Introduction to Business MGT 211
TOTAL QUALITY MANAGEMENT (continued)
Benchmarking--process by which a company implements the best practices from its own
past performance and those of other companies to improve its own products.
Internal benchmarking uses the firm's own performance to evaluate progress and set goals;
external benchmarking begins with a critical review of competitors or even companies in other
businesses to determine which have "best practices."
Getting Closer to the Customer
Customers are the driving force for all business activity.
The most successful businesses keep close to their customers and
know what they want in the products they consume.
Trends in Productivity and Quality Management
a. ISO 9000:2000 and ISO 14000
ISO 9000:2000--a certification program attesting to the fact that a
factory, a laboratory, or an office has met the rigorous quality
management requirements set by the International Organization for
Standardization, to ensure that a manufacturer's product is exactly the
same today, in terms of level of quality, as it was yesterday and will be
tomorrow. More than 140 countries have adopted ISO 9000 as a
ISO 14000--Certification program attesting to the fact that a factory,
laboratory, or office has improved environmental performance
Business Process Re-engineering -- quality improvement process that focuses on
improving both the productivity and quality of business processes.
Re-engineering -- quality improvement process that entails rethinking an organization's
approach to productivity and quality.
The Re-engineering Process
1. Identify the business activity that will be changed
2. Evaluate information and human resources to see if they can
meet the requirements for change
3. Diagnose the current process to identify its strengths and
4. Create the new process design
5. Implement the new design
Adding Value through Supply Chains
The Supply Chain Strategy--Flow of information, materials, and
services that starts with raw-materials suppliers and continues through
other stages in the operations process until the product reaches the end
Introduction to Business MGT 211
Supply Chain Management--Principle of looking at the supply chain
as a whole in order to improve the overall flow through the system
Reengineering Supply Chains for Better Results--By lowering costs,
speeding ser-vice, or coordinating flows of information and materials,
process improvements and reengineering often improve supply chains.
Investing in Innovation and Technology -- Many U.S. firms that have continued to invest in
innovative technology have enjoyed rising productivity and rising incomes.
Adopting a Long-Run Perspective -- Many quality-oriented firms are committed to long-
term efforts at continuous improvement: the ongoing commitment to improving products and
Emphasizing Quality of Work Life
Employee Empowerment--concept that all employees are valuable
contributors to a firm's business and should be entrusted with decisions
regarding their work.
Employee Training--For employee involvement to be effective, firms
are investing in employee training programs that will enhance employee
Improving the Service Sector -- in trying to offer more satisfactory services, many
companies have discovered five criteria that customers use to judge service quality:
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