Reference no: EM131004491

Lecture Notes:

As with any quality improvement exercise, the journey to reducing COPQ should begin by sizing up the enormity of the challenge. Data collection on COPQ, analysis, and planning of an improvement strategy that attack chunks of the glacier rather than ice chips, remains the recommended process for reducing COPQ. A major by-product of COPQ evaluation is the identification of those vital few segments, which contribute most to COPQ. This results in setting priorities for the effective use of resources. Depending upon the case, either a complete overhaul of the existing core/support processes or an incremental project-by-project may be adopted. However, in both cases, the following steps may prove beneficial in diagnostic as well as remedial exercises.

In the Marketplace simulation, you have a good number of ways to reduce the COPQ of your organization, but it all starts with engaging in a journey of continuous improvement. First, Marketplace—as you’ve probably read in Ask the Professor—starts with a continuous improvement approach to quality management, similar to TQM very briefly highlighted previously. Second, quality improvement, which requires significant investment over time, is never complete. Since quality is a moving target determined by whether our products or services fulfill specific customer needs to their satisfaction and/or delight, we must continuously strive to improve processes.

Being that “continuous improvement” is the key term used by Marketplace to address quality, you start the journey by first identifying how much quality variation is typical of your products. Variance studies isolate variation in the different components in your computers: keyboards, monitors, processors, etc. Process control charts help isolate the amount of variation in production processes. By the way, when you invest in variance studies, Marketplace provides a “Gaussian Chart,” which is essentially a control chart. To recall the basics of control charting, pick up your books from MGT620 and review.

The second step of the journey happens after you isolate how much variation exists in your products. Just as a special note, variation is evil when we consider production processes. Eliminate variation as much as possible; however, the first step is always to identify how much process variation exists. The second step is to identify the root causes or sources of process variation. Fishbone diagrams, controlled experiments, among other mechanisms help determine sources of variation. In Marketplace, a “source study” is required to identify those root causes of process variation. You have to purchase variance studies prior to source studies. When you think about it, this makes sense: you first need to know how much variation is in the process or product before you can determine the sources of variation.

The third step of the journey is when your company invests in various mechanisms designed to improve quality. Design for manufacturing (DFM), more exact machining processes and tools, and other mechanisms are available to you. At this point, you’re well on your way toward improving your processes and producing better quality products. Your reliability scores and your Gaussian charts (control charts) should reflect your emphasis on quality management.

Dell Computers goes beyond lean manufacturing and is a pioneer in mass customization, meaning that Dell benefits from scale efficiencies similar to lean manufacturer and is also able to customize computers for each customers in ways which are important to the customer.

From the lecture notes for the week, you will see that mass customization relies on four basic principles:

1. Standardize wherever possible

2. Customize whenever necessary

3. Adopt a modular design for products or services

4. Incorporate process flexibility with enabling technologies

Given the four principles of mass customization, what steps would a company in the Marketplace environment need to accomplish in order to mass customize for various customer segments and what processes would need to be in place to do so