CBMEC 322

Operations Management
(Total Quality Management)
Course Description: This course aims to provide the student with an analytical approach
to the economic problems of planning and deploying human resources, materials,
facilities, and equipment to generate goods and/or services for the marketplace.
Course emphasis will be on the application of the analytical tools to address critical
issues related to strengthening the competitive position of the enterprise, such as
design, management of technology and innovation, environment-friendly design,
management of technology and facilities layout, logistics and supply chain
management, total quality management operations scheduling, and performance
management.

Course Outcomes
Upon completion of the course, the students should be able to develop:
1. Competencies
a) Apply management theories and methods to various types of organizations.
b) Analyze, evaluate, and solve problems using management science methods.
2. Skills
a) Make decisions and act within social and ethical dimensions.
b) Develop the learning capacity of new knowledge and skills.
3. Values
a) Use interpersonal and communication skills to be an effective leader.
b) Plan for self-development while managing one’s self.

Prepared by:

JACQUES ELEAZER B. BETE

Instructor
Second Semester, 2024-2025
CBMEC 322 – Operations Management (TQM)

Overview: Introduction to Operations Management and Total Quality Management

At the end of the lesson, the students should be able to:
1. Define Operations Management and Total Quality Management;
2. Discuss the importance of Operations and Total Quality Management;
3. Differentiate Operations Management from Total Quality Management.

I. What is Operations Management?

Operations management is the administration of business structure, practices, and processes to
create the highest levels of efficiency and maximize profit.
Business Structures Business Practices Business Processes
• Functional Structure • Supply Chain Management • Designing
• Hierarchical Level • Quality Assurance • Planning
• Cross-functional Collaborations • Inventory Management • Executing
• Strategic Planning • Controlling
• Leadership
• Quality Management
• Finance
• Lean Management

Operations Management also refers to the management of functions that a business needs to
run effectively day-to-day, including:
• Overseeing multiple departments and providing goals;
• Overseeing and streamlining processes;
• Balancing revenue and costs;
• Developing strategic plans; and
• Production, logistics, and supply chain.

II. Why is Operations Management Important?

Operations management (OM) is
important in a business organization because it
helps effectively manage, control and supervise
goods, services, and people.
Operations are the foundation of a
business, and without Management, the
business is running the day-to-day operations
without any dedicated leadership which will
result in a chaotic and unorganized setting as it
lacks a clear decision-making structure and
accountability mechanism.
Key points about operations without
management, the organization may:
• Lack of Direction
• Coordination Challenges
• Problem-Solving Difficulty
• Motivation Concerns, etc.
Operations Management cuts across the sector and industry. For instance, in the health sector,
operations management ensures proper health delivery with the right instruments at the right time. It
also helps people like nurses and doctors deliver timely service. A technically savvy individual knows
what is at fault when something goes missing.

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CBMEC 322 – Operations Management (TQM)

For a production or manufacturing company to be successful, OM must first stand. Take an oil
and gas company’s product discharged by ship to the reservoirs to make it available for a large customer.
OM sees the delivery of the products and schedules its execution. With OM, people achieve more, and
productivity is increased.
“Operations management is widely used irrespective of company size or what they do.”
III. Benefits of Operations Management
1. Product Quality
Operations management is the first unit in a typical firm that checks a product’s
durability and reliability. Operations management deals with the quality of products or
goods that would suit customers on and after delivery. When a product is of quality, it
gives you an edge compared to your competitors.
2. Productivity
Productivity is the ratio of input to output and is the only way to verify employees’
input. Operations management ensures appropriate staffing of employees to resources
to get maximum results. The only way to ensure productivity is through effective
operations management.
3. Customer Satisfaction
There is no feeling for a manager or an employee as a customer getting the utmost
satisfaction. Operations management rightly ensures this is coupled with a quality
product. Customers make organizations thrive, and they must be treated well in every
way necessary and possible.
4. Reduced Operating Cost
Through productivity, quality products, and customer satisfaction, the cost incurred on
product servicing is maximally reduced. This simultaneously leads to increased revenue. Only
operations management can make this possible. In reducing operating costs, there is also waste
reduction. The exact number/size of products is produced as requested via proper operations
management.

IV. Twelve (12) Components of Operations Management

Operations management identified components to meet organizational goals and objectives to
ensure the effective and efficient production of goods and services, enhance customer satisfaction,
reduce costs, and achieve organizational objectives.

