Answer :

New Zealand Diploma in Business Level 6 (Leadership and Management Strand)

604: Operations Management – 15 Credits

ASSESSMENT 1 (v4)

Executive summary

South Island clothing produces sportswear for athletes, players, and children, and they have a wide range of products to choose from; operating in New Zealand, Auckland, they are known for comfort and design. The report will discuss various aspects of quality management in the organization.Henceforth, the report is categorised under four parts that helps in evaluating the aspects of quality management. In the first part of the report, the four utmost crucial dimensions of quality management are discussed where it is found that features, reliability, performance and durability are present. In this regard, the second task of this report helps in demonstrating the aspects of cost management which are conformance cost and non-conformance cost that can help the production manager of South Island Clothing Ltd in reducing the number of defects and improving customers’ satisfaction level. The third part of this report represents the utilization of different tools and techniques that can help in ascertaining the cause and effects of specific issues as well as the demand in different offices of South Island Clothing Ltd. The analysis makes it evident that only 174 defects take place in a week and the highest number of defects is associated with the improper usage of chemicals and it accounts for 65. Also, nearly 2000 trousers are made on some days in South Island. 99% is the rate of perfection and the rate of defection is only 5%. The fishbone diagram has made it evident that improper materials and maintenance, followed by absence of training and motivation, inadequate tools and packaging, harmful chemicals and quality measures gas affected the shirt production in the morning shift. South Island has three branches in Auckland, Wellington, and Tauranga. The analysis showed that Christ received the highest call 173 in a week. All the three outlets receive 393 calls in total in a week.    Lastly, the fourth task of this report showcases, the ISO 900 and their utilization for improving customers’ satisfaction level regarding the business expansion of South Island Clothing Ltd. 

Introduction

South Island Clothing is a renowned name in New Zealand known for its sportswear and some winter clothing. They also keep children's sportswear, and they have a branch in Auckland as well. The company also design a jersey for a national and domestic cricket team.

The report is subdivided into four tasks. In task 1, the quality dimensions are defined, and they are analysed in terms of the organizational performance, features of products, durability, and aesthetics. The second task is related to the quality costs, where conformance and non-conformance costs are addressed. The third task is about using quality control tools like histograms and control charts to measure the issues in the organization like improper packaging, chemicals used in manufacturing, and stitching defects. The fourth task is about ISO certification for the continuous improvement process.

Task 1: Quality Management

1.1 Definition and discussion of the term ‘Quality.’

Quality is the totality of a product and services' characteristics and features that can satisfy the demands (Tdindustries, 2017). Froma business perspective, the quality of a product is related to meeting customer demands.

Example 1: A garment industry manufacturing clothes and apparels need to check the quality of the raw materials before processing. The raw materials must follow the safety guidelines not to cause any rashes and skin diseases. Using harmful chemicals must be stopped as the manufacturing process must be sustainable for the environment.

Example 2: The delivery of products must ensure quality in terms of speed and return policy. The garment industry must focus on its transportation process and packaging and ensure that any damage to the clothes does not occur.

1.2 Discussion of Four quality dimensions applying to the products of South Island Clothing Limited

The quality of products or services can be defined using eight dimensions: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perception(Pereira, 2020). 

Table 1: Quality dimension analysis of South Island Clothing Ltd.

Task 2: Relationship between quality management and cost

The quality management process is executed to maintain a certain level of excellence. The process includes determining quality policy, implementing, and creating quality plans and assurance, quality control, and quality improvement(Barone, 2020). The eight universal principles of quality management are leadership, people involvement, customer focus, systemic approach to management, process approach, continual improvement, factual approach to decision-making, and mutually beneficial supplier relations(Perryer, 2018). 

Quality costs are associated with detecting, preventing, remediating product issues related to quality (Bragg, 2020). Quality costs are associated with four categories which include prevention cost, appraisal cost, internal failure, and external failure cost.

Costs associated with quality management.

Conformance cost

Cost of conformance is the total cost of ensuring that the product quality is good. It includes quality assurance activities like training and processes, cost of quality control activities such as reviews, audits, testing, and inspection (Isixsigma, 2021). The two types of conformance costs are prevention and appraisal costs.

