Statistical Process Control whilst primarily a manufacturing quality Essay

Statistical Process Control whilst primarily a manufacturing quality technique can be usefully applied in service industries - Essay Example According to above lines, delivery of service is being compared in context to expectation of customers and divergence of expected service quality from delivered quality creates the gap. Ladhari (2009) stated that four characteristics of service like intangibility, heterogeneity, perishability and inseparability make it different from manufacturing offering. . Markovic (2006) argued that manufacturing sector should not be compared with service sector because customers might act as co-producer in service delivery process while customer involvement is negligent in manufacturing process. In such context, Khan (2003) stated that intangibility and inseparability make it difficult to control service quality while there are statistical procedures available to manage quality of manufacturing process. In such context, Chakrabarty and Tan (2007) found that unlike the manufacturing sector, it took time for service sector to realize the importance of Statistical Process Control (SPC) in managing quality. Sulek (2004) argued that most of the common statistical control mechanism can also be used in service sector to manage quality but little bit recalibration of the statistical model is needed in order to utilize it accurate manner in service environment. Discussion Six Sigma & Control Chart Antony (2006) defined the term Sigma as the deviation from service performance characteristics mean while objective of deploying Six Sigma in service sector is to reduce the scope of variation and subsequently improve quality. In order to control variation in the service performance, specific control limit is being assigned (SLupper). Aim of the service performance would be not to cross the upper control limit or the maximum tolerance zone (Yilmaz and Chatterjee, 2000). In case of Six Sigma, distance between SLupper and service process mean is equal to six standard deviations and in this way term â€Å"Six Sigma† has been arrived. In case of six sigma process, deviation in service performance caused by external uncontrollable influences would not exceed the limit of 3.4 parts per million or 3.4 times the service process will show defect out of 1 million times (Antony, 2006). Antony (2006) and Hoerl (2001) stated that Six Sigma process can be applied to service processes like order entry, invoicing, shipping, baggage handling, payroll processing etc. On the other hand, Yilmaz and Chatterjee (2000) measured that defect rate in service sector is less than 3.5 sigma quality level which means 23,000 times the service process will show defect out of 1 million times. In such context, applying Six Sigma as SPC would improve the service performance level to 99.38 per cent. Hoerl and Snee (2002 and 2003) identified benefits of deploying Six Sigma in service sector as 1- decrease in service defect rate which would automatically increase cost efficiency in the service process, 2- management decision would be guided by data driven statistical analysis which would decrease the scope of assumption bases errors and 3- decrease in service defect would significantly decrease customer complaints. Some practical examples can be cited in order to highlight usefulness of Six Sigma model in service sectors. Table 1: Practical Evidences of Implementation of Six Sigma in Service Organizations Organization Benefits J P Morgan Chase (Global Investment Banking) Applying Six Sigma model has helped the company to reduce flaws in service delivery

Business Organisations Essay Example | Topics and Well Written Essays - 1500 words

Business Organisations - Essay Example The classical school of organisation and management thought was mainly focussed on the overall development of organisations. It comprises of three theories of management, i.e. the ‘Scientific Management Theory’, the ‘Bureaucracy Theory’ and the ‘Administrative Management Theory’. The ‘Scientific Management Theory’ is based on well developed, specifically defined and definite principles of management. Such theories are often observed to assist the effectiveness of management in the organizations in its current status and in future as well (Agarwal, 1983). In the scientific management theory, managers are responsible for enhancing the productivity of the organisation. This theory was introduced by Frederick Winslow Taylor, who is regarded as the â€Å"Father of Scientific Management†. This theory was mainly concerned with its implication in the American Economy when it faced limited competitive productivity along with GNP growt h. Subsequently, four principles of â€Å"Scientific Management† were developed by Taylor. ... l strengthen the employer-employee relationship All of these four principles significantly support the managers to resolve problems related to the productivity of the organisation. With its virtues, these principles became extremely popular in the organisations of America which later influenced the business sector of Europe as well (Hartman, n.d). The â€Å"Bureaucratic Theory† was put forward by Max Weber which largely influenced the management philosophy of organisations in the 20th century with its emphasis on the organisational structure (Agarwal, 1983). According to the assumptions of the theory, the higher level authority would control and supervise the lower level in the hierarchy; the employees in the organisation must have requisite skill to be expertise in a definite task as per the ‘division of labour’. Moreover, the ‘rules and regulations’ in the organisation must be in a standard manner in order to facilitate coordination. There must also be ‘impersonal relationship to be existed in between managers and employees’ so as to develop logical decision making process in the organisation. The competency level needs to be high as this would facilitate to remove biasness while hiring in addition to promoting the employees. It is essentials for an organisation to maintain the complete records of the entire activities in the organisation (Hartman, n.d). The â€Å"Administrative Theory† was proposed by Henri Fayol. This theory was later recognised as Management Process School as it entails that management is a continuous process that can be evaluated by its functions. Because of the fact that the theory considers almost every aspect of management, it was able to gain relevance in all levels of management and in different types of organisations (Agarwal,