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QUALITY MANAGEMENT

Presented byMubina Shekh

Defining Organizational Structure


Organizational Structure
The formal arrangement of jobs within an organization.
Organizational Design

A process involving decisions about six key elements:


Work specialization
Departmentalization
Chain of command
Span of control
Centralization and decentralization
Formalization

Purposes of Organization
Divides work to be done into specific jobs and
departments.

Assigns tasks and responsibilities associated with


individual jobs.
Coordinates diverse organizational tasks.
Clusters jobs into units.
Establishes relationships among individuals, groups,
and departments.
Establishes formal lines of authority.

Allocates and deploys organizational resources.

Organizational Structure
Work Specialization
The degree to which tasks in the organization are divided

into separate jobs with each step completed by a different


person.
Overspecialization can result in human diseconomies from
boredom, fatigue, stress, poor quality, increased
absenteeism, and higher turnover.

Departmentalization by Type
Functional
Grouping jobs by functions
performed
Product
Grouping jobs by product
line
Geographical
Grouping jobs on the basis
of territory or geography

Process
Grouping jobs on the basis
of product or customer
flow
Customer
Grouping jobs by type of
customer and needs

Functional Departmentalization

Advantages
Efficiencies from putting together similar specialties and people with
common skills, knowledge, and orientations
Coordination within functional area
In-depth specialization
Disadvantages
Poor communication across functional areas

Limited view of organizational goals

Geographical Departmentalization

Advantages
More effective and efficient handling of specific regional issues that arise
Serve needs of unique geographic markets better
Disadvantages
Duplication of functions

Can feel isolated from other organizational areas

Product Departmentalization

+
+
+

Allows specialization in particular products and services


Managers can become experts in their industry
Closer to customers
Duplication of functions
Limited view of organizational goals

Process Departmentalization

+ More efficient flow of work activities


Can only be used with certain types of products

Customer Departmentalization

+ Customers needs and problems can be met by specialists

- Duplication of functions
- Limited view of organizational goals

Organization Structure (contd)


Chain of Command
The continuous line of authority that extends from upper levels

of an organization to the lowest levels of the organization and


clarifies who reports to who.

Organization Structure (contd)


Authority
The rights inherent in a managerial position to tell people what

to do and to expect them to do it.


Responsibility
The obligation or expectation to perform.

Unity of Command
The concept that a person should have one boss and should

report only to that person.

Organization Structure (contd)


Span of Control
The number of employees who can be effectively and efficiently

supervised by a manager.
Width of span is affected by:

Skills and abilities of the manager


Employee characteristics

Characteristics of the work being done


Similarity of tasks
Complexity of tasks
Physical proximity of subordinates

Standardization of tasks

Organization Structure (contd)


Centralization
The degree to which decision-making is concentrated at a single

point in the organizations.


Organizations in which top managers make all the decisions and lower-

level employees simply carry out those orders.

Decentralization

Organizations in which decision-making is pushed down to the

managers who are closest to the action.


Employee Empowerment
Increasing the decision-making authority (power) of employees.

Factors that Influence the Amount of Centralization

More Centralization
Environment is stable.
Lower-level managers are not as capable or
experienced at making decisions as upperlevel managers.
Lower-level managers do not want to have a
say in decisions.

Decisions are relatively minor.


Organization is facing a crisis or the risk of
company failure.
Company is large.
Effective implementation of company
strategies depends on managers retaining say
over what happens.

Organization Structure (contd)


Formalization
The degree to which jobs within the organization are

standardized and the extent to which employee behavior is


guided by rules and procedures.
Highly formalized jobs offer little discretion over what is to be done.
Low formalization means fewer constraints on how employees do their

work.

Common Organizational Designs


Traditional Designs
Simple structure
Low departmentalization, wide spans of control, centralized authority,
little formalization
Functional structure
Departmentalization by function
Operations, finance, human resources, and product research and
development
Divisional structure
Composed of separate business units or divisions with limited autonomy
under the coordination and control the parent corporation.

