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An Analysis of Quality Improvement and Economic Effect for Small and Medium-sized Manufacturin Enterprises

Author: YangYuJie
Tutor: QianFengLin
School: Jiangnan University
Course: Business management
Keywords: Quality Improvement Six Sigma COPQ Economics of Quality
CLC: F273.2
Type: Master's thesis
Year: 2013
Downloads: 58
Quote: 0
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Abstract


With the new Chinese government’s policies implementation to upgrade the realeconomy, discussion on how to improve their management and quality level has arousedgreat attention again. Owing to the conditions of their operation, small andmedium-sized enterprises have higher requirement on efficiency about the input andoutput of their quality improvement, focusing on costs needed for the qualityimprovement. The traditional quality cost concept can bring misleading impression tosmall and medium-sized enterprises, believing that the high quality must requires highinvestment. The quality cost theory under six sigma has obvious differences in conceptand content with the traditional quality cost. By questioning the traditional optimalquality cost model, cost on poor quality (COPQ) is used to reflect the economic benefitswhich quality improvement can bring.When choosing a quality improvement strategy, SMEs need an approach which iseasy to implement with immediate economical return, so that they can carry on theimproving process continuously. As an effective method for business processdesigning, improving and optimizing, Six Sigma, just like Total Quality Management(TQM), focus on quality to enhance an enterprise’s competing power. On the basis ofsumming up the experience of the TQM, Six Sigma obtained the further development.Take DAMIC process as example, it is actually, its general structure is similar to PDCACycle for quality improvement. But it has clearer model, closer contact between methodto solve the problem and the goal, thus getting greater chances of success.This paper firstly investigated the characteristics of small and medium-sizedenterprise quality improvement, studied the method under the Six Sigma through anactual case, and compared the COPQ bad quality costs before and after the qualityimprovement, pointing out that the small and medium-sized enterprises should take thesix sigma level as their long-term goal when continuing with quality improvement to thegreatest degree. Therefore, SMEs can reduce quality cost, optimize the structure ofquality cost, maximize the quality and economic benefit, ultimately enhance customervalue and the competitiveness of enterprises.This paper used the combined research methods of normative analysis andquantitative analysis. Quantitative analysis method is used in six sigma quality tools,including FMEA and QDF applied to analyze the practical problems XTW companyencountered in the process of production, give advice on improving the quality of theproducts, and finally verify its effect of improved capabilities through analyzing theperformance of the final product. Conclusion: Despite being restrained by the capital, talent and management level,small and medium-sized enterprises (SMEs) can still, with the help of properorganization and culture breeding, introduce Six Sigma management as long as theright way is taken. It’s possible for SMEs to improve their quality management level andgain values by making use of Six Sigma tools.

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CLC: > Economic > Economic planning and management > Enterprise economy > Production management > Product Management
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