QMS and Business Performance Assignment

1. Please provide solutions to the five (5) problems located at the end of Chapter 1 in the Text (50 pts, 10 pts each question). Please be thorough. Grammar and writing mechanics are taken into consideration in the assignment grade.

2. Read the following case study:

The Absolute Zero Case

3. Consider the following as you read the case study

What is lacking in the overall structure and philosophy at Absolute Zero?

Given the role of the director of quality (a role not mentioned in the case study) how would you go about changing the approach to quality at AZ?

Make note of all aspects that you feel need addressed in the organization as it pertains to quality assurance.

Absolute Zero Case Study Absolute Zero (AZ) is a frozen food processor. It buys fruits and vegetables from farmers, prepares and freezes them, and sells them into trade channels that ultimately get down to the homemaker, restaurant, or hotel. This is an extremely competitive business. Several giant companies operate nationally, offering a broad product line including frozen meat, vegetables, fish, fruit, and juices, plus a widening assortment of prepared pies, dinners, etc. These giants sell under their own brand name, which they advertise to create direct consumer recognition. AZ is one of the many smaller companies operating line, and on a geographical regional basis. AZ's limited to fruits and vegetables, and even these are limited to popular items such as: asparagus, beans, corn, peaches, raspberries, rhubarb, and strawberries. AZ currently has sales around 90 to 100 million. The year around staff is about 500 people. The increases to about 4,000 during the peak sales season. Todd, the president, would like to upgrade the company to become the leader in the industry. He doubts that any one approach can do this, so he is proceeding on several fronts-new products, more company's present financial condition requires a gradual, rather than a crash approach toward investing money. Organization Structure and Roles President - Todd Vice President of Finance Controller Vice President of Marketing Sales Manager (fruit) Product Manager (Fruit) Product Manager (Vegetables) Advertising Manager Vice President of Research Product Research Process Research Packaging Research Central Laboratories Vice President of Manufacturing Plant Operations Production Engineering Production Planning Quality Manager Vice President Purchasing Vice President Personnel All of these activities are at company headquarters except several field sales offices and the plants. There are eight food-processing plants located in the food growing areas. The plants are all organized on pattern as foliows: Plant manager Production superintendent Processing supervisors Packing supervisors Production planning manager Plant engineer Plant controller Personnel assistant Quality supervisor Control Laboratory Marketing Mead, the marketing vice president, is an enthusiastic supporter of the idea of making AZ a national company and the leader in its field. Mead has his own ideas on how to do this. He welcomes new products, quality improvement and other obvious aids to selling the product. However, Mead feels that Control Laboratory Marketing Mead, the marketing vice president, is an enthusiastic supporter of the idea of making AZ a national company and the leader in its field. Mead has his own ideas on how to do this. He welcomes new products, quality improvement and other obvious aids to selling the product. However, Mead feels that the main tool will be marketing skills-attractive packaging, smart promotion, shrewd deals with customers, etc. Recently, Mead reorganized his department to give more emphasis to planning and growth. He did this by separating the planning function from the selling function. He now has two full-time product managers, Konrad and Weaver. Their job is to plan the product line and to budget sales, profits, and inventories. They also price the line, choose the marketing channels, plan the promotion and The field sales force under Byron does the actual contacting of customers, writing orders, negotiating deliveries and such. Because the product manager setup is new, the Marketing Department is still digesting what is to them quite an upheaval in the usual ways of doing business. The product managers also are getting into some new relationships with Research, Finance, and Production. These relationships likewise have not yet shaken down. All the vice presidents feel the product manager idea is sound but that it will take time for it to become effective. Meanwhile, lacking the resources of a national organization with a magic brand name, AZ concentrates its operations in the Northeast. It sells to some food chains but Is obliged to put the chain's name on the product. AZ also sells to food distributors using its own brand name of HiFrost. In addition, lacking a brand name that "sells itself," AZ is forced to give price concessions. The result is a marginal profit operation, with severe management pressure to keep costs down. AZ is developing some Quality Policy AZ's executives are not fully together on a quality policy. Some research and marketing people would like to build AZ's image as a "quality house." The purchasing and production people feel that there is no evidence that quality differences can be made evident enough to customers to pay for the extra costs of material. (Material is believed generally to be the most influential factor in consumer acceptability of the final product.). The higher ups have discussed how to distinguish their product as a "quality" product vs the competition product offered. Top management has not exhibited any enthusiasm for something as philosophic sounding as quality policy, nor do they necessarily have a vison for quality. The most specific comments have been along the line--"We must give the salespeople something they can sell, and "It must be good, and the price must be right, what else matters" Quality Planning The formal quality planning as is done at AZ is carried out by central Quality. This department prepares inspection and test plans, whether for material control, process control, or finished goods control. It drafts the manuals and forms, secures the agreement of the departments, and issues the official plans. Beyond this planning (which Is for product acceptance and process control), AZ has formal quality plans Specifications for material, process, and product verification (inspection) conducted at the individual plants Customer complaint investigation and reporting Budgeting and reporting the percent of grade "A" Procedure for reviewing and dispositioning product held for quality reasons New Product Development AZ is working to increase its product line, particularly in the direction of frozen dinners and other aids to the homemaker. The sequence of new product development, as it affects quality, is as follows: The product manager, who has responsibility for recommending to management what should be the makeup of the product line, screens ideas for new products. The product manager does this screening based on knowledge of the trends in the market, profit margins, availability of material, etc. The first technical steps in new product development are conducted in the Central Laboratories. There, competing products are studied, and a provisional formula is worked out. Central Laboratories has adequate facilities for developing products, processes, and protective packaging. The laboratories can simulate most of the conditions the product will encounter on its way to the consumer and can test for The product manager, who has responsibility for recommending to management what should be the makeup of the product line, screens ideas for new products. The product manager does this screening based on knowledge of the trends in the market, profit margins, availability of material, etc. The first technical steps in new product development are conducted in the Central Laboratories. There, competing products are studied, and a provisional formula is worked out. Central Laboratories has adequate facilities for developing products, processes, and protective packaging. The laboratories can simulate most of the conditions the product will encounter on its way to the consumer and can test for effect of such conditions on the product. Taste testing in the laboratories is done by laboratory personnel in an unofficial test panel. With a provisional formula, enough packages are made up for kitchen testing in Mrs. Menger's spotless kitchen. This kitchen is a part of Central Laboratories and Is used to test out various recipes (AZ hopes also to advertise Ellen Menger into a symbol of excellence for prepared frozen dinners). The kitchen staff, working with the researchers, constitutes the second hurdle of new product evaluation. A third step in new product development Is use of the Consumer Test Panel. A few years ago, the employees who would be willing to make various tests. AZ provided these employees with small food freezers and other gear to facilitate their evaluation of new products, comparison with competing products, etc. These employees were provided with free food for their trouble in carrying out the various tests and in reporting the results that are analyzed statistically. Statistical Methods Right now, AZ's key quality people could use some training in statistical methods to help out in problems such as: Setting up laboratory test panels for sensory qualities Determination of reliable sample sizes Prediction of food freshness Determination of errors of measurement and of sampling Study of cause-and-effect relationship between process variables and product quality Statistical process control Executive Reports on Quality AZ's reporting system is aimed primarily at day-to-day control. It does a good job on this. The supervisors get a quick feedback from the process control people. The production super-intendents and plant managers get a daily feedback from the plant quality supervisor. Central Quality gets daily reports and samples. The top people in AZ get summarized information as follows: Percent of product that has been graded A versus budgeted percent (monthly) Quality complaint summary (monthly) Cost of overfill (annual) Periodic special reports Quality Culture At the top of the company, everyone is for making sure that quality of product is not a liability, i.e., let's have less blunders, let's have more uniformity, more predictability, etc., but without raising the cost. On the matter of making quality a positive asset in selling the product, there is no such unanimity. An important school of thought holds that the consumer is unable to distinguish costly differences in product; that the differences among the various frozen brands are trivial compared to the difference convenience and availability, not quality. There are also some personal problems among the top people with respect to quality. Acosta, the competent and aggressive product research head, had brought in Billings. Acosta was not (and still is not) satisfied with the conduct of quality activity under Manufacture. Acosta felt that the approach was limited to day-to-day acceptance, that it lacked imagination, and is reactive in nature. In the plants, the production supervisors are faced with multiple targets-the schedule, the cost budget, the percent grade A budget, and others. The supervisors are mature, since their job is regarded as a terminal job. The supervisors have extensive experience in the materials, the production machinery, and the process. They also have a big training problem because of the seasonal rise and fall amount of job rotation departments. People who started in the laboratory fill the quality key posts. Their technical training has been in food technology for the most part. Generally, the quality people have made good progress in the company, advancing to posts in Production, Research, and Marketing as well as in Quality itself. AZ has no trouble hiring good people for the laboratories since it can honestly show them a career as well as a job