An Example of a Matrix Organization

Organizational Designs (contd)


Contemporary Organizational Designs (contd)
Boundaryless Organization
An flexible and unstructured organizational design that is intended to

break down external barriers between the organization and its customers
and suppliers.
Removes internal (horizontal) boundaries:
Eliminates the chain of command
Has limitless spans of control
Uses empowered teams rather than departments
Eliminates external boundaries:
Uses virtual, network, and modular organizational structures to get
closer to stakeholders.

Organizational Designs (contd)


The Learning Organization
An organization that has developed the capacity to continuously

learn, adapt, and change through the practice of knowledge


management by employees.
Characteristics of a learning organization:
An open team-based organization design that empowers employees
Extensive and open information sharing
Leadership that provides a shared vision of the organizations future,

support and encouragement


A strong culture of shared values, trust, openness, and a sense of

community.

QUALITY PRODUCT
THE QUALITY OF PRODUCT IS SUBJECT TO THE LAW OF SUPPLY AND
DEMAND IN THE SAME MANNER AS ITS PRICE.DEMAND OF QUALITY
GOES ON INCEASING AS IMPROVED PRODEUCTS ARE MADE TO
AVAILABLE.

BUYING CAPACITY OF CUSTOMER PLAYS AN IMPORTANT ROLE


TO SETS UP THE LIMIT OF THE PRODUCT QUALITY.
PRINCIPLE
QUALITY LIMITS ARE NEVER STATIC

QUALITY VALUE AND


CONTRIBUTION
QUALITY OF A PRODUCT, ALTHOUGH AN INTANGIBLE FACTOR IN
ITSELF GIVES THE PRODUCT ITS VALUE.
THE DIFFERENCE BETWEEN THE VALUE AND THE COST OF THE
PRODUCT AT ANY PARTICULAR QUALITY LEVEL , REPRESENTS
QUALITY CONTRIBUTION.

QUALITY OF CONFORMANCE
QUALITY COST

QUALITY OF CONFORMANCE IS AN INDEX OF THE EXTENT TO


WHICH THE PRODUCT CONFORMS TO THE DESIGN.
ALL QUALITY CONTROL ACTIVITIES DURING MANUFACTURE ARE
AIMED TO ACHIEVE QUALITY OF CONFORMANCE.
ANY COST WHICH IS INCURRED TO ENSURE THAT THE OUTGOING
PRODUCT IS OF REQUISITE QUALITY IS TERMED AS QUALITY
COST.

TYPES OF QUALITY COSTS

FAILURE COST IT INCLUDES :-

INTERNAL FAILURE COSTS, SUCH AS COST OF SCRAP AND RECTIFICATION

AND REDUCTION IN THE SALES PRICE OF SECONDQUALITY GOODS.


EXTERNAL FAILURE COSTS, SUCH AS REPLACEMENT DURING WARANTY
PERIOD, EXPENSES ON INVESTIGATION AND ADJUSTMENT OF
CUSTOMER COMPLAINTS.
APPRAISAL COST- THIS REPRESENTS COST OF INSPECTION AND
TESTING DURING VARIOUS STAGES OF MANUFACTURE , AS WELL AS
INSPECTION OF INCOMING MATERIALS.

PREVENTION COSTS- THIS INCLUDES COST ASSOCIATED WITH


ACTIVITIES SUCH AS QUALITY PLANNING, PROCESS CONTROL AND
QUALITY TRAINING WHICH ARE AIMMED AT PREVENTING DEFECTIVE
JOBS BEING PRODUCED.

Cost Of Quality
Quality cost can be divided in two categories
Quality Control Costs

This category consists of costs necessary for achieving high


quality
Prevention Costs
Appraisal Costs

Quality Failure Costs

This category consists of the cost consequences of poor quality


Internal Failure Costs
External Failure Costs

Prevention Costs
This include:
Cost incurred in the process of preventing poor quality from
occurring
Quality planning costs such as the costs of developing and

implementing a quality plan


Costs of product and process design

Collecting information to design processes


Employee training in quality measurement is included as part

of this cost
Costs of maintaining records of information and related to

quality.

