Dankers Furniture LTD is having a problem with Total Quality Management and has issues with increased costs and poor communication between managers and employees. I will be conducting an analysis of the company including giving a description of what issues are be addressed and my recommendation on what should be changed and what new approaches that could be used.
Dankers Furniture LTD – An organisation overview
Due to the poor quality management of the consignments, Dankers Furniture is now incurring increasing costs due to the defects of the products and is being returned by dissatisfied customers. From a quality perspective, there are eight dimensions on which the customers are able to determine the quality of a product or service.
Performance: what are the standard operating characteristics of the product or service?
Features: what additional characteristics does the product or service have, beyond the standard operating basics?
Reliability: how long will the product last before it needs maintenance?
Durability: what is the useful life of the product? How will the product hold up under extended or extreme use?
Conformance: have the specifications for the product or service been met?
Aesthetics: how well does the product or service appeal to the senses?
Serviceability: how does the product or service respond well to repairs, maintenance or support?
Perceived quality: does the product or service have a good reputation? Does it have an image?
The above dimensions are important to ascertain the full potential of Dankers Furniture and its products. The company itself has had to replace the defected products for new ones which will cost the business a lot of money. These costs are called internal failure costs which are the costs incurred due to the defects that occur prior to delivery to the customer, including money spend on repairing or reworking the defective product.
The company was also hoping to repair the defective products and use them for orders later on. This is in fact a flawed assumption because the levels of defective materials were increasing. This would incur appraisal costs which are costs that a company incurs to assess its quality levels. The main sources of appraisal costs are inspection, the sampling of products or services, and customer survey costs.
Other types of costs that the company could incur are external failure costs which are costs that incur by defects that are not detected until a product or service reaches its customer. These costs can be difficult to calculate but they are usually quite high, as they do not include warranty costs, but also the cost of lost future business and, in some cases, costly litigation. The cost of a dissatisfied customer can be significant.
Prevention costs are costs an organisation incurs to actually prevent defects from occurring to being with. Main examples of this would include employee training, equipment maintenance, supplier certification efforts and investment of new process.
John Condron, who was a dispatch clerk, received the role of Quality Co-Coordinator but needed to undergo an induction course under the International Organisation of Standardization (ISO). The ISO9000 is a family of standards for quality management systems. It represents an international consensus on good management practices. Some of the main requirements include:
A set of key procedures that cover all key processes in the business;
Monitoring processes to ensure they are effective:
Meet the customer’s quality requirements;
Keeping adequate records;
Checking output for defects with appropriate and corrective action where necessary;
Regularly reviewing individual processes and the quality system itself for effectiveness;
Facilitating continual empowerment
The ISO9000 is an important structure that needs to be abided by as well as maintaining quality management in a business. Most of the quality systems were in place at Dankers Furniture but John has identified that more formalized systems would need to be integrated into the quality management system in order to obtain maximum efficiency.
Issues Raised in Dankers
There are quite a number of issues raised in Dankers. These issues that are raised are a Total Quality Management and Statistical Quality Control problems. At the moment, there are no specific responsibilities for quality management that should be given by the Operations Manger. The Operations Manager should be leading the team more efficiently and should ensure that all tasks should be assigned to every employee.
The functional departments were not told about their primary duties which lead to customer complaints or feedback not being recorded. Customer satisfaction is a very important element in any business and also ensuring that any complaints should be taken seriously and should be addressed promptly. Quality Function Deployment (QFD) is a method that is used to translate customer requirements to technical requirements for each stage of product development and production.
Quality performance has not be recorded and data not being compiled correctly. This lack of control will cause a negative image on the business towards customers. Statistical tools will help to maintain control and ensure the process inspections are being met. Furthermore, the tool will boost the efforts of quality assurance and control.
The product design is the responsibility of the sales and operations managers and it is their duty to make sure that the design fulfills customer requirements and satisfaction. From a statistical perspective, Dankers managers need to be using matematical tools so that the technical requirements are being met. Some of these toold would be:
This is a mathematical determination of a process’ capability to meet certain quality standards. It helps to determine with Dankers business processes are being met.
Upper Tolerance Limit and Lower Tolerance Limit
These limits indicate the higher and lower acceptable range of values for some measures of interest, such as weight, temperature, or time.
Inspections should be ongoing and not just random and it will increase efficiency on products. Most nonconforming products should be put back into the production process and then requested to avoid incurring internal failure costs.
There is major problem that needs to be addressed that would involve improved performance and productivity. Employees need to address their own opinions and ensure to bring them forward for consideration and review. Dankers seems to have issues in terms of continuous improvement and leadership involvement. Each employee is responsible to report new ideas and to try and implement them. The business should continue to improve no matter if the company is doing well. This well help to build confidence amongst the employees and it will show to them that their values and opinions are respected.
Dankers need to extend its Total Quality Management efforts to include supply chain partners. If the members of the supply chain do not share the same commitment to TQM, quality will diminish because suppliers’ materials and services ultimately become part of the company’s product or service.
To ensure that the suppliers are participating in the efforts to meet expectations, managers need to constantly monitor their performance carefully and take steps to ensure improvement when necessary. The management could incorporate other quality assurance efforts such as “error-proofing”, which is the deliberate design of a process to eliminate the possibility of an error, and quality auditing of suppliers by carefully trained teams.
Existing Approach Refined
Dankers management team needs to redefine their existing approach to the business. The current managers need to take on board the issues that employees need to be made aware of their responsibilities and duties. Lack of communication seems to be a major problem within Dankers and needs to be addressed. If the employees are not sure of their tasks then they should contact their line manager to confirm their tasks.
