Reference no: EM133781142

Systems Thinking for an integrated workforce

Question 1 - The consequences of ignoring some TQM principles [3,2]

An Iron Ore mining company in Australia is defined as having three primary departments or divisions: the Mine (where Iron Ore is mined), the Rail (which is in charge of the site-to-port land transport of Iron Ore) and the Port (where the Iron Ore is loaded and shipped to markets). Each division has a separate manager who reports to the senior management (General Manager).

The General Manager was known for annually reviewing the budget for each division separately and indicating each division needed to reduce its budget by 10%. However, in an industry where fixed costs (e.g., machinery) are a large proportion of the overall costs, the amount of tonnes available to be sold is central to reducing the overall ‘unit cost' (e.g., cost per tonne).

The Rail Manager decided that his goal was to achieve budget, resulting in a capacity (i.e., maximum) of 58 million tonnes per annum (mtpa) being able to be transported to the Port. The manager of the Mining division believed that the goal was to maximise output. The Mine had a mining capacity of 65 mtpa.

During the year, the marketable amount (that which the company could have transported and sold) was 60 mtpa; however, the constraints set by the Rail Manager's goal dictated that only 58 mtpa would reach the market.

Table 1 content (below) is based on an existing fixed cost of 75% of total costs. Thus even if nothing was produced (mined), 75% of the budget is used.
The first column indicates the Division of the Iron Ore mining company.
The second column indicates unit costs, by division and in total, based on 58 mtpa.
The third column is the expenditure in millions of dollars, by division and in total, based on 58 mtpa.
The fourth column is the expenditure in millions of dollars, by division and in total, if 60 mtpa (the marketable amount) of Iron Ore was mined and sold to the market; the values are based on 75% being fixed costs and the remaining costs (25%) increasing proportionally with the change in mtpa (i.e., 60/58).
E.g., the value 234 is obtained from 0.75*232+0.25*232*60/58 where * represents multiplications (it is not critical that you can follow this calculation).
The fifth column indicates unit costs based on the potential 60 mtpa of Iron Ore mined and sold to the market.

Discuss the implications of this scenario: identify aspects of systems thinking and TQM that this company is overlooking and the significance of doing so (max. 400 words: 300 should suffice).

There is one particular aspect of TQM/Systems thinking that this company was overlooking and from which they would have benefited had it been understood and implemented.

Identify the aspect, which would have been part of your response in a), and provide an example of a situation that exhibits the positive results from implementing such an aspect (and the loss from not doing so). Ensure it is adequately described (max. 120 words: 50-80 should suffice).

Your example cannot be one discussed in lectures and should not simply be a replica of the above values in a new or fictitious situation. Your example is unlikely to be as involved as the presented situation and it does not need to include calculations, values or numbers - the scenario could be simply explained. It need not even be an example for an organisation; it may be something from personal or other non-workplace activities.

Question 2 - Statistical Process Control [4, 6]
(1 per part) Name the control chart (from those discussed in the course) that is most appropriate to apply for each of the following situations and explain why:
Monitoring the monthly number of adverse events (errors) occurring during delivery of new- borns (babies) at a hospital.
Monitoring the daily number of complaints received in an airline's call centre.
Monitoring the weekly total sales (in dollars) of electrical appliances at a store.
Monitoring the number of defective transistors from random samples of 100 tested each week.

(2 per part) Electronics, Inc. has been reporting difficulties with the circuit boards purchased from a supplier. There have been complaints about the distances between the two holes drilled on the circuit
board. The holes are supposed to be 5cm apart.
Twenty-five samples, with each sample consisting of 4 circuit boards, were taken from random samples across successive shipments sent by the supplier. An excerpt of the data is provided below:

The observations represent the distances between the two holes drilled on the circuit boards.
N.B. All control charts relating to this question (Figures 2, 3 and 4) appear after the questions.

R and X-bar control charts are constructed from these 100 observations (25 subgroups, each of size 4), see Figure 2. Report the key information based on Figure 2, clearly (and briefly) identifying your suggested course of action and rationale (max. 120 words: 60 words should suffice).
The supplier's plant quality manager confirmed that they were experiencing quality problems for shipments 18, 19, 20 and 21. These shipments have been excluded and the control charts are reconstructed. Figure 3 contains the revised R and X-bar control charts, where the four poor batches (subgroups) are removed.

How has the removal of these observations affected your assessment of the system, based on the control charts? Report the key aspects based on these two charts (max. 100 words: 50 should suffice)

The supplier's plant quality manager indicated that they had sought to rectify the quality problems they had been experiencing. Samples of 4 circuit boards were taken from each of the next ten shipments. Using the revised control chart limits from part (ii) above (i.e., excluding the samples 18- 21), the R-chart and the X-bar chart for the thirty-five samples have been plotted (see Figure 4). Comment on whether the quality problem appears to have been rectified (max. 90 words).

Question 3 - Deming's Fourteen Points, The Joiner Triangle and TQM

In this scenario, the actual organisation's name has been replaced by a fictitious name ‘FishCo'; in all other respects the following is a true account of the scenario as it transpired.

A customer purchased a crumbed fish product at FishCo. When the customer cooked and bit into one of the crumbed fish pieces, one piece was found to have a white ‘fishing-line-like' thread or band within it - the thread/band remained within the fish piece with a few centimetres of the offending thread/band protruding out where the customer had taken the bite.

The customer reported this to FishCo, and returned the sample in question, and a few weeks later received a letter from FishCo. The sections of the letter pertinent to this exercise read:

"Thank you for taking the time to contact us regarding your experience with the FishCo crumbed fish that you purchased. We are most concerned to learn of this matter and would like to extend our apologies.
Our FishCo products are produced to meet high quality standards. We work closely with our suppliers to ensure that the selection on offer across our stores meets these quality requirements.
Our suppliers have quality assurance checks in place which include raw material and finished product inspections, to prevent any foreign matter making its way into the end product.
We referred your concerns along with the sample you provided to our National Quality Team and our supplier for investigation. The sample was inspected by our supplier and suspects the string comes from the strapping band. Because the colour of the string is similar to the fish, the operator did not pick this up.
As a result of your complaint our supplier has changed the colour of the strapping band to avoid this from occurring.
Our supplier has brought your complaint to the attention of their production team to raise awareness and our National Quality Team will continue to monitor this product, to ensure standards expected by both our customers and us are met.
..."
Consider the above in light of what we have discussed in the course and report notable aspects, including whether or not the response aligns with or indicates use of elements of the course.
Within the above you may identify and explain which, if any, of Deming's Points for Management, the elements of the Joiner Triangle or other Systems thinking or TQM-related concepts are noteworthy in relation to this scenario, including support as applicable. (max. 250 words)