Production management is one of the core company functions that primarily deal with planning, forecasting and marketing of a commodity during the course of its development (Hill and Jones 2007).
Production management primarily comprises of product development and product marketing, with a primary objective of maximizing revenue from sales, increasing the market share and increasing the profit margins.
In most cases, production management can be integrated with supply chain operations of a business enterprise, in order to facilitate the movement of commodities produced by the business enterprise. This paper analyses two case studies with respect to their aspect of production management.
Case 1: The Fred and Barney Cookie Company
X-bar and Range charts serve as control charts that have processes containing one or more sub group sizes. The x-bar and the range charts are deployed after gathering measurements in sub groups classified between 2 to10 observations, whereby each subgroup is a representation of the production processes at that particular time.
They are primarily used for assessing the stability and predictability of given process during production. The x-bar chart normally reveals the rate of mean changes during a time period, while the Range chart is used to indicate how the ranges of the subgroups varies with respect to time.
The Range Chart can also be used in monitoring the various theories that are related to process improvement. Both the x-bar and Range charts are compared with the control limits in order to ascertain the predictability and the stability of the process (Hill and Jones 2007).
The control limits are normally determined from the stratified samples by use of a scale factor used in the estimation of the sigma, sometimes called the standard deviation. Basing on the estimate, one can either add or subtract thrice the value of the standard deviation in order to determine the upper and lower control limits in their respective zones.
The control limits for x-bar chart are determined by the mean range, implying that if the range is not within the control zone, then there is no need to analyze the control limits on the x-bar chart.
After an analysis of the range chart, it is important to evaluate the control points that are found on the x-bar chart and carry out run tests on the production data. Cases of special consideration have to be eliminated prior to the interpretation of range chart.
After analysis of the range chart, the control points on the x-bar chart have to be analyzed for control points. Similarly, cases of special consideration have to be eliminated.
The following is a representation of the X-bar and Range chart of the data provided relating to The Fred and Barney Cookie Company as simulated under Chart Runner. The Upper and lower control limits for the X bar charts are 11.6 and 10.8 respectively, while the upper and lower control limits for the range charts according to the provided data are 0.4 and 1.7 respectively.
From the x-bar and the R-charts, it is evident that the process is under control. This is because the upper and the lower control limits are equally distributed above the average value of the sample. This implies that is the process is effectively controlled about the mean.
Process control is an important aspect of aspect supply chain management due to the fact that it entails both product development and product marketing. The above concept can be best explained by use of process integration with supply chain management.
Conventionally, an efficient supply chain management should incorporate the core business functions into the operations of supply chain management.
Case 2: Finger Spring
House of quality is a diagrammatic representation that defines the relationship that exists between the desires of the customers and capabilities of the firm or product.
The House of Quality is an integral element of the Quality Function Deployment and makes use of the planning matrix in order to ascertain the relationship between the wants of customers and how the company is strategizing to meet the wants of their customers.
The basic outlook of the House of Quality has a correlation matrix at the roof; the needs of the customers are matched against the features of the product at the main part, and then an evaluation of the competitors at the porch (Hauser 1990).
The designing of the House of Quality bases on the perception that the design of products should be such that it depicts the wants of the customers and their respective preferences.
In addition, the House of quality plays an integral role in escalating the cross functional integration in business enterprises that utilize it, with a specific consideration to the marketing, manufacturing and engineering functions (Hill and Jones 2007). The following is the House of Quality Diagram for Finger Spring.
The customer requirements section is an important part of the House of Quality matrix that has to be completed; it is normally a list of the customer requirements in accordance with product development (Hill and Jones 2007). This is what is referred to as the Voice of the Customer.
This data is collected by conducting information surveys with the customers and they are prompted to outline what they need and the problems associated with the product. The Voice of customer for the case of the Finger Spring significantly depends on product reliability, compactness and flexibility; with reliability being given a higher consideration, followed by compactness and then flexibility.
The planning matrix is placed on the right hand portion of the House of Quality Diagram matrix. It is principally used in the quantification of the customer requirements and their opinions of other existing products.
In addition, the planning matrix provides a framework through which the design team can adjust their priorities in accordance with the Voice of Customer. The quantified values in the planning matrix are derived from the potential customers by use of a questionnaire.
Importance weighting is used in denoting the relative importance of every design requirement of the potential customers in accordance to their own opinions. In this case, reliability is given a rank of 5; compactness has been given a rank of 4, while flexibility has been given a rank of 3. In addition, the planning matrix evaluates the level of customer satisfaction with other similar products available in the market.
This is usually done by taking into consideration the performance of other products in meeting their requirements. In the case of Finger Spring, reliability, compactness and flexibility has different values for the various competing products, and has already been quantified in Table 2 of the assignment.
The technical requirements section represents the voice of the company and offers a description of the product in accordance with the company perception.
The data in this section is used in the representation of the measurable characteristics associated with the product, which the Finger Spring perceives as meeting the customer needs. The technical requirements include the size, price, weight, features, battery life and the operating cost of the product, which are matched against the competitors products in the market.
The interrelationships section is the key component of the House of Quality diagram. Its principal objective is to convert the requirements as presented by the potential customer to the technical features of the developed product.
The Roof of the House of Quality plays an inetgral role in the identification of technical requirements used in the characterization of the product. Basically, the question of concern is whether an improvement in the technical design requirement will translate into an enhancement or a deteroriation in another design requirememnts.
In case of deteroriation, trade offs have to be adopted, while in cases of enhancements, it is indicated by alternative symbol. The representation of the roof helps the technical design team to focus on the core design areas that aim at improving customer experience.
The targets section represents the conclusions of the House of Quality Diagram, and comprises of the technical considerations, competitive benchmarks for the product and the targets. The technical priotities represents the significance of each design requirement in attaining customer satisfaction.
Competitive benchmarks are an evaluation of the companys existing products and other competing products in the market and helps in the identification of the taget levels during product development.
Reference List
Hauser, John. 1990. How Puritan-Bennet used the house of quality. Sloan Management Review 90, no. 1 (March): 65-67.
Hill, Charles, and Gareth Jones. 2007. Strategic Management: An Integrative Approach. Boston: Houghton Mifflin Co.
Basically, being a product manager entails developing a particular product in such a way that it appeals to a specific target demographic. What must be understood is that consumer demographics each have their own unique tastes when it comes to specific products. As a result, it is necessary to develop products in such a way that they appeal to specific consumers by way of taste, smell, appearance, functionality etc.
For example, a product manager of a soft drink company would attempt to market different classes of soft drinks to suit differing consumer tastes. Examples of this can be seen in the differences between Mexico and the U.S. when it comes to the overall flavor of a soft drink that is being sold in each country.
Consumers from Mexico prefer a certain degree of tartness when it comes to their soft drinks while Americans prefer a greater deal of sweetness. As such, it is the responsibility of the product manager to ensure that the type of product that is being sold in each individual location conforms to the flavors that local consumers enjoy.
