Semester 2 Assgn 2 Opeartion Mng. vs Quality Management

8/14/2019 Semester 2 Assgn 2 Opeartion Mng. vs Quality Management

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Zahid Nazir

Roll # AB523655

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[ T Y P E T H E C O M P A N Y A D D R E S S ]

ASSIGNMENT2

OPERATIONS

MANAGEMENT

OPERATION MANAGEMENT

VS

QUALITY MANAGEMENT

ZAHID NAZIR

Roll No. AB523655

MBA Executive

2nd Semester , Spring 2009

A L L A M A I Q B A L O P E N U N I V E R S I T Y , I S L A M A B A D

C O M M O N W E A L T H O F L E A R N I N G E X E C U T I V E M B A P R O G R A M M E


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OPERATION MANAGEMENT

Every business is managed through three major functions: finance, marketing,

and operations management. Figure 1-1 illustrates this by showing that the vice

presidents of each of these functions reports directly to the president or CEO

of the company. Other business functionssuch as accounting, purchasing,

human resources, and engineeringsupport these three major functions.

Finance is the function responsible for managing cash flow, current assets, and

capital investments. Marketing is responsible for sales, generating customerdemand, and understanding customer wants and needs. Most of us have some

idea of what finance and marketing are about, but what does operations

management do?

Fig: Organizational chart showing the three major business functions

Operations management (OM) is the business function that plans, organizes,

coordinates, and controls the resources needed to produce a companys goods

and services.

Operations management is a management function. It involves managing

people, equipment, technology, information, and many other resources.


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Operations management is the central core function of every company. This is

true whether the company is large or small, provides a physical good or a

service, is for profit or not for profit. Every company has an operations

management function. Actually, all the other organizational functions are there

primarily to support the operations function. Without operations, there would

be no goods or services to sell. Consider a retailer such as Gap that sells casual

apparel. The marketing function provides promotions for the merchandise, and

the finance function provides the needed capital. It is the operations function,

however, that plans and coordinates all the resources needed to design,

produce, and deliver the merchandise to the various retail locations. Without

operations, there would be no goods or services to sell to customers.

WHY OPERATION MANAGEMENT

The importance of operations management was not always recognized by

business. In fact, following World War II American corporations were

dominated by marketing and finance functions. The United States had just

emerged from the war as the undisputed global manufacturing leader due inlarge part to efficient operations. At the same time Japan and Europe were in

ruins with their businesses and factories destroyed. U.S. companies were left

to fill these markets: the post-World War II period of the 1950s and 1960s

represented the golden era for U.S. business. The primary opportunities were

in the areas of marketing, to develop the large potential markets for new

products, and in finance, to support the growth. Since there were no

significant competitors, the operations function became of secondary

importance, because companies could sell what they produced. Even thedistinguished economist John Kenneth Galbraith was noted as saying: the

production problem has been solved.

Then in the 1970s and 1980s things changed. American companies experienced

large declines in productivity growth, and international competition began to

be a challenge in many markets. In some markets such as the auto industry,


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SYSTEM OF OPERATION MANAGEMENT (Transformation Process)

The role of operations management is to transform a companys inputs intothe finished goods or services. Inputs include human resources (such as

workers and managers), facilities and processes (such as buildings and

equipment), as well as materials, technology, and information. Outputs are the

goods and services a company produces.

Figure shows this transformation process. At a factory the transformation isthe physical change of raw materials into products, such as transforming

leather and rubber into sneakers, denim into jeans, or plastic into toys. At an

airline it is the efficient movement of passengers and their luggage from one

location to another. At a hospital it is organizing resources such as doctors,

medical procedures, and medications to transform sick people into healthy

ones.

Operations management is responsible for orchestrating all the resources

needed to produce the final product. This includes designing the product;


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deciding what resources are needed; arranging schedules, equipment, and

facilities; managing inventory; controlling quality; designing the jobs to make

the product; and designing work methods. Basically, operations management

is responsible for all aspects of the process of transforming inputs into outputs.

Customer feedback and performance information are used to continually

adjust the inputs, the transformation process, and characteristics of the

outputs. As shown in Figure , this transformation process is dynamic in order to

adapt to changes in the environment.

Proper management of the operations function has led to success for many

companies. For example, in 1994 Dell Inc. was a second-tier computer maker

that managed its operations similar to others in the industry. Then Dell

implemented a new business model that completely changed the role of its

operations function. Dell developed new and innovative ways of managing the

operations function that have become one of todays best practices. These

changes enabled Dell to provide rapid product delivery of customized products

to customers at a lower cost, and thus become an industry leader.

For operations management to be successful, it must add value during the

transformation process. We use the term value added to describe the net

increase between the final value of a product and the value of all the inputs.

The greater the value added, the more productive a business is. An obvious

way to add value is to reduce the cost of activities in the transformation

process. Activities that do not add value are considered a waste; these include

certain jobs, equipment, and processes. In addition to value added, operations

must be efficient. Efficiency means being able to perform activities well, and atthe lowest possible cost. An important role of operations is to analyze all

activities, eliminate those that do not add value, and restructure processes

and jobs to achieve greater efficiency. Todays business environment is morecompetitive than ever, and the role of operations management has becomethe focal point of efforts to increase competitiveness by improving valueadded and efficiency.


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DIFFERENCES BETWEEN MANUFACTURING AND SERVICEORGANIZATIONS

Organizations can be divided into two broad categories: manufacturing

organizations and service organizations, each posing unique challenges for the

operations function. There are two primary distinctions between these

categories. First, manufacturing organizations produce physical, tangible

goods that can be stored in inventory before they are needed. By contrast,

service organizations produce intangible products that cannot be produced

ahead of time. Second, in manufacturing organizations most customers have

no direct contact with the operation. Customer contact is made through

distributors and retailers. For example, a customer buying a car at a car

dealership never comes into contact with the automobile factory. However, in

service organizations the customers are typically present during the creation of

the service. Hospitals, colleges, theaters, and barber shops are examples of

service organizations in which the customer is present during the creation of

the service.

The differences between manufacturing and service organizations are not as

clear-cut as they might appear, and there is much overlap between them. Most

manufacturers provide services as part of their offering, and many service firms

manufacture physical goods that they deliver to their customers or consume

during service delivery. For example, a manufacturer of furniture may also

provide shipment of goods and assembly of furniture. On the other hand, a

barber shop may sell its own line of hair care products. You might not know

that General Motors greatest return on capital does not come from selling carsbut rather from post sales parts and service. The differences between

manufacturing and services are shown in Figure 1-3, which focuses on the

dimensions of product tangibility and the degree of customer contact. Pure

manufacturing and pure service extremes are shown, as well as the overlap

between them.


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Fig: Characteristics of manufacturing and service organizations

Even in pure service companies some segments of the operation may have low

customer contact while others have high customer contact. The former can be

thought of as back room or behind the scenes segments. Think of a fast-food operation such as Wendys, for which customer service and customer

contact are important parts of the business. However, the kitchen segment of

Wendys operation has no direct customer contact and can be managed like a

manufacturing operation. Similarly, a hospital is a high-contact service

operation, but the patient is not present in certain segments, such as the lab

where specimen analysis is done.

