Business PCL-II RACS Session 25-26 Modern Control Methods

8/6/2019 Business PCL-II RACS Session 25-26 Modern Control Methods

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Module : Risk Analysis and

Control Strategy

Session 25-26

Modern Control Methods; Total Quality Management

and its implications

Just in time; Decision support systems; Computed

integrated control system



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Expectations Of Modern Management

And Business Organizations

What modern management and business organizations are seeking. Here are a fewexpectations:

- to access wider geographic markets by complying with a recognised standard.- New customers who require quality compliance.- to reduce customer rejection of products/services because of poor quality.- to improve customer loyalty.

- to reduce or eliminate repetition of work.- to reduce warranty and customer support costs.- to reduce management time spent on ³putting out fires´.- to Improve productivity by ³doing it right the first time´.

To this end, the management of an organization would introduce various systems/ techniques to achieve its objectives. These systems or techniques would betermed as µmodern control methods´ The term µcontrol¶ is decisive in this phrase as it

requires certain regulatory frameworks and organizational guidance. In this section weshall be studying a few of the techniques used as control mechanisms in modernorganizations namely:

Total Quality Management and its implications

Just in time;

Decision support systems;

Computed integrated control system



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What do these control mechanisms mean to organizations:

Organizations which have implemented a few of these control mechanisms, it

becomes convenient for them to achieve the following :

-Developing a corporate quality policy.

-Designing and implementing a quality system.

-Developing measures for capturing quality costs and benefits from improved

quality.-Encouragement of teamwork and participation of the management and the

workforce.

-Continuous education and training to foster employee attitudes, management

beliefs and value system.

-Usage of problem solving tools and techniques.

-Benchmarking of business results and processes.

-Improvement of managerial and technical processes.-Integrating the customers¶ and suppliers¶ expectations.

-Carrying out quality audits and reviews on a continuous basis.

Meaning of control mechanisms



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Total Quality Management

Total Quality Management (TQM) is a business management strategy aimed at

embedding awareness of quality in all organizational processes. TQM has beenwidely used in manufacturing, education, hospitals, call centers, government, andservice industries, as well as NASA space and science programs.

Total Quality Management is the organization-wide management of quality.Management consists of planning, organizing, directing, control, and assurance.Total quality is called total because it consists of two qualities: quality of return tosatisfy the needs of the shareholders, or quality of products.

As defined by the International Organization for Standardization (ISO): "TQM is a

management approach for an organization, centered on quality, based on theparticipation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society."

In Japan, TQM comprises four process steps, namely:

K aizen ± Focuses on "Continuous Process Improvement", to make processesvisible, repeatable and measurable.

Atarimae Hinshitsu ± The idea that "things will work as they are supposed to"(for example, a pen will write).

K ansei ± Examining the way the user applies the product leads to improvementin the product itself.

M iryokuteki Hinshitsu ± The idea that "things should have an aesthetic quality"(for example, a pen will write in a way that is pleasing to the writer).



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Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducingin-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signalsbetween different points in the process. This means the process is often driven by a series of signals, or Kanban

which tell production when to make the next part.

Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a

shelf. Implemented correctly, JIT can dramatically improve a manufacturing organization's return on investment,quality, and efficiency.

The philosophy of JIT is simple: inventory is waste. JIT inventory systems expose hidden causes of inventorykeeping, and are therefore not a simple solution for a company to adopt. The company must follow an array of new methods to manage the consequences of the change. The ideas in this way of working come from manydifferent disciplines including statistics, industrial engineering, production management, and behavioral science.

The JIT inventory philosophy defines how inventory is viewed and how it relates to management. Inventory isseen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting. Thisdoes not mean to say JIT is implemented without an awareness that removing inventory exposes pre-existing

manufacturing issues. This way of working encourages businesses to eliminate inventory that does notcompensate for manufacturing process issues, and to constantly improve those processes to require less

inventory. Secondly, allowing any stock habituates management to stock keeping. Management may be temptedto keep stock to hide production problems. These problems include backups at work centers, machine reliability,process variability, lack of flexibility of employees and equipment, and inadequate capacity.

In short, the just-in-time inventory system focus is having ³the right material, at the right time, at the right place,

and in the exact amount´, without the safety net of inventory.

Just-In- Time



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The Main benefits of JIT include: S et up times are significantly reduced in the factory. Cutting set up time allows the company to

improve their bottom line, be more efficient, and focus on other areas that may needimprovement. This allows the company to reduce or eliminate inventory for "changeover" time.The tool used here is SMED.

