Operation Process Design and Total Quality Management

Process design

The process through which function requirement of people is satisfied through shaping and configuration of resources, to check the whole of the process design is to make sure that the performance the product is appropriate to achieve the goals. The design of product and services is partially dependent on the productive system. Product can only work within the limitation of product design. Therefore, the obvious time to start thinking about basic modes of production for product is while they are still in the design stage. This conscious effort to design for productibility and low manufacturing costs is referred to as product design. One of the important functions of product designer is to meets functional requirement.

Service process design

In services there is some interaction and customization is required. recognizing the customer unique desire for the process, manager design the process to accommodate these special requirements, through designing the services process effectively and efficiently they meet the needs of their customers.

Volume variety effect on process design

Operations can range from producing a very high volume of products or services (for example, a food canning factory) to a very low volume. Low volume operations have a very high variety of product and services, while high volume production has low variety product and services. Many manufacturing plants will have a large area, organized on a ‘mass production’ in which they make their high-volume ‘best-selling’ products. In another

Part of the plant they may also have an area where they make a wide variety of products in

Much smaller volumes. The design of each of these processes is likely to be different.

Process reengineering

It is the process of redesigning of business processes and improvement in performance of the product. Customer desires, product technology and product changes, and processes are redesigned is sometime called reengineered.

Design and redesign

The design is the process through which some thing is arrange or work on it before constructing. New information and feeds in from users, and that needs new ways to improve design that reduce and reduce production cost and quality. During design of the product provide freedom to the designer.

Interchangeable part

Design for component part need to specified carefully so that any part from a lot will fit. the result for the specified part design for interchangeable part is interchangeable assembly. Assembly costs are then lower than they would be if workers had to select combination of mating parts that fit.

Standardization

Standardization products are cheaper than custom product. The cost items affected are raw materials inventory, in process inventory, lower set costs, longer production run, improved quality controls with fewer items opportunities for mechanization and automation, more advantageous purchasing, better labor utilization, lower training costs and so on.

Modular designs

Modular design is one way to offer product variety while holding number of component and subassemblies to some reasonable level. Modular design offering variety in the marketplace.

Technology

With the industrial revolution, there has been a continuous substitution of machines power for human power, through use of technology the volume of production level is increase, invention of computer and other chips makes life more easy, in advance and high developed countries they developed a substitute machines for the control functions of the human operation. New and advanced process technology has been developed, such as

·         Robotic

·      
   NC machine (numerically controlled machine where machine tools are controlled by computer )

·         FMS (flexible manufacturing system that combine NC machine in flexible systems of production)

·        
 CAD/CAM (computer aided design and manufacturing system that combine product design and manufacturing instructions)

·        
 CIM (computer integrated manufacturing in which all aspects of manufacturing are integrated through a design and manufacturing data base)

·         GT (group technology that organize planning and facilities for small lot manufacturing by grouping various parts and products with similar design and production process into efficient system  that can use NC machine, robot or other advance technologies)

Process technology in services and nonmanufacturing operations

There are some important factors which effect the process technology in services and nonmanufacturing operations, these operations can classified in the same manual mechanized and automated format used for manufacturing process technology.

Distribution and transport

To transport the manufacturing good there is a need of standardized containering and shipping system through which the manufacturing can easily distributed to all national and international level, that eliminate most small unit handling and provide highly efficient systems for handling large quantities of goods.

Warehousing

In modern era there is use modern technology in warehouses, computer control has been applied to warehousing and advance design will store and retrieve materials on command, items are picked from storage location based on an order list in the computer.

Point of sale systems

Mechanization and automation have impacted the operation function in food markets through point of sale systems. The Universal Product Code (the bare code now printed on most product packaging) provide unique machine readable code for nearly every product.

Quality

A common definition of quality is “the characteristics of a product or services that satisfy the stated and implied needs” “a product or services free of deficiencies” (summer, nd) another approach which defines quality as “consistent conformance to customer satisfaction or dissatisfaction”

Quality system

In order to fulfill the customer need, requirement and expectation organization create quality system. Quality management system for a focused organization that involves all employees which collaborate with all the employees of the organization for the continual improvement. All employee work for achievement of common goal. It uses strategy, data, effective communications and involvement of all level of employees to integrate the quality discipline into the culture and activities of the organization. It does not matter what organization does to improve the employees training, integrate quality into process design, upgrade technology.  The customer ultimately determines the level of quality. The customer determines whether the efforts were worthwhile or not.

