Quality Circles, Benchmarking, Quality Cost, The Food Safety Modernization Act
SEPTEMBER 3, 2011
ELISHA GAY C. HIDALGO, RND
TOTAL QUALITY MANAGEMENT
1. What is Quality Circles? Are you adapting it in your company? If yes, give a write up
about it. If not, state your recommendation.
2. What is benchmarking? Give a situation on benchmarking in your company (either
actual or scenario).
3. What is Quality Cost?
4. Give your impression in ISO 22000 2005 and The Food Safety Modernization Act.
1. QUALITY CIRCLES
“Teams are a major part of any Total Quality
Management effort because teamwork enables
various parts of the organization to work together
to meet customer needs in ways that can’t be
done through individual job performance“.
(Rao et al., 1996)
circles can be broadly defined as the meeting of
minds during a quality journey to attain customer
satisfaction through continuous improvement and
teamwork (Gho, 2000).
One of the most publicized aspects of the Japanese approach to quality has been the quality circles or
kaizen teams. The quality circle may be defined as a group of workers doing similar work who meet:
In normal working time
Under the leadership of their “Supervisor”
To identify, analyze and solve work-related
Problems to recommend solutions to management.
Where possible, quality circle members should implement the solution themselves (Oakland,
2000; Gho, 2000). Whereas, Kaizen is a philosophy of continuous improvement of all the employees in
an organization so that they perform their tasks a little better each day. It is a never ending journey
centered on the concept of starting a new each day with the principle that methods can always be
improved (Oakland, 2000; Heizer and Render, 1999 and 2001).
There are no Quality Circles yet in the hospital I am working at although they are starting some form of
groupings dedicated to Quality Management. The Quality Management is just a year old in our hospital
but so far does not have the effect it is aiming to have. It functions more of a spot audit team, which
unfortunately has received much negative feedback from workers.
I believe that more employee involvement with the support and commitment of top management will
be more effective, like the formation of a good and functional quality circle. In my line of work it can be
applied in two areas of the hospital nutrition services: (1) Clinical Nutrition and (2) Administrative/Food
Service. In this case or process, more people will be able to voice out their concerns and creative
solutions. By sharing best practices and providing mutual support thru teamwork, a more competitive
and productive department or company is expected. I think that a communication line or a form of
quality circle will be beneficial to our company to encourage employee participation.
Understanding the Essentials of Total Quality Management: A Best Practice Approach – Part 1 by Prof.
Mohamed Zairi and Samir Baiduon. Working Paper Series, University of Bradford School of
“Benchmarking is the process of comparing one's business processes and performance metrics to
industry bests and/or best practices from other industries. Dimensions typically measured are quality, time
and cost. In the process of benchmarking, management identifies the best firms in their industry, or in
another industry where similar processes exist, and compare the results and processes of those studied
(the "targets") to one's own results and processes. In this way, they learn how well the targets perform
and, more importantly, the business processes that explain why these firms are successful.
The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place
someone's foot on a "bench" and mark it out to make the pattern for the shoes. Benchmarking is used to
measure performance using a specific indicator (cost per unit of measure, productivity per unit of
measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of
performance that is then compared to others.
Also referred to as "best practice benchmarking" or "process benchmarking", this process is used in
management and particularly strategic management, in which organizations evaluate various aspects of
their processes in relation to best practice companies' processes, usually within a peer group defined for
the purposes of comparison. This then allows organizations to develop plans on how to make
improvements or adapt specific best practices, 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 improve their practices. ”
Reference: http://en.wikipedia.org/wiki/Benchmarking 09/01/2011
In the department I am working at right now, we are continuously trying to improve our
processes. Although, we are no experts at benchmarking, we have applied it in several aspects of
our operation. For example, when suggesting the proposed price for Diet Instruction, we asked
hospitals in our area how much they charge for the service and how their services differ from us.
It gave us an insight on what could be the most reasonable pricing and if we have to add
something to our services. Another proposed example is in the area of food service for patient
meals. We are planning to observe practices in well known hotels and the best hospitals and
combine the two to come up with a newer type of hospital food service. I believe benchmarking
could be a great help to the continuous improvement of processes.
3. QUALITY COST
The concept of quality costs is a means to quantify the total cost of quality-related efforts and
deficiencies. It was first described by Armand V. Feigenbaum in a 1956 Harvard Business Review article.
Prior to its introduction, the general perception was that higher quality requires higher costs, either by
buying better materials or machines or by hiring more labor. Furthermore, while cost accounting had
evolved to categorize financial transactions into revenues, expenses, and changes in shareholder equity,
it had not attempted to categorize costs relevant to quality. By classifying quality -related entries from a
company's general ledger, management and quality practitioners can evaluate investments in quality
based on cost improvement and profit enhancement.
Feigenbaum defined the following quality cost areas:
Cost area Description Examples
Costs of control (Costs of
Arise from efforts to keep defects from
occurring at all
Investment in quality-related
Quality training and
Arise from detecting defects via
inspection, test, audit
Test and inspection of
Setup for test or
Test and inspection
Costs of failure of control
(Costs of non-conformance)
Arise from defects caught internally and
dealt with by discarding or repairing the
Arise from defects that actually reach
Complaints in warranty
Complaints out of
Loss of reputation
The central theme of quality improvement is that larger investments in prevention drive even larger
savings in quality-related failures and appraisal efforts. Feigenbaum's categorization allows the
organization to verify this for itself. When confronted with mounting numbers of defects, organizat ions
typically react by throwing more and more people into inspection roles. But inspection is never completely
effective, so appraisal costs stay high as long as the failure costs stay high. The only way out of the
predicament is to establish the "right" amount of prevention.
