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Quality management


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Quality management

  1. 1. AbstractAccording to the guidelines given in our continuous assignment we prepared a report forOperation Management subject by applying any of the theories we learnt into a real worldmarket situation.For this project, we chose the concept of “Total Quality Management” & selected RathnayakaTea Factory which is located in Deniyaya, as the sample company to introduce this newquality improvement tools. The main objective of this project is to introduce new qualityimprovement techniques to Rathnayaka Tea Factory to enhance the quality of their way ofbusinesses, organizational structure & manufacturing process in a practical way.Rathnayaka Tea Factory is one of tea manufacturing factories in Sri Lanka which produce &export black tea for global market. It is a medium scale factory with 285 employees workingin it. Russia is one of their main customers.One of the best things in the factory is that, “5S” concept is used in it when handling theirdaily operations. And also the location selected to construct the facility is very appropriate fortea plantation.When referring to the weaknesses found in Rathnayaka tea factory, following issues could beidentified. Lack of Training & Development programs to enhance the quality of work life & productivity of human resources. Lack of a standard quality measuring system Lack of Research & Development Activities Less consideration on HR practices Not having a well organized management Maintenance issues regarding the capital equipment Minimum effort on workers’ health & safety enhancement II
  2. 2. Following recommendations are suggested, to address the above mentioned weaknesses of thefactory. Changing the plucking method appropriately to match environmental conditions Replacing machinery with latest equipment Continuous maintenance of the equipment Using a belt system to transfer tea leaves among the processes Optimization of the tea manufacturing process through an integrated computer system Conducting training programs Research & development Setting standardsThe above mentioned, will be elaborated hence-forth in this report. III
  3. 3. Table of Content Page No. Abstract III Acknowledgement V Table of Content VI 01 Introduction 1 02 Rathnayaka Tea Factory (PVT) Ltd. 2 03 Total Quality Management 3-8 04 Tea Manufacturing process in Rathnayaka Tea Factory 9 - 16 05 Main Drawbacks in Tea Manufacturing Process 17 - 18 06 Recommendations 19 - 20 07 Conclusion 21 08 References 22 Appendixes 23 - 24 IV
  4. 4. 01. IntroductionAccording to the guidelines of our continuous assignment in Operation Management we havechosen Rathnayaka Tea Factory & introduced Total Quality Management (TQM) concept forthe whole tea manufacturing process. Through this project we mainly focus on developingquality of overall process & giving solutions to its weaknesses. Not only that but also we hopeto provide some basic knowledge about the Principals of TQM.Total quality Management means,“A way of life an organization as a whole, committed to total customer satisfaction through acontinuous process of improvement and contribution and involvement of people”It is very important function for every type of organizations (both goods and services) becausemost of the time demand of production depends on the quality of the production. Therefore lotsof companies pay their consideration to increase the Quality of their production.Main objectives of project Clearly identify what is the Quality and Total Quality Management. Identify the current situation, strengths and weaknesses of overall process of tea manufacturing in Rathnayaka tea factory. Introduce appropriate quality improvement techniques to the overall tea manufacturing process. Propose suitable recommendations to increase the quality of tea manufacturing process while considering the cost of “TQM”. 1
  5. 5. 02. Rathnayaka Tea Factory (Pvt) Ltd. Vision “To be the best black tea manufacturer.” Mission To be a leading tea manufacturer within “Southern Province” by adapting to the new technologies and quality improvement methods to enhance the productivity and efficiency while paying more attention to their loyal customers by providing friendly service. Rathnayaka Tea Factory (PVT) Ltd is located in Southern province, Galle district, Deniyaya area. It is a family business of Rathnayaka Family & Mr. A. A. A. Muhamdiram Rathnayaka established the Rathnayaka Tea Factory in 1919. In present Mr. S U W Rathnayaka runs the business as a chairman with good staff members. It is a medium scale tea factory with 285 employees. Normally they work from 7.30am to 4.30pm in week days & 7.30am to 12.30pm on Saturdays. They get their salaries based on work performed by them. Mainly they produce Black Tea & target the Global Market. Russia is one of their main customers & normally they export more than 20,000 tea bags per month. Due to the applying of 5S’ concept within their factory they have been awarded as “One Star Tea Rating Factory”. 2
