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This assignment is about the quality and its impact on the organization performance. This assignment also focuses on different approaches and systems of the quality management in the organization. There is a critical case study of Cargill Organization and its impact on innovations and competitiveness of the firm. There are also some recommendations to improve the quality in the organization.
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What is quality?
There is no exact definition of quality it is usually expressed in blurred and vague way. The term quality usually refers to designing the activities and processes of the organization in order to improve the organization and its services. It is also said that quality is about the learning and applying the better things in the organization.
Quality is about:
Learning about new things and how you want to apply these in the organization.
Learn from previous working.
Learn about the things for the sack of continuous improvement.
Learn about things in order to attain competitive advantage.
So quality means learning about new things to improve its current services and processes.
Quality is “the totality of features and characteristics of product or service which bears on its ability to meet stated or implied needs” (Holmes, 1992). In traditional approaches more focus of the organizations are on the inspection of goods but now due to drastic changes the customer’s needs get the importance on everything.
Operation management and Quality:
Operation management is usually concerned with the way of organizing produced goods and services in the organization. There are three main elements of the operation management.
Figure No. 1.2 Operation Management
Quality is related to the betterment of the inputs, processes and outputs. So operation management and quality both of them have their own importance. Quality is part of the operation management.
Quality control and quality assurance
Quality Control (QC):
Quality control is usually related to the routine activities. Most of time quality control is concerned with the inventor and routine operations (Ackermann and Eslami, 1996)
. The quality control system is designed to:
Identification of errors and omissions in routine activities;
Routine and consistent checks on the operations in order to ensure integrity of the operations;
Check on daily documentation of the activities;
Quality control activities also include checks on data acquisition and also check on the compliance of the international standards. Quality control also focuses on the estimating uncertainties, measurements, emission calculations, achievement and reporting of the information.
Quality Assurance (QA):
Quality assurance is not related to the routine activities. It is concerned with the pre-planned activities and procedures in order to attain overall goals of the organization. Quality assurance is the overall quality check on the processes of the organization. Quality assurance is related to overall and long term quality of goods and services (Lomas, 2004).
Quality control is referred to the short term quality of goods and services and quality assurance on the other hand deals with long term goals and objectives of organization. Quality assurance is usually deals with the scientific information available to the organizations.
Different approaches to quality
There are many tools and systems through which the organizations can check the quality of products. Every organization should try to elect the best channel in order to get the maximum output. Following are the main six methods of the quality control or quality check in the organization.
In process or in line system:
This system is also known as checking the quality of the products and services during the production. This is systems refers to the quality inspection in between the production of goods and services (Singh and Deshmukh, 1999). This system helps the organization for early detections of errors and omissions. This system can save the organization from:
Time loss (Time spend on re work to handle the problems).
Financial losses (If company is unable to repair the problems, this will results in the re ordering of materials which results in the time delay and many other financial costs as well).
Loss of Goodwill (if raw material is specific in nature and supplier is unable to provide this within in short notice).
In line system usually deals with in the middle of processes. First of all the sample is produced after completely inspecting the product the remaining supplies is produced. The corrective measure is taken if there are some errors and defects in the sample. This system saves after production losses.
This system also calculates the finished goods and date of starting of the process. This will help the buyer to check the goods quality and idea about the work completion.
This system also helps the buyer to check the factory or place where the goods being produced. In most of the cases the suppliers directly contract the buyers and after that he makes sub contract with other supplier for the goods on cheaper rates.
Initial quality inspection system:
This system is also known pre-production quality inspection system. This system usually refers to the inspection of the quality of the raw materials, because raw material is the main element for the quality of goods. If raw material is good it will produced the good quality product and if it is bad it will turns into low quality products (Singh and Deshmukh, 1999).
This system helps to reduce quality risk by inspecting the raw material before production. In this system sample of raw material is taken for the laboratory test, after approving the raw material further production steps are taken. This system also helps to clearly focus on the buyer’s instructions and specification for the products.
First of all this raw material is used to make sample which helps the organization to make sure:
Is the raw material compliance with the buyers requirements and all the technical information are also taken?
Check on the information from the buyers about the products and the information available to the manufacturing team in order to get optimum results.
This pre-productions system will helps the organizations to get the accurate products same to the buyers requirements. This system sometimes also inspects the finished goods in order to check the quality of the raw material. This system is used for the production of standardize products.
Final Quality system:
This system is also known as random quality check or pre-shipment inspection system. This system is most common in import and export businesses. This system takes place when all the goods are finished or produced and ready for the shipment.
There are usually two methods used for the quality check one is internal control from the supplier and another one is external check by the buyer’s respondent. The suppliers inspect the products after they are ready for the shipment. And the buyer hires and external or third party for the inspection of the goods before they are being shipped. For this reason 10% of the shipment is checked and result of this sample is extended to the whole shipment. If sample is good then whole shipment is good and vice versa.
The sample is check on the criteria given by the buyers like workmanship, production quantity, safety, functions, size, aspects and packing etc. This inspection of the quality is done on random basis. This also ensures the seriousness of the suppliers regarding the control and quality of the products.
