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Supply Chain Management & Quality Management

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Background: Scenario:
You have been promoted to senior analyst in the Distribution Engineering, Maintenance, and Productions Management group of the Central Engineering Department of the Canbide Corporation, near Torrance, CA. At this location is a facility for the electronics business. Based upon your previous successes in the electronics division, you will now spend most of your time with the chemical plants.
The Canbide Corporation is a U.S.-based, multi-national, publicly traded, manufacturing company with annual sales nearing $10 billion. Canbide is one of the pioneers of the petrochemical industry and is the acknowledged technology leader in several market sectors, and benefits from large licensing royalty checks for those technologies. Canbide is the low cost producer for a number of commodity products. Canbide's current marketing approach is based on providing a wide selection of products from a single location, more than any of their competitors.
In a suburb of Tulsa, OK, Canbide operates a facility for the Chemical Business Group, which contains the Divisional Research and Engineering Department (DRE), the experts on the specific reactions and equipment associated with that division's production processes, and the Central Central Engineering and Research Department (CERG), experts in specific subjects that cross divisional boundaries. The employees in CERG generally work as internal consultants for the divisional research and engineering groups and often work on plant level issues.
Mr. Villani, president of the Chemicals Business Group, is pressing his divisional VPs to solve several problems. There is internal pressure for a new distribution facility in the Midwest. There continue to be quality problems at a facility near Toledo, OH that serves the automotive market in Michigan. There are customer service problems at most of the distribution locations, but especially at a facility near Denver, CO. There are inventory and materials handling problems at the production facility near Huntsville, AL.
Your supervisor has alerted you to three important projects for the coming year.
Product Quality and Distribution Problems at the Denver facility: This facility has experienced slow physical growth since its beginning in the 1930s. Over the years, new production units (measuring 2 km x 1 km) have been added on the periphery of the facility, in a widely scattered manner. Unfortunately, your previous recommendations regarding customer service have not yet been implemented due to budgetary constraints; customers desiring to pickup multiple products must now drive from point to point within the plant to pick up each product. There are often waiting lines at each loading point. This is causing gridlock within the facility caused by the arrival pattern of trucks picking up products. In addition, there are product quality problems, primarily due to new rules that the automotive industry (ISO 9000) is imposing on all of their suppliers.
New Distribution Facility in the Northeast: For years, long before you joined Canbide, the Divisional Sales and Marketing Departments have clamored for a new distribution facility located near New York to serve many customers throughout the Northeast. Previous studies have always indicated that the benefits of a New York location are outweighed by the costs. In spite of this, you are being asked to take another look.
A Quality Program for CERG: With the increasing prevalence of ISO 9000 programs, Canbide has initiated a corporate wide Excellence through Quality (EQ) program. Most of the plants and operational locations have already launched their EQ programs. Now, Mr. Harkins, the VP of Central Engineering and Research Group (CERG), has picked you to help develop and implement the EQ program for his corporate level engineering and R&D groups.

Situation: As part of your research for the quality project for the Central Engineering and Research Department (CERG) at Canbide, you have identified W. Edwards Deming, Joseph M. Juran, and Philip Crosby as the three individuals who are most often associated with Quality Management philosophies.

Problem: Discuss which of the three you think has the best approach to quality management that would meet the needs of CERG.

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Solution Summary

Supply chain management and quality managements are discussed.

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The company

Canbide's vision is to be a leader in all the products it manufacturers. Further, its goal is to provide total customer satisfaction to its consumers by introducing innovative products. It aims to satisfy all the stakeholders of the company by continuously incorporating their inputs in its operations, products and processes. In order to achieve all these goals and its strategic vision to excel in its industry, It not only needs to produce quality and innovative products aimed at total customer satisfaction, but also needs to produce and offer it at a price which is affordable and competitive.

Let us first of all understand the principles of all the three gurus:

The basic tenets of Philip B. Crosby

* Quality is conformance to requirements
* Quality is achieved through prevention, not appraisal
* Quality standard is zero defects, not just acceptable levels
* Quality is measured by the price of non-conformance
(indiainfoline)

W. Edwards Deming

* The Plan-Do-Check-Act Cycle
* Quality through
- Constancy of purpose
- No inspection
- Continuous improvement
- Barrierless communication
Pride of workmanship
- Constant training

Joseph M. Juran

* Quality control must be an integral part of management
* Quality is no accident
* Quality must be planned
* There are no shortcuts to quality
* Use problems as sources of improvements

After deep contemplation I will suggest that Mr. Juran ...

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