Chapter 2-Increasing Productivity and Quality

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14 Aug 2010
Chapter 2: Increasing Productivity and Quality
The Productivity - Quality Connection
Productivity - A measure of efficiency that compares how much is produced with the resources used to produce it
Quality - A product's fitness for use in terms of offering the features that consumers want
Responding to the Productivity Challenge
Measuring Productivity
Labour productivity-partial productivity ratio calculated gross domestic product divided by total number of workers
Managing For Quality
Total Quality Management (TQM) - (aka Quality Assurance) A concept that emphasizes that no defects are tolerable
and that all employees are responsible for maintaining quality standards
Planning for Quality
Performance Quality - The overall degree of quality; how well the features of a product meet consumers' needs and
how well the product performs
Quality Reliability - The consistency of quality from unit to unit of a product
Quality Ownership - The concept that quality belongs to each employee who creates or destroys it in producing a good
or service; the idea that all workers must take responsibility for producing a quality product
Business Process Re-engineering - Redesigning of business processes to improve performance, quality, and
The Re-engineering Process
1. Identify the business activity that will be changed
2. Evaluate information and human resources to see if they can meet the requirements for change
3. Diagnose the current process to identify its strengths and weaknesses
4. Create the new process design
5. Implement the new design
Supply Chain - Flow of information materials, and services that starts with raw materials suppliers and continues
through other stages in the operations process until the product reaches the end customer
Supply Chain Management (SCM) - Principle of looking at the chain as a whole to improve the overall flow through
the system
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