Total Quality Management

TQM is based on the premise that the quality of products and processes that involve everyone who create or consume the product or services which are offered by an organization, requiring the involvement of management, workforce, suppliers, and customers, to meet or exceed customer expectations.

Nine common TQM practices

1. cross-functional product design
2. process management
3. supplier quality management
4. customer involvement
5. information and feedback
6. committed leadership
7. strategic planning
8. cross-functional training
9. employee involvement

The basic idea of TQM is extremely expensive to inspect quality into a company outputs and much more efficient and affective to produce them right in the first place. as a result responsibility for quality is taken away from the department of quality control and the place where it belongs with the workers who produce the parts or provide the service in the first place.

Quality planning. The is the process of preparing to meet quality goals.

Quality control. The process of meeting quality goals during operations.

Quality improvement. This encompasses the activities directed toward achieving higher levels of performance.

Six Sigma

The six sigma concepts were developed by bill smith, a senior engineer at Motorola, a comprehensive and flexible system for achieving, sustaining and maximizing business success. Close understanding of customer needs, discipline use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes.

At Motorola, six sigma is defined as “a business improvement process that focuses on organization on customer requirements, process alignment, analytical rigor, and timely execution”. Six sigma initiatives are associated with a increased profitability, improve quality, improve employees moral, lower costs, higher productivity, market share growth, improved levels of customer retention and satisfaction, and shorter leads times.

The DMAIC improvement process

The phase DMAIC is defines measure, analyze, improve, and control. the DMAIC  is used to improve the process by using scientific method. A progress is asses at the end of each phase which is discus in detail.

Define

·         Define goals for process improvement

·         Define the customers

·         Define the project in which you work

·         Define the problems or opportunity

Measure

·         Identify appropriate performance measures

·         Collect data

·         Evaluate current process performance

Analyze

·         Develop and test theories related to root causes of problems

·         Identify cause and effect relationships

Improve

·         Develop and evaluate solution to reduce gap between desired process performance and current performance

Control

·         Monitor process to sustain improved performance

·         Ensure that problems do not resurface.

Benchmarking

Benchmark involves comparing organizations processes with best practices to be found. Identify the best practices to implement .projecting trend in order to be able to respond proactively to future challenges and opportunities.

Benchmark is the way through which companies compare their performance against the set of standards with best class companies, through use of information provided by comparison, a company come to know how to improve its own performance. They make a conclusion about the performance and necessary improvements. (summer, nd)

Defining and measuring quality

Richard and schonberger has compiled a list of 12 dimension that customers perceive as associated with product and services.

Conformance to specifications

·         Confirmation to specification is the extend to which the actual product matches the design    specifications.     

Performance

·         The customer equates the quality of products and services with their performance.

Quick response

·         amount of time required react to customers demand.

Quick change expertise

·         By changing the model with out any delay.

Features

·         Features are the attributes that a product or services offers.

Reliability

·         The probability that a product will continue to perform for some period of time.

Durability

·         Durability shows the product toughness

Serviceability

·         Serviceability refers to the ease with which maintenance or repair can be performed.

Entrepreneurial Process and Five Process for Business Growth

 entrepreneurial process is break into five phases: idea generation, opportunity evaluation, planning, company formation/launch and growth.
Idea Generation: every new venture begins with an idea.before starting the business entrepreneurs first generate idea,the basic thing which entrepreneur first going to start the business is the idea and act accordingly, we take an idea to be a description of a need or problem of some constituency coupled with a concept of a possible solution. (A characterization of this phase is still work in process on this site.)

 Opportunity Evaluation: this is the step where you ask the question of whether there is an opportunity worth investing in. before investing some one some else the owner search the opportunities and investigate the customer potential and invest accordingly, Investment is principally capital, whether from individuals in the company or from outside investors, and the time and energy of a set of people. But you should also consider other assets such as intellectual property, personal relationships, physical property, etc.

Planning: Once you have decided that an opportunity,before starting a new venture the business person or the organization plane the business and act accordingly, you need a plan for how to capitalize on that opportunity. A plan begins as a fairly simple set of ideas, and then becomes more complex as the business takes shape. In the planning phase you will need to create two things: strategy and operating plan.

