OPERATIONAL MANAGEMENT -

BSOA-2B

Understanding
Quality
 Presented by
Group 1
Mery Joy Oracion Stella Rea Mercado Gian Carlo Casañada Mariel Buliboli

1 2 3 4
What is Quality
It is an excellence that emphasizes the high
standard or general goodness of something.
It is described as "fitness for use," which centers
on how well something satisfies its primary
purpose and consumer expectations.
Overall, it is the set of features and characteristics
of a product or service that influence its capacity to
meet both explicitly or implicitly needs.
The Total Quality Approach
A management approach to long-term
achievement based on consumer fulfillment and
continuous business process improvement.

Philosophically, it is focused on continuous

improvement in all aspects of an organization.
 Two Views of Quality
Total Quality
Traditional view
Management (TQM)

Focuses on satisfying emphasizes exceeding

established standards and customer expectations
detecting defects after throughout the entire process,
production. preventing faults or defects,
and continual improvement.
 12 Key Elements of Total Quality
Customer
1 Focus
Recognizing and meeting consumer expectations.

Employee
2 including employees in quality improvement and decision-making.
Empowerment

Continuous
3 Improvement Making continuous improvements to all procedures.

Establishing transparent and truthful interactions through channels

4 Communication which plays a large part in maintaining morale and in motivating
employees at all levels.
 12 Key Elements of Total Quality
Facts or Data
5 Driven Decision Employing data to identify problems and make accurate assumptions.
Making

Training and Providing workers with the expertise and knowledge they need to
6 Education deliver quality results.

7 Process Putting importance on productivity and success in managerial

Centered operations.
Strategic and
A critical part of the management of quality to achieve an
8 systematic
approach organization’s vision, mission, and goals.
 12 Key Elements of Total Quality
Supplier
9 Quality
Ensuring providers offer high-quality goods and services.

Measurement to
10 Performance
focus on tracking improvements and evaluating outcomes.

11 Teamwork promoting cross-departmental cooperation and problem solving.

putting more of an emphasis on defect avoidance than on beyond

12 Prevention
correction.
 Quality Gurus
William Edwards Deming (1950s)
Deming's focus on statistical process control (SPC) and the Plan-Do-
Check-Act (PDCA) cycle which significantly changed manufacturing.
SPC uses charts and data analysis to detect and avoid problems early
in the manufacturing process. While PDCA cycle supports continuous
improvement by pushing businesses to plan, implement, assess, and
evolve their operations..
 William Edwards Deming
DEMING’S CHAIN PDCA CYCLE
 Quality Gurus
Joseph M. Juran (1950s-1960s)
Juran focused on quality planning, management, and improvement.
He pioneered the concept of "fitness for use," which defines quality
from the customer's point of view. He also highlighted the
importance of the cost of quality, asking businesses to examine not
only the cost of manufacturing a product, but also the cost of defects
and poor quality.
Joseph M. Juran
 Quality Gurus
Genichi Taguchi (1950s-1980s)
Taguchi's emphasis on resilient design was intended to reduce the
influence of manufacturing differences on product quality. He devised
strategies for designing items that are less prone to production
irregularities, resulting in improved quality and reduced prices. The
"loss function" measured the financial consequences of modifications
from target specifications.
 Quality Gurus
Kaoru Ishikawa (1960s-1970s)
Ishikawa is best known for its quality circles, small employee groups
empowered to identify and solve quality problems on the shop floor.
He also developed the Ishikawa diagram (fishbone diagram), a visual
tool for root cause analysis, helping teams identify the underlying
causes of defects.
Kaoru Ishikawa
FISHBONE DIAGRAM
 Quality Gurus
Philip Crosby (1970s)
Crosby's "Zero Defects" perspectives aimed to prevent errors before
they happened. He emphasized open discussion or communication of
standards for quality, employee participation in quality
improvement, and the significant financial and reputational cost of
"doing things wrong".
 Hindrances To Total Quality
Lack of Leadership Commitment (W. Edwards
Deming & Joseph M. Juran):
Demming emphasis that leadership must possess
"profound knowledge,". Resources could be few
and employees might think that quality is
unimportant if upper management isn't fully
committed to the objective. Nevertheless, Juran
emphasized that top management needs to be
involved in quality planning and enhancement.
Lacking the resources and employee
participation is a barrier for long-term success,
while TQM becomes a meaningless project
without the support from the leadership.
 Hindrances To Total Quality
Lack of Customer Focus (Joseph M. Juran):
According to Juran, quality is "fitness for use"
as seen through the viewpoint of the
consumer. Businesses that just concentrate on
internal measurements could miss chances to
enhance consumer satisfaction.
 Hindrances To Total Quality
Short-Term Focus (Philip Crosby):
Crosby criticized the emphasis on "doing
things right" based on short-term output
targets. This approach values speed over
quality, resulting in rework and displeased
consumers.
 Hindrances To Total Quality
Resistance to Change:
Every quality expert admits that organizations
naturally refuse changes. In order to
implement a continuous improvement culture,
workforce members must overcome their
traditional routines and doubts. If resistance is
not addressed, workers may weaken new
procedures or go back to their old routines,
which could complicate the adoption of TQM.
 Hindrances To Total Quality
Inadequate Training and Education:
Every quality expert emphasizes the
significance of employee training and
education. Employees could be unaware how to
contribute effectively if they aren't properly
trained on TQM principles, quality tools, and
how their responsibilities contribute to quality.
 Quality Certifications
• Quality certifications refer to official recognitions
granted by independent organizations or regulatory
bodies that confirm a product, service, or process
meets specific quality standards. These certifications
typically involve rigorous evaluation processes,
audits, and compliance assessments against
predefined criteria.
• They serve as assurances to consumers, businesses,
and other stakeholders that the certified entity
adheres to established quality management
principles, ensuring consistency, reliability, and often
safety in products or services.
Some examples include:
• GMP (Good Manufacturing Practice): Essential
for industries like pharmaceuticals, cosmetics, and
food, GMP certification ensures that products are
consistently produced and controlled according to
quality standards.

