BA 101 1st Edition Lecture 9Outline of Last Lecture1. AnnouncementsA. Midterm 12. Lecture: Capacity continued, Automation, Contribution MarginOutline of Current Lecture I. Foundation updateII. Lecture: A. Total Quality ManagementB. Human Resources Current LectureI. Foundation: The official rounds open after the midterm. Round 1 is due Tuesday, Feb 10th by 11:59 pm. Meet your deadlines! Rounds total after each class each week, round 1 story is posted on blackboard. Strategic questions:- Are you going to serve the high or low tech market? Or both?- How many products will you offer?- When will you introduce them?- How will you translate “serving customers” into meeting your organizational goals of profit?Your sales forecast:- 4 techniques, use those that are known to work best- Determines how much product to produce - Drives the proforma statements- Can be used to test different possibilitiesII. LectureA. Total Quality Management: Increasing quality expectations and performance through advanced production techniques. Total Quality Management is the act ofmonitoring and improving the quality of products and services a company produces. Primary Objectives: educate and train managers and employees, encourage increased responsibility, and discover production improvementsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Investing to improve the process by which tasks are accomplished, for example, Chris spends 20 hrs/week reading and retains 70% of the information, then he invests time and money into taking a speed reading course, and after the course he has reduced his hours per week to 10, and retains 80% of the information. TQM Initiatives and Benefits:1. Continuous process improvement: reduces material costs2. Vendor just in time inventory: reduces material costs, inventory carrying costs, admin costs3. Quality initiative training: reduces labor costs4. Channel support systems: more for you money, sales budget and demand5. Concurrent engineering: reduces R&D cycle time6. UNEP green programs (UN): Reduces material cost, increases demand for your now environmentally friendly products7. Benchmarking: reduces admin and inventory carrying cost8. Quality function deployment effort: reduces R&D cycle time, increases marketing effectiveness9. 6 Sigma/concurrent engineering: reduces material and labor costs, increases marketing effectiveness10. GEMI TEQM: reduces material and labor costs, very new to foundation, not entirely sure why or how it works. 1-5 and 8-9 are known to be very effective and well worth investing in. For optimal results spend between 250,000 and 1 million each year. Don’t exceed 2 million in any 1 category over the 8 rounds (diminishing returns). One way to approach this is first year put in 750, 2nd year put in 750, 3rd year put in 500 (this is for a singular category). Then move on to a different category. TQM last thoughts: be selective. Focus on categories that will help with the strategy you are going with. “Finish” the areas you’re investing in before moving on. B. Human Resources: people’s role in business activitiesComplement: number of workers. The needed complement is the number of workers required to fill the production schedule for the first shift without overtime. If you are expecting overtime next year, match the needed complement by 100%Caliber: Talent of the workforce. A greater investment (up to $5000 per worker) results in higher productivity and lower employee turnover. The more the company spends, the higher the skill level, or caliber, of the worker that is hired. Training: the investment of time. Better training leads to higher productivity, lower employee turnover, but takes people off the job while they are beingtrained. Each training hour costs $20 per worker. Training reduces the need to recruit new workers and reduces separation costs when workers are laid off. Human Resources choices:- As a manager: your choices, your decisions, and your behavior give definition to the world in which you work. As a manager you shape the organization that your employees inhabit. Including employment agreement, the structure of the job, interpersonal interaction (use decency and respect)A historical perspective: - The industrial revolution- Changing work enviroments- The role of unions- Variations in Human Resources Management- Current trendsThe role and impact of unions: historically, collective bargaining has been the best way for workers to have an impact on their working conditions. More than 100,000 contracts are in effect today. This represents 9 million workers in the private sector. There are an additional 8 million workers are covered under labor agreements in the public sector (ex: Teacher’s