Managing Quality And Risks In Woolworth’s Supply Chain System

Total Quality Management in Project Management

Discuss about the Risk Management In Retail Sector of Woolworth’s.

This paper is about Woolworth’s and the need to maintain quality and manage risks in its supply management processes. The development of the supply chain system and associated risk management for the Woolworth’s chain is budgeted to cost $ (AUD) 30 million, to be executed over a one year period. After a evaluation, it has been realized that the main risks to undertaking the project include a limited time-line, lack of sufficient information for managing the project, limited number of dedicated team members, lack of knowledge, and communication processes that are underdeveloped that have resulted in poor relationship with the project members. This paper outlines a system for managing quality in undertaking the project as well as how the risks will be effectively managed, following the rule of Total Quality management (TQM) and other quality management methods and approaches. This paper undertakes a critical analysis of issues and and their causes with respect to the development of the supply chain system and associated risks, in the context of project total quality management. The paper then proposes the best practice models that will guarantee quality

TQM refers to a technique in project management that is implemented so as to ensure that quality awareness becomes embedded in all phases of a project, from its conception to successful completion.  TQM requires that there is a consistent and careful review of all the phases in a project, and coordinated effort applied to ensure its realization and maintenance by all parties involved in the project (Morfaw, 2009). The key to effective TQM in project is effective communication: further, standards for quality must be developed and relevant procedures defined. Further, all people involved in the project must adhere to the quality plan strictly to ensure project success (Oakland, 2014).  TQM has its first paradigm being ‘total’ and requires an integrated system with dependent variables: in this phase, the most important aspect is effective planning. During the planning phase for the Woolworth’s project, all obstacles (risks) to the successful achievement of the project must be identified, confronted, and overcome (Luburic, 2014). 

This is the process involved in identifying the quality standards and requirements for a project and the project deliverables, as well as documenting how compliance with the relevant quality requirements will be demonstrated.  This process will give the necessary direction and guidance on the management and validation of quality throughout the process of developing the Woolworth’s system. The plan includes the necessary tools, inputs, outputs, and techniques. The quality plan will use the scope baseline that entails the scope statement for the project, the Work Breakdown Structure, and the Work Breakdown Structure Dictionary. The schedule baseline will also be incorporated in refining the project quality plan, as is the project cost line. One of the quality metrics for the project will include delivering the final project within the defined scope, time-line, and the budget (Heldman, 2015).

Developing a Quality Plan for Woolworth’s Supply Chain System

Inputs

Project Management Plan

The project management plan will be used in developing the quality plan and the information to be used includes;

Project Scope Statement: This contains major project deliverables, the description of the project, and the acceptance criteria (Perrin, 2015). The scope is to ensure groceries are delivered to the chain (Woolworth’s) on time and fresh, as well as to ensure thee are always sufficient stocks. The project plan is summarized in the table below;

Task No	Task	Duration in days	Comments	Deliverables	Lead
1	Review the current procurement policies and plans	4		To understand existing processes and help identify risks	Project manager
2	Requirements document	5		Develop the list of requirements	Project manager
3	Develop project backlog	5		Define what the system will require	Project manager
4	Assemble project team	14		Get the right personnel to work on project	Project manager
5	Assign roles	4		Assign roles and responsibilities	Project team
6	Identify risks	5		Identify risks to supply chain system	Risk management team, project team
7	Develop risk management plan	5		Risk management document and plan for monitoring risks	Risk management team, project team
8	User requirements document	5		Develop the user requirements document	Project manager
9	Risk analysis	5		Develop risk profile	Risk management team, project team
10	Stakeholder analysis	5		Identify stakeholders and develop stakeholder communications plan	Project manager
11	Cost benefit analysis	5		Undertake a cost benefit analysis of the system and risk management plan	Project manager
12	Cost quality analysis	5		Determine cost of quality	Project manager
13	Use quality tools	12		Determine causes of problems and risks using 7 basic quality tools and develop plan to address issues	Project manager
14	Benchmark	7		Compare processes and approaches for Woolworth’s against industry standards	Project manager
15	Statistical sampling	5		Sample acceptable quality standards, sample attributes, and variables sampling	Project manager
16	Design tests	7		Test supply chain performance against set objectives	Project manager
17	Develop quality management plan	5		Develop an elaborate plan and document for managing supply chain system quality	Project manager
18	Process improvement	4		Define how the system will be continuously improved	Project manager
19	Define metrics and checklists for quality	4		Define how quality for groceries supply chain will be measured	Project manager
20	Documentations	5		Define all documents and their management policies	Risk management team, project manager
21	Review	4		Review plan and make comments, continuously monitor risks	Project manager

WBS: This identifies the work packages and the deliverables for the project to b used in measuring the performance of the project (Perrin, 2015). For Woolworth’s, te WBS will follow the project plan developed above

Schedule baseline: This documents the accepted measures for schedule performance including the start and finish dates

Cost baseline: This documents the accepted interval to be used in measuring cost performance

Management plans: these are other plans that contribute to the overall quality of the project

Stakeholder register

This helps in identifying stakeholders that have a specific interest in, or have an impact on the quality of the project (Perrin, 2015). register is shown below;

Stakeholder	Role	Influence	Impact	Communication	frequency	Lead
CEO	Executive sponsor	Very High	Very high	E-mail, reports (Pdf), word document, face to face status meetings	Weekly	Project manager
Supply chain manager	Business sponsor	High	Very high	E-mail, reports (Pdf), word document, face to face status meetings	Weekly	Project manager
Steering committee	Advisory and approvals	High	Very high	E-mail, reports (Pdf), word document, face to face status meetings	Fortnight;y	Project manager
Project team	Execute project	High	Very high	Daily status meetings using collaboration tool, e-mail, face to face, pdf documents	Daily Weekly	Project manager
Project manager	Ensure objectives are met	Very high	Very high	Daily status meetings using collaboration tool, e-mail, face to face, pdf documents	Daily Weekly	Project manager

This plan will have a responsible person, documentation, and a risk management team assigned with monitoring and implementing proposed mitigation measures for identified risks (Marcelino-Sádaba, Pérez-Ezcurdia, Echeverría Lazcano, & Villanueva, 2014).          

Risk Code	Risk	Description	Probability	Impact	Effect	Mitigation Plan	Contingency
1	Limited time-line	Project can go over stipulated time that represents failure	Very high	Very high	Failure to meet deadlines, increased costs	Use project management planning Continuous monitoring achievements (executed tasks) against plan	Compression if running out of time-line Work overtime Add resources (more manpower0
2	Lack of adequate information	Insufficient information and understanding of supply chain processes for Woolworth’s	High	Very high	Developing wrong approaches to ensure quality and wrong scope	Brainstorming Understand existing processes of supply chain system and develop quality and key performance indicators train team members on concept Ask clients what they need in terms of quality, pricing, availability	Invite external consultant to help achieve objectives
3	Limited dedication by team members	Team members not committed to executing tasks to achieve set objectives	High	Very high	Failure of project failure to improve systems and processes Inability to meet organization and customer needs	Use effective change management strategies identify suitably qualified personnel	Motivation tactics project manager to inspire and create better vision for project
4	Undeveloped communications process	Poor communications	High	Very high	Inability to meet objectives and deadlines Poor understanding of what is required Focus on wrong objectives	Develop communications plan	Evaluate existing communications plan Brainstorming meeting to solve communications barrier
5	Lack of knowledge	Lack of the right skills (technical and soft) in understanding supply chain system and how to improve it	Medium	Very high	Failure to achieve objectives	Project manager and risk manager to train and educate team on system and what the team is trying to achieve	Training sessions

 

Requirements Documentation

This captures the requirements that the project must meet pertaining to the expectations of the stakeholders.  (Kerzner & Saladis, 2009). The scope of the project is to ensure an efficient groceries supply chain system and to identify and manage risks to achieving this objective. The stakeholders will be met and all requirements identified; customers will be interviewed to understand what they need. Supply chain department will be interviewed and  the existing process evaluated with new needs identified and a requirements documentation developed. The requirements include an efficient supply chain system for groceries that secures the highest quality, freshest groceries. Having the delivered in time and quality maintained. Automatic entry of stocks into system, and constant monitoring to ensure automated replenishment times. Projections made so that there is no under or overstocks