  6. 6. 03. Total Quality ManagementWhat is Total Quality Management (TQM)?Total Quality Management (TQM) is a quality improvement body of methodologies that arecustomer-based and service oriented. It involves everyone in the organization in a continuouseffort to achieve customer satisfaction & improve quality.TQM was first developed in Japan, and then spread in popularity. It has two fundamentaloperational goals namely, Careful design of the product or service Ensuring the organization’s systems can consistently produce the design.Principles of TQM Customer-oriented– Customer defines quality and customer satisfaction is the top priority Leadership– Top management must provide the leadership for quality Strategic planning– Quality is a strategic issue and requires a strategic plan. Employee responsibility- Quality is the responsibility of all the employees Continuous improvement- All functions of the organization must focus on continuous quality improvement to achieve the strategic goals. Cooperation– Quality problems are solved through cooperation among employees and management Statistical methods- Use of statistical quality control methods Training and education– Training and education of all employees are the basis for continuous quality improvement 3
  7. 7. Quality, cost classification 1. Prevention cost These are the cost incurred to prevent quality problems before producing the product. Training & development cost of employees Maintenance cost of machinery Cost incurred in purchasing better equipment or machinery Cost incurred to build better relationship with suppliers to ensure high quality of raw material Salaries paid to employees to ensure high quality raw material inputs & supervision 2. Appraisal cost. (while & after producing the product) Objective is to ensure the expected quality. These are the cost incurred to continuously appraise the quality of the finished goods & the working progress. Salaries paid to working progresses involving quality checking Costs incurred with regard to machinery & equipment & OHs 3. Internal failure cost. If a difference product is identified within the organization & any cost amount which can be attributable to the defective product are known as internal failure product. Cost of reproduction, Cost of disposal, Cost of investigation & rectification. 4. External failure cost If a product is identified as defective by the customers any cost attributable are known as external failure cost. Cost of delivery (call back the product) Loss of sales & reputation Any compensation pays to the customer Cost of reproduction 4
  8. 8. When talking about the TQM there are several different theories at work guiding TQMpractices. Demings TheoryDemings theory of Total Quality Management rests upon fourteen points of management heidentified, the system of profound knowledge, and the Shewart Cycle (Plan-Do-Check-Act).He is known for his ratio - Quality is equal to the result of work efforts over the total costs.Demings system of profound knowledge consists of the following four points: System Appreciation - an understanding of the way that the companys processes and systems work Variation Knowledge - an understanding of the variation occurring and the causes of the variation Knowledge Theory - the understanding of what can be known Psychology Knowledge - the understanding of human natureBy being aware of the different types of knowledge associated with an organization, thenquality can be broached as a topic. Quality involves modifying processes using knowledge. The fourteen points of Demings theory of total quality management are as follows: Create constancy of purpose Adopt the new philosophy Stop dependencies on mass inspections Dont award business based upon the price Aim for continuous production and service improvement Bring in cutting-edge on the job training Implement cutting-edge methods for leadership Abolish fear from the company Deconstruct departmental barriers Get rid of quantity-based work goals Get rid of quotas and standards Support pride of crafts man ship Ensure everyone is trained and educated Make sure the top management structure supports the previous thirteen points. 5