 Company formation/launch: Once there is a sufficiently compelling opportunity and a plan, the entrepreneurial team will go through the process of choosing the right form of corporate entity and actually creating the venture as a legal entity.

 Growth: After launch, the company works toward creating its product or service, generating revenue and moving toward sustainable performance.growth of the business depends upon the your efforts and the nature of the business. The emphasis shifts from planning to

execution. At this point, you continue to ask questions but spend more of your time carrying out your plans

Although it is natural to think of the early steps as occurring sequentially, they are actually proceeding in parallel. Even as you begin your evaluation, you are forming at least a hypothesis of a business strategy. As you test the hypothesis, you are beginning to execute the first steps of your marketing plan (and possibly also your sales plan). We separate these ideas for convenience in description but it is worth keeping in mind that these are ongoing aspects of your management of the business. In the growth phases, you continue to refine you basic idea, re-evaluate the opportunity and revise your plan.
This website is focused on the early phases of new ventures. It does not delve into the process of generating the original idea. Nor does it cover the phases of growing a company much beyond it's initial launch. However, the topics of evaluation and business planning remain relevant well into the early life of the company.
The focus here is the evaluation and planning phases. We first develop a framework for understanding and analyzing this process. This table summarizes this framework:

Risk Propensity

Sitkin and Pablo (1992) offer definitions critical to this trait perspective: risk propensity as the tendency to take or avoid risk: risk perception as the assessment of risk inherent in a situation: risk behavior as decisions with varying degrees of uncertainty. They propose two, alternative models of risk behavior. One suggests that risk propensity and risk perception mediate risk behavior (1992,p. 15). The other suggests a moderated relationship, explicitly, that risk propensity moderates the relationship between risk perception and risk behavior (1992, p. 26). Sitkin and Weingart (1995) test the mediated model and report promising results. However, the debate is not closed. Mediation is suggested when there is a demonstrably strong relationship between predictor and criterion (Baron and Kenny, 1986), and empirical results in this domain are mixed (Busenitz and Barney, 1997; Sitkin and Weingart, 1995). In a study that examines the relationships between anticipated venture outcomes and differences in risk propensities, Forlani and Mullins (2000), find that risk propensities did not influence perceptions of venture risk. That empirical result directly contradicts the Sitkin and Pablo (1992) prediction.

Risk taking propensity has limited implications for the discovery and exploitation of wealth generating ideas. Brockhaus (1980) studies entrepreneurs and managers with a view toward assessing risk taking propensity. He finds no significant differences across these groups. Masters and Meier(1988) extend this research. They use the same instrument (the Choice Dilemma Questionnaire, hereafter, CDQ) and ask essentially the same question: Do entrepreneurs differ in their risk taking propensity from non-entrepreneurs? They report no significant differences between entrepreneurs and managers. This empirical evidence on risk propensity runs counter to conventional wisdom and suggests that entrepreneurs exhibit the same propensity to take or avoid risks as the general population. However, other scholars are not as sanguine. Shaver and Scott (1991) critique the CDQ as inappropriate for this research question. The instrument was developed to study individuation, the diffusion of responsibility often found in mob behavior. Moreover, it was designed to measure changes in expressed levels of riskiness. Consequently, Shaver and Scott assert that its use as an index of a relatively stable personality trait is methodologically unsound (1991, p. 29). Sitkin and Pablo (1992) extend the discussion of risk taking propensity, and we take advantage of their indirect support for our competing, theoretical perspective. They argue that risk taking propensity has three determinants: risk preferences, a somewhat durable predisposition to accept or decline risk; inertia, a habituation of sorts in which the decision maker employs processes and criteria used in past situations; outcome history, a phenomenon in which the decision maker attributes outcomes to his or her actions. Further, they propose that risk propensity may be a moderator variable, explicitly, that it influences the relationship between risk assessment and risk behavior (1992. p. 26). We seize upon their conceptualization of risk propensity as a moderator and substitute ‘‘priors.’’ Priors are information gained by decision makers from prior immersion in a similar context (Venkatraman, 1997).

Brandstatter (2010) stated that, during the last two decades entrepreneurship has become a very active field of research in various social science and economic policy.

