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Quality management in SME for cost reduction: Case study of aqua vis co.,ltd.

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Nguyễn Gia Hào

Academic year: 2023

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Has senior management ever called a meeting to discuss product quality and how to improve product quality. What has the company done to improve product quality and what was the effect on product quality. Interviewer: Has senior management ever called a meeting to discuss product quality and how to improve product quality.

Interviewer: What has the company done to improve product quality and what was the effect on product quality. Interviewer: In your view, how can design reviews help the company improve product quality.

Appendix C: Example of intensive system

APPENDIX D: Example of statistical process control (SPC)

Appendix E: Example of supplier evaluation

Appendix F: Example of preventive maintenance schedule

F-1 CNC daily maintenance schedule

F-2 Pressing machine daily maintenance schedule

ENTREPRENEURSHIP MANAGEMENT)

This research aims to develop suitable solutions to improve each factor to improve product quality, and also find out expected improved quality and cost reduction. From literature review, there are five factors for quality management that can improve product quality. These factors are top management support, employee involvement, supplier quality, process management and customer involvement.

CONTENTS

INTRODUCTION

CONTENTS (cont.)

LIST OF TABLES

  • Wakeboarding and kiteboarding
  • Watersports equipment industry background
  • Company’s background
  • Problem statement
  • Research question
  • Research objectives
  • Research scope

Aqua Vis Company Limited was established in 2012 as a manufacturer of original wakeboard and kiteboard equipment. In order to have a clear picture of Aqua Vis products, Figure 1.3 - 1.5 shows the company's product categories. Aqua Vis must ensure that every product supplied to customers is of high quality in order to satisfy customers and make a profit.

With the current situation, the company is able to keep customers satisfied; However, the margin is lower than expected due to fluctuations in product quality, which costs the company both time and capital. Therefore, product quality is a very critical factor for the company to retain customers and also increase the company's profits. The most important factor for the customers to choose Aqua Vis Company is the quality of the products, because the company has to meet specifications that come directly from the customer and each customer has their own specifications.

The company must ensure that each process must meet the requirements regarding dimensions, materials and chemical formulas. It is very necessary for the company to correct these defects because the cost of each plate is quite high (about 2,000 baht per plate). With a small defect such as small bubble or shrink on the surface, the company can repair; however, if this defect is beyond acceptable limit, the defective board will be discarded because the ultimate goal of the company is to deliver high quality product, and this will keep customers with the company.

The scope of this research will focus on employee opinions on how each factor affects product quality and also how to improve product quality on each factor through interviews, including studying quality management theories and literature reviews to propose a framework, which corresponds to the organization, in this case Aqua Vis Co., Ltd.

LITERATURE REVIEW

  • Theoretical Foundation
    • Crosby’s four absolute of quality (Warwick Manufacturing Group, 2006)
    • The Road to “total quality”
  • Quality management factors
    • Top Management Support for Quality Management
    • Employee Involvement
    • Quality of suppliers
    • Process management
    • Customer Involvement
  • Proposed framework
  • Hypothesis development
  • Top management support
  • Employee Involvement
  • Supplier quality
  • Process management
  • Customer involvement

To respond to quality problems, the organization must establish systems for corrective action. The results of this research show that infrastructure QM factors have direct impacts on core QM factors, leading to quality performance of the organization as shown in figure 2.1 (Zu, 2009). For TQM, teamwork is a critical factor in driving quality improvement from bottom to top management, effecting the improvement of quality efforts throughout the organization.

However, there is a downside to cross-functional teamwork because it will isolate collaboration from other departments of the organization. Suppliers or vendors must put in a perspective as an integral part of the organization because parts and materials have direct impacts on the quality of the product;. To reduce the number of direct suppliers, the organization should help the suppliers develop competencies in line with customer requirements, which will help the organization improve quality as well as reduce costs.

Especially for manufacturers, the processes to determine the quality of materials, such as inspection, are a very important step for the organization to develop TQM (Pulat, 1994). According to Measurement Business Excellence (2006), a reward system is a commonly used tool for continuous organizational improvement, especially in developing organizations or small organizations where systematic processes have not been properly implemented. Therefore, the organization can use the solution to maintain or even increase profit levels.

In passive participation, the customer is just a physical presence for the organization, while active participation allows customers to be an integral part of production or service processes.

CHAPTER III

RESEARCH METHODOLOGY

Research method

  • Interview with Aqua Vis’s Employees

Then the next part focuses on the issue of preventive maintenance. The questions will be asked to explore employees' perspectives regarding the importance of preventive maintenance and its impact on product quality, and also an opportunity for employees to propose their ideas to help the company perform preventive maintenance . maintenance plan. The employees are asked about their views on customer roles, the problems with customer engagement and how this problem can be solved.