  9. 9.  Plan-Do-Check-Act (PDCA) –Is a cycle created for continuous improvement? In the planning phase, objectives and actionsare outlined. Then, you do your actions and implement the process improvements. Next, youcheck to ensure quality against the original. Finally acting requires that you determine wherechanges need to occur for continued improvement before returning to the plan phase. Crosbys TheoryPhilip Crosby is another person credited with starting the TQM movement. He made the point,much like Deming, that if you spend money on quality, it is money that is well spent. Crosbybased on four absolutes of quality management and his own list of fourteen steps to qualityimprovement. Crosbys four absolutes are: We define quality as adherence to requirements Prevention is the best way to ensure quality Zero Defects (mistakes) is the performance standard for quality Quality is measured by the price of nonconformityThe fourteen steps to continuous quality improvement, for Crosby, are: Attain total commitment from management Form a quality improvement team Create metrics for each quality improvement activity Determine cost of quality and show how improvement will contribute to gains Train supervisors appropriately Encourage employees to fix defects and keep issues logs Create a zero-defects committee Ensure that employees and supervisors understand the steps to quality Demonstrate your companys commitment by holding a zero defects day Goals are set on 30, 60, or 90 day schedule Determine root causes of errors, remove them from processes Create incentives programs for employees Create a quality council and hold regular meetings Repeat from step one 6
  10. 10.  Joseph Jurans TheoryJoseph Juran is responsible for what has become known as the "Quality Trilogy." The qualitytrilogy is made up of quality planning, quality improvement, and quality control. If a qualityimprovement project is to be successful, then all quality improvement actions must be carefullyplanned out and controlled. Juran believed there were ten steps to quality improvement.These steps are: An awareness of the opportunities and needs for improvement must be created Improvement goals must be determined Organization is required for reaching the goals Training needs to be provided Initialize projects Monitor progress Recognize performance Report on results Track achievement of improvements Repeat The EFQM FrameworkThe European Foundation for Quality Management (EFQM) Model is based upon nine criteriafor quality management. There are five enablers (criteria covering the basis of what a companydoes) and four results (criteria covering what a company achieves). The result is a model thatrefrains from prescribing any one methodology, but rather recognizes the diversity in qualitymanagement methodologies. The nine criteria as defined by the EFQM Model are: 7
  11. 11. 1. Focus on Results - pleasing company stakeholders with results achieved by stakeholders is a primary focus. 2. Focus on Customers - it is vital that a companys quality management leads to customer satisfaction. 3. Constancy of Purpose and Consistent, Visionary Leadership 4. Process and Facts form the Management Focus - Management breaks down everything into systems, processes and facts for easy monitoring. 5. Training and Involving Employees - Employees should receive professional development opportunities and be encouraged to remain involved in the company 6. Continuous Learning - everyone should be provided with opportunities for learning on the job 7. Developing Partnerships - It is important to encourage partnerships that add value to the companys improvement process 8. Social Responsibility of the Corporation - The Company should always act in a way where it is responsible towards the environment and society at large. Ishikawas TheoryCreator of the last theory, Dr. Kaoru Isikawa is often known for his name sake diagram, but healso developed a theory of how companies should handle their quality improvement projects.Ishikawa takes a look at quality from a human standpoint. He points out that there are sevenbasic tools for quality improvement. These tools are: Pareto Analysis - Pareto analysis helps to identify the big problems in a process. Cause and Effect Diagrams -help to get to the root cause of problems. Stratification - Stratification analyzes how the information that has been collected fits together. Check Sheets - Check sheets look at how often a problem occurs. Histograms- Histograms monitor variation. Scatter Charts - Scatter charts demonstrate relationships between varieties of factors. Process Control Charts - A control chart helps to determine what variations to focus upon. 8