In addition to pure manufacturing and pure service, there are companies thathave some characteristics of each type of organization. For these companies it

is difficult to tell whether they are actually manufacturing or service

organizations. Think of a post office, an automated warehouse, or a mail-order

catalog business. These companies have low customer contact and are capital

intensive, yet they provide a service. We call these companies quasi-

manufacturing organizations.


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TYPES OF OPERATIONS

Types ofOperations

ManufacturingSystem

ContinuousProduction

MassProduction

(Flow)

ProcessingProduction

IntermittentProduction

BatchProduction

JobProduction

Service System

Basic Types of Production Processes

Intermittent Production System

Production is performed on a start-and-stop basis, such as for the manufacture

of made-to-order products.

Mass Production

A special type of intermittent production process using standardized methods

and single-use machines to produce long runs of standardized items.

Mass Customization

Designing, producing, and delivering customized products to customers for ator near the cost and convenience of mass-produced items.


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Mass customization combines high production volume with high productvariety.Elements of mass customization:

Modular product design

Modular process design

Agile supply networks

Continuous Production ProcessesA production process, such as those used by chemical plants or refineries, that

runs for very long periods without the start-and-stop behavior associated with

intermittent production.

Enormous capital investments are required for highly automated facilities thatuse special-purpose equipment designed for high volumes of production andlittle or no variation in the type of outputs.Mass Production System (Flow)

Continuous Production

Anticipation of demand

May not have uniform production

Standardized Raw material

Big volume of limited product line

Standard facility- high standardization.

Fixed sequence of operation Material handling is easier

High skilled operator not required

More Human problem is foreseen

Huge investment.

High raw material inventory.


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Processing Production System

Extended form of mass production system F.G of one stage is fed to next stage

More automatic machines

One basic raw material is transferred into several products at severalstages.

Less highly skilled workers required

More human problems foreseen

Highly standardized system

Batch Production System

Highly specialized Human resource is required

Highly specialized multi tasking machines

Machines are shared.

Production in batches

Production lots are based on customer demand or order.

No single sequence of operation

Finished goods are heterogeneous

Custom built / job order production system

Highly specialized Human resource is required

Highly specialized multi tasking machines Machines are shared

Raw material is not standardized

Process is not standardized

No scope for repetition of production


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Comparative study of different production systems

TypeParameter

Mass/ Flow Process Job Batch

Per unitmanf.cost

High Low High High

Size &

Capital Invest.

Large

Less

V. Large

High

Small

Low

Medium

High

Flexibility No No More More

Technical abilitySkills

Less Less High High

Orgn. Structure Line staff Line staff Functional Functional

Industrialapplication

Automobile

Sugar

Refinery

Chemical

Petroleum

Milk

process.

Construction

Bridges

SPM

Consumerprod.

M/c. Tools

OPERATIONS MANAGEMENT DECISIONS

Decisions made in operations management are mainly of two types:

Strategic Decisions

Tactical Decisions

Long-term decisions that set the direction for the entire organization are called

strategic decisions. They are broad in scope and set the tone for other, more

specific decisions. They address questions such as: What are the unique

features of our product? What market do we plan to compete in? What do we

believe will be the demand for our product?


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Short-term decisions that focus on specific departments and tasks are called

tactical decisions. Tactical decisions focus on more specific day-to-day issues,

such as the quantities and timing of specific resources. Strategic decisions are

made first and determine the direction of tactical decisions, which are made

more frequently and routinely. Therefore, we have to start with strategic

decisions and then move on to tactical decisions. This relationship is shown in

Figure. Tactical decisions must be aligned with strategic decisions, because

they are the key to the companys effectiveness in the long run. Tactical

decisions provide feedback to strategic decisions, which can be modified

accordingly.

Fig: The relationship between strategic and tactical decisions

FUNCTIONS OF OPERATION MANAGEMENT

Operation management involves the management of human, technology and

system resources. To manage these resources, operations managers must

perform the same basic functions that all mangers are expected to perform.

The operations management functions include planning, directing, organizing,

staffing, motivating and controlling.

PLANNING

Planning is a management function that involves the establishment of goals

and objectives towards which employees direct a course of action. There are

many different type of planning activities.


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Strategic Planning: It involves the establishment of long-term goals for

the entire organization or system. An example of an OM strategic plan is

to achieve a goal of growth by building and locating a new production

facility.

Tactical Planning: Planning that involves a more specific effort to

establish a means by which to achieve the desired goals and objectives in

the medium term is sometimes referred to as tactical planning. An

example of an OM tactical plan is the stepwise implementation

procedures for locating a new plant.

Operational Planning: Its a shorter term planning that implements the

critical objectives. If the first step of an OM tactical plan to locate a new

plant is to determine which state the plant is to be located in, an

operational plan might establish a team of researchers and detailed

methodology to be used by the team to facilitate their state selection

decision.

DIRECTING

The directing function of management involves supervising, ordering and

commanding. Examples of directing in operations management include making

daily job assignments, giving directions to employees on job-related

procedures, and ordering people to perform specific tasks.

ORGANIZING

The organizing function involves structuring the organizations systems toachieve planned objectives. Examples of organizing in operation management

includes structuring the tasks that make up an employees job, defining the

procedures that are required to produce a product and coordinating individual

and group activities.


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STAFFING

The staffing function of management includes recruiting employees, screening

job applicants, and selecting and training personnel. Staffing can also include

writing job specifications, which are the job requirements that the each worker

is expected to perform for a specific job (for example learning to use

microcomputers), and job descriptions, which define the type of tasks involved

( such as keeping inventories in the stock room).

MOTIVATING

The motivating function of management involves guiding, coaching and

inspiring employees to achieve planned objectives. In operation management

motivating employees involves understanding psychological and sociological

factors that affect employees behavior in the workplace. In recent years, the

motivating function of management has shifted from the study of psychology

of the individual working in the OM system to how the individual interacts with

the OM system. Management is learning how the OM system can be structuredto motivate the employee to achieve planned objectives.

CONTROLLING

The controlling management function involves setting standards, monitoring,

measuring, observing and when necessary, taking appropriate actions to

adjust the system to keep it on track to achieve planned objectives. Bothhuman and physical resources requires some type of control. Examples of

operation management controlling include using computerized lasers to spot

defects in paint jobs and auditing freight bills to determine the accuracy of

vendor delivery times and charges.


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ACTIVITIES IN OPERATION MANAGEMENT

In addition to the management functions, operation managers perform manyother activities. These operation management activities are what make up an

operations managers job and are often included in OM job descriptions and

job specifications. The OM activities can be organized into three categories of

activities:

Planning for the future

Planning and controlling operations

Improving products and systems

a). PLANNING FOR THE FUTURE

operations managers must anticipate the future and plan it for today.

Three activities that are focused on planning for the future are total

quality management, forecasting and improving technology and

international integration of OM systems.