Interview question development

  • Top management support
  • Employee Involvement
  • Supplier Quality
  • Process Management
  • Customer Involvement
  • Open-Ended Questions

Questions about employee involvement were developed from Pulat (1994) who stated that quality management can be more effective when employees are involved at all levels and one way to increase employee involvement is through training, as training improves the skills and knowledge of employees , which increases their confidence in discussions. with the top management to solve the quality problem. In addition, rewards do not have to be only in monetary form, but can also be praises that encourage employees to perform quality teamwork (Thiagarajan and Zairi, 1997). For good product quality, the quality of materials or parts from suppliers is one of the key success factors of TQM.

Furthermore, suppliers must be evaluated, and according to Pulat (1994), suppliers must be evaluated to weed out the incompetent suppliers, so that the organization will only have suppliers who can deliver good quality materials. The questions about the relationship between supplier quality and product quality were therefore developed from the literature review as described earlier in this section. This research also provides methods for SPC to be implemented in the organization as described in the previous chapter.

Design reviews should be performed early prior to the actual production process to avoid conflicts between design changes and production processes that could affect the quality of the final product (Burgess, 1999). After summarizing and analyzing existing research and journals, the questions related to process management were developed based on the measurement of Business Excellence (2002), Caulcutt (1996), Burgess (1999) and Ahmed, Hassan and Taha (2004). are suitable for business context. The questions in this section are about employees' perspectives on customer involvement in the company, and how the customer can help the company improve product quality, as developed from Dadfar et al.

A purpose of open-ended questions is to obtain additional opinions from employees beyond the questions developed from literature reviews to obtain extra factors that may not be included in hypotheses for improving product quality.

Data collection and research measurement

In addition, each employee's transcript will be deeply analyzed to determine the tendency of the answer to each question so that each answer goes in the same direction or not because the differences can also be considered as a quality improvement method.

RESEARCH FINDINGS

Research results

Research analysis

  • Top management support
  • Employee Involvement
  • Quality of Suppliers
  • Process Management
  • Customer Involvement

Employee involvement is a very important aspect to help the company ensure product quality, because top management alone cannot guarantee that QM is successful. To ensure that the quality of raw materials is up to standard, the company provides a checklist to ensure that all raw materials can be used in production, and also to monitor the company's inventory. If the company were ever to evaluate the supplier's performance, the most favorable factors would be on-time delivery and quality of raw materials.

In addition, the company has already replaced electronic instruments that control the temperature of the heating plate in the pressing process to ensure that the heating plate does not burn the wakeboard's surface, and interviewees said that measures help the company improve product quality. Moreover, the products of the company are mostly made by hand; therefore, employee morale is a critical factor for quality improvement. Consequently, this previous research supports the result regarding incentive system can improve product quality, and since the company can be considered as developing organization, incentive system is the simplest method to use as continuous improvement tool.

However, interviewees agreed that SPCA can help the company to identify the weak spot in manufacturing processes, and if the company can eliminate weak spot, better product quality is most likely possible. According to Caulcutt (1996), SPCA can improve product quality for the reason that SPCA provides statistical production records, so that the employees understand where and why defects occur in the processes, the company can deploy solutions to countermeasure quality problems. After asking all the respondents about how to solve equipment breakdown problem, they agree that the company should develop maintenance schedule; for example, according to mr.

Although customers are involved with product designs and specifications, customers are not part of the production processes as the company tries to limit customer involvement to being informative only.

CONCLUSION

  • Conclusions
  • Recommended solutions
    • Incentive system development
    • Statistical Process Control (SPC) development
    • Supplier Evaluation
    • Customer Involvement
    • Training
    • Preventive maintenance schedule development
  • Expected Quality Index and Cost Reduction
    • Expected Quality index
    • Expected Cost Reduction
  • Limitation and future research

Since the company has not been developing SPC, SPC should be one of the top priorities to be developed and implemented in the near future. According to the interviews, all respondents recommended that the company evaluate suppliers based on the quality of raw materials. Therefore, it is very important for the company to improve the skills and abilities of the employees by sending these employees to training programs.

The company plans to send CNC experts to a training course so that these personnel will gain more knowledge on machine operation and new techniques to produce better quality products. CNC training will be the only training that the company has to send personnel for training outside the company because the company has no competence in this field. From Table 5.1, preventive maintenance is one of the factors that can improve product quality, because without equipment failure, the company will not have interruption of production processes, so the company can maintain the initial time limit.

For future expectations, the company must be able to respond to all customer requests and improve on-time delivery to meet 90 percent of requests. The company may not be able to guarantee 100% on-time delivery because the products are handmade, and some parts of the products may need to be repaired; so this factor may delay the delivery. For %Right first time, the company currently has a %Right first time of 70%, with the recommended solutions this number should increase to 95%.

These benefits cannot be achieved immediately, but the company should achieve this goal within one to one and a half years of implementation.

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