• Halal Certification: Ensures that products comply

with Islamic law requirements and are permissible
for Muslims to consume.

• BIR Accreditation (Bureau of Internal

Revenue): For accounting and invoicing systems to
ensure compliance with tax laws and regulations in
the Philippines.
 Generalization, Application,
and eLMS
Generalization
- In the context of learning and cognition,
generalization refers to the ability to apply
knowledge or skills learned in one situation to
another similar but different situation. It involves
transferring understanding or capabilities from
specific instances to broader contexts. For example, if
someone learns to solve a particular type of math
problem, they can generalize that skill to solve
similar problems they haven't encountered before.
 Generalization, Application,
and eLMS
Application
- refers to the practical use or implementation of
knowledge, skills, principles, or theories learned. It
involves utilizing what has been learned in real-
world situations to solve problems, make decisions,
or achieve specific goals. For instance, a software
engineer applies coding principles to develop a new
application or a chef applies culinary techniques to
create a new dish.
 Generalization, Application,
and eLMS
eLMS (Electronic Learning Management System)
- is a digital platform or software used to manage,
deliver, and track learning and training programs
electronically. It provides tools for creating,
organizing, distributing, and managing educational
content and resources. eLMS platforms are
commonly used in educational institutions, corporate
training environments, and online courses to
facilitate learning activities such as content delivery,
assessments, collaboration, and progress tracking.
 Quality and
Competitiveness

Quality refers to the degree of excellence or superiority of a product,

service, or process. It encompasses factors such as reliability, durability,
performance, and meeting customer expectations. Achieving high-
quality standards requires robust processes, adherence to standards,
continuous improvement, and a focus on customer satisfaction.
 Quality and
Competitiveness

Competitiveness involves factors such as productivity, innovation,

efficiency, infrastructure, economic policies, and the business
environment. Competitiveness determines the capacity of entities to
attract investments, export goods and services, create jobs, and
contribute to economic growth.
 Relationship between Quality and
Global Competitiveness
The relationship between quality and global
competitiveness is symbiotic and essential for
modern businesses aiming to thrive in
international markets. Quality enhances
competitiveness by driving customer satisfaction,
reducing costs through efficiency gains, fostering
innovation and differentiation, ensuring regulatory
compliance, integrating supply chains, building a
strong reputation, and promoting long-term
sustainability.
 Relationship between Quality and
Global Competitiveness
Companies that prioritize and maintain high
standards of quality are better positioned to meet
global challenges, attract discerning customers, and
sustain growth in an increasingly competitive
global economy. Thus, quality not only serves as a
hallmark of excellence but also as a strategic
imperative for achieving and maintaining global
competitiveness.
Cost of Poor Quality
The cost of poor quality refers to the financial and non-
financial impacts incurred due to defects, errors,
inefficiencies, or failures in products or services. These
costs can be categorized into several types:

1. Internal Failure Costs: Costs incurred before the

product reaches the customer due to defects, such as
rework, scrap, and downtime.