Total Quality management

Total quality management (TQM) is primarily concerned with the

principles and overall philosophy that drive an organization to seek

quality in the products and services that it provides to customers. TQM is

a corporate level strategy that becomes an operation management

strategy for manufacturing and service excellence. TQM is so

prerequisite to OM success.

Forecasting

Operations mangers must be able to accurately forecast demand for

timely production of their products. They must be able to forecast

human resource needs to acquire necessary worker inputs into their

transformation process. Managers must be acquainted with different

types of forecasting that affect the OM system.


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Improving Technology and International Integration of OM System

International competition is forcing operations managers to developglobal planning strategies. Adapting and integrating international

strategies require operations managers to understand the various

restrictive roles the integration of management resources can play, and

the strategic opportunities offered by advanced OM technology. For

example, manufacturing firms during the 1980s that choose a strategy

of cost reduction to be competitive with international manufacturers

found their strategy to be successful in the 1990s when coupled with the

mid 1980s devaluation of the US dollar.

b). PLANNING AND CONTROLLING OPERATIONS

Another category of operations management activities involves basic

planning and controlling activities. These activities includes production

planning, materials management, inventory management and

scheduling.

Production Planning

Production planning activities involves setting and achieving goals

specifically related to operations management planning of management

resources.

Materials Management

The materials management activity involves the grouping of

management functions supporting material flow. Materials managementincludes activities such as the purchase and internal control of

production materials; the planning and control of work in process

(unfinished products in various stages of production; and warehousing

shipping and distribution of the finished product.


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Inventory Management

The inventory management activity is concerned with the planning andcontrol of inventories. There are two general type of inventory;

dependant demand inventory and independent demand inventory.

Dependant demand inventory is made up of inventory items that are

consumed within an organization to produce a finished product. For

example, rubber- the raw material used by the Good Year Company to

produce automobile tires for consumers is an example of a dependant

demand inventory item. Dependant demand inventory items depend on

consumer demand of finished products.

Independent demand inventory comprises inventory items consumed by

customers external to the organization. For example, a grocery stores

inventory of flashlight batteries is an independent demand inventory

item.

Scheduling

Scheduling involves assigning specific tasks, jobs and work for

equipment, facilities and human resources in accordance with a timed

planning horizon.

c). IMPROVING PRODUCT AND SYSTEMS

Operation management activities in the 1990s must also support

continuous improvement of product and systems. These activities

include product and service design, quality assurance, facility locationanalysis and layout design and job design and work measurement.

Product and Service Design

Product and service design includes all the activities that are required to

create and structure a product or service. Although the design stage

largely involves design engineers and marketing personnel, operation

managers are often included as well, to ensure that the end result is


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producible. Examples of activities in product design includes performing

cost analysis to determine if new product designs are economically

feasible, linking activities between computer aided design systems and

actual production facilities, and sequencing activities to ensure an

ordered sequence of production tasks to complete the product.

Quality Assurance

The quality assurance activity involves the rules and methodological and

technological aspects of manufacturing and service quality. It includes a

comprehensive analysis of the entire operations management system

from input to output on any attribute that can be used to define quality.

Quality assurance seeks to implement TQM as an OM strategy. Examples

of quality assurance include reducing product defects, maintaining a

customer service department and monitoring the quality of incoming

raw materials.

Facility Location and Layout Design

The facility location activity involves determining where to establish amanufacturing plant or a service facility. The layout design activity

involves determining how the internal facility (departments, equipment,

and service or work stations) will be arranged.

Job Design and Work Measurement

The job design activity involves the structuring of work tasks assigned to

an employee. Job design is the study of the tasks that make up a job. The

work measurement activity involves the timing of tasks that comprise ajob.

Not all operations managers perform all of these activities. Many

mangers make a productive career out of performing just one of the

above activities. To be a successful manager, one must have some

knowledge of all of these activities and the role they play in an

organization.


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COMMUNICATION IN OPERATION MANAGEMENT

In the age of information, operation managers must be able to

communicate and interact with the people with whom they work and

with those for whom the work is performed. There are two types of

communication:

i). Communication or interaction within the organization is known as

cross-functional relations. This is the communication b/w different

function or departments like accounting, marketing, finance, IT,

personnel and technical specialists.

Marketing Finance

AccountingOperations

ManagementIT

Technical

Specialist Personnel

DEPARTMENTAL AREAS WITHIN THE INTERNAL

ENVIRONMENT OF THE ORGANIZATION

ii). Communication or interaction with individuals outside the

organization is referred to as external relations. External individuals

includes customers, public interest groups, competitors, stockholders

and owners, suppliers and government.


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CustomersPublic Interest

groups

GovernmentTHE

ORGANIZATIONCompetitors

Suppliers Stockholders &Owners

THE ORGANIZATION AND THE EXTERNAL ENVIRONMENT

**********************


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Zahid Nazir

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The philosophy is to keep improving the quality of an organization. It is defined

by four keys:

Plan: Design or revise business process components to improve results

Do: Implement the plan and measure its performance

Check: Assess the measurements and report the results to decision

makers

Act: Decide on changes needed to improve the process

The consolidation phase enables the organization to take stock of what has

been taking place and to ensure made to processes that require

documentation (both to allow processes to be repeatable and to facilitate

recognition of the achievement of some form of quality standard).

QUALITY ASSURANCE

It is part of quality management focused on providing confidence that qualityrequirement will be fulfilled.

Productions quality starts with process capable of producing to design

Specification and continuous with an inspection program arises if standards are

being met. As said earlier the initial deviation concerning specification is based

on precision sought by customers and accuracy attainable by production

facilities. Given a process capable of obtaining the required precision

unacceptable variations still occurs. Bluent tools, misalignment due to wearand tear of machinery, workers unless they can contribute to inferior output

from a process inherently capable of acceptable quality. Coordinatorcontrolled

activities to prevent this and ensuring what customer wants they get.


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QUALITY INSPECTIONS

The single act most costly associated with quality control is inspection (e.g.technicians testing concrete slabs in lab, food inspectors are also inspecting

food grading tea, etc). In addition to maintaining quality inspectors provide

information by which the performance of sorters, machines, departments, and

plans can be evaluated.

COST OF QUALITY

Prevention costs

Quality planning

Formal Technical Reviews

Test equipment

Training

Appraisal costs

In-process and inter-process inspection Equipment calibration and maintenance

Testing

Failure costs

Internal failure costs

Rework

Repair

Failure mode analysis

External failure costs

Complaint resolution

Product return and replacement

Help line support

Warranty work


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EVALUATION OF QUALITY CONTROL

Part 1: The ancient Egyptians demonstrated a commitment to quality in theconstruction of their pyramids Greeks set high standards in arts and crafts. The

quality of Greek architecture of the 5th century BC was the motivation behind

subsequent architectural construction of Rome. Roman built cities; bridges and

roads inspire us even today.

