Operations management

Table of Contents

1. Topic pack - Operations management - introduction
2. Operations Management (OM) - Introduction
3. 5.1 Production methods notes
4. 5.1 Production methods - questions
5. 5.2 Costs and revenues - notes
6. 5.2 Costs and revenues - questions
7. 5.3 Break-even analysis - notes
8. 5.3 Break-even analysis - questions
9. 5.3 Break-even analysis - simulations and activities
10. 5.4 Quality assurance - notes
11. 5.4 Quality assurance - questions and activities
    1. Quality at Nikon Kohden and Toyota
    2. Quality control - case study
    3. Quality control - short answer questions
    4. Retail quality and brand image - questions
12. 5.5 Location - notes
13. Innovation - notes (HL only)
14. 5.6 Innovation - questions
15. 5.7 Production planning - notes
16. 5.7 Production planning - questions
17. 5.8 Project management - notes (HL only)
18. 5.8 Project management - questions (HL only)
19. Print View

Quality control - case study

Purest Chemicals plc

Purest Chemicals has built up a successful business supplying specialty chemicals to the printing industry. The firm was founded 30 years ago by Peter Smith, who had completed a degree in Chemical Engineering 5 years before. The firm has built up its product range using batch production methods.

Peter's daughter, Sally, joined the company 10 years ago, and is now Development Director. Her brother is the Production Director and Ranjit Shar is the Finance Director. Peter Smith is the CEO, but has retained a special interest in the Quality Control function.

Stocks have built up steadily during the life of the firm. Working capital levels are now high, and the firm sometimes has cash flow problems. The firm works using the classic saw-tooth control chart and Peter also likes to have 3 months stock of all raw materials, regardless of supply conditions

The firm has built up a good relationship with a major magazine publisher, which regularly places large orders for two specific chemicals. However, Sally knows that the market is increasingly competitive and quality is becoming a significant differentiating factor when publishers place orders. Sally has proposed a n umber of changes to the firm's operations to maximise the profits they receive from existing orders and ensure they remain competitive into the future. Her proposals are to:

• Change from traditional quality control methods to total quality management (TQM)
• Seek ISO 9000 approval
• Investigate the use of mass production for chemical production
• Set up a benchmarking process using their key competitors

A Board Meeting is scheduled for the next week, when key decisions will have to be taken.

Question 1

Define the terms:

• Product range
• Stock control chart

Question 2

Explain what the holding of a ISO 9000 Certificate will tell potential customers.

Question 3

Analyse the advantages and disadvantages to Purest Chemicals of adopting mass production

Question 4

Evaluate the proposed move from traditional quality control methods to a total quality culture.