8/13/2019 29_908941_as Business Studies Total Quality Management Case Study

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AS BUSINESS STUDIES TOTAL QUALITY MANAGEMENT

CASE STUDY.

Leasdille and Simmons Ltd is a small manufacturing company located inSouth London. The company makes sunglasses. The sunglasses are sold tosupermarkets. The supermarkets then sell the sunglasses on to the generalpublic as an own label item.

The market for own label sunglasses is extremely competitive. There aremany small producers like Leasdille and Simmons in the market whowould love to have contracts with one of the major supermarket chains.Leasdille and Simmons have a contract to supply Tesco. However, theircurrent contract is due to expire next year. Last week the anaging!irector of Leasdille and Simmons met with Tesco"s chief sunglassesbuyer in order to negotiate a new contract. #t the end of a heated

discussion Tesco announced that they would only re$new their contractwith Leasdille and Simmons provided that they could get a price cut of%&' next year.

(esterday e)ele, the anaging !irector met with *emma, the +roductionanager to discuss the implications of the new Tesco contract.

Look *emma at present -&' of our turnover comes from Tesco. e mightnot like what they are offering but there are plenty of our competitors out therewho would gladly accept Tesco"s new contract. #ccepting a %&' price cutneed not reduce our profits, so long as we can cut our costs by a similar

amount. There"s no other solution, as +roduction anager you have got toincrease efficiency/

e)ele went away from the meeting with an idea in her mind. She thoughtthat the best way of decreasing costs inside the factory was by reducingwastage. The company had always operated with a traditional )uality controlsystem. The sunglasses were checked once for )uality at the end of theproduction line by a specialist team of )uality control inspectors. The sameinspectors were also responsible for trying to re$work any poor )ualitysunglasses they found. The aim of the re$working being to rectify any faultsdiscovered so that the defective products could be brought up to the )uality

re)uired by Tesco.

e)ele began to think things through. Surely their current way of working waswasteful. Their current strategy of re$working defective products eventuallyproduces a level of product )uality that is acceptable to Tesco. However, re$working poor )uality is very expensive in terms of materials and labour costs.Secondly, the inspectors cannot examine every pair of sunglasses producedbecause they do not have enough time. They only inspect small samples offinished products. #s a result Tesco fre)uently receives sub$standardsunglasses from Leasdille and Simmons. This could explain why Tesco havebeen so insistent about the price cut.

8/13/2019 29_908941_as Business Studies Total Quality Management Case Study

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e)ele then remembered a topic she had studied at 0ollege in #S Level1usiness Studies called Total 2uality anagement. #fter digging out her old1usiness Studies textbook she went back to *emma the following day

*emma, 3 know that production and )uality is your job but, 3 really think that

we are going about )uality control in the wrong way. #t present we creategood )uality by inspecting it in at the last minute at the end of the productionline. 3 think that we need to switch to a more modern Total 2ualityanagement system where good )uality is built in at every step of theproduction process.

4very pair of sunglasses should be tested for )uality at every step in theproduction process. e shouldn"t wait until the products drop off the end ofthe production line before they are checked for )uality. 2uality needs to bechecked at every stage of production. Shop floor staff should be in charge ofmonitoring their own )uality. 3f they see a fault they should have the authority

to stop the production line in order to fix the problem at source. 2uality mustbe every employees concern, their non$negotiable priority.

1y switching to a Total 2uality anagement system we will be able to cutdown massively on the amount of time and money we currently waste on re$working poor )uality finished products. 1y adopting a Total 2ualityanagement approach we can achieve 5ero defects the first time around. 6oneed for re$working. The aim has got to be to build )uality in at every stage ofproduction rather than trying to inspect it in right at the last minute like we donow. !o you get it *emma7/

*emma resented e)ele"s interference and rather aggressive tone. However,she conceded that she probably did have a point. The company had tobecome more efficient if it was to continue to survive.

Questions.

%. !escribe the main features of a traditional 2uality control system.

8. 4xplain 8 problems that can be created when using a traditional )uality

control system.

9. :utline the main features of Total 2uality anagement.

;. hy is it better to build in )uality rather than trying to create )uality byinspecting it in/7

hat does this mean7

=b> State 8 benefits of 5ero defects.