Part 2: up to 1800 production of goods and services was predominantly

confirmed to single individuals/family responsible for quality of product

(operator quality control period)

Part 3: Starting in early 1900 1920 . The second phase called former quality

control period. With the industrial revolutions (steam engine-James watt-coal

and iron) came the concept of mass production which was based on principle

of specialization of labor .supervisor will be responsible for overall quality.

(Companies with machine power in place of Human power alone came into

existence.

Part 4: Period from 1920- 1940. This is the inspection quality control period.

Product and processes become more complicated and production volume

increased. No. of workers reporting to a foreman increased. Inspectors were

therefore designated to check the quality of the product item with those of

standards. Non-conforming items were either reworked if feasible or were

discarded.

During the period the foundations of statistical aspects of quality control were

being developed. Bell labs proposed the concept of using statistical charts to

control the variables of a product dodge and rowing proposed acceptance

sampling.

1930 saw the application of acceptance sampling plan in industring .In 1929

Walter show hart got sponsorship of ASTM, ASME, ASA for creating a joint


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committee for the development of statistical applications in engineering and

manufacturing.

US Food Drugs and cosmetic Act 1938 came into existence-a quality measure.

Phase 5: the next phase in the evaluation process occurred between 1940-1960

and is termed as statistical quality control phase.

American society for quality control was formed in 1946. Use of quality control

procedures however no where close to the level that it should have been even

in America. Japan although totally destroyed during World War II embraced the

new philosophical whole-heartedly.

QUALITY ASSURANCE

Analysis

Auditing

Reporting

Goal of quality assurance

Provide management with the data necessary to be informed about

product quality.

Make confidence and be sure that product quality is meeting .

Quality Standards

The International Organization for Standardization (ISO) created the Quality

Management System (QMS) standards in 1987. These were the ISO 9000:1987

series of standards comprising ISO 9001:1987, ISO 9002:1987 and ISO

9003:1987; which were applicable in different types of industries, based on the

type of activity: designing, production or service delivery. The standards have


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been regularly reviewed every few years by the International Organization for

Standardization. The version in 1994 and was called the ISO 9000:1994 series;

comprising of the ISO 9001:1994, 9002:1994 and 9003:1994 versions. The last

revision was in the year 2000 and the series was called ISO 9000:2000 series.

However the ISO 9002 and 9003 standards were integrated and one single

certifiable standard was created under ISO 9001:2000. Since December 2003,

ISO 9002 and 9003 standards are not valid, and the organizations previously

holding these standards need to do a transition from the old to the new

standards. The ISO 9004:2000 document gives guidelines for performance

improvement over and above the basic standard (i.e. ISO 9001:2000).

The Quality Management System standards created by ISO are meant to certify

the processes and the system of an organization and not the product or service

itself. ISO 9000 standards do not certify the quality of the product or service.

Recently the International Organization released a new standard, ISO 22000,

meant for the food industry. This standard covers the values and principles of

ISO 9000 and the HACCP standards. It gives one single integrated standard forthe food industry and is expected to become more popular in the coming years

in such industry.

The most elaborated and accepted concept of quality management is the

model of the EFQM Excellence Model.

THE DETERMINANTS OF QUALITY

The degree to which a product or service successfully satisfying its intended

purpose has four primary determinants

1) Quality of design

2) How well it confirms to the design

3) Ease of use

4) Service after delivery


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Quality of design

Quality of design refers to the intentions of designers to include or exclude

certain features in a product or service (e.g.: different automotives with

different size appearance, fuel economy, comfort, material used etc) These

differences reflect choices made by designers that determines the quality of

design. There design decisions take into account customer wants, production

or service capabilities, safety, liability cost and similar other considerations.

Designers may work closely with marketing and operations department. A

poor design can result in difficulties in production or service. For example,materials might be difficult to obtain specifications to meet, procedure difficult

to follow, similarly a superior design usually cannot offset

poor workmanship.

Quality of conformance

Refers to the degree to which goods and services conform (i.e. to achieve) the

intent of designers. This is affected by factors such as the capability ofequipments, skills, training, taking prompt corrective action etc. (That is the

reason we want designers to work in close coordination with manufacturing

and inspection department during pilot job and procedures for manufacture

developed accordingly.

Ease of Use

The determinants of quality does not stop once the product or service hasbeen sold. Ease of use and user instructions are important. They increase the

chances but do not guarantee, that the product will be used for its intended

purposes and in such a way that it will continue to function properly and safely.

(i.e. user misused case) Much of the same can be applied to services also.

Customers, patients, clients must be clearly informed. Much of the instructions

takes the form of printed instructions, labels and what to do if something goes

wrong.


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Service after delivery

For a variety of reasons products do not always perform as expected andservices do not always yield the desired results. Through recall adjustmentreplacement, buyback etc this situation is remedied.

Quality of care should be defined in light of both technical standards and

patients' expectations. While no single definition of health service quality

applies in all situations, the following common definitions are helpful guides:

Technical performance

Access to services Effectiveness of care

Efficiency of service delivery

Interpersonal relations

Continuity of services

Safety

Physical infrastructure and comfort

Choice

QUALITY MANAGEMENT PRINCIPLES

Following are the eight quality management principles on which the quality

management system standards of the revised ISO 9000:2000 series are based.

These principles can be used by senior management as a framework to guide

their organizations towards improved performance. The principles are derived

from the collective experience and knowledge of the international experts who

participate in ISO Technical Committee ISO/TC 176, Quality management and

quality assurance, which is responsible for developing and maintaining the ISO

9000 standards.

Principle 1 Customer focusOrganizations depend on their customers and therefore should understand

current and future customer needs, should meet customer requirements and

strive to exceed customer expectations.


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Principle 2 Leadership

Leaders establish unity of purpose and direction of the organization. Theyshould create and maintain the internal environment in which people can

become fully involved in achieving the organization's objectives.

Principle 3 Involvement of people

People at all levels are the essence of an organization and their full

involvement enables their abilities to be used for the organization's benefit.

Principle 4 Process approach

A desired result is achieved more efficiently when activities and related

resources are managed as a process.

Principle 5 System approach to management

Identifying, understanding and managing interrelated processes as a system

contributes to the organization's effectiveness and efficiency in achieving its

objectives.

Principle 6 Continual improvement

Continual improvement of the organization's overall performance should be a

permanent objective of the organization.

Principle 7 Factual approach to decision making

Effective decisions are based on the analysis of data and information.

Principle 8 Mutually beneficial supplier relationships

An organization and its suppliers are interdependent and a mutually beneficial

relationship enhances the ability of both to create value.


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BENCHMARKING

Benchmarking (also "best practice benchmarking" or "processbenchmarking") is a process used in management and particularly strategic

management, in which organizations evaluate various aspects of their

processes in relation to best practice, usually within their own sector. This then

allows organizations to develop plans on how to adopt such best practice,

usually with the aim of increasing some aspect of performance. Benchmarking

may be a one-off event, but is often treated as a continuous process in which

organizations continually seek to challenge their practices.

A process similar to benchmarking is also used in technical product testing and

in land surveying. See the article benchmark for these applications.