Influencing Factors in Getting into this Field
The most influential factor in getting into this kind of work comes in the form of the desire to develop a product as if it was your very own child. From conceiving the idea of the product on a drawing board to eventually manufacturing it and having it on store shelves creates a certain amount of pride in a product manager since the idea they initially conceived of is now being bought by consumers.
Should the product become a considerable success this would of course create a feeling of happiness comparable to witnessing your very own child graduate from college.
What type of education is necessary for this job?
Should someone wish to enter into this particular type of career it is generally advised that they focus on becoming a product manager within a specific field.
For example, the requirements for a product manager in the food services sector are drastically different to that of a product manager within electronics or social media services. As such, it is advisable that students combine a business degree in management with a secondary degree in whatever field they wish to specialize in.
Advice to College Students
The best advice I can give to students in becoming a product manager is to gain as much experience in the field as possible. Academic literature can only get you so far, it is important to develop a sufficient understanding of various consumer demographics in order to understand how to best develop a product that they will buy.
It is due to this that experience will be your best teacher rather than theories and literature which may or may not be able to give you the necessary information you need.
What difficulties can students expect when entering into this particular career?
The main problem that students can expect when entering into this field is that they will be unable to rise quickly without sufficient experience. While in other career fields employees can rise quickly given enough hard work and diligence, the world of product management often will not promote an employee unless they have accumulated a certain number of years within the company.
The reason behind this is due to the span of time it takes to understand a consumer demographic and know what does and does not appeal to them.
In the article, Martin Cagan discusses the mistakes managers make in their work and offers the ideas of how to avoid these mistakes. Products may be bad due to their usefulness or too complicated instruction (Cagan 1). Product management is a serious issue that can never be neglected (Stark 2), and the identification of mistakes seems to be a necessary task.
People make many decisions on how to achieve success with their products and face considerable pitfalls on their way to recognition every day. The importance of this article lies in the fact that each product has to be studied before it is presented on the market. A number of techniques and processes have to be done beforehand as well as all possible mistakes have to be determined, and each member of the team that works on product development has to perform his/her own functions completely.
Important Ideas
Product strategy and innovation: engineers should not consider the idea of innovation only but takes care of a products true value and its functions.
Customer and product requirements: engineers have to identify the quality of products considering the needs of customers (Blazey 148), not their own ideas.
Customers vs. users: people, who buy products, are always the users of the products, and the developers should consider this little still significant detail.
Features vs. benefits: communication with customers will help to realize that product benefits should never be replaced with its specific features (Varley 254).
Right product vs. product right (Charvet, Sandlin, Collier, and Wilson 310): the product is created and demonstrates the successful performance of its functions.
A good product requires good business: it is necessary to introduce a product and think about the supportive means to prove the worth of the chosen product (Ali 249).
Emotional element: a boring product, even it is characterized by a number of functions, maybe failing; therefore, a portion of the excitement is necessary.
To add vs. to improve : when a team thinks about additional features of a product, its members should not admit that they add something to the already existing thing but information about its possible improvement on the basis of the current achievements.
Complete vs. sellable products: a product may undergo changes and improvements all the time to be sold.
A true success of a product: when a product is launched in time, gets positive reviews, or takes a leading market position, it is not successful; customers should be happy and satisfied with the product and stay loyal to it (Herr, Page, Pfeiffer, and Davis 833).
Relevance
The chosen reading related to the course due to its intention to provide people with information about the enhancement of problem-solving activities and the techniques crucial for successful innovations and work in a team. In my daily life, the mistake because of confusing innovation with value takes place. I like buying things without paying attention to their functions and values.
I am obsessed with the products general views and prices. If I like a thing, I do not analyze it but buy it. A not long time ago, I bought a fancy box to gather my small staff. Still, the instructions on how to use it are too complicated and require much time to study all of them. The results are annoying the box stands as a beautiful, not useful object in my room.
Works Cited
Ali, Hassan. The Process in Developing a New Successful Product. STEdex 6 (2014): 249-253. Print.
Charvet, Francois, Sandlin, Doral, Collier, David, and Wilson, Darryl. CRM, SRM, and Integrated NPD: Having the Right Product versus Having the Product Right. Proceedings of the 2008 Academy of Marketing Science (AMS) Annual Conference. Ed. Leroy Robinson. New York: Springer, 2015.310. Print.
Herr, Paul, Page, Christine, Pfeiffer, Bruce, and Davis, Derick. Affective Influences on Evaluative Processing. Journal of Consumer Research 38.5. (2012): 833-845.
Stark, John. Product Lifecycle Management: 21st Century Paradigm for Product Realization, New York: Springer, 2015. Print.
Varley, Rosemary. Retail Product Management: Buying and Merchandising, New York: Routledge, 2014. Print.
Every company must have a mission statement. A mission statement shows direction of the company. Moreover, it ensures that objectives of the company align with its mission. This paper will explore Toyotas mission statement. It will also investigate if its strategies are aligned with the mission statement.
Mission statement
A Mission statement provides direction for a company. This is essential in defining its objectives as well as strategies. Toyota is an automobile manufacturing company. Its mission statement is to move people in a better way. Precisely, it has a global mission. Its mission states Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people.
Current strategies
The company has established numerous strategies to pursue its Global mission, these include:
Commitment to quality
Respect for planet
Constant innovation
The company has utilized these strategies with a view to reaching its mission statement.
Discussion
Toyota has presence all over the world. In fact, the company has continued to provide affordable quality automobiles to its range of customers. Moreover, it has implemented flexible structures that enable it to reach out to different groups of customers. For instance, the company has introduced Toyota certified used automobiles for its low-income customers.
The first strategy employed by Toyota is to commit to quality. Toyota has an operation segment that designs and supplies quality automobile to its customers. Toyota conducts quality assessment on its products to ensure compliance with the latest regulation on safety and quality.
Moreover, the company has employed mechanisms to communicate with their customers and dealers with a view to ensuring quality of automobiles. Recent recall of specific brands of Toyota automobiles is an evidence of commitment to quality, even after sales.
This strategy has ensured that Toyota command the worlds market in volume of sales. This strategy therefore goes a long way in strengthening its mission statement of moving people in a better way. The second strategy is to commit to constant innovation. The world is ever changing with various technological advances aimed at making life easy, being explored.
Toyota has committed its finances in research and development to improving and innovating new technologies for better automobiles. In essence, the company spends on research and development for innovation with a view to improving ways of moving people. This strategy aligns with the companys mission since it aims to give people better technology that moves them in a better way.
The third strategy is to commit to respect for planet. The planet is faced with increasing challenges with regard to its conservation. Issues such as global warming, among others, have put pressure in companies to reduce greenhouse gas emissions. Toyota is committed to this initiative.
In fact, the company has proved this by manufacturing environment friendly automobiles. Moreover, it has made steps to contribute to environmental conservation efforts through participation and contribution. This shows that the company values its community and aims to move them in a better way as confirmed in the mission statement.
Conclusion
Toyota has a mission aimed at bettering the movement of its customers. This has enabled them to establish mission friendly strategies namely, commitment to innovation, quality and the planet. Toyota is therefore committed to its mission statement through the strategies employed above.
