5.Continuous Process Improvement 6.

Supplier Parnership

A written report for TOTAL QUALITY MANAGEMENT.

Submitted by: Cayanong, Jochelle Clemente, Mary Ann Cruz, Dayle Cruz, Joemarie David, Shaine Ann Marie Aquino, Kristelle

5.1 THE IMPORTANCE OF CONTINUOUS PROCESS IMPROVEMENT

We continuously improve by: 1. Considering all work as a process. 2. Doing effective, efficient, and adaptable processes. 3. Forecasting changing customer needs. 4. Regulating in-process performance. 5. Keeping constructive dissatisfaction with the present level of performance. 6. Removing waste and rework wherever in occurs. 7. Evaluating activities that do not add value to the product or services. 8. Removing nonconformities in all phases of everyones work. 9. Benchmarking to improve competitive advantage. 10. Planning to achieve breakthroughs. 11. Keeping gains so there is no regression. 12. Integrating lessons learned into future activities. 13. Employing technical tools. Process refers to business and production activities of all organizations

INPUT/ OUTPUT PROCESS MODEL

Inputs may be materials, money, information, data, etc. Outputs may be information, data, products, services, etc. Process definition starts with defining the internal and/or external customers. The process is the interaction of some combination of people, materials, equipment, method, measurement, and the environment to produce an outcome such as product, service, or an input another process.

Five basic ways of improvement, according D.H. Besterfield

1. Reduce resources, 2. Reduce errors, 3. Meet or exceed expectations of downstream customers. 4. Make the process safer; and 5. Make the processes more satisfying to the person doing it.

5.2

THE JURAN TRILOGY

1. Planning The planning starts with external customers. 2. Control Control is used by operating forces to help meet the product, process, and service requirements. 3. Improvements Aims to achieve levels of performance that are significantly higher than current levels.

Discussed by: Shaine Ann Marie P. David

5.3 PROBLEM-SOLVING METHOD

The problem solving method has many variations depending on the use: however, they are all similar.

Here are the basic continuous process improvement cycles. The phases are included and they are dependent upon the previous phase. Continuous process improvement is the goal, and these phases are the framework to achieve that goal.

Figure 5.2 Basic Continuous Process Improvement Cycle Sources: US Army Aviation Systems Command

Phase 1 Identify the Opportunity Identify and prioritize opportunities for improvement is the objective of this phase. It consists of two parts namely: Identify the problem and form of the team. In problem identification it answers the question: What are the problems?and seeks for the answer to lead those problems that have the greatest potentials for improvement and have the greatest need for solution. The second part of Phase 1 is to form a team. If the problem is of a multi functional nature then the team is selected and task by the quality council to address the improvement of specific proves.

Phase 2 Define the Scope Poor definition of the problem is frequently be the cause of failure in problem solving. A problem that is well stated is half solved. This phase requires a comprehensive charter for the team. The charter must specify the following: 1. Who authorize the team? (Authorize ) 2. What are the expected outputs and specific areas to be improved? ( Objective and Scope ) 3. Who are the team members and process and sub-process owners? ( Composition) 4. What are the guidelines for internal operations? ( Direction and Control )

5. What are the methods to be used, the resources, and the specific milestones? (General)

Phase 3 Analyze the Current Process The objective of this phase is to understand the process and how it is currently performed. The first step is for the team to develop a process flow diagram. A flow diagram translates complex work into an easily understood graphic description. Next, Measurements are fundamentals to meaningful process improvements. If something cannot be measured then it cannot be improved. Lastly, Caused-and-Effect diagram this is particularly effective in this phase. Determining all the cause requires experience, brainstorming, and thorough knowledge of process. It is important to know the root of the problem; this can be determined by voting. A mistake here can lead to a waste of time and money. Phase 4 Envision the Future Process Establishing problem solutions and recommending the optimal solution to improve the process is the objective of this phase. When possible solution have been determined, evaluation or testing of the solution is next.