Advantages of benchmarking

Benchmarking is a powerful management tool because it overcomes

"paradigm blindness." Paradigm Blindness can be summed up as the mode of

thinking, "The way we do it is the best because this is the way we've alwaysdone it." Benchmarking opens organizations to new methods, ideas and tools

to improve their effectiveness. It helps crack through resistance to change by

demonstrating other methods of solving problems than the one currently

employed, and demonstrating that they work, because they are being used by

others.

Competitive benchmarking

Advantage of the benchmarking for a company:

1. A better understanding of the wants (expectations) of the customer because

it is: based on the reality of the market estimated in an objectivist way.


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2. A better economic planning of the purposes and the objectives to achieve in

the company because they are: centered on what takes place outside

controlled and mastered.

3. A better increase of the productivity: resolution of the real problems

Understanding of the processes and what they produce

4. Better current practices Search for the change Many decisions practices of

break

5. A better competitiveness thanks to: a solid knowledge of the competition a

strong implication of the staff new ideas on practices and tried techniques.

Benchmarking has consequences which are beyond the process itself: it

reforms all the levels of the company.; modifies the process of manufacture of

the product leads(drives) ; also reforms the hierarchical organization of the

company, the product itself, and the state of mind of the employees.

Procedure

1. Identify your problem areas - Because benchmarking can be applied to any

business process or function, a range of research techniques may be required.

They include: informal conversations with customers, employees, or suppliers;

exploratory research techniques such as focus groups; or in-depth marketing

research, quantitative research, surveys, questionnaires, reengineering

analysis, process mapping, quality control variance reports, or financial ratioanalysis.

2. Identify other industries that have similar processes - For instance if one

were interested in improving handoffs in addiction treatment s/he would try to

identify other fields that also have handoff challenges. These could include air

traffic control, cell phone switching between towers, transfer of patients from

surgery to recovery rooms.


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3. Identify organizations that are leaders in these areas - Look for the very best

in any industry and in any country. Consult customers, suppliers, financialanalysts, trade associations, and magazines to determine which companies are

worthy of study.

4. Survey companies for measures and practices - Companies target specific

business processes using detailed surveys of measures and practices used to

identify business process alternatives and leading companies. Surveys are

typically masked to protect confidential data by neutral associations and

consultants.

5. Visit the "best practice" companies to identify leading edge practices -Companies typically agree to mutually exchange information beneficial to all

parties in a benchmarking group and share the results within the group.

6. Implement new and improved business practices - Take the leading edge

practices and develop implementation plans which include identification of

specific opportunities, funding the project and selling the ideas to theorganization for the purpose of gaining demonstrated value from the process.

Cost of benchmarking

Benchmarking is a moderately expensive process, but most organizations find

that it more than pays for itself. The three main types of costs are:

Visit costs - This includes hotel rooms, travel costs, meals, a token gift,and lost labor time.

Time costs - Members of the benchmarking team will be investing time in

researching problems, finding exceptional companies to study, visits, and

implementation. This will take them away from their regular tasks for

part of each day so additional staff might be required.


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Benchmarking database costs - Organizations that institutionalize

benchmarking into their daily procedures find it is useful to create and

maintain a database of best practices and the companies associated with

each best practice now.

KAIZEN

Kaizen, a Japanese term that basically translates to 'continuous improvement'

or 'change to become good', is a management concept originated by theJapanese in order to continuously effect incremental changes for the better,

involving everybody within the organization from workers to managers. Kaizen

is aimed at producing more and more value with less and less wastes (higher

efficiency), attaining better working environment, and developing stable

processes by standardization.

This never-ending process of achieving small improvements within the

company everyday is in contrast to trying to achieve breakthrough results froma large improvement once in a while. Kaizen as a management technique is

therefore more suitable for organizations with a collective culture that is trying

to achieve long-term gains from a continuous supply of small and less radical

contributions from its employees.

Kaizen implementation is said to operate on the following principles: 1) that

human resources are the company's most important asset; 2) that success can

not be achieved by some occasional radical changes alone, but more so by

incremental yet consistently arriving improvements; and 3) that improvements

must be based on a statistical or quantitative study of the performance of the

process.

Thus, under Kaizen, everyone is a valued contributor to the company's success,

and must therefore be given the necessary education and training in order to


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contribute in his or her own way on a continuous basis. Everyone in the

organization must genuinely believe in the idea of Kaizen and strive to achieve

one small goal at a time, each of which is considered a step towards the

company's over-all success.

Every person must therefore be willing to: 1) learn; 2) communicate; 3) be

disciplined; 4) get involved; and 5) change in order to maximize gains from

Kaizen. Management must also be able to support this Kaizen structure by

aligning resources, metrics, rewards, and incentives to Kaizen principles,

encouraging all employees to contribute in their own ways.

Management programs that promote Kaizen include but are not limited to the

following: 1) employee suggestion systems; 2) recognition systems for

employees who exert effort for continuous improvement; 3) group-oriented

suggestion or improvement systems like Quality Circles (small groups that

perform quality improvement activities); 4) JIT; 5) 5- S; 6) Total Productive

Maintenance; and 7) Total Quality Management.

Kaizen's Business Tenets

1) Not a single day should pass without any kind of improvement anywhere in

the company.

2) Improvement strategies must be driven by customer requirements and

satisfaction.

3) Quality must always take a higher priority over profits.

4) Employees must be encouraged to recognize problems and suggest

improvements to address these problems.

5) Problems must be solved by a collaborative and systematic approach

through cross functional teams.


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6) Process-oriented thinking (as opposed to results-oriented thinking) must be

practiced by everyone, so that every process gets continuously improved fromtime to time.

SIX-SIGMA

6-Sigma refers to a quality improvement and business strategy concept started

by Motorola in the United States in 1987. In statistical terms, 6-Sigma is the

abbreviated form of 6 standard deviations from the mean, which

mathematically translates to about 2 defects per billion. Thus, strictly speaking,

your process is said to have achieved 6- sigma if it is producing no more than 2

defects per billion parts produced.

No company is probably nearly perfect enough to achieve this quality level.

Consequently, the term 6-Sigma in the industry has somehow taken on the

equivalent defect rate of 3.4 ppm, which in reality corresponds to roughly 4.5

sigmas. Thus, in the industry today, a person speaking of 6-sigma is most likely

referring to a quality level equivalent to 3.4 defects per million.

Regardless of how one wishes to use the term 6-sigma, though, it is apparent

that its purpose when its concept was first incepted is to make processes as

consistent as possible in order to reduce the defect rates of their outputs.

Consistency of meeting customer specifications as well as the probability of

meeting them consistently in the future is the essence of 6-sigma. To see how

the number of sigmas relates to the process Cpk and the process ppm level,please refer to the Cpk/ppm Table.

6-Sigma has evolved into a continuous, disciplined, and structured process of

improving operations to make products that are consistently meeting

customer requirements. In effect, 6-Sigma no longer simply means excellent

finished products, but more importantly, excellent processes, services, and

administration. When Motorola started 6- Sigma in the 80's, it was applied to


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repetitive manufacturing processes. Presently, however, the use of 6-Sigma is

well-established in almost all aspects of doing business in a wide range of

industries.

