Intermediate Management Accounting Assessment 1

Intermediate Management Accounting

Assessment 1

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Total quality management (TQM)

It is the process that helps the companies to monitor the production to identify and counter the errors in production. It also manages the stream line supply management. It also helps in enhancing the customer experience as it manage the error in production which allows to supply better quality products to the customer and it also allows supply at a higher pace as it manage the streamline supply chain. It also allows the companies employ to increase their efficiency of production. It allows the production of the product with full potential of the company with maintaining the quality of the finished product (Barone, 2020).

Benefits of TQM

Total quality management primarily priories the client or the customer of the company. Total quality management goal is to integrally improve the production process to improve the business working process or operation. It ensures to motivate the companies employs to work hard to achieve the goal of the company together. It also ensures to connect the employs to work together for the betterment of the company with enhancing the quality of the product and processer of the production. It can be used by various industries that are production companies. It helps in enhancement of the product with set goal for near future to bring huge change in the working module in the future. It also specifies the changes which are going to effect the production to enhance and bring betterment of the product to serve the client in a better way with better product. It can help the graison to manage the product supply with quality quantity and can help in satisfying their client with quality product and help in fulfilling their client’s requirement (Barone, 2020).

Just in time (JIT)

It is an inventory management system that allows the manufacturing company to schedule the production of the product exactly at the time of need. It allows to manage the inventory in such a way that the product needed to be delivered or to process further to complete the product at the time of requirement and no product is been produced which is or are needed in near future. It helps in determination of the problem in the production and help in rectification of the problem and schedule the production in such a way that the production produce the exact quantity of the product and at the exact time of requirement of the product that helps in saving time and produce at full potential. It identifies and resolves the inventory problems. Just in time model helps in management of the inventory in such a way that the company can avoid the excessive utilization of inventory and helps company to make their production with smoother operations if the production is taking longer or the production error rate is big with defects in the production of products. Just in time inventory management main motive is to reduce the holding of the inventory and the related charges and utilization of the inventory to its full potential and increase the inventory turnover to its full extent. It helps the company to order the raw material on the same day of production which helps the company to run their production line continuously and does not have to hold large volume of space to store the raw material which is not going to be utilized for a long time. This approach also helps in reducing the cost of holding and managing of the material that also reduce the losses that can be caused due to wastage of raw material or damage of raw material due to storing and not utilization for long time. To utilize the just in time model for production there should be continues synchronization between the production line and the supply chain. Just in time requires a good connection and understanding of suppliers and manufacturer on bases of quality and availability of the material for delivery. It is necessary because any misunderstanding between the manufacturer and supplier of the material can cause the whole production to halt that can cause losses to the manufacturer and the supplier as well (cleartax, 2021).

Benefits of JIT

Just in time helps manufacturer with large production like car manufacturer to continue their production without management of inventory as the material require to manufacture product arrives in the plant just in time not before nor after just in time. Because if the material arrives before it can jam the production line and if the material arrives after the production line can halt. In both cases the manufacturer has to face the loss. To implement the just in time model for management of the inventory of the manufacturer is to be managed properly with the management of the suppliers that put the suppliers in the tremendous pressure to supply the quality material when required by the manufacturer. It can help graison to run their production line continuously and help them to fulfill the client’s requirement or order for the product on time of the requirement without any delay (Kong et, al. 2018).

Kaizen costing

It is a way of cost cutting in the production of a product without compromising the quality of the product or without increasing the time consumption of production. It helps in reducing the process by eliminating the step of production which is not very necessary and does not add up to the quality of the product or value of the product. In other words it is a process of cost reducing of the product and brings the costing of the production to as minimal as possible to increase the profit margin and provide the product to the clients as soon as possible without compromising the quality of the product. The supply chain costing includes the order process costing, costing for inventory and costing for transportation of goods. These can be evaluated by the kaizen costing to bring it as low as possible to increase the profit margin for the production. It can be used to control many other type of costing associated to the production which includes fees of legal formalities like production line registration, expenditure for license, cost for patent filing, and fees for CA to manage the accounts of the company or cost related to the product enhancement that includes research done on products, testing of the new product or batches, analysis of the product and many more (The investors book, 2019).

Kaizen costing as part of TQM

Kaizen costing can be utilizing to analyze cost of anything related to the production of the final product to reduce it to as minimal as possible. To implement the kaizen costing one has to follow the following steps:

Include employ: The employ of the company is the one who know the product better than anyone so employ’s feedback can play very huge rule in enhancement of the product and reducing the production cost of the product as they can tell what are the do and don’ts of procedure that are involved in the production of the product.

Identification of the problems: The company has to find the problems that are associated with any part of the production to delivery or selling of the product that can affect the profitable of the company these problems can be in any department of the company that are finance, customer help, HR, design, research, production and many more (Olszewska, 2019).