The Philip Morris Heat Stick can be classified as a specialty product and is considered as a new product line under the different types of new products category (Richardson and Gosnay 55). The heat stick is the companys attempt at staying relevant in a changing market environment where the use of e-cigarettes has gained a considerable level of popularity among U.S. based tobacco smokers (Felberbaum 1).
The heat stick is different than its other e-cigarette counterparts since, instead of vaporizing a flavored liquid that contains trace amounts of nicotine, the heat stick instead heats dry tobacco which creates a flavored vapor (Mulier, Chambers and Liefgreen 22). This alternative variant to the classic e-cigarette is supposedly healthier than its actual cigarette counterpart since the smoke that is produced has no tar. As a result, it is supposedly a better alternative to other e-cigarettes since it allows the user to get a fuller tobacco flavor without cancer-causing additives.
Product Life Cycles
Traditional cigarettes are currently in the declining stage of the product lifecycle. While this may not seem as apparent due to the sheer amount of smokers, studies such as those by Murray have indicated a 35 percent decline in the number of cigarette smokers compared to a decade ago. This is in part due to a wide variety of different education and health campaigns sponsored by numerous global governments aimed at limiting the number of smokers (Murray 341).
E-cigarettes, on the other hand, can be classified as being in the introduction stage and mid-way towards the growth stage of their product lifecycle (Paley 153). Yes, they have grown in popularity over the past six years, but they are still isolated to a relatively small niche market due to the inherent expense of having to buy an e-cigarette kit (Schneider and Diehl 651). The long term implications this has on the marketing strategy of Philip Morris is that the company should start investing in developing marketing campaigns centered on its e-cigarette brand. Due to their status as a niche market product, e-cigarettes marketing campaigns focus on traditional methods such as signboards and leaflets as well as non-traditional methods such as online banner ads and promotions (Mackey, Miner, and Cuomo 98).
Marketing methodologies that center on the use of television ads, which have a greater scope, have yet to gain popularity among e-cigarette sellers. One of the main reasons behind this is the fact that the current e-cigarette market is composed of an amalgamation of small to medium scale companies. On their own, they are unable to match the marketing budgets of major companies like Philip Morris.
Not only that, attempting a joint television marketing strategy by these SMEs (Small to Medium Enterprises) is not possible since each has developed its brand name which makes a joint television advertisement through a major network unlikely to occur. It is due to this that Philip Morris has a considerable market advantage since it is capable of leveraging its financial resources and experienced marketing department to produce television advertisements that would enable it to target larger audiences and, as a result, bring more attention to its heat sticks compared to these smaller companies.
Stages of Product Development
The most important stage in the product testing process of the heat stick is the marketability tests that the firm will utilize. The problem with introducing the heat stick into the present market is that many present-day e-cigarette users are used to using liquids in their e-cigarettes. Heating tobacco may not be as appealing since it is limited to just one flavor compared to the hundreds if not thousands of liquid e-cigarette flavors currently available on the market today.
The company needs to determine if sufficient appeal can be generated to justify commercializing the product on a large scale in multiple markets. If it fails to do so, it could likely release a product that has little in the way of mass appeal and could cost the company billions of dollars in unsold merchandise. Another factor to take note of is that not all markets will respond well to the e-cigarette and, as such, multiple markets need to be tested for their viability.
Impression on the potential success of the heat stick
Based on the work of Branston and Sweanor, it was noted that the popularity of e-cigarettes was, in part, due to a lack of sufficient legislation and regulation. They had fewer regulations imposed by the government since they were considered as a relatively new product being introduced into the American market and insufficient studies were conducted that indicated that they were harmful (Branston and Sweanor 14).
This allowed suppliers to openly sell them to high school students and young adults. One of the main contributing factors to their rise in America was their popularity among high school students which translated into continued product patronage when they graduated and started college or entered into various career paths.
The study of Kim showed that nearly 90 percent of individuals addicted to tobacco started young and, as such, the use of e-cigarettes during an individuals high school years results in a greater likelihood of them continuing to utilize the product well into the future. From this perspective, it would seem that the Heat Stick of Philip Morris has a considerable amount of potential since it is a well-known brand and the ability to draw young consumers early enough could result in long-term product patronage. However, the problem with the introduction of this product is in its timing (Kim 1).
On May 5, 2016, the Federal government made a ruling indicating that new regulations are now being put in place to keep e-cigarettes out of the hands of children. Within 90 days of the judgment, the sale of e-cigarettes to anyone under 18 will be banned, and adults who are under the age of 26 need to be able to show proper identification. This landmark ruling could have a devastating impact on the ability of e-cigarette liquid and set producers to develop long-term patronage of their products. Due to their unique ability to produce a lot of vapor, their technological nature, and their stylish designs, e-cigarettes appealed to young consumers who wanted to appear cool (Perkins, Karelitz, and Michael 106).
This ruling by the FDA constrains the targetable market resulting in the need to develop new marketing concepts that target consumers in their early to mid-20s or even in their 30s. This casts a considerable amount of doubt on the long-term viability of the Heat Stick considering the currently overly saturated market and the new limitations that have been put in place. Yes, the heat stick is not a traditional e-cigarette but it is still likely to fall under the same legislation.
Works Cited
Branston, J. Robert, and David Sweanor. Big Tobacco, E-Cigarettes, And A Road To The Smoking Endgame. International Journal Of Drug Policy 29.(2016): 14-18. Print.
Felberbaum, Michael. Philip Morris Intl to Sell Marlboro HeatSticks. Washington Times. The Washington Times, 2014. Web.
Kim, Annice E. Using Twitter Data To Gain Insights Into E-Cigarette Marketing And Locations Of Use: An Infoveillance Study. Journal Of Medical Internet Research 17.11 (2015): 1. Print.
Mackey, Tim K., Angela Miner, and Raphael E. Cuomo. Exploring The E-Cigarette E- Commerce Marketplace: Identifying Internet E-Cigarette Marketing Characteristics And Regulatory Gaps. Drug & Alcohol Dependence 156.(2015): 97-103. Print.
Mulier, Thomas, Sam Chambers, and Dan Liefgreen. Marlboro Kicks Some Ash. Bloomberg Businessweek 4469 (2016): 24-26. Print.
Murray, Conor. Western Australian Cigarette Smokers Have Fewer Small Lung Nodules Than North Americans On CT Screening For Lung Cancer. Journal Of Medical Imaging & Radiation Oncology 53.4 (2009): 339-344. Print.
Paley, Narton. The Marketing Strategy. Crest House, 2007. Print.
Perkins, Kenneth A., Joshua L. Karelitz, and Valerie C. Michael. Reinforcement Enhancing Effects Of Acute Nicotine Via Electronic Cigarettes. Drug & Alcohol Dependence 153.(2015): 104-108. Print.
Richardson, Neil, and Ruth Gosnay. Develop Your Marketing Skills (Creating Success Series). Kogan Page, 2010. Print.
Schneider, Sven, and Katharina Diehl. Vaping As A Catalyst For Smoking? An Initial Model On The Initiation Of Electronic Cigarette Use And The Transition To Tobacco Smoking Among Adolescents. Nicotine & Tobacco Research 18.5 (2016): 647-653. Print.