Appraisal Costs
This include:
Costs are incurred in the process of covering defects.
Cost of quality inspections
Cost of product testing
Cost of performing audits to make sure that quality standards

as being met
Cost of worker time spent measuring quality
Cost of equipment used for quality appraisal

Internal Failure Costs


This include:
Cost associated with discovering poor product quality before

the product reaches the customer site.


Cost of rework, which is the cost of correcting the defective

item
Cost of scrap (cost of material, labor, and machine cost spent in

producing the defective product)


Cost of machine downtime due to failures in the process and

the costs of discounting defective items.

External Failure Costs


This include:
Costs are associated with quality problems that occur at the

customer site.
Costs of customer complaints
Costs of product returns and repairs
Costs of warranty claims
Recalls costs

Costs of lost sales


Costs of lost customers

Cost of defects

Cost of Defects

Product
design

Product
production
Location of defects

Customer
site

Human factor in quality management


The human element is the most important input in any

industrial enterprise and it is the one most difficult to


control.
This factor operate at all level from lowest worker to the top
management.
The responsibility of quality is not confined to a single
individual or a group.

Attitude of top management


The management of most companies in this country has not

realized the potential of quality management.


It is just a fancy name for inspection.
It is generally felt that there is no need for quality control
mere to interfere with other department.

Co operation of other functional group


Mere acceptance of quality programme by top management

cannot automatically assure its successful implementation.


Company personnel may pay service to the quality
programme but unless their whole cooperation can be
secured the chances of success of the programme are rather
slim.
Various committees comprising of executives should take the
active part in quality programme.

Attitude of operator
Operator contribute the maximum to quality of product.
His attitude to work is a decisive factor in determining the

quality of the product.


It is the who actually built quality into the product.

Operator responsibility for quality


Operator plays a major role in quality development.
If the company is able to maintain good quality of their

product the management may take the credit of it but if


quality of there product is poor then they generally blame the
worker.
Quality conformance can be achieved only if process is kept
under a state of control.

Other responsibility of operator


The operator must know what he is

supposed to do.
He must have means by which he can
know the result.
He must be able to regulate the
process.

OPERATORS ERROR
The quality of a product is ultimately depend upon two things ,
namely ,
Management
Operator
If any of the factor doesnt works well then it will leads to
degradation of quality of a product.

CAUSES OF OPERATORS ERROR


Operators error result from three main causative factors
, namely ,
Incompetence
Lack of awareness
Carelessness and lack of interest
INCOMPETENCE
Mean-Lack of physical and intellectual ability or
qualification.
Depends of skill of operators.
Once deficiency is identified the remedy lies in
training

LACK OF AWARENESS
There are some errors which are made by the operators

without their being aware of it.


Minimized by making a process fool-proof like use of
fixtures to ensure correct position.
Providing visual or sonic alarms.
CARELESSNESS OR LACK OF INTERESTS
Cause of majority of errors.
Lack of knowledge about the product.
It is mainly due to ignorance and lack of understanding
of the implication of poor quality.

REMEDIES
EDUCATION OF WORKERS
Company product ,their uses and customers.
Company quality policy and objectives.
Effect of quality on companys sales and profitability.
Effect of quality errors on the product and the cosumer.

DATA COLLECTION
Collect full information , study and analyze a problem.
The information may be in the form of flow process chart ,
control chart.
By identifying the problem it can be solved by using
suitable efforts.

MOTIVATION TO WORKERS
It plays a very important role to minimize the error .
It can be in the form of good wages , financial

incentives , etc
Quality bonus will provide a strong motivation for the
operator to improve the quality of work.

WORKERS INVOLVEMENT IN
QUALITY IMPROVEMENT
The most effective means of Stimulating interest in

quality is by direct involvement of worker in the


quality improvement program.
Suggestions of the workers should be given serious
consideration.
They should be encouraged to offer any solution
comes to their mind without any fear of being
ridiculed.
This climate of joint consultation will will give the
workers a sense of participation and involvement.

THANK YOU