Author: elizabeth3011f14

Quality Matters

Posted on by elizabeth3011f14

Quality is a factor that can affect what a consumer purchases. As consumers, we do not want a product that will fall apart the next day. We don’t want a car that will blow up if we get rear-ended. If a company produces products or services that consumers do not deem to be good, this can affect sales and also the company’s reputation. Because of this, quality is an important part of operations management. Our text defines quality as “the ability of a product or service to meet customer needs.” (Heizer 209.) This definition might seem vague, but in reality, quality can mean different things to different consumers, such as reliability, durability, or even performance. The textbook mentions that two ways quality can improve a company’s profitability are creating sales gains and reducing costs (Heizer 208.)

An example of how quality comes into play in management is the situation going on in the auto industry and the handling of vehicle quality and safety. Recently, Audi and Honda have recalled certain vehicles. The Wall Street Journal reported that Audi’s recall was a result of an air-bag deployment glitch. “Audi’s action is the latest in an industry burdened by recalls. There have been tens of millions of vehicle recalls issued this year, costing…billions of dollars and denting the reputations of executives the companies they run.” (WSJ.) This highlights the fact that when a company’s product or service is perceived to have bad quality, it will cost the company money and will impact the company’s reputation. In addition, not only will recalls affect customers’ perception of a company, but they can lead to government investigations, fines, and lawsuits, all of which will impact the company’s operations management. The article mentions that Honda is reforming its quality assurance structure and will create a new job to oversee the safety changes the company will implement.

Personally, I believe quality is a vital part of operations management. I prefer to buy and spend more for products that I know are not going to fall apart a right after purchasing them. With all of these vehicle recalls, I believe the auto industry really needs to look at its quality standards. Companies need to look at where quality ranks in its operations and consider improving the system. Quality can help a company gain a competitive advantage over others, which will lead to higher profitability and a better reputation. As the textbook mentions, quality can reduce costs and improve sales, which are two features that all companies want. For instance, a product made of higher quality material will have a lower warranty cost for the company. Also, if consumers know a company produces high quality products, they are more likely to buy from that company.

Questions for the reader:

How do you define quality? Do you think its has a big effect on operations management? What are your thoughts on the continuous product recalls?

Sources:

Heizer, Jay, and Barry Render. Principles of Operations Management. Upper Saddle River. 2013. Print. 208-209.

Pfanner, Eric, Boston, William, and Megumi Fujikawa. “Audi, Honda Swept Up In Concerns Over Safety.” online.wsj.com. The Wall Street Journal, 2014. Web.

http://online.wsj.com/articles/more-auto-makers-act-on-quality-defects-1414081212 

Going Green to Put You in the Black

Posted on by elizabeth3011f14

Climate change, environmental protection, carbon footprint; all of these phrases are familiar to us. But what do they have to do with operation management? A lot, actually! We can see this in the concept of sustainability, “meeting the needs of the present without compromising the ability of the future generations to meet their needs.” (Heizer 189.) Sustainability is important to operation managers because of how it affects things outside of the company. From the beginning of the supply chain to the end, managers have to consider how the product and the operations will affect not only consumers, but also the environment. To do this, managers can look at raw materials, product design, suppliers, disposal of material and waste, and transportation to reduce the impact on the environment. If the managers do not practice sustainability, the company can receive bad press from different stakeholders. Not only that, if the company is not meeting regulations, the company can be fined. According to our text, “if a firm wants to be viable and competitive, it must have a strategy for corporate social responsibility and sustainability.” (Heizer 199.)

There are many examples of companies changing the supply chain to be more sustainable. For instance, bottle companies using recycled plastic or companies reusing wastewater. Recently, even more companies have promised to reduce their environmental impact. Last week the New York Times reported more companies are supporting greener supply chains, renewable energy, and stopping the destruction of the tropical forests. According to the article, these promises have been a growing trend for a number of years, “…with virtually every major company now feeling obliged to make commitments about environmental sustainability, and to report regularly on progress.” (Nytimes.) This goes back to why sustainability is important for operations management. Because of the growing expectations, managers are looking for ways to make the supply chain sustainable. It also supports the fact that companies have to be sustainable to be competitive. Apple has committed to looking for ways to practice renewable energy and reduce emissions from their suppliers in the supply chain. For instance, Apple has been building solar farms and wind arrays in the United States. Other companies in the article have pledged to stop deforestation. Including Unilever, who has pledged to “…trace all…palm oil to known sources by the end of this year.” (Nytimes.)

Personally, sustainability was really interesting to read about. Though I have chosen to only talk about sustainability in regard to the environment, sustainability also includes other dimensions, as well. I think what surprised me most about sustainability is how companies really do have to practice it in order to stay viable and competitive. I realized that company sustainability influences how I think about a company. I am more willing to buy the company’s products and I think most other customers are like that too.

What are your thoughts on sustainability? Do you agree with the statement that companies need to practice sustainability in order to be viable and competitive? Why or why not?

Sources:

Gillis, Justin. Companies Take the Baton in Climate Change Efforts. Nytimes.com. New York Times, 2014. Web.

http://www.nytimes.com/2014/09/24/business/energy-environment/passing-the-baton-in-climate-change-efforts.html?_r=1

Heizer, Jay, and Barry Render. Principles of Operations Management. Upper Saddle River. 2013. Print.