Environmental Enterprise Factors

These influence the process of planning quality and include government regulations, standards, rules, and guidelines relevant to the project and the operating conditions for the project as well as any cultural perceptions. The supply chain will be managed with compliance to WHS policies, regulations on pesticide use and levels, and labor relations from suppliers side

Inputs

Organizational Process Assets

Historical databases as well as lessons learned from previous projects or project phases will also be used in setting and managing quality (Whitaker, 2016).  The process for socks management and approvals for purchases, as well as tendering and sourcing supplies will be reviewed. The goal is to use competitive bidding and quality assessments with samples to award supply contracts, effectively manage contracts and monitor supplier performance quality.

Cost Benefit Analysis

The main benefits from meeting the quality requirements of the system development include higher productivity from using the supply chain management system, less reworks when developing the system, increased satisfaction by stakeholders, lower costs, and increased profitability. The cost of quality is compared with expected of the quality

Cost of Quality

Costs of failure can either be internal or external and are associated with poor quality (Hughes, 2011). The table below shows costs that will need to be considered

Cost of Conformance	Cost of Non Conformance
Prevention costs Develop new supply chain management system Train employees on its use Implement partially, not problems and improve	Internal failure Costs Delays in supplies Over/ under stocks Poor quality  groceries non competitive prices and low profits/ losses
Appraisal costs Evaluate current system Review contract and sourcing plan Stock management system Ensure supplier quality through testing	External Failure Costs Poor supplier contract management failure to test products for chemicals
Use money to develop better systems that assure quality of produce, delivered on time, at competitive prices and use principles such as kanban for continuous improvement	Avoid having to redevelop system, use incremental improvement and seven quality tools

These are used within the project quality development cycle to identify and solve problems related to quality. The tools include

• Scatter diagram
• Pareto chart
• Histogram
• Control chart
• Check sheet
• Cause and Effect Diagrams

Benchmarking

The groceries will procured through competitive bidding where suppliers bid and are evaluated on various aspects including chemical use, conformity to government regulations on food and groceries  code of conduct. Samples will always be taken and tested before acceptance and contracts awards will be well explained and contract management principles used. Aggregation centers will be set up for collection and distribution to where demand is based on distance and forecasts. Ordering to be done using a computerized system with just in time principles used. Cold chain will be maintained throughout to meet quality and freshness regulations as set by the food and grocery code of conduct. Woolworth’s to sign up to the  food and grocery code of conduct and review conformance every quarter

Design of Experiments

Analyzing test data will provide optimal conditions for the system and its functions and processes, highlight factors influencing performance, and reveal interactions and synergy with other systems (Perrin, 2008). The groceries must not have quality issues; minimum acceptable is 95% quality based on assessment of freshness, chemical use, and food and grocery code of conduct compliance. Stocks cannot go beyond required minimums, based on forecasting, by more than 5%; same applies for maximum allowed stocks.

Meetings

Review meetings to evaluate compliance with  food and grocery code of conduct and set quality objectives, including freshness, stock levels, reordering, and stock management.

Stakeholder Register

Outputs

Quality Management Plan

Only the freshest groceries to be procured; procurement plan entails inviting bids from possible suppliers, reviewing their bids based on benchmarks, awarding contracts to many suppliers based on product, managing contracts effectively. The project manager will solicit and document customer expectations for groceries at Woolworth’s and develop the user requirements. This will be updated regularly. Project manager to work with stakeholders and communicate effectively with them in ensuring quality supply chain management.  Woolworth’s to sign up to the grocery and food code of conduct and review every quarter. Project manager to train team on quality supply chain and why it is important as well as keep team motivated through allowing member input. Evaluate the existing process and improve it, using quality tools and implement lean practices including just in time and kanban systems. Review supply chain system every quarter and evaluate against benchmark and set criteria 9such as percentages). The project team will ensure delivery of objectives; progress to be monitored based on the WBS and schedule and corrective actions taken. Outside consultants will be used to test product quality and contract management practices used. Qualified staff to be hired for supply chain. Cold chain to be maintained with supply stores located near outlets based on distance and demand forecasts. WHS policies to be implemented and monitored.