Inventory management is a key part of operations in service or goods producing business. Many businesses today run out of stock and the businessmen ask themselves why we are always out of stock? Such are questions asked by many businessmen faced with frustrations and dilemma of attempting to simultaneously provide customers with adequate service maintain stable productions and keep investment in equipment and stocks at reasonable levels.
There are many other problems faced by retailers while dealing with production planning, keeping inventories in hand, scheduling and expenditure. The type of inventory policy in effect in a business determines the size of safety stock in place. Inventory consists of services and goods that a business has on hand and these can be raw materials to be processed into finished goods, supplies that are used to provide services that is offered in the business or finished goods themselves.
Inventory planning is very important to a business and if not properly formulated, the business could experience great costs in terms of money, time and potential loss of clients too. In this paper a local retail business is going to be considered and analysis of its inventory policy discussed.
There are several inventory policies that are applied in businesses. Taking a look at anticipation stocks, which is a key factor in any retail business. Anticipation stocks are required materials and goods consumed on a conventional but shifting pattern through a certain given period.
It also comes in handy in a scenario where it is advantageous to absorb the changes experienced by building and diminishing inventories as opposed to changing production rates with attendant variations in additional capital capacity requirements and employment. Inventories in this case may be built up in expectation of fill needs when the business is not running or a special sale.
There is need of seasonal stocks too. Examples of these materials are agricultural products which are produced at seasonally unpredictable rates but their consumption is reasonably uniform (Magee, 2009).
Fluctuation stocks are also common in a retail business and are held to help mitigate the shocks that arise from unpredictable variations in the part of customers demand. A retail outlet would maintain stocks so as to enable the business to supply customers demand even in a situation when the rate of customer demand may show quite an irregular and unpredictable variation (Magee, 2009).
Factories come in handy by maintaining their stocks so as to be in a position to restock retail and warehouses to meet customers demand. All fluctuations cannot be anticipated and it is uneconomical to do so. However, a business cannot run smoothly without some fluctuation stocks because a good retail outlet would not want its customers to wait for supplies until they are restocked conveniently or their orders are scheduled into production.
A businessman therefore has to make sacrifices in terms of costs in fluctuating stocks in order to meet his or her business philosophy of serving the customers want rather than forcing them to take what they can get on the shelves (Heizer & Render, 2011).
Movement inventories are thought of in line with movement of products between two distant retail outlets or from a warehouse to a retail outlet. There is need for inventory balance as a result of time required in movement of stock from one point to another which is normally not recognized by many retail outlets (Magee, 2009).
The amount of movement stock varies only when time in transit or sales is varied. Method of transportation determines the time in transit and hence improvement in dispatching and loading mechanisms can cut time in transit by elimination of delays.
References
Heizer, J. H & Render, B. (2011). Operations management. Boston: Prentice-Hall.
Historically, manufacturing management concept was coined by Adam Smith in eighteenth century in his contribution to specialization of labor in manufacturing. Adam Smith indicated that industrial jobs can be broken into smaller jobs and laborers were recommended to specialize in areas that they deem perfect, skilled and efficient (Anon, 1998).
Accordingly, Fredrick Taylor coined the scientific management theory and implemented Adam Smith’s recommendation to manufacturing set up. In this respect, organizations in the service and manufacturing industries have a production or an operation department. The departments are significant in that they provide the services or the goods that translates to organizations’ revenues.
Production or operations management is the process through which inputs resources are combined and transformed in production synergies of the organization, to provide value added outputs in a planned and controlled criteria, utilizing organizations’ policies and procedures (Anon, 1998). Essentially, production is that part of organization concerned with bringing inputs together and transforming them into a range of quality output product. Production entails a set of interconnected activities to create a product.
Production management refers to activities of manufacturing of goods while operations management involves activities in the delivery of services. Applying the scientific management theory, managers in the contemporary industries have adopted to techniques and procedures, concentrating on increased quality and economic efficiency in manufacturing products. According to Llopis & José (nd), research shows that laborers in organizations are focused in waste reduction and realizing high level of efficiency and quality.
The paper focuses on the production management in a case study of IDT Australia limited. Importantly, the case study provides a detailed analysis of quality management in organizations. In addition, a recommendation or suggested strategies to improve current situation is also provided.
Research objectives
The objectives of the study include:
To establish quality management process and the vital quality management activities in organizations
To elaborate the concept of standards, assurance and control to organization quality management
To explain organizations quality measurement and limitations in total quality management
To bring forth suggestion on the improvement of the current situation in quality management in IDT Australia limited
IDT Australia limited
Institute of drug technology Australia Ltd (IDT) operates in a highly monitored and specialized field of manufacturing pharmaceutical drugs and substances. Based in Melbourne, Australia, IDT is Australian pharmaceutical contract manufacturing organization for over 25 years of experience in production for local and international markets.
The company possesses international recognized pharmaceutical producing facilities. According to company profile, the company is primarily committed to supply of drugs and provision of research and development and other technical services. The company commits its resources in four activities that include; new drug development and scale up, clinical research services, API manufacture and pharmacy services.
According to the AusBiotech (2009), the company’s “state of art” facilities are developed and designed to conform to the international regulations and standards GLP/GMP requirements.
The company’s 15 manufacturing suites have been purposely constructed as contained suites, enabling the production of highly potent and cytotoxic drug in a human health conducive environment (AusBiotech, 2009). IDT has employed approximately over 100 employees where around 65 staffs are engaged in manufacturing and the other 35 staffs employed at the clinical facility.
The company does not face stiff competitions since it has a distinct competitive advantage. Among its competitive advantage include; confidentiality in drug development and manufacture, access to the most prominent clinical facility nationally and overseas, access to large database of clinical trials volunteers and experience of over 25 years in drugs manufacture and research contract (AusBiotech, 2009).
Production management
Anon (nd) defines production as “the step by step conversion of one form of materials into another form through chemical or mechanical process to create or enhance utility of the products to the user”. Ideally, production can be seen as a function in organizations that convert inputs into outputs that are of high quality level (Bagad, 2008). Similarly, production is a process of adding value to inputs. The figure below shows an example of production process adopted by most of manufacturing industries including IDT Company.
Figure one: production process diagram, source (anon, nd)
As the above diagram indicates, manufacturing is a system that comprises transforming inputs into outputs through a certain process and management of the system to produce high quality products economically and efficiently. The continuous monitoring of the production process is one of the most important function of management (Hakes 1991). Ideally, management team concentrates on Demand Forecasting, Aggregate planning, Inventory management, material Requirement Planning (MRP), Constraints and bottleneck managemen,t and Quality management.
Quality management
The term quality is frequently used in production processes. Departments of trade and industry define this term as “delighting the customers by fully meeting their want, needs and expectations” (Anon 1998, p.12). Radziwill (2005), argues that quality is an indicator of high and improved performances, whether in relation to the individual performance, teams, products or the whole company. Quality can also refer to free from deficiencies or abnormality of products, or leading to total satisfaction to the expectation of the end user.