2. External Failure Costs: Costs incurred after the

product reaches the customer, including warranty
claims, recalls, replacements, and customer support.
Cost of Poor Quality
3. Appraisal Costs: Costs associated with activities
aimed at ensuring quality, such as inspections, testing,
and quality audits.

4. Prevention Costs: Costs incurred to prevent defects

from occurring, such as training, quality planning,
process improvements, and quality management
systems.
Impact of Competitiveness on
Quality of Life
Competitiveness can have a significant impact on
quality of life in various ways:

1. Economic Opportunities: A competitive economy

tends to offer more job opportunities and higher wages,
leading to improved standards of living for individuals
and families. This can positively impact access to
healthcare, education, housing, and other essential
services.
2. Innovation and Technology: Competitive
environments encourage innovation and technological
advancement. This can lead to the development of new
products, services, and processes that enhance quality
of life through improved efficiency, convenience, and
sustainability.

3. Infrastructure Development: Competition often

drives investments in infrastructure such as
transportation, communication, and utilities. Improved
infrastructure can enhance connectivity, accessibility,
and overall living conditions.
4. Social Well-being: Competitive environments can
foster a sense of community and collaboration. It may
encourage social initiatives, cultural activities, and
philanthropy, which contribute to a richer social fabric
and improved mental well-being.

5. Health and Safety: Competitive markets often lead

to higher standards of health and safety regulations.
This can result in safer working conditions, cleaner
environments, and better access to healthcare services,
thereby improving overall health outcomes and life
expectancy.
 Factors Inhibiting Competitiveness
Several factors can inhibit competitiveness in various
contexts, including:

1. Lack of Infrastructure: Inadequate

transportation, communication networks, energy
supply, and other essential infrastructure can hinder
the efficient operation of businesses and limit market
access.

2. Bureaucracy and Red Tape: Excessive

regulations, complex bureaucratic procedures, and
corruption can increase the cost of doing business,
discourage investment, and slow down economic
activities.
 Factors Inhibiting Competitiveness
3. Limited Access to Capital: Difficulty in accessing
financing, particularly for small and medium-sized
enterprises (SMEs), can restrict growth opportunities
and innovation.

4. Poor Governance and Political Instability:

Weak governance, political instability, and
inconsistent policies can create uncertainty for
businesses, deter foreign investment, and undermine
economic growth.
Factors Inhibiting Competitiveness
5. Skills Shortages: Insufficient skilled labor or
mismatch between available skills and industry
needs can limit productivity and innovation
potential.

6. Market Concentration: Dominance by a few

large firms or monopolistic practices can reduce
competition, stifle innovation, and limit consumer
choice.
 Factors Inhibiting Competitiveness
7. Inefficient Regulatory Environment: Overly
restrictive or outdated regulations, lack of regulatory
clarity, and barriers to entry can impede competition
and entrepreneurship.

8. Weak Intellectual Property Rights: Inadequate

protection of intellectual property rights can
discourage innovation and technology transfer,
reducing competitiveness in knowledge-based
industries.
 Factors Inhibiting Competitiveness
9. Inadequate Education and Training: Poor
education systems, lack of vocational training
programs, and insufficient investment in human
capital development can limit workforce productivity
and innovation capacity.

10. Environmental and Social Factors: Issues such

as pollution, climate change impacts, social
inequality, and labor rights violations can affect
competitiveness through increased costs, regulatory
compliance burdens, and reputational risks.
Factors Inhibiting Competitiveness
Addressing these factors requires a combination of
policy reforms, investments in infrastructure and
human capital, improvements in governance and
regulatory frameworks, and efforts to promote
competition and innovation.
Comparisons of International
Competitors

Comparing worldwide competitors involves assessing the strengths,

weaknesses, opportunities, and threats (SWOT analysis) of organizations
operating in the same industry across multiple nations. It is an
important step for organizations to understand their position in a global
market.
 Comparisons of International
Competitors
It helps to Identify:
Market share and growth potential of competitors.
Competitive advantages and disadvantages.
Pricing strategies and product offerings.
Innovation and technological capabilities.