Table 2: Conformance cost analysis of South Island Clothing Ltd.

1. Non-Conformance cost

Non-conformance costs are incremental costs incurred by an organization when it fails to meet the quality standards (Accountingtools, 2020). It includes all the costs required in the manufacturing phases and later stages to conform to the low quality. The two types of non-conformance costs are internal and external failure costs.

Table 3: Non-conformance cost analysis of South Island Clothing Ltd.

Task 3: Application of quality control tools and techniques for managing the quality of South Island Clothing Ltd. Products

Quality control is a process through which a business seeks to ensure that its quality is maintained and meets the final product's requiredspecifications (Hayes, 2020). The sevenessential quality control tools are:

• Cause and effect diagram- It is used for identifying the causes of some of the problems and defects associated with organizational products or services.
• Control chart- It is a graphical representation that is used to identify changes over timer. The present data are compared with historical data, and the deviation is identified as consistent or unpredictable. 
• Check sheet- It is used for collecting and analysing data; it is a generic tool that is used for a variety of purposes.
• Pareto chart- A bar chart is used to show the significant factors of a process. 
• Histogram- Histogram is used to show the frequency distribution of products related to a particular data value.
• Stratification-It is a process of differentiation of the data gathered from various sources to identify specific patterns.
• Scatter diagram- Graphs are created by identifying the data and plotting them in two different axes for finding a relationship (Asq, 2021).

Recommendation and justification of the best quality tool and technique for South Island Clothing Ltd.

Task 3.1 South Island clothing faces some issues in their clothing like improper packaging, unfit clothing, and chemicals in materials used for making clothes.

Reason for a recommendation for using the Check sheet.

Recommendations for using a check sheet are crucial as it helps to keep a systemic record. Checksheet facilitates histogram and bar charts, which represent issues briefly(Techqualitypedia, 2020).

Table 4: Check sheet for identification of defects

Discussion of check sheet: From the check sheet, we can see that South Island clothing has some issues with their garments, like improper packaging, resulting in 50 damaged clothes in a week. The total number of damaged or improper garments for a particular week is 170. It is noticed that every week the clothes with defects is around 25 to 35. They have problems with using raw materials in their clothes as the chemicals create itching and rash problems in the customers.

Task 3.2 Checking the specified range of the diameter of the trouser buttonhole.

South Island is expected to keep the diameter of the buttonhole within the range of 0.75 cm to 1 cm. The company must keep this measurement intact in a single batch of the items. 

Reason for a recommendation of using Histogram

The reason for recommending Bar chart is its ability to give a categorical data representation with frequency distribution.  It will help in identifying the frequency of occurrence in multiple categories of data.

Table 5: The diameter of trousers of South Island Clothing Ltd.

Figure 1: A bar chart showing the percentage of perfect trousers

Discussion of a Bar Chart

A bar chart shows that the defects for the cloths are around 1 % to 3% on average. The perfect number of clothing ranges from 96% to 99% over a week. The organization works for six days, with Sunday as a holiday. The total number of clots intended to manufacture per day is 2000.

Task 3.3 Root cause of the substandard shirt produced in the morning shift

The substandard shirts produced by South Island in one of their products lots caused dissatisfaction among the customers.

Reason for suggesting cause and effect diagram.

Figure 2: Cause-effect diagram in producing substandard shirts

Discussion of the cause-and-effect diagram- The effect is substandard shirt design in the morning shift. Various causes are possible like lack of employee training, low machinery usage, lack of experience, harmful chemicals in manufacturing, causing rash and itching in children, and packaging issues causing product damage.The morning shift employees work after a long break that affects their quality due to lack of motivation. The machinery has more friction, and also no quality check process exists in the morning shift.

Table 3.4 Analysis of Trends of the daily volume of class in various branches

South Island Clothing has its office in various city locations, and its factories are in South Island, Auckland, and Wellington. They have many dealers and customers, and they receive more than 50 phone calls per day in their various offices. So, they require a control chart to manage the volume and type of calls they receive in their factories and offices.

Reason for recommending line graph.