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CBMEC 322 – Operations Management (TQM)

1. Forecasting
Proper forecasting is necessary to know how much of a specific product should be
produced. This will allow your facility only to produce what is needed to avoid being stuck
with excess inventory or having too many shortages.
2. Location Strategies
This component of operations management involves selecting the right location
for your organization. Several factors are involved in selecting the appropriate location:
availability and proximity, materials and labor resources, transportation cost, etc.
3. Maintenance
Maintenance management involves ensuring that equipment and facilities are
properly maintained to minimize downtime and prevent equipment failure. This
component involves scheduling all of the regular maintenance checks and adjustments
for your machines and equipment. Regular maintenance creates a safer workplace and
will keep your machines running at maximum efficiency for the longest time so that your
overall production output remains high.
4. Purchasing
This component pertains to ensuring that you have enough raw materials to
supply the incoming demands for products. Purchasing can be done using centralized,
decentralized, or combined strategies. Centralized purchasing occurs when a single
department is in charge of purchasing for the entire organization. Decentralized
purchasing occurs when each department or branch is in charge of purchasing to meet
their individual needs.
5. Scheduling
This operations management component involves assigning jobs or operations to
the right machine or labor resource. When an operation schedule is done right, it allows
your company to decrease your overall production time and allow for more items to be
produced and shipped out in time. This will allow you to increase your revenues and
maintain a competitive advantage in the market.
6. Total Quality Management (TQM)
TQM is a strategy that is used to create a customer-focused organization and
involves improving all employees and activities of the company to meet customer
requirements. The focus of total quality management is usually on improving the
processes rather than the outcomes and enables the organization to work towards having
zero defects.
7. Materials Requirements Planning (MRP)
This component ensures that you are receiving the right amount of the right
material on time to be able to complete your production on time. MRP involves taking
inventory of the items you currently have, identifying which additional materials are
required, and scheduling the production of materials or their purchase.
8. Quality
This component is important for companies to conform to product specifications
and maintain favorable relationships with their customers. Having quality products or
services usually means that they meet your customer's demands.
9. Just-In-Time (JIT)
This component refers to the process of scheduling your operations so that they
can start and be completed “just-in-time” - or just when they are needed. This technique
ensures that you are limiting the number of WIP items so that materials and
intermediates can flow from one resource to another to avoid needing to store large
quantities of WIP items.
10. Process and System Performance
This component is measured through examination, capacity utilization, or
production. You can analyze and compare the expected time and quantity of items
produced to the actual values to get a sense of whether your production facility is
meeting its targets of falling short.
11. Layout of Facilities
This component ensures that the most optimal workflow is used within your
production facility. One of the 7 wastes identified in lean manufacturing involves the
unnecessary movement of items throughout the facility caused by poor workflow, poor

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CBMEC 322 – Operations Management (TQM)

layout, and inconsistent working methods. An optimal facility layout minimizes this
motion.
12. Inventory Management
This component involves keeping track of the stocked materials and items and
making sure that the company is carrying the products it needs at the right time. Effective
inventory management will help companies meet demands by ensuring that they have
the right amount of materials and finished goods to avoid having too much or too little
stock.

V. Responsibilities of Operations Managers

Duties vary according to the nature of the company and the specific role, but in general,
someone working in business operations is responsible for:

• Evaluating, designing, and implementing business processes

• Managing logistical processes and supply chain
• Overseeing production, distribution, and quality assurance
• Managing and analyzing financial budgets
• Making strategic decisions and engaging with other senior staff members on business strategy
• Supervising employees
• Supporting HR with recruitment initiatives
• Building relationships with stakeholders and suppliers

Skills needed
Working in operations management requires a variety of skills, including:

• Leadership • Financial analysis

• Organizational skills • Business acumen
• Interpersonal skills • Detail-oriented approach
• Problem-solving ability • Communication skills
• Process improvement • Decision-making ability
• Project management • Excellent time management

VI. What is Total Quality Management (TQM)?

Total Quality Management (TQM) is a
management approach that aims to improve a company's
products and services to meet or exceed customer
expectations. TQM is based on the idea that quality should
be a core part of a company's operations. It aims to hold
all parties involved in the production process accountable
for the overall quality of the final product or service.
TQM consists of continuous process enhancement
activities involving managers and workers alike in an
organization in a completely integrated effort to improve
performance at all levels. It combines basic management
techniques, current improvement efforts, and technical
tools in a disciplined approach focused on continuous
process improvement, which is sought to enhance
customer satisfaction.
“TQM begins with a focus on the customer and is
boundless,
with a life-time dedication to continuous improvement.”
TQM is an integrative system that uses strategy, data, and effective communications to integrate
the quality discipline into the processes, products, services, and culture of the organization. The methods
for implementing this approach are found in the teachings of quality leaders such as Philip B. Crosby, W.