T he flow of goods from warehouse to shelves improves. Having employees focus on specificareas allows them to process goods faster and not become fatigued from doing too many jobsat once. Small or individual piece lot sizes reduce lot delay inventories, which simplifiesinventory flow and its management.

E mployees who possess multiple skills are used more efficiently. Having employees trained towork on different parts of the inventory cycle allows companies to move workers where theyare needed.

JIT provides better scheduling and work hour consistency. If there is no demand for a productat the time, workers don¶t have to work. This saves the company money, either by not havingto pay workers or by having them focus on other work.

T here is an increased emphasis on supplier relationships. A company without inventory doesnot want an inventory system brake that creates a supply shortage. This makes supplier relationships extremely important.

S upplies come in around the clock, which keeps workers productive and businesses focused on turnover. Focusing management on deadlines makes employees work hard to meetcompany goals, in pursuit of job satisfaction, promotion, or even higher pay.

Benefits of JI T



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Decision Support Systems Decision support systems constitute a class of computer-based information systems

including knowledge-based systems that support decision-making activities. DecisionSupport Systems (DSS) are a specific class of computerized information systems(But not limited to computerized system only) that supports business andorganizational decision-making activities. A properly-designed DSS is an interactivesoftware-based system intended to help decision makers compile useful informationfrom raw data, documents, personal knowledge, and/or business models to identifyand solve problems and make decisions.

Typical information that a decision support application might gather and present

would be: an inventory of all of your current information assets (including legacy and relational data

sources, cubes, data warehouses, and data marts),

comparative sales figures between one week and the next,

projected revenue figures based on new product sales assumptions;

Management decision support systems are systems for assisting managers inmaking decisions. They incorporate decision rules that indicate the manner in whichan expert in the area would arrive at a solution to a problem on the basis of certain

facts. Thus, natural language systems, expert systems, knowledge based systems,and artificial intelligence systems are instances of decision support systems.



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There are five types of DSS A model-driven DSS emphasizes access to and manipulation of a statistical, financial,

optimization, or simulation model. Model-driven DSS use data and parameters provided byusers to assist decision makers in analyzing a situation; they are not necessarily data-intensive. Dicodess is an example of an open source model-driven DSS generator.

A communication-driven DSS supports more than one person working on a shared task;examples include integrated tools like Microsoft's NetMeeting or Groove.

A data-driven DSS or data-oriented DSS emphasizes access to and manipulation of a timeseries of internal company data and, sometimes, external data.

A document-driven DSS manages, retrieves, and manipulates unstructured information in avariety of electronic formats.

A knowledge-driven DSS provides specialized problem-solving expertise stored as facts,rules, procedures, or in similar structures.

DSS components may be classified as: Inputs: Factors, numbers, and characteristics to analyze

User Knowledge and Expertise: Inputs requiring manual analysis by the user

Outputs: Transformed data from which DSS "decisions" are generated

Decisions:R

esults generated by the DSS based on user criteriaIn addition, three fundamental components of a DSS architecture are: the database (or knowledge base),

the model (i.e., the decision context and user criteria), and

the user interface.

T ypes of DSS & Components of DSS



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Benefits of DSS

The benefits of DSS are Improves personal efficiency

Expedites problem solving (speed up the progress of problemssolving in an organization)

Facilitates interpersonal communication

Promotes learning or training Increases organizational control

Generates new evidence in support of a decision

Creates a competitive advantage over competition

Encourages exploration and discovery on the part of the decisionmaker

Reveals new approaches to thinking about the problem space Helps automate the managerial processes.



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Computed Integrated Control System

The following Computer-aided techniques are

used as computer integrated devices to act as

control measures in the respective disciplines

CAD (Computer-aided design) CAE (Computer-aided engineering)

CAM (Computer-aided manufacturing)

CAPP (Computer Aided Process Planning)

CAQ (Computer-aided quality assurance)

ERP (Enterprise resource planning)



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Implementation of Modern control methods leads to a synergy of

benefits to the firm which can be summed up as follows: A philosophy that improves business from top to bottom

[everybody in the organization is involved towards the sameobjective]

A focused, systematic and structured approach to enhancingcustomer's satisfaction [helps toincrease sales / profit of the organization ]

Process improvement methods that reduce or eliminate problemsi.e. non conformance costs. It improves the efficiency of the

process and better results

Tools and techniques for improvement - quality operating system[improved working methods for improves results ]

Delivering what the customer wants in terms of service, productand the whole experience [helps to tailor the product/service tomatch customer requirements and the customer satisfaction]

Intrinsic motivation and improved attitudes throughout theworkforce [improved work conditions means employees are

motivated to perform better]

Benefits Of Modern Control Methods

Documents

Business PCL-II RACS Session 25-26 Modern Control Methods