6-Sigma encourages leanness, simplicity, and doing things right the first time,

so that wastes and corresponding costs are avoided. Statistics-based problem

solving, results orientation, and quantifiable top and bottom-line returns are

also ingredients of 6-Sigma. Lastly, 6-Sigma is driven by the voice of the

customer.

TOTAL QUALITY MANAGEMENT

Total Quality Management is a structured system for managing the quality of

products, processes, and resources of an organization in order to satisfy its

internal and external customers, as well as its suppliers. Its main objective is

sustained (if not progressive) customer satisfaction through continuous

improvement, which is accomplished by systematic methods for problem

solving, breakthrough achievement, and sustenance of good results(standardization).

Total Quality Management (TQM) is a management strategy aimed at

embedding awareness of quality in all organizational processes. TQM has been

widely used in manufacturing, education, government, and service industries,

as well as NASA space and science programs.

Total Quality provides an umbrella under which everyone in the organizationcan strive and create customer satisfaction. TQ is a people-focused

management system that aims at continual increase in customer satisfaction at

continually lower real costs.

Definition

TQM is composed of three paradigms:


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Total: Organization wide

Quality : With its usual Definitions, with all its complexities (ExternalDefinition)

Management : The system of managing with steps like Plan, Organize,Control, Lead, Staff, etc.

As defined by the International Organization for Standardization (ISO):

"TQM is a management approach for an organization, centered on quality, based

on the participation of all its members and aiming at long-term success throughcustomer satisfaction, and benefits to all members of the organization and to

society."

Principles of TQM

1) Quality can and must be managed.

2) Everyone has a customer to delight.

3) Processes, not the people, are the problem.4) Every employee is responsible for quality.

5) Problems must be prevented, not just fixed.

6) Quality must be measured so it can be controlled.

7) Quality improvements must be continuous.

8) Quality goals must be based on customer requirements.

5S

Five related terms, beginning with an S sound, describing workplace practices

conducive to visual control and lean production. The five terms in Japanese are:

1. Seiri: Separate needed from unneeded items-tools, parts, materials,

paperwork-and discard the unneeded.


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2. Seiton: Neatly arrange what is left-a place for everything and everything in its

place.

3. Seiso: Clean and wash.

4. Seiketsu: Cleanliness resulting from regular performance of the first three

Ss.

5. Shitsuke: Discipline, to perform the first four Ss.

Muda, Mura, Muri

Three Japanese terms often used together in the Toyota Production System(and called the Three Ms) that collectively describe wasteful practices to beeliminated.

Muda: Any activity that consumes resources without creating value forthe customer.

Mura: Unevenness in an operation; for example, an uneven work pace inan operation causing operators to hurry and then wait.

Muri: Overburdening equipment or operators.

CONTROL CHART

A control chart is a statistical tool used to distinguish between variation in a

Process resulting from common causes and variation resulting from special

causes. It presents a graphic display of process stability or instability over time.

Every process has variation. Some variation may be the result of causes which

are not normally present in the process. This could be special cause variation.

Some variation is simply the result of numerous, ever-present differences in the


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process. This is common cause variation. Control Charts differentiate between

these two types of variation.

One goal of using a Control Chart is to achieve and maintain process stability.

Process stability is defined as a state in which a process has displayed a certain

degree of consistency in the past and is expected to continue to do so in the

future .This consistency is characterized by a stream of data falling within

control limits based on plus or minus 3 standard deviations (3 sigma) of the

centerline.

ISO 14000

The ISO 14000 environmental management standards exist to help

organizations minimize how their operations negatively affect the environment

(cause adverse changes to air, water, or land), comply with applicable laws,

regulations, and other environmentally oriented requirements, and continually

improve on the above.

ISO 14000 is similar to ISO 9000 quality management in that both pertain to the

process (the comprehensive outcome of how a product is produced) rather

than to the product itself. As with ISO 9000, certification is performed by third-

party organizations rather than being awarded by ISO directly. The ISO 19011

audit standard applies when auditing for both 9000 and 14000 compliance at

once.

Standards

The material included in this family of specifications is very broad. The major

parts of ISO 14000 are:

ISO 14001 is the standard against which organizations are assessed. ISO

14001 is generic and flexible enough to apply to any organization

producing any product or service anywhere in the world.


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ISO 14004 is a guidance document that explains the 14001 requirements

in more detail. These present a structured approach to setting

environmental objectives and targets and to establishing and monitoring

operational controls.

These are further explicated by the following:

ISO 14040 discusses pre-production planning and environment goal

setting.

ISO 14020 covers labels and declarations.

ISO 14030 discusses post-production environmental assessment.

ISO 14062 discusses making improvements to environmental impact

goals.

ISO 14063 is an addendum to 14020, discussing further communications

on environmental impact.

ISO 19011 which specifies one audit protocol for both 14000 and 9000

series standards together. This replaces ISO 14011 meta-evaluationhow

to tell if your intended regulatory tools worked. 19011 is now the only

recommended way to determine this.

ISO 14001 is an internationally accepted specification for an environmental

management system. It specifies requirements for establishing an

environmental policy, determining environmental aspects and impacts of

products/activities/services, planning environmental objectives and measurable

targets, implementation and operation of programs to meet objectives and

targets, checking and corrective action, and management review.


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ISO 9000

ISO 9000 is a family of standards for quality management systems. ISO 9000 ismaintained by ISO, the International Organization for Standardization and is

administered by accreditation and certification bodies. For a manufacturer,

some of the requirements in ISO 9001 (which is one of the standards in the ISO

9000 family) would include:

A set of procedures that cover all key processes in the business;

Monitoring manufacturing processes to ensure they are producing

quality product;

Keeping proper records;

Checking outgoing product for defects, with appropriate corrective

action where necessary; and

Regularly reviewing individual processes and the quality system itself for

effectiveness.

A company or organization that has been independently audited and certifiedto be in conformance with ISO 9001 may publicly state that it is "ISO 9001

certified" or "ISO 9001 registered." Certification to an ISO 9000 standard does

not guarantee the compliance (and therefore the quality) of end products and

services; rather, it certifies that consistent business processes are being

applied.

Although the standards originated in manufacturing, they are now employed

across a wide range of other types of organizations, including colleges and

universities. A "product", in ISO vocabulary, can mean a physical object, or

services, or software. In fact, according to ISO in 2004, "service sectors now

account by far for the highest number of ISO 9001:2000 certificates - about 31%

of the total" - source: the ISO Survey 2004


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Advantages

1. Create a more efficient, effective operation2. Increase customer satisfaction and retention

3. Reduce audits

4. Enhance marketing

5. Improve employee motivation, awareness, and morale

6. Promote international trade

********************


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PRACTICAL STUDY

OF ORGANISATION


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GA

COMPANYS OVER

At GlaxoSmithKline, weaspire to excellence inof the business, and enWe offer a competitivebalance between work

GlaxoSmithKline welcoprovide the expertise,prosperous future. We

minds who seek a broagrowth, and whose efworldwide.