A line graph is beneficial to understand the performance of the company and achieve consistency. It is used for detecting and correcting issues before causing deeper problems (Qualitymag, 2019).

Table 6: Phone call volume of South Island Clothing Ltd.

Figure 3: Area chart of South Island Clothing Ltd.

Analysis and Discussion

The total number of calls is 393, and for Tauranga, it is 81. The total number of calls suggests the working capacity and the workload for each city where they have their branches. Auckland received the highest number of calls, and on Friday, the total call number is the highest for every city. Tauranga has the highest standard deviation, and it means that the number of customer queries also vary in the city. The average number of calls received in Tauranga is the lowest, which suggests that the branch is not having enough consumers or their reception in taking calls is not sufficient. Tauranga is the focal point, and further investigation is necessary in this regard.

Task 3.5 Analysis of every step in the production process of trousers

South Island Clothing Ltd.'s production process is analysed using a flow chart for identifying their design process.

Reason for a recommendation of the flow chart

The flow chart is a step-by-step procedure about how a process works through images. It explains how the process is performed sequentially from start to finish (Quain, 2018).

Steps for making trousers.

Figure 4: Flow chart for shirt designing of South Island Clothing Ltd.

Discussion of using flow charts

The process involves the decision of the approval of the shirt design after employees send their feedback. The cutting, stitching is finalized, and then the packaging is considered before the product is distributed.

At first, the decision is taken, then a quality check is done regarding fitting and cut, then the stitching process starts. After the completion, the packaging is done and then sent to distribution. The flow chart shows the process flow starting from decision making and then following quality issues. The company is having issues regarding their stitching, and the flow chart will give a decision-making approach where the design or quality aspect can be revisited, and the task can be repeated.

Task 4: Continuous improvement in company performance

Continuous improvement is a must for any business. It is required for South Island Clothing to improve their business for achieving long-term goals, increase profit margins and draw customer attention and to achieve continuous improvement. ISO standards are the most critical standards described below.

Task 4.1 Description of ISO 9000 Certification and seven quality management principles of ISO 9000

ISO 9000 is defined as the set of international standards used in quality management and quality assurance, which helps companies document the quality elements used to maintain a uniform quality system (Asq, 2021).

ISO Terms and Aims

The ISO aims to maintain the quality achieved through proper documentation and using technical tools for quality improvement. They focus on documentation, keeping updated records, and certification aspects. Proper quality management, decision making, planning, controlling procedures, documenting, and effective operations are the terms of ISO 9000 standards.

Seven Quality Management Principles of ISO 9000

The seven quality management principles of ISO are customer focus, leadership, engagement of people, process approach, improvement, evidence-based decision making, and relationship management (Asq, 2021)

Customer focus- The primary focus of quality management is to satisfy customers for sustained success. It will increase customer value, revenue, and customer satisfaction(Biswas, 2019).

Leadership- Leadership is essential to engage employees to perform well for achieving quality standards. It will improve the capability of an organization, and employee can deliver better results(Biswas, 2019).

Engagement of people- It is necessary to engage employees and empower them with the necessary skills and knowledge for reaching quality standards (Biswas, 2019). 

Process Approach- The system can deliver effective results when the process works coherently and activities are well understood and managed (Biswas, 2019).

Improvement- Any successful organization must constantly thrive for improvement (Biswas, 2019).

Evidence-based decision making- The evidence can collect from research, data collection and evaluation of results (Biswas, 2019).

Relationship Management- Organizations must maintain a good relationship with employees and the stakeholders like suppliers (Biswas, 2019).

Figure 5: Quality Management principles of ISO 9000

Source: (Asq, 2021)

Task 4.2 Justification for the adoption of ISO Certification by South Island Clothing Ltd.

By adopting the ISO certification standards, South Island Clothing will improve its quality as ISO deals with continuous improvement through conscious decisions, effective planning, and Quality assurance activities that will enhance the organization's performance.

Justification based on financial aspects.