Organizations evaluate or measure quality through their performances, costs, prices, supply time, consistency, accessibility, and upkeep of customer relationship. Thus, organizations must first recognize customers’ expectations and need to deliver quality to the market. Market research becomes significant process of establishing products features and the customers’ expectations.
Quality management entails the process of planning. Organizing, staffing, directing and controlling quality system s in organizations to meet products requirements and customers’ expectations.
Radziwill (2005) defines quality management as to involve developing and applying quality management and control systems in production, operations or delivering substantial satisfaction to the customer. In other words, quality management system can be viewed as tailored tender of principles into a collection of standards, policies, procedures, tools and methodology implemented to achieve quality goals of all industrial participants (Radziwill, 2005).
Markets acts as interface between customers and organizations and grounds of evaluating quality of products offered by different organizations. Market environments are ever dynamic and organizations must be vigilant in supplying and maintaining quality on their products. Competitions in the market have changed directions and quality provision is now a competitive strategy.
Macro-economic factors are still changing and enforced through rules, requirements and procedures. International standards of organizations have brought forth another approach to enforce quality in organizations. In this regards, organizations qualifying to promote and maintain quality are recognized as ISO quality certified.
Moreover, there exists interconnectedness between all participants in a production process to ensure total quality control. Various interfaces exist in the process such as customer-organization interface and supplier-organization interface (Hakes, 1991). Thus, cooperation of all is vital to enhance a total control system. Therefore supply chain management becomes a significant approach to managing total quality.
Customers and suppliers in quality management
Basically, organizations must understand who their customers are, what are their needs and expectations and how the organization can find out these. Again, the firm must know how to evaluate the ability to meet these wants and expectations, is the organization capable to meet these?, can the company continue to meet these needs and expectations in long run?, and how the organization can control and evaluate the performance in meeting customers’ needs and expectations (Hill et al., 2001).
Similarly, organizations are customers of a certain suppliers. Therefore, for organization to improve the supply chain and achieve quality management objectives there is a need to understand it’s internal and external suppliers. Organizations must know who their external and internal suppliers are, and what are the organizations needs and expectations from suppliers, and how to effectively communicate these needs.
In additions, organizations must evaluate whether potential suppliers are capable of achieving their needs and expectations and strategize on the effective approach to communicate any change in expectations. As noted by Bagad (2008), the realistic perfect situation is an open partnership relationship between all parties where share and benefit concept exist. This means that as the organization is aware of the customers’ benefits they must conversely appreciate the expectations of their suppliers.
Quality planning
Managers frequently argue with their counterparts on how essential quality management is vital as competitive edge, yet relatively a very small percentage know how to implement it in their organizations (Bagad, 2008).
By committing organization to quality management, staffs must also understand systems necessary to upgrade the production process. In his research on quality management in organization, Anon (nd) indicated that quality is synonymous of integrity, standardization in production process and the customer trustworthiness towards company’s products.
To achieve organization goals, mission and realize vision, planning is the first function of management and unto which all other functions depend on. In this regard, as Bagad (2008) suggests, without adequate planning for quality management, control and assurance becomes problematic to organizations. Proper total quality planning provide avenue to quality control and assurance translating to objectives accomplishment.
Quality control
A proper quality management system enhances firms to accomplish objectives targeted and sustain the strategy. As Bagad (2008) states, it is imperative for organization leaders and managers are responsible in monitoring the quality journey. Once the quality management strategy is implemented, it needs performance evaluation to control the policy.
Through monitoring and controlling, the desired level of performance is realized and also sustainable in long run. Quality Control should be established in all levels of organization’s management. Ideal control is undertaken by quality control team via activities of performance evaluation and monitoring (Bagad, 2008).
Quality assurance and standards
pqcassist, (nd) indicated that, companies committed to inspiring confidence to customers and staffs, break barriers between organization departments and achieve business goals must have quality assurance and standards systems.
According to Bagad (2008), standards are requirements, frameworks or procedures that must be adhered by the individual, government, firms, and industries and are usually enforced to achieve specific targets. Policies in organizations enforce standards for either operating business activities or implementing certain managerial plans.
Standards can only change under a formal framework and passed by key stakeholders of framework. As argued by Radziwill (2005), organization quality systems are focused to attain conformity, reduce variation, eliminate non adding value activities, waste reduction, minimize/prevent workers error and increase integrity thereby improving productivity and customer satisfaction. All organization objectives are attainable by implementing a dynamic, up to standards and assured quality management system (Bagad, 2008).
International organization for standardization is the reputed standard body for quality assurance to partners in all industries across the world. Another is the fair trade partnership agreement. Quality management system certified to ISO 9001 or 9000 refers to organization benefits in achieving consistency business processes and ambitious measurement/evaluation, and cost leaders or performance perfection. IDT Australia is among over one million companies certified for ISO 9001 and 9000 certification across the globe.
For quality assurance the company must be ISO 9001: 2008 certified. The certification is the world’s leading quality management system for assurance and standards.
This certification refers to company assurance in quality standards in areas such as customer focus, leadership, involvement of people, and continuous improvement in quality systems (pqcassist, nd). In addition, the company either small or large must poses realistic approach to decision making, improve in process method, system approach to management and shared beneficial supplier relation must exist (pqcassist, nd).
Current situation in the company
Emphasize on innovation has increased in Australia for the past and recent years. Understanding the quality management concept on managers and employees is much emphasized under industrial research and development. IDT Australia managers are well conversant with the quality management in production and all other areas. The company has employed over 25 PHD doctors and researchers to facilitate the creation and development of effective quality management in assurances and control.
As an international competitive organization, adherence to different quality management standards and policies is pivotal to its success. The company measures its total quality management by a basis on analyzing customer requirement, defining its processes that bring out products and services to the customers and provisions implemented in retaining a quality control system.
IDT organization structure and its functional units are accorded quality control manual and assurance department is instituted in all key quality adherence units. Quality assurance unit in the company concentrates primarily on the customer handling, proper books keeping, products quality and handling and the safety of organization physical and non-physical assets. Current total quality management system implemented by the organization is comprehensive process of stakeholders’ satisfaction.
Stakeholders include the customers, shareholders, suppliers, the government, and the employees. The quality control starts with implementing supply chain effective to meeting both the needs of customers and the suppliers. The company manuals indicate total quality management process comprises of quality assurance to the manufacturing activities and the customer service delivery at the clinic unit.
Basically, IDT Australia limited assurance and control systems ensures that the process prevent problems or issues that may arise, detecting them in advance, identifying accurately their causes, providing remedies immediately, prevent future occurrence and enhance quality progress.
As the objective of the company total quality is providing products of high quality that provide value and meets customers expectation, its system is derived from ISO 9001 certification and framework supplemented by the customer specification requirement (Hill et al., 2001). Currently, the company upholds its ability to provide continuous improvement in quality and increase individual goal accomplishment.
The quality manuals state that, “Quality management system shall promote guidance for the continued efforts including customer satisfaction, quality and reliability of products, process and all attached services” (MarketPublishers, 2011).