  12. 12. 04. Tea Manufacturing Process of Rathnayaka Tea FactoryTea is secondly most widely consumed beverage in the world after the water. Therefore, thereis a huge demand for the tea which is grown in Asian Countries like Sri Lanka. As a result ofthat Sri Lanka has also become one of major countries which exports various types of teaflavors to the global market.Likewise other tea factories in Sri Lanka Rathnayaka Tea Factory also follow the same processwhen manufacturing tea. It mainly includes following stages: Plucking Withering Rolling Fermentation Drying Sorting & Grading Packaging& Storage 9
  13. 13. 4.1 WitheringDefinition: There are two types of withering. 1. Chemical Wither: Desirable biochemical changes from plucking to initiation of processing (manufacturing), normally 14-20 hrs. 2. Physical wither: Moisture loss, leaf becomes flaccid. Physical withering reduces the moisture content in the leaf and correct withering is essential for quality, although, it has always been a difficult task to determine the end-point of withers. The same reduction in moisture percentage and increase of flaccidity of leaf to the desired level can be achieved in a shorter period; a longer period is necessary for chemical wither. Therefore, physical wither is regulated at a slower rate, so as to reach the desired physical withering in the same interval as required for the chemical wither. The objectives are achieved by passing air through the leaves.Current Situation: WITHERING is the first and foremost step involved in tea manufacturing. Eventhough there are different methods are used in Sri Lanka for withering, “Withering Trough”is used in our visited factory. There are 2 troughs can be seen in the upstairs of factorybuilding. The width of those troughs is 6 feet & the deep is 1 feet. The evaporation of moisture in the green leaf is brought about by blowing or movingair over the leaf in the withering trough. The current of air performs two functions,conveyingheat from the leaf as well as carrying away the water vapor through a bed of green leaves toachieve physical withering. Whenever the hygrometric difference is below 3° C, hot air ismixed in suitable proportion or heat energy is supplied to increase the hygrometric differencewith the concomitant rise in the dry bulb temperature of air. But the dry bulb temperature of airafter mixing should not exceed 35° C. The extent which tea leaves is packed in trough – 2.5 sq feet to 3.5 sq feet. The necessity of air – 20° C per kg The speed of fans – 980 cycles per minute The motor – 15 horse powers 10
  14. 14. After tea leaves are packed according to above standards it must be kept around 20-30minutes. Then evaporated teas must be turned into other side. They use a Hydrometer to checkmoisture content in tea leaves.Factors that must be considered in withering process. Tea leaves must not be raw. Must not be faded than requirement. It must be checked whether withering speed is similar to the pressure of air. Tea leaves must be packed without tight. The places of getting air must not be blocked in trough. The supply of air must be constant. Stream of air must be supplied through Plenum Tunnel under a pressure. The objective of this is to reduce the moisture in tea leaves between 6-10 standardHydrometer values. After 8 hours withered leaves are moved to the Rolling process. 11
  15. 15. 4.2 RollingDefinition:Rolling is a process where rollers are used to rupture the cell walls of the withered leaves foroxidation of the polyphenols in the presence of oxygen from air.Current Situation: After withering teas are moved to the process of rolling. There are two methods ofrolling. Traditional method of Orthodox & CTC method. By rolling process produce twistyleafy tea with higher & more flowery liquor. Withered leaves are subjected to rolling machineunder pressure twisting the leaves, rupturing the cells & releasing the natural juices promotingoxidization. Teas are rolled, twisted & broken into pieces. Teas are rolled by four rollers. The time allocation for each rolling is, 20 minutes forfirst rolling, another 20 minutes for second & third rolling & 20 minutes for fourth & lastrolling. But this time can be changed according to market demand. The sizes of rolling machines used in the factory, 47 sq feet - Three roller machines for first rolling 47 sq feet – two roller machines for second rolling 45 sq feet – two rollers for third rolling 47 sq feet – one roller for fourth rolling These machines must be cleaned by employees every day. There are about 12employees are involved in rolling process. Machine call braver is also used to separate rolled tea. There are two types of bravermachines call “Rotory Roll Braver” & “Reciprocators Roll Braver” are used in Sri Lanka.Rotory roll braver is used in our visited factory. 12