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CBMEC 322 – Operations Management (TQM)

Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa, and Joseph M. Juran. TQM also draws on a
knowledge of the principles and practices of:
• The behavioral sciences
• The analysis of quantitative and nonquantitative data
• Economics theories
• Process analysis

VII. Why is Total Quality Management Important?

Total Quality Management (TQM) is a comprehensive approach to improving organizational

processes, products, and services through continuous quality enhancement. It fosters a culture of
ingrained quality, teamwork, proactive problem-solving, and commitment to excellence, aiming to
eliminate defects, reduce waste, and enhance overall performance.
Some of the direct and indirect benefits that may result from implementing TQM principles
include:
1. Strengthened competitive position
2. Higher productivity
3. Enhanced market image
4. Elimination of defects and waste
5. Reduced costs and better cost management
6. Higher profitability
7. Improved customer focus and satisfaction
8. Increased customer loyalty and retention
9. Increased job security
10. Improved employee morale
11. Enhanced shareholder and stakeholder value
12. Improved and innovative processes
13. Greater emphasis on and awareness of the value of producing quality products and services.
14. Adaptability to changing or emerging market conditions and to environmental and other
government regulations.

Along with the benefits of implementing TQM principles, common difficulties that may arise
include:

1. Lack of management commitment

2. Changing organizational culture
3. Lack of workforce preparation (i.e., changes were not communicated effectively)
4. Use of accurate, timely, and reliable data
5. Lack of strategic direction
6. Lack of shared vision, mission, or guiding principles
7. Lack of cooperation and teamwork among different workgroups
8. Focus on short-term profits rather than on long-term goals
9. Failure to focus on customers’ needs and expectations
10. Lack of mutual trust and respect among levels of employees
11. Insufficient resources or lack of sustained commitment to those resources
12. Lack of continual and effective training and education
13. Management’s failure to recognize and/or reward achievements

“Total Quality Management aims to hold all parties involved in the production process
accountable for the overall quality of the final product or service.”

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CBMEC 322 – Operations Management (TQM)

VIII. Benefits of Total Quality Management

Essentially, TQM refers to the total quality in fulfilling the needs of the customers, the quality of
the products, and the quality of life Having these focuses leads to better business results and also
benefits business in several different ways.
1. Creates a good corporate culture.
Quality is transformed from an issue of the production department to a
strategic business entity to meet global challenges. Its philosophy revolves around
developing a culture that supports total commitment to customer satisfaction
through continuous improvement.
2. Better reviews from customers.
Given the quality assurance testing procedures, the products of the
company will constantly meet the requirements and needs of clients and
customers. Therefore, the customers stay with the company longer, deepen their
relationship with the company, and demonstrate less price sensitivity while
recommending the company’s products and services to others.
3. Better performance from employees.
The training given to employees as part of the program can boost
employee morale at the workplace resulting in employees working harder to
achieve the goals of TQM.

IX. Eight (8) Principles of Total Quality Management

TQM is considered a customer-focused process that emphasizes consistently improving business
operations management. It strives to ensure that all associated employees work toward the common
goals of improving product or service quality, as well as improving the procedures that are in place for
production. Several guiding principles define TQM:
1) Customer Focused
The primary goal of TQM is to meet or exceed customer expectations.
Understanding customer needs and providing products or services that deliver value is a
central tenet.
2) Employee Involvement
All employees, regardless of their level or role, should actively participate in
quality improvement efforts. Training, empowerment, and fostering a culture of
accountability are essential.
3) Process Approach
TQM emphasizes understanding, managing, and improving processes to achieve
desired results. It focuses on efficiency and effectiveness in the operations of an
organization.
4) Integrated System
TQM integrates all organizational systems and processes to work toward common
quality objectives. Goals are aligned across teams to ensure coherence and collaboration.
5) Strategic and Systematic Approach
The quality management system is aligned with the organization’s strategic goals
and is consistent with long-term objectives.
6) Continual improvement
The organization strives for ongoing improvements in processes, products, and
services. Incremental enhancements and innovative changes contribute to overall
quality.
7) Fact-based Decision-Making
The organization makes decisions based on accurate data and objective analysis
rather than assumptions. Statistical tools and quality management methods can aid in
this process.