GlaxoSmithKline is anopportunities. Our recrcandidate care by listecustomer.

45

XOSMITHKLI

IEW

conduct our business with integritll we do. We know our people areourage everyone to achieve their m

benefits package and recognize thend family life.

es the talent of people from diverdedication and imagination to prlook for individuals with daring spi

range of opportunities for personorts are realized in the improved

xciting organization, which offersitment process aims to achieve thing to your interests, and treating

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E

and honesty, andital to the successaximum potential.need for a healthy

e backgrounds topel us toward aits and inquisitive

l and professionalhealth of people

variety of careere highest level ofyou like a valued


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The organizational struccompany a model forcompany that represent

GSK is a company withsucceed, and to drive thorganized as a flexible

changing marketplace.benefits of size and scaunits, dedicated to deliaround the world.

The new and innovatipharmaceutical businesglobal services such asapproach which will lea

G

GlaxoSmithKline is a leWith nearly $6 billion imarkets, the consumdimension to GSK.

Operating in the fiercemarketing GlaxoSmithKl

46

BUSINESS UNITS

ure of GlaxoSmithKline (GSK) is desexcellence in the pharmaceutical

s best practice in every way.

the size and scale to invest in theat success going forward. To achievcompany, capable of responding q

rganized globally to coordinate actile, the company is built on smaller,ering medicines that relieve the su

ve model for R&D, the focusedthroughout the world and the o

IT and Procurement are some of thour success.

K CONSUMER HEALTHCARE

ader in the worldwide consumern sales, over ten million brands ar healthcare business brings an

ly competitive environment of retine Consumer Healthcare brings ora

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igned to make ourindustry - a new

tools we need toe that goal, GSK isuickly to a rapidly

vities and gain thecustomer-focusedfering of patients

structure of ourganization of oure highlights in the

ealthcare market.nd present in 130

added dynamic

ail and consumerl healthcare, over-


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the-counter medicinespeople.

Brand names such as PaNiquitin smoking cessatione year GSK Consumbillion tablets to relieveand 600 million tubes of

But the driving force beis science. With four

consumer healthcare reas seriously as marketin

GThe Corporate busineleadership, processes,areas of CorporateCorporate Ethics & Cofunctions work individcorporate functions an

The functions aim to aframeworks within andmotivating GSK peopleresponsive business inshared services approaCorporate functions comedia, governments, an

47

and nutritional healthcare produ

nadol, Aquafresh toothpaste, Lucozon products are household names arr Healthcare produces - among m

stomach upsets, six billion tablets otoothpaste.

hind GlaxoSmithKline's Consumer Hdedicated consumer healthcare

ulatory affairs, the business takes sexcellence and offers leading-edge

SK CORPORATE FUNCTIONSss unit within GlaxoSmithKline, ipolicies, standards and services inommunications & Global Commumpliance, Finance, Human Resourcually and in cross-functional team

businesses within GSK.

hieve compliance with legal, finanoutside the corporation; protectinnd the communities in which theyrastructure - combining accountches - to work with GSK's diversnt among their audiences; employ

alysts, institutions and shareholders

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ts to millions of

de, Nicorette andound the world. Inany others - ninepain relief tablets

ealthcare business&D centers and

ientific innovationcapability in both.

s responsible forthe core businessnity Partnerships,es and Legal. Thes across different

ial and regulatoryg, supporting andork. They utilize a

management andbusinesses. The

ees, communities,orldwide.


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GS

In GSK, Information Tecwith all parts of the coadvantage of global scpeople and businesses l

Six IT departments prov

business units and by GS

Cross Functionalchanges have a sbusiness processe

Global eBusiness - Global Strategy &

ensures the IT astrategies.

Project and Portprojects, manageproject managem

Systems and Comcost effective, flerequired by GSK.

Risk Managementrisks resulting froand computerized

48

INFORMATION TECHNOLOGY

nology is a business unit, one that is

pany, all around the world. It is orgale when that is appropriate, whilcally so they have the IT tools they n

Global capabilities:

de core services that are required by

K at large. These IT departments are

Process Design - Ensures that allgnificant, positive impact on the ps.Develops GSK's commercial capabilitApplications - Drives the overall IT strchitecture is coordinated in conc

olio Management - Builds procesproject issues as they progress a

nt groups to build skills and capabiliunications Services - Builds, deploy

xible, computing and communicati

& Security - Identifies and addressesm external or internal use of inforinformation.

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closely integrated

nized to take beste supporting GSKeed to succeed.

each of the

roposed systemsrformance of the

ies in eBusiness.rategy of GSK andert with business

es for approvingd works with theies.and operates the

ons infrastructure

security and otheration technology


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IT is supported by six cAlliances, Human Resou

GLOBA

GSK has 85 manufacturThe sites within the GSK

supply prod produce ov manufactur produce ov supply arou manage abo

Production of nutritionabottles, 350 million Ribcans per year. The annuto about 1,000 millionmanufactured annually

You would be forgiven f- with over 100,000 emthe bottom line. But t

49

ore service teams: Audit, Communices, Legal and Procurement.

L MANUFACTURING AND SUPP

ing sites in 37 countries with overmanufacturing network:

cts to 191 global markets for GSKr 1,200 different brandsalmost 4 billion packs per year

r 28,000 different finished packs perd 6,900 tons of bulk active each yea

ut 2,000 new product launches glob

l products is in excess of 300 millioena tetra packs and 20 million Lucl output of Horlicks is 50 million kilservings. In oral care, the volu

xceeds 600 million tubes.

GSK PHARMACEUTICALS

or thinking that a company the sizeloyees around the world - is only eve truth is that every member of o

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ations, Finance &

Y

5,000 employees.

yearrlly each year

Lucozade/Ribenaozade carbonatedgrams, equivalente of toothpaste

f GlaxoSmithKlineer concerned withur organization is


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equally dedicated to heand Do more.

We have a diverse porexciting compounds. Ev

GlaxoSmithKline investGlaxoSmithKline is a lecentral nervous systeAnnual Results, GSK hadPharmaceutical sales ac

22% of total pharmaceuti

This continued success iworking with healthcara changing environment

RESE

We live in an exciting mgiving up its secrets totechnological marvels tgeneration ago. We haccelerating progress a

At GlaxoSmithKline, sciecapturing this moment.the resources of a parenurgency of knowing thaIn pursuit of this purposothers who share their tas collaborators in indus

50

lping people around the world Live

folio of brands, as well as a healtry year

approx. $5 billion into researchder in four major therapeutic area, respiratory and gastro-intestinalsales of $37.2 billion and profit befocounted 24.8 billion with new pro

cal sales.

achieved by being a responsible leaprofessionals, listening to patients

.