One of the main functions of management is control and communication is a key element in any business. The customers drive the business and if there are no customers then there will be no business. In my opinion, total quality management is a major concern in Dankers and a complete integration of a new approach and tactics will help increase efficiency and build employee relations.
The amount of failure costs is far too high but the quality management in this area needs improving. There is a significant cost occurring when a consignment of cabinets is being delivered to a customer and the cabinet is being returned due to a quality control issue. Defective products will happen but if the consignment is being constructed properly then hopefully there will be no returns.
Defects that are identified before shipment are on the rise. It is a good idea to take the defective products and use the operating components to build a new product. It will reduce manufacturing costs. The dispatch clerk that has received a promotion to Quality Co-coordinator is a good move. John went on a three day course on the Quality System Standard. He identified that Dankers does not have a manual underlining the system and specific responsibilities for managers and employees. Quality management systems were identified for problems and the employees raised their own concerns. John’s observations were well noted and with his experience he has helped to point out the main issues that the company has.
Dankers Furniture Ltd has a number of issues to which has been raised in this report. My recommendations are as follows:
From working as the Operations Manager in Dankers for so many years I am extremely happy with the increasing sales volumes of the standard cabinetry and the success of this has been great. It is really increasing profits in the business and customers are satisfied. But with every satisfied customer there comes a few dissatisfied customers. Even though the sales are successful but due to nature of the business and that Dankers sales are of products, Total Quality Management is a concerning issue and it is dramatically falling. TQM must be implemented with immediate effect. For some reason there has been a rise in the level of customer returns.
Dankers has a high reputation and a lot of customers who buy our products and we have an incredibly busy time at Christmas so product efficiency is a top priority. As I said before it can be a good idea to restock the operating components of defective products and reuse them for new consignments. The internal failure costs could be reduced if the manufacturing team that assembles the cabinets could ensure that they are build correctly. It is also advisable to use the correct raw materials to ensure that the fixtures are being fitted properly.
Total Quality Management will help to improve the day to day tasks that have to be performed by each employee. These rules and protocols show the employees and managers how the work should be completed.
To fully understand these rules and protocols both the value and conformance perspectives on quality must:
Comprehend what dimensions of quality are more useful to people
Develop people and services that will meet the requirements
Dankers should put in place the processes that will be capable of meeting these specifications derived from the employees requirements
Identify and verify that the business process are meeting the specifications
To meet the factors above, Dankers employees need to ensure the quality with the business process. Total Quality Management can be developed within Dankers through seven core ideas. These ideas will help managers and employees to fully understand what’s involved when it comes to the quality of the products.
Customer Focus – this will show employees what it is like to be a customer at Dankers and understand the behaviour of a customer that is dissatisfied with a product. If this is not done then the employee is at risk of being biased towards the customer.
Leadership Involvement – If management at Dankers is serious about integrating Total Quality Management then it is critical to inform the employees that we are a part of a team and quality counts to everyone in the business. Each employee is responsible for his/her own tasks and responsibilities and failing to comply with this will result in quality control problems and product issues.
Continuous Improvement – Success of Dankers is irrelevant because there is always room for improvement in business. Just because Dankers is doing well with the sales of the cabinets it doesn’t mean that improvement shouldn’t always be addressed. This will help to continue success of the company.
Employee Empowerment – From the dawn of time it has been tradition that top level people are required to do all of the thinking and that employees at the lower level are just there to work and not to share ideas. Total Quality Management requires everybody in the business to contribute their ideas. This means that you are delegating responsibility and authority to somebody to ease the workload.
Quality Assurance – Quality assurance in this business is of most importance as it outlines the specific actions that are required to meet the quality requirements for the products.
Strategic Quality Plan – It may be necessary for Dankers management to establish a strategic plan in order to set a series of objectives for the future. This is a well-developed plan that will give an insight, guidance, and measurements to drive the quality control effort and to shift the organisation’s course where necessary.
Process Owner – It would be ideal to hire a process owner that will be responsible to evaluate and re-evaluate the goals of Dankers and to make sure that such goals are being met.
I would also recommend that Dankers use Statistical Quality Control. It aims at making sure that the business processes are being met. I would recommend that the following statistical techniques be used:
Process Capability Index – this determines the process’s capability of meeting certain tolerance limits.
Six Sigma Quality – This indicates how well the process is being controlled
Control Charts – this tool will help Dankers to track changes in key measures over time. By using control charts, Dankers can quickly identify whether a process is “in control” and take immediate action if it is not.
In relation to the control charts, the management team should use a sampling method to check every process outcome to assess how well a process is doing. The idea behind this method is that you don’t have to check this every time because you can use a carefully selected sample to set a fair idea of how well the process is working.
A final recommendation I would give would be along the Supply Chain area. As already mentioned earlier, John received a promotion and had to get a Quality System Standard certification. The ISO9000 focuses on practices than outcomes. This certification will be necessary for this business and I think that all employees do this course to help them fully understand what their job involves. This system will help to provide an insight whether or not the conformance of the products that the specific requirements are being met.
Even with the best of quality programs, external failure can happen, Dankers employees will still need to put into place processes to catch defective products once they have left the organisation and entered into the supply chain. Being prompt and efficient will assist Dankers on a large impact on the resulting external failure costs. Some systems that can be introduced are tracking systems, lot identification numbers, and explicit procedures for returning or destroying defective goods. These are good solutions that can be employed to deal with such issues.
I am confident that the recommendations that I have given with efficient and prompt integration will help Dankers to improve its Total Quality Management and continue to assess this idea for the future.
Total Function Deployment
Process Capability Ratio
Process Capability Ratio.png
Process Capability Index
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