  16. 16. 4.3 FermentationDefinition:Fermentation is the process during which the Polyphones in the tea leaf are oxidized inpresence of the enzymes and subsequently condensed to form Colored compounds contributingto the quality attributes of tea. Fermentation starts immediately after cell rupture.Current Situation: The objective of fermentation is occurring chemical changes of tea that will lead toincrease the tasty of tea.The result of chemical process involve in fermenting process is getting the taste, smell & colorAfter the rolling process of tea leaves, tea leaves are forwarded to the fermentation process toproduce different kinds of tea colors such as non-fermented, light-fermented, medium-fermented and fully-fermented.In this process, two (2) instruments are used to fulfill fermentation conditions and they are, 1. Humidity Fan – This instrument uses to stable the weight at about 55% of the tea leaves during the fermentation process. 2. Wet & Dry Hygrometer – This instrument uses to measure the humidity of the air and it performs its activity for about 2 hours and 30 minutes and it is notes that the difference between wet & dry should be 3F0. 13
  17. 17. 4.4 DryingDefinition: Drying is the process during which the enzyme activities are stopped & moisture content is brought down to 2% - 3%.Current Situation: After fermenting teas are moved through a belt call conveyer belt to the process ofdrying. The machine used for this purpose is called drier. There are three types of dryingmachines can be seen in Sri Lanka. 1. Endless Chain Pressure 2. Fluid Bed Drier 3. Combination Drier Among these machines Rathnayaka tea factory has two machines of Endless ChainPressure. There are 8 workers are working at a time. These workers are paid an additionalallowance. Old drier machine can dry 215 kg per hour & the new machine can produce 290 kgper hour. 14
  18. 18. 4.5 Sorting & GradingDefinition:Sorting is the operation in which particles of bulk teas are separated into various grades ofdifferent sizes conforming to the trade requirements.Current Situation: These are many machines using in Sri Lanka for sorting. Commonly these are named as“Winnower” machines. There are 13 grades of teas are produced. They use machine called“Chota” for this purpose. Sorted teas are mixed to avoid changing from one packing to another. Winnowermachines are used for this purpose. There are 3 winnower machines in Rathnayaka tea factory.Stems of sorted teas must be removed before packing. The machine used for this purpose iscalled “Electronic Color Separator”. Special technician needed for maintenance of themachine. It is done once a year. Stems are removed by this machine using computertechnology. This machine costs more than 100 lacks & this is the most expensive machine inany tea factory. 15
  19. 19. 4.6 Packaging & StorageDefinition:Packaging, is a process design and produce the container or wrapper for a productStorage, is a process of stored final out puts after packaging before it handed over to thecustomers.Current Situation:Wood boxes, Polythene and thick paper bags are used for packing, sorted and graded tea. Quantities and weights that can be packed in tea Boxes Grade Boxes(Kg) Bags(Kg) FPEK 36-38 39-42 FBOP 38-40 40-42 FBOP 1 36-38 30-40 FBOPE 1 42-44 44-45 FBOPF 48-50 48-50 BOP 1 A 33-34 35-37 BM 35-36 37-39 16
  20. 20. 05.Main Drawbacks of the Tea Manufacturing Process There is not a proper standard system to measure quality of tea. The management of the factory doesn’t implement a proper standard system to measure the quality of tea & also the workers don’t have enough awareness about the manufacturing process. Lack of Training & Development programs to enhance the quality of work life & productivity of human resources. Experience of working is inherited by employees from their generation & they don’t have proper technical skills & knowledge. Lack of Research & Development Activities. There are not innovations of tea. They only produce traditional black tea due to the lack of scientist knowledge& financial limitations. Less percentage of interest to the HR practices. They don’t have separate HR department & pay minimum attention to the motivation of the employees. As a result employee dissatisfaction can be increased & it will cause to reduce the productivity of final outcome. There is not well organized management board. Top managers inherit their positions from generation to generation & lack of education is the reason for this problem. Workers don’t have proper dress code &safety equipment. They wear casual dresses & don’t use any safety equipment. This will badly affect to the quality of tea & their lives. Maintenance issues regarding to the operations machines. They don’t get any steps to prevent machine breakdowns. They only consider about that once a machine is broken down. 17