Phase 5 Implement Changes

Implementation occurs when the optimal solution is selected. Prepare and implement the plan, obtain approval, and implement the process improvements is the objective of this phase. Phase 6 Pilot/Verify Changes It has the objective of monitoring and evaluating the change by tracking the effectiveness of improvement efforts through data collection and review of process. The last element of the implementation plan is the monitoring activity which answers the following: 1. What information will be monitored and what resources are required? 2. Who will be responsible for taking the measurements? 3. Where will be the measurements be taken? 4. When will the measurements be take Phase 7 Continuous Improvement It has the objective of achieving improved levels of process performance. Everybody in the business organization involved in a systematic long-term endeavor to develop processes that are customer oriented, flexible, and responsive and constantly improve quality. Note: PROBLEM SOLVING CONCENTRATES ON IMPROVEMENT RATHER THAN CONTROL.

5.4 KAIZEN (Japanese word)

It is the philosophy that defines management role continuously encouraging and implementing small improvements involving everyone. 3 basic principles of Kaizen 1. Work place effectiveness- to address the work effectiveness the Japanese have developed 5S tools. 5S practices are : Sort (eliminating unnecessary things), Straighten ( arranged the essential things in order), Scrub (keep the machines and working environment clean), Systematize ( make cleaning ad checking as a routine practice), lastly, Standardize ( standardize the previous steps). 2. Elimination of waste, strain, and discrepancy3. Standardization Discussed b: Mary Ann Clemente

6.1 IMPORTANCE OF SUPPLIERS

The quality of goods and services received from suppliers, the upstream portion of the supply chain has a significant effect on the quality of goods and services that downstream customer receive.

Suppliers are those companies that provide organization with goods and services that help them to satisfy the needs of their own customers.

If a suppliers performance is of consistently high quality, its customer can decrease or eliminate costly incoming inspections that add no value to the product.

The importance of the suppliers is at least as great when they provide training, software, or other goods or services that do not physically become part of the final product; they will influence its quality nevertheless by shaping the qualityof the processes used to produce it.

In business today, operations are often highly decentralized and dispersed around the world. Consequently, managing a complex network of suppliers becomes a critical interorganizational issue.

Suppliers play a vital role throughout the product development process, from design through distribution.

Increasingly, suppliers are viewed as partners with customers, because there usually is codependent relationship.

6.2 PARTNERING
Partnering is a long-term commitment between two or more business organizations for the purpose of attaining specific goals and objectives by maximizing the effectiveness of each participants resources. Three Elements to a Partnering Relationship

1. Long-term commitment Long-term commitment provides the needed environment for both parties to work toward continous improvement. Dependency is a consequence in a long-term commitment as a result of system integration and improvement.

2. Trust Trust enable the resources and knowledge of each partner to be combined to eliminate an adversial relationship.

3. Shared Vision To achieve this vision there should be an open and candid exchange of needs and expectations. Shared goals and objectives ensure a common direction and must be aligned with each partys mission. Discussed by: Jochelle Cayanong

6.3 SOURCING
Sourcing the process of finding suppliers of goods or services. There are three types of sourcing: Sole; Multiple; and Single, as stated by A. Aswad: 1. Sole

The business organization is forced to use only one supplier. This situation is due to the following factors, such as: patents; technical specifications; raw material location; only one organization producing the item; or the item being produced by another plant; or division of the business organization.

A sole source procurement is authorized when there is only one source practicably available for the goods or services required. With sole sourcing, there are no options. Companies may search for multiple suppliers and distributors for a product or service, then discover only one vendor is capable of producing the product. Having only one supplier, distributor or vendor for a particular merchandise reduces the amount of time spent researching products and negotiating prices with vendors.

2. Multiple

Multiple sourcing is the use of two or more suppliers for an item. The theory of multiple sourcing is that competition will result in better quality, lower costs, and better service. The purchase of individual items used to create a product from different, multiple providers in order to keep production on track in the event of a failure to produce at one particular source. This reduces production risk in the event that the supply chain has a problem.