Data analysis
The above literature review on production and quality management systems, and the current IDT Australia limited situation has left very many questions unanswered relating to the company’s quality management. The literature brings unclear contribution of quality issues in the organization achievement.
Fundamentally, it is important to understand the various factors that influence the quality of firm’s products and the satisfaction of the customers. The influence of either internal or external factors and the unanswered question persuade the study to carry out more research and conduct a data analysis. Specific objectives of the study are;
To establish quality management process
To elaborate the concept of standards, assurance and control
To evaluate organizations quality measurement and limitations
To assess and provide suggestion on the improvement.
In general, the concept quality is a multidimensional term which can be measured and evaluated by many factors and indicators that are associated with customer satisfaction and the supply chain quality. In this study, the analysis on the quality management in IDT Australia limited focuses on customer needs fulfillment and satisfaction. Investigating the impact and the quality level of IDT limited by applying customer response is more acceptable than taking the whole supply chain fulfillment.
In this regard, to identify and analyses customer related issues and complaints in the study, freely and accessible information or data is utilized. As Radziwill (2005) supports, Critical Incident Technic (CIT) is the appropriate methodology employed to categorize and systematically analyze customer related issues and complaints from the standpoint of IDT Corporation. The following table provides categories of quality delivered by the company and the associated group of benefit.
Table 1: quality categories and the benefit group
Quality category
Service issue and complaint
Quality benefit group
Service or staffs competence
Staffs are well qualified and can solve problems.
Over 25 staffs are PHD qualified
Customers
Research partners
Service and product availability
High customers response
Experience of over 25 year
Customer loyalty.
Less competition
Customers
Government
Research partners
Other suppliers
Product fulfillment
No over production
Customer complaints handled by professionals
Retailers
End users
International clients
Delivery
No delay in delivery
No wrong product and service delivery
Drug distributors
Contractors
Government
Patients-customers
Product quality(goods and services)
Performance is consistent
Control mechanisms are excellent
ISO quality on drugs certified
Manufacturer
Employees
customers
Source: MarketPublishers (2011).
The analysis done identifies that there are certain reasons that make companies become ISO certified. These factors include the relationship with customers, and include internal factors and the external factors. Among all the factors, internal factors are the most preferred.
In addition, the relationship with customers may neither be influenced by the quality control, nor quality system be influenced by customer satisfaction. Customer satisfaction and requirement fulfilling may be influenced by the internal marketing strategies. Furthermore, quality management literatures show that external factors and internal factors lead to companies’ certification.
From the table the analysis concludes that, it is imperative for the organization to provide continuous quality improvement criteria where controls and assurance can be benchmarked with their competitors in the global arena. As presented in the literatures, the issue of identifying, assessing quality based on customers’ satisfactions is not adequate. In this respect the research require full primary data collection consideration.
Recommendation
Generally, the adoption and application of ISO 9001 and 9000 in health services and drugs, and the utilization of customer specification is justified by the organization quality management manuals, issues may arise in quality control and assurance.
This way organization is driven by many factors in seeking for certification from either ISO, trade fair or from the government. In certain circumstances, internal factors are largely depended on when seeking certification. Internal factors include the level of employees performance, level of company performance financially and quality of the management.
As argued by Llopis and José (nd), successful implementation of quality management system to organization may reveal benefit of low cost and also differentiation. Therefore, adapting to ISO 9000 is much fair in terms of environmental factors. Essentially, internal factors contribute positively to internal organization improvement, while external factors contribute into good relationship with the external environments.
Llopis and José (nd) indicate external benefits as increasing market share, improved customer satisfaction, attracting new customers and retaining the relationship with customers and suppliers. Internal factors positively lead to increased staffs motivation and productivity, true and fair books of accounts presentation, efficiency achievement and lowering production costs. The motive of organizations is to make profits and increase shareholders wealth.
Based on this, companies that are certified due to internal factors makes higher profits that those certified due to external factors. Therefore, IDT Australia limited should be more focused on internal factors rather than external factors. Essentially, the reason why firms seek certification depends on the amount of internal managers’ dedication to the internal factors. Therefore, internal factors are vital and most recognized influences of certification and quality management systems.
Conclusions
All organizations consist of departments, customers, suppliers, and customer supplier system. Supply chains are exhibited by the suppliers, departments and customers’ interfaces. The objectives of a supply chain monitoring are achieving just in time delivery and meet customers’ expectations through quality products.
Poorly established supply chain translates to poor quality and customer dissatisfaction. Therefore, to achieve total quality throughout the company operations, every participant in the supply quality chain must be focused and trained on customer- supplier relationship. Fundamentally, quality management system can be implemented through a supply chain system.
In this perspectives, internal factors, external factors and the customer relationship with the organization is taken into consideration. The fact that IDT Australia limited has been certified for a long period of time and it has experience of over 25 years does not have an impact of the profits. The firm size qualification quality management is far much influenced by its internal functioning and other internal factors that accelerate quality control and quality assurance to internal and external observers.
List of References
Anon (1998). Production and operations management: An international journal of the Production and Operations Management Society, Volume 7. Production and Operations Management Society, University of California.
Anon. Introduction to production and operations management. Web.
Aus Biotech (2009). IDT Australia Limited Contract cGMP manufacturer of high-potency and cytotoxic active pharmaceutical ingredients and finished solid dosage forms. Web.
Bagad, V.S. (2008). Total Quality Management. Vienna, Austria, Technical Publications.
Hakes, C. (1991). Total quality management: the key to business improvement: A Pera International executive briefing. Canada, Springer.
Hill, N., Self, B., & Roche, G. (2001). Customer satisfaction measurement for ISO 9000:2000. Oxford, Butterworth-Heinemann.
Market Publishers (2011). IDT Australia Limited Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis. London, Business Analytic Center (BAC).
Pqcassist. Standards Australia – Quality Management Systems: Industry News. Web.
Lean Product Management enhances viable operations, accuracy, and promptness during project execution. According to Hobbs & Burton (2008), it is a business hypothesis aimed at adding more value to customers through efficient use of the available resources. This theory was introduced by Henry Ford at the time when automotive processes started.
Henry came up with a process called “flow production” when he created the idea of assembling motorized cars. Currently, lean concepts are established and implemented in all business sectors. Many companies using lean project concepts always replace “lean” with their business name (Lindenau-Stockfisch, 2011).
This implies that lean management is not only a project aimed at reducing expenditure, but also a phenomenon that organizations want to associate with. Moreover, it is currently being applied by a number of motor vehicle manufacturing companies around the world. Through lean concepts, there are several methods and tools for ensuring continuous improvement in the construction sector. Lean concepts assume that most micro level advancements are better compared to a wide-ranging macro system analysis.
How lean project is applied in project management
Organizations use five principles of lean concept in their project management processes. The first one is to state the value of a certain product family which most of the customers are yearning for. The second step is to recognize an appropriate value stream for every manufactured goods (Jackson, 2006).
After identifying an appropriate value stream, an organization is supposed to ensure that there is continuous distribution of products in the market. The fourth step is to bring in pull through all the stages. The last step is the supervision towards excellence hence this reduces the time and information taken. Apart from lean construction, there are also other applications like lean manufacturing and lean enterprise.