Use of lean principles

Evaluation of progress against set objectives and benchmarks

Scope is on groceries only

Follow set process for managing groceries supply chain

Metrics will be used in monitoring performance against benchmarks

Quality Metrics

            The grocery and food code of conduct

            Grocery freshness

            Supply levels (stock management)

            Contract management

            Competitive pricing          

Project Document Updates

A stakeholder management document, a communications plan document, a risk management plan document, benchmark document for quality, quality management plan, project plan. All documents to be managed according to company policy, with versions and responsible persons. Revisions to be documented. Documents to be in electronic form and be stored for at least five years before being archived.

Information Management

According to Lientz (2011), documents must be accordingly generated, in soft and hard copies, with a designated person responsible: all documents must have versions, approvals, creation dates, and revisions and be archived accordingly. Records must be kept, based on legal legislation and organization requirements.

Control Quality

This requires that relevant quality criteria be defined for the system (Kerzner, 2013). Quality metrics will be monitored constantly and performance reviews undertaken every quarter. Other quality criteria should include the management framework, for instance Agile and/ or PRINCE 2 methodologies in executing and monitoring the project (Spundak, 2014).

Risk Management Plan

Procedures for Reviewing Outputs

The role of the execute and business sponsor are defined and what tests will be undertaken to ensure the supply chain system meets the set objectives and quality standards (Nanda, 2016).  For this phase, technical (output) quality consultants can be hired to handle this process (of reviewing quality performance) (Miguale & Dias, 2009). Scope will be managed strictly and an approval process used for any changes with stakeholders involved.

Procedures for Acceptance (of output)

A procedure must be put in place for the acceptance criteria in the context of product quality. The sourcing, contract management, and testing for quality will be strictly adhered to, as is cold chain management and stock management using lean principles of just in time.  These steps form part of the project QMP as part of the project management plan (Kahn, Kay, Slotegraaf, & Uban, 2013).

Plan Procurement Management

The procurement plan is then generated to determine if expectations are realistic, and allows all stakeholders to meet and discuss procurement requirements (Kerzner, 2017). The procurement plan is also important for purposes of planing; the duration with which items and services will be procured and forms part of the project plan and QMP (Papke-Shields & Boyer-Wright, 2017).

Procurement Management Plan
Steps	Task	Lead
1	Invite bidders through advertising	Procurement project manager
2	Set out criteria for quality and performance by bidders on quality, and conformance to regulations	Procurement project manager
3	Evaluate bids and shortlist	Procurement project manager
4	Detailed evaluation of shortlisted suppliers	Procurement project manager
5	Award supply contracts after detailed negotiations, including testing samples	Procurement project manager
6	Create contracts and contract management plan	Procurement project manager
7	Monitor contract performance	Procurement project manager
8	Review quarterly	Procurement project manager

Fixed price incentive fee contracts; The prices for products will be fixed based on contract details; however, the supplier will be given an incentive (financial) based on their performance checked on criteria including quality, conformance with food and grocery code of conduct, test results for chemicals, general quality tests, and delivery.

Fixed price with economic adjustment contract; In this contract, longer contracts are given after vetting suppliers and the supplier is give protection against issues such as inflation; as such prices can be adjusted upwards or downwards depending on economic environment.

Cost plus incentive fee contract: Supplier is reimbursed all costs involved in supply and delivery of groceries after being vetted and contract awarded, plus an incentive based on performance; the performance criteria include timely delivery, freshness and quality tests, compliance with food and grocery code of conduct, tests for chemical use (to be within stipulated regulations)

Cost reimbursable contract; in this contract type, the suppliers will be paid a fee based on deliveries (completed) and according to benchmark and a fee representing profit paid on meeting objectives or expectations

References

Cauchick Miguel, P. A., & Celso Sobreiro Dias, J. (2009). A proposed framework for combining   ISO 9001 quality system and quality function deployment. The TQM Journal, 21(6), 589-     606. doi:10.1108/17542730910995864

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