ISO Certification will help the organization in dealing with financial issues where improving the standard of their products will decrease their non-conformance costs. ISO certification will attract more consumers that will promote growth. Since, South Island is entering a new market, it needs to keep a focus on the customer needs following ISO 9000 standard. This would help in creating products that would help to attract the customer by satisfying their choice.  Appointing a good leader will be worth the price invested as they will motivate the employees to perform better. Following the ISO 9000, the leaders would focus on quality executive thereby improving the sales and profitability of South Island. Also, as per ISO 9000, South Island needs to engage people at all levels to ensure proper decision making and developing products that would be preferred by customer thereby creating financial viability. The process of designing and creating a shirt, T-shirt, or a trouser must be adequately monitored. Adding some features in the shirt's packaging to keep them in shape can increase the budget, but it will restore the cut and dimension of the shirts thereby meeting international quality standards and rising market share and profitability (Asq, 2021).   

Justification based on the quality management aspect.

The quality aspect will be handled where the certification will work as a guideline about maintaining standards. For competing in the global market of USA, China, Middle East where they are planning to expand, a quality check is necessary. More employee engagement through effective leadership can help in attracting new customers in the global arena.To ensure customer satisfaction, high customer focus is essential to have clear understanding of the needs of international customers. Evidence-based research is important to understand the strategy of the international competitors, market trends and demands so that South Island can develop products that are preferred by customers. Following the ISO 9000, South Island needs to maintain effective relationship with the customers so that they can connect with in case they encounter any issues related to the products. The employees can be trained, and they must be motivated to improve the production process and adhere to quality standards of ISO 9000 and thereby satisfy the customers on a global level. 

.Conclusion

Quality is the most crucial aspect of an organization. From task 1, the quality dimensions are considered, and the four dimensions used for analysis were features, performance, durability, and aesthetics. South Island Clothing Limited is considering these quality dimensions to produce good quality products in terms of their longevity and aesthetic beauty in terms of colour, style. The conformance cost related to quality management is necessary to be handled by South Island Clothing Ltd to improve its product standards. They need to perform internal audit and research about customer preferences for lowering down their conformance cost. The use of quality management tools is an efficient method of detecting flaws and takes corrective actions in future for better product design.From the analysis, it has been found that manufacturing in South Island takes place from Monday to Saturday. The total number of production defects in a week is 170 which are quite low. The highest number of the defects is the inappropriate usage of the chemicals in materials, and it accounts for 65 in a week. On Monday and Tuesday, the highest number of defects takes place. The analysis also showed that 2000 trousers manufacture in a week and the bar graphs makes it evident that the highest rate of perfection is 99% while the highest rate of defection is 4%. The fishbone diagram showed that issues in manpower, achiness, people, and materials have resulted in defective production of shits in morning shift. Also, the three outlets of South Island in NZ received 393 calls per week. The line graph showed that calls for each day in each outlet differ and the highest number of calls are received by Auckland.  Using ISO certification standards, quality control and performance improvement can be achieved.ISO Certification will help in documenting their procedures and assure usage of quality tools to achieve products having a certain standard.

Recommendation

• South Island Clothing manufactures sportswear and children wear, and they need to be very efficient as any skin damage caused to the child will destroy their reputation. The athletes need a good quality of products, and it is necessary for identifying their issues from the cause-effect analysis. They must perform quality checking to identify the problem associated with their design and manufacturing process.ISO Certification is necessary to improve their quality standards where they can regulate their quality with respect to the use of raw materials, any chemical, machinery defects or unskilled labour issue. 
• ISO Certification is necessary for the organization as they need to improve their product standards. Quality assurance will be beneficial for them, and it is recommended that they get certified, which will help them is keeping track of their performance and improve as per requirements.
• Providing training to the employees and recruiting more experienced employees will help maintain the product quality.
• Being in a garments industry, innovation, and creativity in terms of aesthetics of the products is necessary, and they must encourage inputs from the employees before finalizing any design. ISO Certification will help them understand the standards that are expected, and it will guide them to follow the aspects of quality control for the improved product range. 
• Quality management is connected to business operation (Asq,2021). South Island is planning to expand in Europe, China, the USA, Middle East and implementing ISO 9000 will help them in identifying requirements and offer good quality to new customers.