As has been said the most common method of using information technology in supply
chains is a bar-coding. Perhaps soon one of the newest developments in information
technologies, particularly radio frequency identification (RFID) will completely replace bar
codes. 
RFID - this technology uses radio waves to automatically identify physical objects. It
allows non-contact input and retrieval of data from the chips at a distance and without direct
line of sight. To implement the technology used in RFID-system, this hardware-software
complex, consists of the following components:
• Tags
• Reed
• System of a host computer and software
RFID technology allows the identification of several thousands of labels per second.
Reading the information from the tags, perhaps as the place of its location, and in the process
of motion tags by the reader.
In itself, fixing labels on objects into account, whether books or products in stock, could
not solve the problem of recording and tracking. In order to built an RFID system to
effectively carry out its tasks, it should be organically integrated with the accounting system.
Only if the user program will fully support the functions provided by the system, RFID, users
will be able to get the maximum profit from the introduction.

5. Use of RFID in the supply chain

 
With help of RFID technology, we can track goods at every stage of the supply chain:
during production, transportation, storage at the time of processing and at the time of sale. 
The entire staff and all office equipment company that provides distribution processes, is also
under the control of the radio frequency. Some of the reporting company partners have the
user access. With this information, make their management decisions. Figure 3 shows what
problems can be solved by using RFID technology in various stages of the supply chain. 
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(Figure 3) The use of RFID in the supply chain. 

Based on: RFID. Enabling Next Generation Supply Chain Today

pg17

  
 pg18

As we see from the picture by using this innovation in the field of supply chain
management, in step with the development can save time during installation and track parts,
as well as automate the process. In retail addressed the issue of the shortcomings on the
shelves and theft. In this case, the store is able to control the availability of goods on sale.
Keep track of and quickly regulate the supply-demand. Thus, the companies Wal-Mart,
Metro and Sainsbury RFIT actively use technology. For example, Sainsbury weekly to check
the shelf life of 225 thousand packages of food.

  In addition, the use of RFID-technology will greatly accelerate the process of customer
service. And it leads to an increase in the level of quality service.

In conclusion of this chapter, I want to justify my choice of RFID technology in this

work. This technology is completely new tool in the management of supply chains, which
solves many problems and makes it easier to control the whole line. RFID is a promising tool
for the development of information technology in supply chain management.
  
6. Information Technology in SCM in the company of Wal-Mart

The director of information services in Mattel Company J. Ekrot said: "Becoming a

supplier company Wal-Mart - not a simple happiness. On the one hand, while we have
phenomenal sales channel, and with another - the client, who is very hard work. After all, it
requires only an excellent quality ". Company Wal-Mart Stores has invested significant
money in advanced technology for data collection and organization of control, built the
World's Largest in the world system of supply chain management. "Perhaps, Wal-Mart - the
best manager of supply chains in the history of their existence", - said the director at AMR
Research P. Abella.

Information technologies have a tremendous impact on various spheres of life, and to

provide modern business is impossible without information technology, like a car without
wheels (L. Gruzdeva, 2005).
 pg19

Conclusion 

Current state of the logistics system is such that companies are very difficult to compete
on price factor. In such circumstances, the success of achieving the company can provide the
best service. From this arise the question of optimizing inventory management and supply
chain. There are also many problems associated with the promotion of goods of goods from
producer to consumer in the supply chain. And here the main effective tool for information
technology. In this paper, we considered an acceptable field of SCM and analyzed ways to
solve them through information technology. As an example, I took as a basis technology for
RFID. According to the study, RFID has a great future. Now the paper flow largely replaced
by computer networks and it significantly reduces the costs associated with the movement of
information. But to enter information into a computer, requires manual labour and time.
Today this function is performed by RFID.

In order to prove that the technology of RFID is one of the best options for supply chain
management, I gave examples. In the projects on creation of RFID-technology is now
actively participating retail chains Metro and Wal-Mart. In RFID-technology has a great
future.
 pg20

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 pg21

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 pg22

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