Productivity and Quality Management

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Issue paper one: Productivity and Quality Management

Executive Report
Prepared by
G.Y. Attanayake
MBA/2003/1448

Course : MBA 501 Managing Business Operations
Dr. Travis Perera
and
Mr. A.K.L Jayawardana

July, 2003

POSTGRADUATE INSTITUTE OF MANAGEMENT
University of Sri Jayewardenepura
TABLE OF CONTENTSPAGE NO.

EXECUTIVE SUMMERY4
1.0INTRODUCTION5

1.1MEASURING PRODUCTIVITY IN THE MANUFACTURING AND SERVICE SECTORS
1.1.1Productivity Defined and Explained5
1.1.1.1Why Productivity7
1.1.2Manufacturing Sector Productivity8
1.1.3Service Sector Productivity14
1.1.4Nestle Lanka Performance Measures15

1.2TOTAL QUALITY CONCEPTS
1.2.1Total Quality Management Models26
1.2.1.1The origin of TQM26
1.2.1.2Total quality defined26
1.2.1.3Why TQM27
1.2.1.4TQM models28
1.2.2Issues in Application of TQM33

1.3HIGH PERFORMANCE ORGANIZATION
1.3.1Characteristics of a high Performance Organization and Benefits35
1.3.1.1What is a high Performance Work System35
1.3.1.2Benefits of a High Performance Work System36

1.3.2Job Design Defined37
1.3.3Job Design in an Performance Organization37

2.0ORGANIZATION OVERVIEW
2.1Nestle Mission and Vision37
2.2Nestle Quality Objectives38
2.3Nestle Key Products40
2.4Current Customer Expectations and Perceptions41
2.5The Products Which does not meet the Expectations of Customer41
2.6The departmental Process42
2.6.1The core customer requirements 42
2.6.2The inputs43
2.6.3The output43

3.0IMPROVING THE DEPARTMENT45
3.1Achieving of key parameters in the operational plan and the revised plan in relation to Management accounting Department46
3.2Utilization of software systems to the betterment of the department and internal customers.47
3.3Measurement of internal customer satisfaction and identification of errors made48
3.4Cost per Ton Delivered49

EXECUTIVE SUMMERY

Productivity measures in the manufacturing and the service sectors are varied and Complex ,the benefit from these, is to maintain a check on the efficiency and the effectiveness of organization processes. In looking at the productivity concepts applied in Nestles, it seems that, almost all the aspects of productivity measures in large processes are covered to achieve excellence. Total quality management can be defined as a change agent which will assist organizations to survive in this tough, unforgiving & changing environment. Implementing and sustaining total quality management is not a smooth sailing for any organization and many issues will have to be addressed. To survive in this turbulent environment, companies further needs to improve their performance, and the beast way forward is to become a high performance organisation. A high performance organization would have several traits, which would support it, and one of the important ones is Job design. Any organization would have a defined mission and set objectives to achieve it, the said variables would depend on the customer base and the internal strengths possessed. Nestles being a company with a rich history and being renowned for being the largest food manufacturing company in the world incorporates all the things defined and practiced. The department management accounting is service oriented, and it has no direct linkage to performance measures currently in use and by implementing a said few, we expect to improve the efficiency and to achieve the set goals. By looking at these measures, the concepts and the current position of the organization, we continuously strive to improve the organizations performance.

1.0 INTRODUCTION

In this dynamic environment of ours, it is crucial that the companies stay ahead of the competition and embrace change for survival. The way forward is by implementing various change agents like Total quality...
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