This system is very useful in imports and exports where buyer get the random samples of the finished goods and check their quality on its own criteria and specifications, this sample is the representative of the whole shipment. It is considered that results of the final inspection are more reliable and valid towards the quality of the product, because many of the time if buyer engages third party for the inspection of the quality he guarantees for the quality of the shipment (Singh and Deshmukh, 1999).
There are many disadvantages of this system as well:
There is always chance of frauds as well because if final inspection shows the good results the dishonest suppliers may ship low quality products instead of the original one. This can be avoided by container loading shipment, inspection on the containers.
The results of the final check are not always 100% reliable because there are chances that sample is not a good representative of the whole shipment. This can also create mess to the shipment as well
The fees of the final quality check are also very high from the third party. If the shipment is of sub standard goods this cost will increase its cost very high. This fee is usually 300 $ to 800 $ per day.
In production or during production system allows the organization to evaluate its products and rates during their manufacturing process whether they are good, average or bad quality. The initial production system allows the organization to make sure that there is now any quirkiness in the specification and raw materials. On the other hand third party check is done on large pool or first production, this is helpful for the buyer and on the part of organizations it helps to check the quality of products with respect to the buyer’s specifications.
Each method has its own importance and every organization is free to adopt any particular method according to its own expediency. But most of the organizations prefer the in-line production system and buyers usually prefer the after production system.
The OEC model stands for Overall, everyone & everything, control model. This model is everything and every work should be done on specified time period. Every day work should be done on the same day. Every problem in the work must be addressed and solved immediately without wasting any time.
Six sigma method:
Six sigma is used to improve the quality and process of goods and services in the organization. This system is used to detect the problems and errors in the manufacturing system and business processes (Aghili, 2009). This system is used to control and improve the quality of products and services. This approach is adopted by the Haier.
Total Quality Management (TQM):
This total quality management is used to detect errors and frauds in the manufacturing system, increase customer satisfactions, service process, aim for modernization, supply chain management and to ensure workers have the highest level of training (Koch, 2003). Total quality management is very effective in the manufacturing it is 1 error per 1 unit. Total quality management is used for the development of the organizational management system. Most of the Japanese companies are following total quality management system like Honda and Yamaha etc.
Case study (Cargill):
Cargill is Minneapolis, United States base company. It is internal marketer and producer of agriculture, food, industrial and financial products and services. It was founded in 1865. It has now 131,000 employees all around the world. It is operational in 66 countries around the globe. Their motive is to help customers to succeed through innovations and collaborations. It is also committed to provide assistance to the world regarding environmental, economic and social challenges (Cargill, website).
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Quality system of Cargill:
Cargill is one of the leading agriculture goods producing company in the USA and around the world as well. Its aim is to provide best quality product around the USA and exports to the world as well. It has adopted the best quality management system (QMS) to ensure the better quality of the products (Cargill, website).
Quality management system of the Cargill is very renown to USA and around the world as well. This system was developed on following concepts:
Good Agriculture Practice (GAP)
Good Manufacturing Practice (GMP)
Sanitary and Phyto sanitary (SPS)
Hazard Analysis and Critical Control Point (HACCP)
Quality Assurance (QA)
International standards for organizations (ISO)
This system was designed to produce certified goods in order to get maximum output. This system is run by a good management in order to reduce certain chemical, physical and financial hazards. The main motive of this system is to ensure the best quality of the products which will strengthen the operation management in longer run.
Figure No 1.7 Core concepts of Quality Management System (QMS) of Cargill (Cargill, website):
The above table shows the quality items and the quality objectives of the Cargill. Water, land history, pesticides issues and on farm stocking and transporting of produces are covered under physical, chemical and biological safety. Corp protection is covered under free of pests objective. Production process and post harvest handling are covered under the objective of quality to meet customer satisfaction. Records are covered under the objective or trace back.
Components of Cargill’s quality system:
Following are some main components of Cargill’s quality system (Cargill, website):
Forms and checklist
Work instructions and operation procedures
Cargill develops its quality plan on the methods of Hazard Analysis and Critical Control Point (HACCP) and International standards for organizations (ISO). These methods are adopted in order to ensure quality objectives. The HACCP helps them to analyze the potential product quality hazard and what practices or practical steps required to tackle this hazard affectively. This ISO helps them to identify the international standards for their products and to maintain quality according to them. Their plan is to define the quality principle which ensures the international quality of the products.
Quality objectives are considered the basis for the quality plan. Usually these objectives are developed on the customer’s requirement and demands to ensure the customer oriented products. Their main quality objective is to produce fresh and healthy products which ensure the customer requirements, chemical, physical and biological requirements as well. Their additional quality objectives are:
To produce chemical free goods
To produce pest free goods
To produce fresh quality products
To produce healthy products
These objectives become the basis for the quality plan.
Quality policy is extended to whole of the organization. Their quality policy is to strive to produce fresh vegetables and fruits for the fresh markets which ensure the best customer satisfaction. They don’t compromise on their quality policy for any cost because quality policy becomes the basis for quality plans and quality objectives as well.