Once categorized, quality costs can serve as a means to measure, analyze, budget, and predict.
Variants of the concept of quality costs include cost of poor quality and categorization based on account
type, described by Joseph M. Juran:
Cost area Examples
Materials scrapped or junked
Labor and burden on product scrapped or junked
Labor, materials, and burden necessary to effect repairs on salvageable
Extra operations added because of presence of defectives
Burden arising from excess production capacity necessitated by defectives
Excess inspection costs
Investigation of causes of defects
Tangible costs—sales accounts
Discount on seconds
Charges to quality guarantee account
Delays and stoppages caused by defectives
Customer good will
Loss in morale due to friction between departments
Reference: http://en.wikipedia.org/wiki/Quality_costs 09/01/2011
4. ISO 22000:2005
ISO 22000:2005 specifies requirements for a food safety management system where an
organization in the food chain needs to demonstrate its ability to control food safety hazards in
order to ensure that food is safe at the time of human consumption.
It is applicable to all organizations, regardless of size, which are involved in any aspect of the
food chain and want to implement systems that consistently provide safe products. The means
of meeting any requirements of ISO 22000:2005 can be accomplished through the use of
internal and/or external resources.
ISO 22000:2005 specifies requirements to enable an organization
-- to plan, implement, operate, maintain and update a food safety management system aimed at
providing products that, according to their intended use, are safe for the consumer,
-- to demonstrate compliance with applicable statutory and regulatory food safety
-- to evaluate and assess customer requirements and demonstrate conformity with those
mutually agreed customer requirements that relate to food safety, in order to enhance
-- to effectively communicate food safety issues to their suppliers, customers and relevant
interested parties in the food chain,
-- to ensure that the organization conforms to its stated food safety policy,
-- to demonstrate such conformity to relevant interested parties, and
-- to seek certification or registration of its food safety management system by an external
organization, or make a self-assessment or self-declaration of conformity to ISO 22000:2005.”
My impression of ISO 22000:2005 is it’s a management system intended to be incorporated in other
management systems to help establishments come up with processes to ensure food safety. In times
where food safety is what concerns the consumers most, food companies depend on standardizat ion
bodies to develop standards they could meet to ensure quality food service. ISO 2200:2005 is one such
standard. Food reaches consumers via supply chains that may link many different types of organizations
and may stretch across multiple borders. One weak link may result in unsafe food that is dangerous to
health and if this happens, the hazards to consumers may be serious. ISO 22000 is therefore designed to
allow all types of organizations within the food chain to implement a Food Safety Management System.
These include feed producers, primary producers, food manufacturers, transport and storage operators
and sub contractors, retail service outlets, producers of equipments, packaging materials, cleaning
agents, additives and ingredients. ISO 22000 will make it easier for organizations to implement HACCP
(Hazard Analysis and Critical Control Point) system for food hygiene as it incorporates the principles of
HACCP. Another benefit of ISO 22000 is that it extends the successful management system approach
of ISO 9001:2000 quality management system standard which is widely implemented in all sectors but
does not itself specifically address food safety.
THE FOOD SAFETY MODERNIZATION ACT
The FDA Food Safety Modernization Act (H.R. 2751) is a federal statute signed into law by
President Barack Obama on January 4, 2011. The law authorizes the Food and Drug Administration (FDA)
and the Secretary of Health and Human Services (HHS) to increase inspections of many domestic food
facilities, enhance detection of foodborne illness outbreaks, and order recalls of tainted food
products. The law requires most food companies to write and implement new safety protocols to
mitigate potential hazards. Also, imported food products face increased scrutiny under the law,
including denial of entry into the United States under certain circumstances. The law also contains a
food safety whistleblower provision designed to encourage employee reporting of food safety concerns
and protect the whistleblower from retaliation by the whistleblower's employer. It is the most
significant update of American food safety laws since the Federal Food, Drug, and Cosmetic Act in 1938.
The HHS will require registration and payment of a fee by any "person (excluding farms and restaurants)
who manufactures, processes, packs, distributes, receives, holds, or imports an article of food."
Individuals who partake in food handling without official registration are subject to a maximum 10 year
prison sentence. Registration requires each facility which produces or handles food to mai ntain records
relating to food safety.
The law contains potential exceptions for food grown and consumed at private residences. Likewise,
smaller farms that sell directly to consumers can be exempt. For example, food sold at local farmers'
markets would not necessarily be subject to the certification requirements.
Specific provisions in the law governing small -farm and farmer's markets provide for FDA authority to
exempt farms engaged in low or no risk processing or from co-mingling activities from new regulatory
requirements or to modify particular regulatory requirements for such farming operations; to minimize
the number of different regulatory standards that apply to separate foods; to make requirements scale
appropriate, and to prohibit FDA from requiring farms and other food facilities to hire outside
consultants to write food safety plans; to provide for a USDA-delivered competitive grant program for
food safety training for farmers, small processors and wholesalers, with emphasis placed upon on small
and mid-scale farms; to prohibit wildlife-threatening enforcement against “animal encroachment” of
farms and to require the application of sound science to any requirements that might impact wildlife
and wildlife habitat; to exempt farmers from extensive and expensive traceability and record-keeping
requirements if they sell food directly to consumers or to grocery stores; to provide that labeling
preserving the identity of the original farm through intervening processors to the consumer can satisfy
traceability requirements, and, in most cases, to limit farm record-keeping to the first point of sale when
the product leaves the farm.
The new law also places more extensive requirements on importers via the Foreign Supplier Verification
Program (FSVP) and the Voluntary Qualified Importer Program (VQIP). Both programs place importers in
the front line of defense against bringing unsafe foods into the United States.