 Janny & Dess (2006) attempted to summarize the literature on risk in three dimensions:

1. Risk as variance.
2. Risk as downside loss.
3. Risk as opportunity.

Sitkin & Weingart (1995) describe risk perception as, “The decision maker’s evaluation of the level of risk inherent in a situation, associated with its uncertainty and the control that individuals perceive they have over such uncertainty”.

It is argued that in order to increase risk perception, risk identification needs to increase.

Norton & Moore (2002) summaries previous literatures and upcoming researches on entrepreneurs in quite simple way “entrepreneurs hold a dissenting view of the future which often permits the discovery of arbitrage opportunities overlooked by others. In the field of entrepreneurship there have been a huge number of researches looking at the opportunity recognition element of entrepreneurship.

In the field of research many studies had been done on entrepreneurial risk and their assessment abilities and opportunities so far, now question arise here whether these entrepreneurs are born or made their distinguishing factors, personalities and attitudes and source of their relentless drive and their different creativity have been topics of many studies, researches undertaking around the world. (Pieter Ernst 2012).

Relationship between Entreprenourial Education and Motivation

Relationship between entrepreneurial education and entrepreneurial motivation

The result shows significant and positive relationship between personality traits and entrepreneurial motivation. This implies that when the students’ entrepreneurial education their tendency to become a entrepreneur will always increases.

Entrepreneur education help in developing a students’ independent attitude, is probably the most difficult and important goal. It focus is on the talents, capacities or characteristics of students, among which showing initiative, creativity, perseverance, independence, goal setting, opportunity recognition, and risk taking are vital. Educational institutions can promote the characteristics of students associated with successful entrepreneurship.

Finally, educational institutions are trying to develop an entrepreneurial culture, an atmosphere promoting entrepreneurial attitudes and skills, which stimulates innovation and creativeness.

Relationship between personality traits and entrepreneurial motivation.

The result shows significant and positive relationship between personality traits and entrepreneurial motivation. This implies that more students have willingness to become and entrepreneur and they have personality trait of risk taking.

Risk taking is one the personality traits of the students which motivate them to become to the successful entrepreneur. Individuals who have higher achievement motivation prefer activities of intermediate risk because these types of activities will provide a challenge, yet appear to be attainable.

Risk Perception in Entreprenours and its Solution

Risk Perception:

At the individual level, risk reflects the degree of uncertainty and potential loss associated with the outcomes which may follow from a given behavior or a set of behaviors (Forlani & Mullins, 2000). Yates and Stone (1992) identify the basic element of risk construction: potential losses and the significance of those losses.

The point of research focuses on how entrepreneurs cope with the risks inherent in their decisions, what determines the way they perceive the riskiness of their decisions, and whether they possess character traits which predispose them to engage in uncertain behavior or assess opportunities and threats differently from non -entrepreneurs (Norton & Moore, 2002).

The ‘expected utility’ theory found in psychology and information economics has often been taken as the theoretical background for the basics of the explanation of decision-making under risk. However its predictive ability is questionable (Cherry & Fraedrich, 2002). A viable alternative is ‘prospect theory’ (Kahneman& Tversky, 1979) which regards the individual as risk averse in the domain of gains and puts risk seeking in the domains of losses. In any case, the process whereby entrepreneurs make decisions about risk-taking is extremely complex (Ray, 1994).

Risk perceptions involve the way individuals make sense of the degree of uncertainty and the possibility for loss associated with particular actions (Knight 1921; Forlani and Mullins 2000). This cognitive construct is often viewed as the potential for loss and tends to be more closely associated with negative outcomes (Sitkin and Weingart 1995), as opposed to potential for gain. Some describe risk perceptions as “the extent to which there is uncertainty about whether potentially significant and/or disappointing outcomes of decision will be realized” (Sitkin and Pablo 1992: 10). Essentially, risk perceptions are not limited to economic variability, but also are more closely linked to undesired outcomes.

Every individual’s perception of risk in a given decision will differ; some will weigh in a higher risk factor in the generated profit, some will evaluate the higher risk factor in the strategic outcome. To choose to take the risk although the perception of the aggregative risk in a decision is high is to have high risk propensity. This will always have to be compared to this individual’s own evaluation of different risk related decisions

Risk perceptions, in turn are expected to influence choices among risky alternatives. Choices among alternatives in a decision set by a decision maker who perceives the set as less risky are expected to be riskier than for those who perceive the set as riskier (Yates 1990).