RCH AND DEVELOPMENT (R&D

oment in the history of biomedicalthe intelligence and dedication ofat might have been the stuff of scive every reason to believe that

ainst many of the afflictions of hum

ntists in Research and DevelopmentThey bring to it their own very cot company devoted to the scientific

their highest purpose is the relief o, they desire to make of GlaxoSmith

alents, whether as prospective corptry, academe, and government.

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longer, Feel better

h pipeline of new

nd development.s - anti infectives,. Based on 2004e tax of 11.1 billion.ucts representing

der, committed toand responding to

)

science. Disease iscientists aided bynce fiction only aahead of us liesnkind.

are committed tosiderable abilities,nterprise, and the

f human suffering.Kline a magnet forrate colleagues or


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Creating a new medicintypically taking betwee

stringent, yet escalatindemand that the wholeGSK uses the scale of aimprove patient health.scientists the freedom tto move quickly, on the

Once a compound hasthrough an exacting, rig

and effective. Any potedropped from the comcandidates.

GSK IN TIME

Every seconGSK worldw

Every minutproducts w

Every hourmedicines.

Every day,

GSK brand t Every year,

and product

GSK employees arcompetencies and

Performance witand individual trus

51

is a complex business, costing ov12 and 15 years. Regulatory hurdl

costs, medical need and the pressprocess is condensed into as shorthuge company to reach its goal of aEqually important is its flexibility,take an entrepreneurial approach,asis of informed decisions.

been identified as a potential drugorous process to prove that the ne

tial new project not meeting the critany portfolio to make way for othe

d, more than 30 doses of vaccineside.e, more than 1,100 prescriptions arrldwide.

GSK spends more than $450,

ore than 200 million people aroun

oothbrush or toothpaste.laxoSmithKline donates more than

s to communities around the world.

e each expected to strive for improvalign themselves with the supportiv

Integrity - Delivering on promisestworthiness.

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r $324 million ands are increasingly

re of competitiontime as possible.

pplying science toallowing teams ofnd enabling them

candidate, it goesdrug is both safe

eria at any stage isr, more promising

are distributed by

e written for GSK

00 to find new

d the world use a

138 million in cash

ment in these keybehaviors.

ith organizational


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People with Passion - People are enabled and motivated to do their bestwork.

Innovation & Entrepreneurship - Competitive advantage through well-executed ingenuity.

Sense of Urgency - A nimble, focused, resilient and fast-learningorganization.

Everyone Committed, Everyone Contributing- All employees have anopportunity to make a meaningful contribution, and to succeed based onmerit.

Accountability for Achievement - Clear expectations; focus on the criticalfew. Performance matters, and will be rewarded.

Alignment with GSK Interests - One team, in single-minded pursuit of ourmission, reflecting a common spirit and integrated strategies.

Develop Self and Others - A norm of career-long learning agility acrossthe organization. Employees continuously learn and develop their

professional potential. Leaders have key roles as teachers, coaches andchampions of development.

WHAT IS DIVERSITY AT GSK?

At GSK, we are committed to creating an inclusive environment for ouremployees, customers, and stakeholders.

For employees, it means creating an environment where we value anddraw on the differing knowledge, perspectives, experiences, and stylesresident in our global community.

For customers, it means understanding who they are, what theirchanging needs are, and how GSK can help them do more, feel better,and live longer.

For stakeholders, it means understanding what they prefer, what theyrequire, and how GSK can work most effectively with them.


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53

t makes GSK a great place to work?

our current employees, and here's

local companies that would welcoxperience. Here, I get the addeding to better lives around the world

ers a competitive salary and excellepackage, you'll find that most comp

and supportive teams, individwarded."

a project there is a real sense ofone"

thin the company that makes it grea

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hat they said:

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"


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GALXOSMITHKLINE PAKISTAN LIMITED

Overview

GlaxoSmithKline Pakistan Limited was created on January 1st 2002 through the

merger of SmithKline and French of Pakistan Limited, Beecham Pakistan

(Private) Limited and Glaxo Wellcome (Pakistan) Limited- standing today as the

largest pharmaceutical company in Pakistan.

As a leading international pharmaceutical company we make a real difference

to global healthcare and specifically to the developing world. We believe this is

both an ethical imperative and key to business success. Companies that

respond sensitively and with commitment by changing their business practices

to address such challenges will be the leaders of the future. GSK Pakistan

operates mainly in two industry segments: Pharmaceuticals (prescription drugs

and vaccines) and consumer healthcare (over-the-counter- medicines, oral care

and nutritional care).

GSK leads the industry in value, volume and prescription market shares. We are

proud of our consistency and stability in sales, profits and growth. Some of our

key brands include Augmentin, Panadol, Seretide, Betnovate, Zantac and

Calpol in medicine and renowned consumer healthcare brands include Horlicks,

Aquafresh, Macleans and ENO.

In addition, we are also deeply involved with our communities and undertake

various Corporate Social Responsibility initiatives including working with the

National Commission for Human Development (NCHD) for whom we were one


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55

of the largest corporate donors. We consider it our responsibility to nurture the

environment we operate in and persevere to extend our support to our

community in every possible way. GSK participates in year round charitable

activities which include organizing medical camps, supporting welfare

organizations and donating to/sponsoring various developmental concerns and

hospitals. Furthermore, GSK maintains strong partnerships with non-

government organizations such as Concern for Children, which is also

extremely involved in the design, implementation and replication of models for

the sustainable development of children with specific emphasis on primary

healthcare and education.

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MISSION STATEMENT

Excited by the constant search forinnovation, we at GSK undertake ourquest with the enthusiasm ofentrepreneurs. We value performanceachieved with integrity. We will attainsuccess as a world class global leader witheach and every one of our peoplecontributing with passion and an

unmatched sense of urgency.Our mission is to improve the quality ofhuman life by enabling people to do more,feel better and live longer.

Quality is at the heart of everything we do-from the discovery of a molecule to thedevelopment of a medicine.

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QUALITY MANAGEMENT SYSTEM (QMS)

GSK has developed a comprehensive system of QMS by aligning internationally

recognised standards and best practices. The primary goal of this vital exercise

is to provide safe and effective products for patients and customers, satisfying

the stringent requirements of the regulators and the needs of our

shareholders.

For GSK to remain an indisputable industry leader, the company has set a list of

stringent criteria that ensures all customer needs are achieved.

Standards:

Global quality policies

Global quality guidelines

Global quality management processes

Training

Material

Auditing

Continuous improvement


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GSKs Quality Management System is an innovative yet practical tool that is

benchmarked against all international standards and guidelines ensuring risk

minimization, and more importantly top-notch managerial skills.

Our QMS is a living system which focuses on the ever changing needs of our

main customer groups patients, regulators, company / shareholders. This is afast-paced world and industry where changes are constant, and the QMS has

been created to ascertain that everything is managed in a controlled and

proficient manner.


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To reiterate GSKs quality statement:

Quality is at the heart of everything we do from the discovery of the

molecule through to product development, manufacture, supply and sale and

vital to all the services that support our business performance.

Andrew Witty, Chief Executive Officer

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Documents

Semester 2 Assgn 2 Opeartion Mng. vs Quality Management