They also serve similar purpose as lean construction (Hobbs & Burton, 2008). For instance, they are practiced to ensure add value to products for customer satisfaction. Lean construction is considered as a means of creating production systems to ensure that less building resources are wasted.
In addition, it started in 1992 when the construction management society was advised to take into consideration that there are some insufficiencies of the time-cost-quality exchange model. Establishing a production system to meet the required standards can only be achieved through cooperation of people involved in the project.
Last Planner System is lean construction equipment used to make various plans and construction procedures more conventional (AME, 2007). There are a number of companies involved in lean construction. For instance, Toyota Company and other large motor vehicle manufacturing companies in Japan are currently developing lean construction provisions in order to enhance competency and market penetration.
Lean product management enhances the estimation processes. This entails the interactions of various materials dealers and subcontractors, and every one performs their individual value-added action to make the project a success. The estimation procedure could rise to an extremely high level if the involvement and participation of these partners are taken into consideration.
Because of the typical features of construction projects, such as marine construction, all parties involved have to communicate in a rapid, simple and consistent ways by exchanging info related to the project. For instance, companies that deal with construction projects frequently place lower bids every time they are invited to make bids on construction projects.
High competition can cause spiteful price conflicts to win a tender (Hobbs & Burton, 2008). Obviously, this could harmfully compromise on the quality of the construction project. Therefore, the most important concerns regard some methods of ensuring continuous improvement during project implementation.
Lean Project Management enhances the implementation processes by eradicating actions that do not provide any substantial value to the client. It operates on the assumption that eliminating wasteful procedures enhance business performance. In addition it assumes that most micro level advancements are better compared to a wide-ranging macro system analysis. However, it results into decreased flow time, efficiency of the process and well as fewer inventories (Lindenau-Stockfisch, 2011).
Essentially lean concepts, when applied in a project, change the manner in which work is carried out all through the execution processes. Lean management is derived from the goals of the lean production system, which emphasizes on the maximization of value while at the same time reducing waste. This is relevant to particular methods used in the project execution process.
On-going studies for development of lean project management and lean construction for future expectations
There are numerous on-going studies for the expansion of lean project management and lean construction for future expectations. According to Poppendieck (2006), there are a number of studies on the development of software enterprises which is expected to positively add more value to product development projects. Other studies are currently being carried out to build up a fresh “project production” way of life.
Additionally, they put a lot of focus on the methods of implementation in all the sections that are based on projects (AME, 2007). The other on-going study for the expansion of lean project management and lean construction is the production of high value material goods. Other studies are also being carried out on how people can quickly learn from group activities (Jackson, 2006). Arguably, the above studies will provide viable solutions to the current troubles and questions around the world.
Lean concepts endeavors to design cost effective and efficient project execution processes in order to disclose and support the client objectives. Work is organized all through the process not only to maximize value but also to minimize wastes that could be incurred at the project execution level (Poppendieck, 2006).
Again, on-going efforts are in place to manage and enhance performance with an intention of boosting the overall project execution since it is more significant than decreasing the cost or up surging the speed of any project action. Control incorporates the measurements as well as advancements in the planning and managerial performances. The dependable delivery of work between experts in the design, supply, and construction guarantees value is provided to the client and waste is minimized (Lindenau-Stockfisch, 2011).
Lean concept approach is especially beneficial on complicated, indefinite and rapid projects. It defies the conviction that there have to be a trade between factors such as cost, time, and quality. Besides the tools discussed above, there is ongoing search of other technique that could as well be employed for continuous improvement. Some of these techniques include the incorporation of six sigma and total quality management techniques (Hobbs & Burton, 2008).
Lean concepts result into decreased flow time, efficiency of the process and well as fewer inventories. Fundamentally, lean concepts, when used beneficially in any construction work, transforms the execution of project processes. Lean construction is derived from the goals of the lean production system, which emphasizes on the maximization of value while at the same time reducing waste.
This is relevant to particular methods and applies them in fresh project execution process. According to Jackson (2006), the project managers who deal with project specifications conduct market survey, whenever necessary, and provide an estimate of the cost as well as the period it will take to complete the project.
Depending on these estimations, the company gives the tender document to the client who then analyzes it and normally after some talks with the company, an agreement is reached, which is commonly referred to as the project contract. Through lean concepts, there are several methods and tools for ensuring continuous improvement in the construction sector. This is a vital provision when considered critically in the context of project management (Hobbs & Burton, 2008).
Conclusion
In conclusion, continuous improvement is necessary, especially during project execution processes so that quality and efficiency are not compromised. Four-step quality model, which involves plan, doing, checking, and acting are very useful to ensure that Lean Product Management concepts are attained. Basically, “lean” is a simple concept that targets at bringing efficacy by applying the least amount of required resources.
This method necessitates the identification the requirements of the client, and enhancing the processes by eradicating actions that do not any substantial value to the client. It operates on the assumption that eliminating wasteful procedures enhance business performance. In addition it assumes that most micro level advancements are better compared to a wide-ranging macro system analysis. However, it results into efficiency and fewer inventories.
References
AME (U.S.). (2007). Lean administration: Case studies in leadership and improvement. New York: AME.
Hobbs, D., & Burton, T. (2008). Enterprise lean six sigma implementation: A step-by-step business transformation methodology. Boca Raton, Fla: J. Ross.
Jackson, T. L. (2006). Hoshin kanri for the lean enterprise: Developing competitive capabilities and managing profit. New York: Productivity Press.
Lindenau-Stockfisch, V. (2011). Lean Management in Hospitals: Principles and Key Factors for Successful Implementation. Hamburg: Bachelor + Master Publ.
Poppendieck, M. (2006). Lean software development: An agile toolkit. Boston: Addison-Wesley.
Production management is one of the core company functions that primarily deal with planning, forecasting and marketing of a commodity during the course of its development (Hill and Jones 2007).
Production management primarily comprises of product development and product marketing, with a primary objective of maximizing revenue from sales, increasing the market share and increasing the profit margins.
In most cases, production management can be integrated with supply chain operations of a business enterprise, in order to facilitate the movement of commodities produced by the business enterprise. This paper analyses two case studies with respect to their aspect of production management.
Case 1: The Fred and Barney Cookie Company
X-bar and Range charts serve as control charts that have processes containing one or more sub group sizes. The x-bar and the range charts are deployed after gathering measurements in sub groups classified between 2 to10 observations, whereby each subgroup is a representation of the production processes at that particular time.
They are primarily used for assessing the stability and predictability of given process during production. The x-bar chart normally reveals the rate of mean changes during a time period, while the Range chart is used to indicate how the ranges of the subgroups varies with respect to time.
The Range Chart can also be used in monitoring the various theories that are related to process improvement. Both the x-bar and Range charts are compared with the control limits in order to ascertain the predictability and the stability of the process (Hill and Jones 2007).
The control limits are normally determined from the stratified samples by use of a scale factor used in the estimation of the sigma, sometimes called the standard deviation. Basing on the estimate, one can either add or subtract thrice the value of the standard deviation in order to determine the upper and lower control limits in their respective zones.