Through this comparison, businesses may improve their product development

and marketing efforts, gain a competitive edge, and may enter new markets.
Comparisons of International
Competitors
Examples of Comparisons of International Competitors

Airlines: Emirates (Dubai) vs. Singapore Airlines (Singapore) vs. Qatar

Airways (Qatar) - Comparing these airlines reveals how each uses its
assets to appeal to a certain target market. Emirates provides premium
service to luxury fliers, while Singapore Airlines strives to exceed
expectations with great customer service. Qatar Airways provides an
attractive value with affordable prices and a modern fleet.
Comparisons of International
Competitors
Examples of comparing International Comparison

Smartphone Market: Apple (USA), Samsung (South Korea), Huawei

(China) - This contrast may show Apple's strong brand loyalty in
developed nations and a focus on premium features, whereas Samsung
caters to a broader audience with a broad product line and price range.
Huawei's success is heavily dependent on dealing with geopolitical
issues.
 Industrial Policy and
Competitiveness
Industrial policy is a series of government
activities aimed at promoting the development
and expansion of certain industries or the
economy as a whole. On the other hand
competitiveness is defined as its capacity for
effective production of goods and services and
successfully selling them in both domestic and
international markets.

They work together due to the government's actions

to strengthen domestic industries, giving them a
better chance to succeed in the global market.
 Industrial Policy and
Competitiveness
Here are some of the tools governments might use in
an industrial policy:

Investing in research and development

(R&D): This can help organizations in
developing new technology and products, which
will boost their competitiveness.
Building infrastructure: Investing in
transportation networks, electricity grids, and
communication systems can reduce operational
costs for enterprises in specific industries.
 Industrial Policy and
Competitiveness
Providing subsidies: Financial assistance can
help domestic companies compete with foreign
rivals by lowering their costs.
Training and education: Governments can
fund programs to generate a trained workforce
suited to specific industries.
Trade policies: Trade agreements, tariffs, and
subsidies can be used to both protect domestic
businesses from overseas competition and
promote their productivity.
 Technology and Competitiveness
Technology as a Driver of Competitive Advantage:

Technology helps businesses to produce creative products and

services. This allows them to stand out themselves from rivals and
provide unique offers.
Technology gives people access to huge amounts of data and strong
analytical tools. Companies can use data analytics to get insights into
customer behavior, market trends, and competitive strategy. This
allows them to make more informed judgments and respond rapidly
to changing market conditions.
Technology and Competitiveness
Technology as a Driver of Competitive Advantage:

Technology allows global communication and collaboration.

Companies can use online platforms and e-commerce to enter new
markets and grow their consumer base, increasing their worldwide
competitiveness.
Technology automates processes, improves the use of resources, and
simplifies operations. Lower expenses and more efficiency arise from
this. At that point, businesses can effectively compete on price or
provide better products at lower costs.
 Human Resources and
Competitiveness
A skilled and highly motivated workforce is a critical
asset for any organization striving for competitiveness.

How human resources (HR) practices impact competitiveness?

Workforce Flexibility and Adaptability: In today's

rapidly evolving world of business, adaptability is essential.
HR policies that encourage staff flexibility, such as
upskilling and reskilling programs, assist businesses in
adapting to changing technologies, market trends, and
customer demands.
 Human Resources and
Competitiveness
.
How human resources (HR) practices impact
competitiveness?
Employee Motivation and Engagement: HR strategies
that support employee motivation and engagement result in
a happier and more productive workforce. Employee
engagement increases the likelihood that they will go the
extra mile which improves customer service, produces
higher-quality goods, and fosters a more favorable
workplace atmosphere.
 Human Resources and
Competitiveness
.
How human resources (HR) practices impact
competitiveness?
Recruitment and Retention: Strong HR strategies attract,
develop, and hold onto elite personnel. This guarantees a
solid group of knowledgeable workers capable of boosting
creativity, output, and general performance.
 Characteristics of World-Class
Organizations
1. Customer Focus:
World-class organizations prioritize their customers in all aspects of their
operations. They understand client demands, collect feedback, and use it to
continuously enhance their goods, services, and relationships.

2. Resources and Capabilities:

A world-class organization requires a solid base of resources and
competencies. This includes access to the latest technologies, qualified
workers, and sufficient cash to support research efforts.
 Characteristics of World-Class
Organizations
3. Strategic Vision:
This vision outlines the long-term goals and direction for organizational
efforts, ensuring that they are consistent with the overall business strategy.

