INITIALS SURNAME STUDENT NO
PS XXXXX 2008YYYY
Submitted in partial fulfillment for the degree of
B/TECH (OPERATIONS MANAGEMENT)
DEPARTMENT OF QUALITY AND OPERATIONS MANAGEMENT
UNIVERSITY OF JOHANNESBURG
SUPERVISOR: A. Vermuleun
TABLE OF CONTENTS
1.3Aim of the research7
9 Literature Review10
10 Research Question48
11 Scope of the Research54
3.1 Research Methodology56
3.2 Data Collection56
3.3 Data Analysis57
14 Findings of the study 59
5.1Discussion of findings61
6.1Conclusion and Recommendation65
6.2Glossary of Terms67
6.3Summary of Research 69
Annexure 1 – Workforce questionnaire
Annexure 2 – Measures of central tendency
BACKGROUND TO RESEARCH PROBLEM
The ZZZ group of companies, with its head office based in RRRRR, GGGGG, develops, manufactures and markets a wide range of high performance biaxially orientated polypropylene films for a wide variety of applications in the food, packaging, label and tobacco industries. The ZZZ group markets its product in over 90 countries, at 7 sites around the world. (ZZZ SA presentation)
ZZZ South Africa is situated in Chamdor, Gauteng and markets its product locally and internationally. The company has a staff compliment of 149 workers, 53 exist in the production plant.
ZZZ (Head office) identified the need for the implementation of a process improvement strategy within all its subsidiary companies in order to gain a significant competitive edge and assist in improving its bottom line.
ZZZ South Africa decided to run a continuous improvement program in the operations department. The main aim being to improve, equipment effectiveness, by reducing equipment failure (breakdowns), improve productivity, by reducing idling and machine stoppages and improving the quality of products by eliminating defect losses, thus increasing usable throughput and enhancing competitiveness.
Besides revamping the quality control program in the plant, the company thought it necessary to instill an awareness of the importance of quality amongst the production personnel and implementing the cost of quality as quality improvement initiative primarily in the production plant.
The reasons for the company’s interest in quality costing can be summarized as follows; the relatively low profits made in the past three years with respect to sales turnover indicated that it was important to identify suitable cost savings to ensure the health of the business. There is also a need to raise the level of quality awareness by bringing to people’s (operators & managers) attention the financial implication of producing nonconforming products, which in turn result into external customer complaints and customer dissatisfaction.
The lack of a quality orientated culture amongst operators and supervisors whilst performing their daily production activities has resulted in a high level of wastage (i.e. quality defects and rework losses, set-up and adjustment losses, start-up losses, etc). Quality costing is seen as one means of measuring the success of the company’s improvement efforts. Figure 1 and 2 shows, the internal rejection rate and the annual returns which barely meets the required target of less than 4% and 0.5 %...