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CBMEC 322 – Operations Management (TQM)

8) Communications
Communication is the glue that binds the principles of TQM together, ensuring
seamless implementation and promoting a culture of quality throughout the
organization. It fosters a shared vision, encourages employee engagement, promotes
transparency, and enhances collaboration.

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CBMEC 322 – Operations Management (TQM)

X. Operations Management vs. Total Quality Management

While operations management focuses on the overall efficiency of production processes,
including planning, organizing, and controlling all aspects of production, total quality management
(TQM) specifically focuses on ensuring high quality throughout the entire production process by
integrating quality principles into every aspect of a company's operations, with a strong emphasis on
customer satisfaction and continuous improvement; essentially, operations management is a broader
field that includes quality management as a key component, with TQM representing a more holistic
approach to achieving consistently high quality across all operations.
Aspect Total Quality Management (TQM) Operations Management
A structured approach to improving The management of processes that
the quality of outputs through transform inputs into goods and
Definition
continuous improvement of internal services, focusing on efficiency and
processes. effectiveness.
Emphasizes customer satisfaction,
Concentrates on planning, executing,
quality improvement, and error
Focus and monitoring production processes
reduction across all organizational
to optimize resource use.
levels.
Encompasses broader business
Involves all employees in the
activities beyond production, including
Scope organization in the quality
logistics, supply chain management, and
improvement process.
service delivery.
Aims for long-term success through Seeks to maximize efficiency and
Goals customer satisfaction and continuous reduce costs while maintaining quality
improvement. in production.
Based on principles such as leadership Involves strategic planning, process
commitment, employee involvement, design, inventory management, and
Principles
process approach, and continual quality control as part of operational
improvement. efficiency.
Implemented by designing operational
Implemented through quality
processes, managing resources
planning, quality assurance, control
Implementation effectively, and ensuring
measures, and training programs for
product/service delivery meets
all staff.
standards.

↘ Lesson Exercises
I. True or False
Identify each statement if it is True or False by putting your answer in the space provided before
each number. Write True if the statement is correct, write False if otherwise, and provide a brief
justification.

________ 1. Operations Management is solely focused on the financial aspects of a business.

________ 2. Total Quality Management (TQM) is a strategy that focuses exclusively on the end product.
________ 3. The primary goal of Operations Management is to minimize costs at all times.
________ 4. A well-implemented Operations Management strategy can lead to increased customer
satisfaction.
________ 5. Inventory Management is not a component of Operations Management.
________ 6. Just-In-Time (JIT) inventory management helps reduce waste by ensuring materials arrive
exactly when needed.
________ 7. Total Quality Management does not involve employees at all levels of an organization.
________ 8. Operations Managers are responsible for making strategic decisions related to business
processes.
________ 9. Forecasting in Operations Management is unnecessary if a company has a stable demand.
________ 10. TQM can lead to improved employee morale and job security.

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CBMEC 322 – Operations Management (TQM)

II. Identification
In the space provided, write the word or words that will make the statement correct.

1. Operations Management aims to maximize __________ and efficiency in business processes.

2. The __________ component of Operations Management ensures that equipment is maintained
properly to minimize downtime.
3. __________ refers to the process of scheduling operations so they are completed just when needed.
4. Total Quality Management focuses on continuous __________ improvement across all organizational
processes.
5. The __________ component involves selecting the right location for an organization based on various
factors.
6. Effective __________ management helps companies meet demands by ensuring they have the right
amount of materials.
7. One of the key responsibilities of an Operations Manager is managing logistical processes and
__________ chain.
8. __________ management involves ensuring that raw materials are available in sufficient quantities
for production needs.
9. The concept of __________ requires that all parties involved in production are accountable for quality
outcomes.
10. __________ strategies are essential for determining how much product should be produced based
on-demand forecasts.

III. Enumeration
1. Twelve Components of Operations Management:
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)

2. Eight Principles of Total Quality Management

1)
2)
3)
4)
5)
6)
7)
8)

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