  21. 21. Cause-and-Effect Diagram for Rathnayaka Tea FactoryAccording to this cause – and – effect diagram major quality issue & its root & sub causes canbe clearly identified.P-D-C-A CyclePDCA is a systematic approach used for problem solving. After Identifying the root & subcauses, carrying out a PDCA cycle is recommended to identify & solve quality issues faced bythe Rathnayaka tea factory. Following are the major recommendations which were suggested. 18
  22. 22. 06. Recommendations Changing the plucking method appropriately When discussing with tea pluckers we came to know that they use the same plucking method throughout the year. But in the modern world most of giants in tea manufacturing industry change their plucking method in accordance with environmental conditions. For instance they use a method called sheer plucking during July to September when there is a scarcity of workers. Some of the other methods used are step up method, fish leaf plucking, Janam plucking. So we think, workers should be educated regarding this matter & it will help to increase the quality of the plucking stage. Replacing machinery with latest equipment All most all the machinery used in Rathnayaka tea factory has been placed around 1980 which means that they are still using a technology which is old for more than 2 & half decades. But with the technological improvements nowadays there are so many machines available in the market into which latest technologies are embedded. Although the company is having financial limitations, management should pay some consideration to replace the equipment even in a step by step basis. This will generate some kind of short term financial difficulties towards the company but it will ensure the long term quality & efficiency of the production.  Axial flow fans-for withering  ROTOVANES- for rolling (easy to be cleaned & maintained)  OXYTEA continuous fermenting machine- available in both steel tray & PES belt systems.  Super indirect fired coal heaters-for drying (guarantees the lowest fuel consumption in tea industry) 19
  23. 23. Continuous maintenance of the equipment Another issue we found in Rathnayaka tea factory is that machinery are onlytested & repaired when a defect is occurred. So if machinery breaks down, it will causeto create some idle time in the overall process. In order to prevent from these types ofinefficiencies, a continuous monitoring & maintenance system of capital assets shouldbe implemented within the organization.Using a belt system to transfer tea leaves among the processes Management of the tea factory stated that their normal loss is around 17% perannum from the plucking stage to the consumption by end users.& while visiting thefactory we observed that a significant amount of tea leaves become a waste due togetting trampled by workers. Another thing is that a considerable amount of dust is mixed with the WIP asthey are laid on mats. This would have an identifiable impact over the quality of the finalproduct. To address both of the above mentioned issues, a belt system can be used totransfer WIP among the different processes. This will enhance the quality of the finalproduct as well as the efficiency of the overall process.Optimization of the tea manufacturing process through an integrated computer system Here the integrated computer system refers to an expert based plant monitoringsystem in which all the critical processes are linked with an overall MIS. In the currentmarket most of the Sri Lankan tea manufacturers use this strategy to enhanceperformance & quality of the production. Rathnayaka tea factory can also adopt thisstrategy to their firm to minimize the overall energy conservation & increase the totalquality of their product. 20
  24. 24. 07. ConclusionWe have selected Rathnayaka tea factory located in Deniyaya for our OM assignment &introduced a Quality management system to enhance the quality of final outcome.In this project we have given brief introduction to the Rathnayaka tea factory & the currentsituation of its process. Tea manufacturing process is namely Withering, Rolling,Fermentation, Drying, and Sorting & Grading & Packaging & Storage.We identified main drawbacks of this process & gave our recommendations to improve thequality of the overall functions of the organization.Finally we expect their overall quality will improve by implementing our recommendations. 21
  25. 25. 08. References DSC 2302, “Operations Management Course Manual”, Seventh Edition, 2010, Page 41 – 50 Rathnayaka Tea Factory (PVT) Ltd - Deniyaya 22
  26. 26. Appendixes 23
  27. 27. 24