3. Single This is a planned decision by the business organization to select one supplier for an item when several sources are available. For the organization, the advantages are reduced cost, complete accountability, supplier loyalty, partnering, and a better end product with less variability. For the supplier, the advantages are new business from the customer, reduced cost of business and production processes because of economies of sole, and partnering.

Choosing a specific company and bypassing the competition refers to single sourcing. Different suppliers and distributors typically produce and sell similar merchandise. This is advantageous to companies that purchase supplies because they can choose among various companies. However, after a thorough analysis of possible suppliers, company heads, managers or owners may choose to sign with a single company and pass up the opportunity to work with other suppliers. This decision could be based on price or the quality of products. Business owners may initially select a supplier or distributor, then choose a new vendor due to inadequacies. Single-source contracts allow business owners to move from vendor to vendor if they're unhappy with the results.

6.4 SUPPLIER SELECTION

There are ten conditions for the evaluation and selection of suppliers, according to K. Ishikawa, such as: 1. The supplier knows the management philosophy of the organization. 2. The supplier has a stable management system that is respected by others. 3. The supplier maintains high technical standards and has the capability of dealing with future technological innovations. 4. The supplier can supply precisely those raw materials and parts required by the purchaser, and those supplied meet the quality specifications. 5. The supplier has the capability to meet the amount of production or can attain that capability. 6. There is no danger of the supplier breaching corporate trade secrets. 7. The price is right and the delivery dates can be met. In addition, the supplier is easily accessible in terms of transportation and communication. 8. The supplier is sincere in implementing the contract provisions. 9. The supplier has an effective quality system and improvement program. 10. The supplier has a track record of customer satisfaction and organization credibility. The preceding conditions go beyond evaluating a supplier on the basis of quality, price, and delivery.

Discussed by: Dayle Jormaine B. Cruz

6.5 Principles of Customer/Supplier Relations

1. Both the customer and the supplier are fully responsible for the control of quality with mutual understanding and cooperation between their quality systems. 2. Both the customer and the supplier should be independent of each other and respect each others independence. 3. The customer is responsible to provide the supplier with clear and sufficient requirements so that the supplier can know precisely what to produce. 4. Both the customer and the supplier should enter into a non-adversarial contract with respect to quality, quantity, price, delivery method and terms of payments. 5. The supplier is responsible for providing the quality that will satisfy the customer and submitting necessary data upon the customers request. 6. Both the customer and the supplier should decide the method to evaluate the quality of the product or service to the satisfaction of both parties. 7. Both the customer and the supplier should establish in the contract the method by which they can reach an amicable settlement of any disputes that may arise. 8. Both the customer and the supplier should continuously exchange information that will improve the product or service quality.

9. Both the customer and the supplier should perform business activities such as procurement, production and inventory planning, clerical work and systems so that an amicable and satisfactory relationship is maintained. 10. Both the customer and supplier, when dealing with business transactions, should always have the best interest of the end user in mind.

6.6 Supplier Certification

1. The customer and supplier shall have agreed upon specifications that are mutually developed, justifiable and not ambiguous. 2. The customer shall have no product-related lot rejections for a significant period of time. 3. The supplier shall have no non product-related rejections for a stated period of time. 4. The supplier shall have no negative non product-related incidents for a stated period. 5. The supplier shall have a fully documented quality system. 6. The supplier shall have successfully passed an on-site system evaluation. 7. The supplier must make inspections and tests. 8. The supplier shall have the ability to timely provide inspection and test data.

There are benefits to certification. (1) It eliminates receiving inspection, which allows the supplier to ship directly to stock. (2) A customer/supplier partnership is created with each partner being responsible for their appropriate quality. (3) It also reduces the number of supplier to a manageable level. Discussed by: Kristelle Aquino