Rectification of the problem identified: After identification of the problem the next step is to evaluate the problem and find a counter plan for resolving the problem to enhance the product and product sale to increase the profit of the company.

Implementation and monitoring: After the evaluation of the problem is done and the solution is been found to the problem next step is to implement the problem and monitor the outcome of the counter plan to evaluate the solution found and make changes as required according to the circumstances.

Finalize: after the minor changes in the counter plan as per required on implementation of the plan the finalization of the new process is to be done and standardize to make it permanent ( Abbas, 2020).

Shortcoming of implementation of TQM

Total quality management is the structure that helps the company to organize the steps of production in such a way that the production catch up speed and maintain the quality simultaneously. The purpose of the total quality management is to enhance the quality of the product manufacture and boost up the production to the maximum potential of the company by improving the production process continuously. It helps in defining the standards which includes company’s priorities as well as the standard set for the industry for the product the company is producing. These industrial standards can be dependent on various factors which can includes the laws for the production of the product manufactured by the company to product the product legally. These standards also include the undefined stands that are necessary for the quality of the product whether it is not specified by any laws or regulation specified by the official. This approach can help graison to manage the supply chain and can counter complain that graison does not fit with the supply chain requirement. And can run their supply chain properly to satisfy their customer with regular supply of product on time and with maintaining the quality of the product (Pambreni et, al. 2019).

Total quality management can help the graison to get the clients which had left recently by presenting them the new approach that is total quality management that can help the graison to ensure the continuous running supply chain to fulfill the requirement of the clients on time.

Evaluation of the suggestion to reduce the quality control staff

Just in time helps in identification and rectification of the problems with removal of anything that is unnecessary for the production and does not helps in improving the quality of the product.

Just in time helps the production to keep running without maintaining the stock of raw material and help in produce the required product and fulfill the order of the products by getting the raw material just in time and process the material to get the finish product to get ready just in time of delivery that allows the manufacturing line to keep going and does not has to maintain the large ware houses to store the raw material and finish products for very long before processing or delivery that eliminate the cost and risk associated with the storing of the raw material and product that helps in avoiding the change of loss for the manufacturer (Phogat and Gupta, 2019).

It also is the easy approach for management of the inventory which makes the procedure of the production to be simple to understand that can be easily maintained and reduce the changes of error to minimal.

It helps in production of the products at a higher pace and use the production line to it maximum potential its primary focus is on production of the product with quality and minimal possible expense to make the product affordable and at a cheaper price. It help in ensuring quality at the production level which makes the worker to analyze the quality of the product produced by the worker and enable the worker to improve their production capabilities. It can help the graison to enhance their employs performance and can help in reducing the error rate to minimal and improve the productivity of the employs.

It can help the graison to reduce the costing of the product and help the manufacturer to increase the gain by increasing the profit margin by reducing the production cost.

By using the JIT approach the graison can shift the quality control staff to the production and all the production staff will also evaluate the quality of the products on the production level that can help them to evaluate the quality of product and every staff will be responsible for the production of the product and will also ensure the quality of the product in that way the production of the will increase as the production staff will increase and the efficiency of the employs will also not get down as they also have the evaluate the quality of the product produce by them. This will also help them to get their performance report by evaluation of the product produce by them that will motivate them to work harder to improve their production efficiency and performance.

References

Barone, A., 2020. Total Quality Management (TQM). Investopedia, [online] available at: https://www.investopedia.com/terms/t/total-quality-management-tqm.asp#:~:text=Total%20quality%20management%20(TQM)%20is,up%20to%20speed%20with%20training.

Cleartax. 2021. JIT - Just In Time Inventory Management - Definition, Elements & Advantages. Cleartax. [online] available at: https://cleartax.in/s/just-in-time-jit-inventory-management#:~:text=Just%2Din%2Dtime%20also%20known,JIT%20%2D%20Background%20and%20History

The investors book. 2019. Kaizen Costing. The investors book, [online] available at: https://theinvestorsbook.com/kaizen-costing.html

Kong, L., Li, H., Luo, H., Ding, L. and Zhang, X., 2018. Sustainable performance of just-in-time (JIT) management in time-dependent batch delivery scheduling of precast construction. Journal of cleaner Production, 193, pp.684-701.

Phogat, S. and Gupta, A.K., 2019. Expected maintenance waste reduction benefits after implementation of Just in Time (JIT) philosophy in maintenance (a statistical analysis). Journal of Quality in Maintenance Engineering.

Pambreni, Y., Khatibi, A., Azam, S. and Tham, J., 2019. The influence of total quality management toward organization performance. Management Science Letters, 9(9), pp.1397-1406.

Abbas, J., 2020. Impact of total quality management on corporate green performance through the mediating role of corporate social responsibility. Journal of Cleaner Production, 242, p.118458.

Olszewska, K., 2019. Cost management with budgeting and Kaizen Costing. World Scientific News, 133, pp.171-190.