April 15, 2013
Inventory Control Systems
For most retailers and manufacturing companies, the right inventory control system can help an organization maximize profits while reducing inventory costs. These systems are widely sought after by large, medium, and small size organizations in the assistance relating to timing and quantity production. Retailers and manufacturing companies need to decide when to order product from suppliers to satisfy the demand by the consumers. In the next paragraphs readers analyze three inventory systems: Total Quality Management; Work in Progress; and Just-in-Time Inventory. In the process, aside from providing definitions, readers will identify advantageous and not elements important when assessing the appropriate system for an organization. Ultimately solidifying the importance of an inventory control system, but most important what is at stake. Total Quality Management (TQM)
Total Quality Management, better known as TQM is an intense a long-term commitment to quality and implementing such a commitment requires the use of tools and techniques. TQM is about creating and developing a set of values of beliefs that let everyone knows that quality for the customer is the most basic aim and that the ways of working together as well as the ways people are expected to deal with problems and changes, are determined by what will support and sustain this basic aim, (Sashkin & Kiser, 1992). TQM provides a sole approach to improve effectiveness of an organization. This approach can provide a solid abstract base and at the same time, offers a tactical plan for improving performance that takes account of how people and organizations operate. There are five interventions that defines the core of TQM: Knowledge of customer requirements provides a test for considering and evaluation process changes. Supplier partnership ensures that materials entering the organization are of acceptable quality. Cross-functional teams bring the full spectrum of relevant information and expertise to bear on decisions about system-wide problem. Scientific methods and statistical analysis provide teams with trustworthy data to use in their decision-making. Finally, the process management heuristics can improve the quality of the decision-making process itself, (Hackman & Wageman, 1995). Advantages. TQM model is center in leadership, customer needs, employee involvement and process management; companies can increase profitability by rewarding stakeholders and stockholders in the near future. The primary objectives of TQM are 1. to reduce defects in a product or service, and 2. To improve the process of providing a product or service. In auditing, the characteristics that define product quality for users are quite different from those in manufacturing. There are four primary sources of quality problems in auditing - procedures, staffing, conduct of the audit, and independence. Problems associated with procedures include: 1. not in accordance with specified auditing standards, 2. improper selection, and 3. improper application. Problems with staffing can be: 1. poor hiring, 2. poor training, and 3. inadequate supervision. Problems with conduct of the audit are: 1. lack of planning, 2. lack of timeliness, and 3. lack of efficiency. Impaired independence can lead to overlooking important audit areas or mishandling important accounting and reporting issues, (Wilcox & Discenza, 1994). Disadvantages. Implementing a Total Quality Management system in a company requires extensive training of employees. The employee training includes instruction in problem-solving techniques and the tools to evaluate a process and identify weaknesses such as statistical process control, Pareto diagrams, and brainstorming techniques. During the initial training period, productivity can decline. Meetings for quality improvement teams also take workers away from their duties, which also reduce...