Forms and checklist
In this section they developed their records and documentations by indicating as critical control points (CCP). This checklist helps them for internal control of the things like financial reports and inventory records and for the external control as well. Their main motive is to produce quality in each and every area of the organization whether they are related to products and goods or not. There are many workers for the admin staff as well.
Work instructions and operation procedures
Operation procedures include all guidelines required to manage the operations in the organization and the work instructions includes all rules and regulation which are required to effectively perform the operations. In work instructions there are many techniques as well which enables workers to ensure the quality of products and services. All rules and regulations are designed to bring quality in the products and services.
If we can see overall quality system of the Cargill they have set rules and regulations to ensure quality on each and every phase of the operations. They have quality plans and quality objective for the longer run. They stick to their quality policy which is the base for every action. They ensure the quality in operations as well. They are working to become the world’s no. 1 food and agriculture producing company. There are many hazards as well but they have a hazard control cell which identify the hazard and also provides a plan of action to tackle this situation. Their main focus is produced quality products according to the customer’s requirements and needs.
As far as the quality approach for the Cargill is concerned they are following the in-line and initial production approach simultaneously because they first ensure the quality of the raw materials and seed that is going to be used to make finish goods. They are also focusing on the in-line or during production approach as well because they check time to time samples and raw materials during production as well.
Quality systems and their impact on innovation, change and competitiveness:
Following are the impact of the different quality system on innovation, change and competitiveness:
Total quality management is very much reliable and affective towards the change in the organization. This system helps the organization to minimize its errors and maximise their outputs. Like for Cargill the customers need new and innovative things with high quality.
Cargill is working in many countries so in each country it has to face different behaviours and demands from the customer. So there is need of the system which can handle each and every customer with optimum output. Like in eruption countries there are more trends towards the green vegetables and in Middle East they are trendier towards the fruits.
Quality system is very much important for the innovation because if you have good system then you have more customers and more demand which automatically lead towards the innovation.
Impact on change:
The innovation in the organization leads to the change in the society and organization as well. Cargill is introducing new kinds of vegetables and agriculture products in regular bases, which cause change in the behaviours and attitudes the people towards the agriculture products.
On the other hand Cargill arranges one food and agriculture exhibition every year to introduce the new agriculture products to the society, which helps them to get good feedback from the customers and the society as well.
Impact on competitiveness:
It is seen that in every business sector the trend towards the quality is increased in the last decades. Every company is trying to make batter quality product as compared to its competitors. In this way quality system is very effective in the competition amongst the companies.
Due to the quality system the spending on the research and development systems is also increased.
Following are some recommendations for this research:
Cargill is using very good internal control system for the quality of its products. But there is also need of the external control on the quality by third party as well to ensure the integrity of the results.
There is also a need of the marketing about the quality of its products, because Cargill is producing best quality products but it has very less market as compared to the quality of the product.
There is also need of the training to employees and its staff members about the latest quality measures. This will help them to produce up-to-date quality products and services.
The Cargill is engaged in agriculture products and industrial products as well but there is need to maintain quality in industrial products as well, because they have sub-standard industrial products as compared to their agriculture products.
Nowadays, world is consider as global village and it eliminates the boundaries between the countries for trade as well. There are lots of choices for the customers as well, so there is need of best quality products in reasonable prices which can only be possible with the help of best quality system. The quality system is considered to be the best one if it encourages the quality standards, innovations and customer oriented products.
This assignment was a great opportunity for me to learn about the operation management and the role of quality in the organization. After doing research on this topic I have come to know that quality of goods and services is the main competitive edge for any company. If we provide best quality products in reasonable prices then we have more customers as compared to other and vice versa. The information is very important in the organization and if you have the right information then you can develop the right thing on right time.
As far as the current quality systems are concerned every company has adopted the system according to its customs, needs and behaviours. Japanese are more interested in the total quality management, in this system quality is maintain on each and every phase of the production. On the other hand Americans are more interested in Six Sigma and during production system. Six Sigma is only applicable to the manufacturing organizations because this system is related to the measurement of the products during manufacturing. Before adopting any approach the characteristics of the organization should be considered.
Now-a-days the sense of quality is increased among the companies. The customers are more focused towards the quality products. Brand system is also increasing day by day.
If I am a manager, first of all I will analyse the characteristics of the organization and its mission towards the quality and operation management. Then, I will derived a plan for the scratch because in every organization there is need of change and your colleagues also expect change from the new manager as well. The quality system should be mixture of one or two systems, because every system has some advantages and disadvantages as well and mixture of system will help the organization to overcome the disadvantages of the one system with the help of advantages of other system.
In current scenario the importance of the operation management is also increased. If you have the good operation management then you will be able to reduce costs, timely formation of products and competitive edge as well. Operation management is the base for any company progress, because every company is focusing on its operations. Japanese are focusing on total quality management for the quality management and in European countries there is still trend of Six Sigma and during production system.
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