The control limits for x-bar chart are determined by the mean range, implying that if the range is not within the control zone, then there is no need to analyze the control limits on the x-bar chart.
After an analysis of the range chart, it is important to evaluate the control points that are found on the x-bar chart and carry out run tests on the production data. Cases of special consideration have to be eliminated prior to the interpretation of range chart.
After analysis of the range chart, the control points on the x-bar chart have to be analyzed for control points. Similarly, cases of special consideration have to be eliminated.
The following is a representation of the X-bar and Range chart of the data provided relating to The Fred and Barney Cookie Company as simulated under Chart Runner. The Upper and lower control limits for the X bar charts are 11.6 and 10.8 respectively, while the upper and lower control limits for the range charts according to the provided data are 0.4 and 1.7 respectively.
From the x-bar and the R-charts, it is evident that the process is under control. This is because the upper and the lower control limits are equally distributed above the average value of the sample. This implies that is the process is effectively controlled about the mean.
Process control is an important aspect of aspect supply chain management due to the fact that it entails both product development and product marketing. The above concept can be best explained by use of process integration with supply chain management.
Conventionally, an efficient supply chain management should incorporate the core business functions into the operations of supply chain management.
Case 2: Finger Spring
House of quality is a diagrammatic representation that defines the relationship that exists between the desires of the customers and capabilities of the firm or product.
The House of Quality is an integral element of the Quality Function Deployment and makes use of the planning matrix in order to ascertain the relationship between the wants of customers and how the company is strategizing to meet the wants of their customers.
The basic outlook of the House of Quality has a correlation matrix at the roof; the needs of the customers are matched against the features of the product at the main part, and then an evaluation of the competitors at the porch (Hauser 1990).
The designing of the House of Quality bases on the perception that the design of products should be such that it depicts the wants of the customers and their respective preferences.
In addition, the House of quality plays an integral role in escalating the cross functional integration in business enterprises that utilize it, with a specific consideration to the marketing, manufacturing and engineering functions (Hill and Jones 2007). The following is the House of Quality Diagram for Finger Spring.
The customer requirements section is an important part of the House of Quality matrix that has to be completed; it is normally a list of the customer requirements in accordance with product development (Hill and Jones 2007). This is what is referred to as the Voice of the Customer.
This data is collected by conducting information surveys with the customers and they are prompted to outline what they need and the problems associated with the product. The Voice of customer for the case of the Finger Spring significantly depends on product reliability, compactness and flexibility; with reliability being given a higher consideration, followed by compactness and then flexibility.
The planning matrix is placed on the right hand portion of the House of Quality Diagram matrix. It is principally used in the quantification of the customer requirements and their opinions of other existing products.
In addition, the planning matrix provides a framework through which the design team can adjust their priorities in accordance with the Voice of Customer. The quantified values in the planning matrix are derived from the potential customers by use of a questionnaire.
Importance weighting is used in denoting the relative importance of every design requirement of the potential customers in accordance to their own opinions. In this case, reliability is given a rank of 5; compactness has been given a rank of 4, while flexibility has been given a rank of 3. In addition, the planning matrix evaluates the level of customer satisfaction with other similar products available in the market.
This is usually done by taking into consideration the performance of other products in meeting their requirements. In the case of Finger Spring, reliability, compactness and flexibility has different values for the various competing products, and has already been quantified in Table 2 of the assignment.
The technical requirements section represents the voice of the company and offers a description of the product in accordance with the company perception.
The data in this section is used in the representation of the measurable characteristics associated with the product, which the Finger Spring perceives as meeting the customer needs. The technical requirements include the size, price, weight, features, battery life and the operating cost of the product, which are matched against the competitors’ products in the market.
The interrelationships section is the key component of the House of Quality diagram. Its principal objective is to convert the requirements as presented by the potential customer to the technical features of the developed product.
The Roof of the House of Quality plays an inetgral role in the identification of technical requirements used in the characterization of the product. Basically, the question of concern is whether an improvement in the technical design requirement will translate into an enhancement or a deteroriation in another design requirememnts.
In case of deteroriation, trade offs have to be adopted, while in cases of enhancements, it is indicated by alternative symbol. The representation of the roof helps the technical design team to focus on the core design areas that aim at improving customer experience.
The targets section represents the conclusions of the House of Quality Diagram, and comprises of the technical considerations, competitive benchmarks for the product and the targets. The technical priotities represents the significance of each design requirement in attaining customer satisfaction.
Competitive benchmarks are an evaluation of the company’s existing products and other competing products in the market and helps in the identification of the taget levels during product development.
Reference List
Hauser, John. 1990. How Puritan-Bennet used the house of quality. Sloan Management Review 90, no. 1 (March): 65-67.
Hill, Charles, and Gareth Jones. 2007. Strategic Management: An Integrative Approach. Boston: Houghton Mifflin Co.
Basically, being a product manager entails developing a particular product in such a way that it appeals to a specific target demographic. What must be understood is that consumer demographics each have their own unique “tastes” when it comes to specific products. As a result, it is necessary to develop products in such a way that they appeal to specific consumers by way of taste, smell, appearance, functionality etc.
For example, a product manager of a soft drink company would attempt to market different classes of soft drinks to suit differing consumer tastes. Examples of this can be seen in the differences between Mexico and the U.S. when it comes to the overall flavor of a soft drink that is being sold in each country.
Consumers from Mexico prefer a certain degree of tartness when it comes to their soft drinks while Americans prefer a greater deal of sweetness. As such, it is the responsibility of the product manager to ensure that the type of product that is being sold in each individual location conforms to the flavors that local consumers enjoy.
Influencing Factors in Getting into this Field
The most influential factor in getting into this kind of work comes in the form of the desire to develop a product as if it was your very own child. From conceiving the idea of the product on a drawing board to eventually manufacturing it and having it on store shelves creates a certain amount of pride in a product manager since the idea they initially conceived of is now being bought by consumers.
Should the product become a considerable success this would of course create a feeling of happiness comparable to witnessing your very own child graduate from college.
What type of education is necessary for this job?
Should someone wish to enter into this particular type of career it is generally advised that they focus on becoming a product manager within a specific field.
For example, the requirements for a product manager in the food services sector are drastically different to that of a product manager within electronics or social media services. As such, it is advisable that students combine a business degree in management with a secondary degree in whatever field they wish to specialize in.
Advice to College Students
The best advice I can give to students in becoming a product manager is to gain as much experience in the field as possible. Academic literature can only get you so far, it is important to develop a sufficient understanding of various consumer demographics in order to understand how to best develop a product that they will buy.
It is due to this that experience will be your best teacher rather than theories and literature which may or may not be able to give you the necessary information you need.
What difficulties can students expect when entering into this particular career?
The main problem that students can expect when entering into this field is that they will be unable to rise quickly without sufficient experience. While in other career fields employees can rise quickly given enough hard work and diligence, the world of product management often will not promote an employee unless they have accumulated a certain number of years within the company.
The reason behind this is due to the span of time it takes to understand a consumer demographic and know what does and does not appeal to them.