4. Strategic Leadership:
Effective leadership is essential, but world-class businesses benefit from
visionary and strategic leaders who can set the agenda, motivate people, and
make solid decisions for long-term success.
 Characteristics of World-Class
Organizations
5. Empowered and Engaged Workforce:
World-class organizations understand the essential role that their workers
play. They invest in attracting, developing, and empowering their
employees. This creates a culture of engagement, ownership, and high
performance.
E-Commerce, Information Quality,
and Competitiveness:
Maintaining Information Quality:
Information must be regularly updated to reflect changes in product
features, pricing, availability, and policies.
To eliminate confusion, ensure that product information is accurate and
consistent across all platforms.(Data Accuracy)
Implementing a strong Content Management System (CMS) allows
efficient information production, editing, and updating.
E-Commerce, Information Quality,
and Competitiveness:
High-Quality E-Commerce Information:
Product descriptions are detailed, including specifications, features,
benefits, and high-resolution images
Correct size charts and sizing recommendations are provided to ensure
a correct fit for clothing and other important products.
Complete shipping and return policies that are simple to identify and
understand.
Price transparency which covers all taxes, fees, and potential additional
costs.
Reviews and ratings from customers that offer insightful opinions from
other purchasers.
 E-Commerce, Information Quality,
and Competitiveness:
Standing Out from the Competition:
By offering complete and precise information, your business will stand out
itself from competitors that might only provide unclear or insufficient
details in a saturated online market. Those who value transparency and a
satisfying shopping experience may be attracted by this differentiation.

Improved Search Engine Optimization (SEO):

Search engines prioritize websites that provide high-quality, relevant
information. Providing detailed product descriptions and information can
boost your website's ranking in search results, resulting in greater organic
traffic and visibility for potential customers.
 Key Global Trends in Quality
Management
Preventative Focus: Moving from catching
defects to preventing them by building quality into
processes from the start.

Data-Driven Quality: Increased use of data

analytics to identify quality issues, trends, and
make informed decisions.

Customer Centricity: Defining quality by how

well it meets customer needs and expectations.
 Key Global Trends in Quality
Management
Global Quality Standards: Widespread adoption
of international standards like ISO 9001 for
consistent quality across borders.

Sustainability Integration: Combining quality

management with sustainability initiatives to
minimize environmental impact and promote
ethical sourcing.
 U.S. Companies: Global Strengths and
Weaknesses in Quality Management:
Strengths:
Innovation and Continuous Improvement: Emphasis on
developing new ideas and constantly refining processes to
achieve better quality.

Quality Management Infrastructure: Established systems

and methodologies for managing quality.

Customer Satisfaction: Strong focus on understanding and

meeting customer needs.
 U.S. Companies: Global Strengths and
Weaknesses in Quality Management:
Weaknesses:
Global Supply Chains: Maintaining consistent quality across
complex, international supply chains can be challenging.
Cost vs. Quality: Balancing the need to control costs with the
importance of meeting quality standards.
Technological Advancements: Adapting to rapid
technological changes and their impact on quality
requirements.
By understanding how accounting can support TQM, along
with these global trends and U.S. strengths and weaknesses,
businesses can develop a well-rounded approach to
achieving and sustaining quality.
 Antithesis of TQM
"Management of Accounting" typically refers
to the approach where accounting practices
and financial metrics are the primary drivers
of managerial decisions. This approach often
focuses heavily on cost control, financial
reporting, and achieving financial targets as
key measures of success.
 Antithesis of TQM
In contrast, "Total Quality Management
(TQM)" is a philosophy that emphasizes
continuous improvement, customer
satisfaction, and the involvement of all
employees in quality improvement efforts.
TQM promotes a comprehensive approach to
quality that encompasses processes, people,
and systems across the organization.
 Antithesis of TQM
Therefore, when we discuss "Management of
Accounting" as the antithesis of "Total
Quality," we're highlighting the conflict
between these two approaches:
 Antithesis of TQM
1. *Focus*: Management of Accounting
prioritizes financial metrics and cost
considerations, potentially overlooking non-
financial aspects crucial to organizational
success, such as customer satisfaction and
employee engagement.
 Antithesis of TQM
2. *Philosophy*: Total Quality Management
advocates a broader view of organizational
excellence, integrating quality into every aspect
of operations, fostering innovation, and
ensuring customer needs are met consistently.
 Antithesis of TQM
In essence, while "Management of Accounting"
may streamline financial management and
control, it risks neglecting the holistic
approach to quality and customer focus that
TQM promotes. Thus, they represent
contrasting paradigms in how organizations
approach management and operational
excellence.
THANK YOU FOR LISTENING!