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Organizational Analysis

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ST. PAUL UNIVERSITY MANILA
Graduate School
Subject-TOTAL QUALITY MANAGEMENT

Course Requirement

LALEINE L. SINJIAN
August 25,2014 Prof. Chantal Acayen
Topic: Elisse Enterprise : Organization analysis and relation to TQM

Please answer the following questions based on your observations in the organization that we visited last Saturday, August 16, 2014:

Describe the Organization and its Retail Trade Area (RTA)

Marikina has been known to be the shoe capital of the Philippines but because of declining seasoned shoemakers that passed the skill from generation to generation, the shoemaking industry decreased in amount. Thanks to promising entrepreneur like Ms. Monica Edullan who continues to believe in the industry, Elisse Enterprises was established.

It is a promising shoemaking company located at E. Dala Paz St. in the heart of Marikina City. It operates Monday to Sunday with operating hours of 8am to 5pm. It has been in existence since 2012. The major players of the shoemaking industry are just nearby – Hush Puppies, Otto, Itti, Happy Feet to name a few. It’s location is nearer to where raw materials are being sold compared with that of its competitors.

Ordering Process
Elise Enterprise produces sandals, slippers, shoes for men, women and children. Their products are sold by more than 30 wholesalers locally. These wholesalers bring in sample designs and the company then decides if they can produce it or not. Orders ranges from 30pcs to 1500 pieces. It takes a week or two to produce a batch of orders. There are times when finish products are out of specifications from the original orders. These products are then sold in their small store at a discounted price together some limited items for walk in clients.
Since most of its clients come from the province, they deliver the goods through cargo/courier services.

The Shoemaking Process 1. Pattern making – is the first step in shoe making. This area creates the cuts/patterns of a specific shoe sample. It has a Hydraulic Padlock that cuts the said patterns. This is where most of the scrap leather are found. 2. Upper making – the part where all the top portion of the shoes are made. A lot of sewing is being done in this area. Most of the makers in this area are female. 3. Sewing – mostly, in this area the sewing part of the sandals are made. 4. Shoemaking – This is the most important part of the shoemaking process. This determines and finishes the sole part of the shoemaking process. If there was an error made on this part, the said shoe will not be comfortable to wear. It connects the upper portion of the shoe to its sole or it base. 5. Sewing – last sewing activities are done in this area. 6. Finishing – final designs are done before it reaches the last part. 7. Quality Control – the last process wherein a team of workers check for possible defects on the shoes before it is packed for the client. The company has 36 workers who are divided to do the said phases. They are skilled workers of a particular step only. They can be rotated to a different department but it will take a longer time for them to finish because they are not cross trained to do the said task.

Mode of payment Elisse Enterprise only accepts cash or checque. They give 15 to 30 days credit terms for regular clients.

Discuss the TOWS of the organization and explain each.
STRENGTH
Young entrepreneurial owner - Ms Monica Edulan is the young owner of this shoemaking business . At the very young age she has been a key player to establish on of the top 20 shoemakers in Marikina
High skilled employees - since it opened, workers of Elisse has remained loyal and motivated to stay with the company. They are the new breed of shoemakers in Marikina.
Quality shoes produced – products are made from scrap leather.
Innovative raw materials being used – Shoes are made from leather scraps taken from nearby competition and some even in abroad.
Loyal wholesale clients – because of the quality products they produce, Elisse Enterprise already has a regular market locally.

WEAKNESSES
Weak marketing strategy - Elisse Enterprise has not ventured in marketing its products other than that of her existing clients.
Limited market - Since it has not exposed itself much on expos and internet shopping, its market is limited only to their existing ones only.
Low production capacity – since the company is a small business and the number of workers on board, Ellise Entreprise can only produce lower compared to its competitors who are big players in the industry.
Styles dependent on need of distributor - innovation in design is dependent on the design given by client. They have a dedicated person to do this but apparently, the worker is not performing well on his job of producing designs for the company.
Presence of safety hazards – no exhaust and not enough ventilation is available. Cabinets are made of wood. Disorganized piles of stocks are found that be harborage for pest.
Layout can be improved – too big empty space for scattered scrap leather.

OPPORTUNITY
International Market – Marikina has been known to produce quality shoes. By exposing the brand to international market, it can promote not only the brand but the whole country as well.
Shoe expo events – engaging in such activity will help increase Elisse Enterprise’s exposure to the wider market.
Tie up with security agencies - they produce quality security guard shoes too.
Preference for internet shopping - There is already a market on internet shopping.
Exposure trips – educational tour to relive the shoemaking industry in Marikina

THREATS
Exported footwear from China – cheaper than what is made but there is a question to quality for these said footwear.
Variety of Competition – big and small players locally, regionally and international
Manufacturing capacity - limited production area

What TQM tools can you recommend to the organization? Why will you recommend these tools? In what way can it help the organization?

Checklist chart in managing wastage of raw materials in shoemaking
In order to manage cost, Elisse Enterprise has to determine what products are mostly being wasted (raw materials from errors in production). In this way, the Management will determine what probable is the cause for this errors thus will help them come up with a solution to eliminate the said problem. In this case, wastage will be minimized.

Root cause analysis It has been said by Ms Edullan has a problem dealing with an employee who has been none performing.
What causes the delays in production?
Because absenteeism is rampant in the company
Why is it rampant in the company?
Because workers does not care whether they absent or not because they are not reprimanded anyway by the top management.
Why are they not reprimanded by top management?
Because there are no set guidelines for absenteeism in the company.
Therefore, basing it on the “whys” taken, the top management should come up with guidelines in managing absenteeism in the company. Not just concerning absenteeism but also with regards to their performance. Efficiency and Dependability should be stressed to the team and should be followed by all.

Moreover, basing it in the root cause analysis, it was found out that the company does not have guidelines in evaluating their performance that is why there is a tendency for workers to be lax in their performance since they will be paid anyway regardless if they perform or not. Policies should be made, Performance Appraisals even in the simplest form should be done in order to raise the bar of excellence in the workers performance (no matter small or big the company is).

Histogram
By using this tool in tracking down sales, Elisse Enterprise will determine its sales trend thus will help her manage her cost especially during those times of low sales.

Process Chart
If in case Elise Enteprise ventures in having a tie up with educational tours in the future, the best way to describe the process how to make shoes is through a process flow chart.

Lateral thinking
Thinking out of the usual is a good tool to market the brand. Since the company has not ventured into aggressive marketing of the brand activities like internet shopping, tie up with military or security agencies can be done. To increase workforce in a seasonal way, tie up with NGOs by teaching a selected group of people on how to make a certain process of the shoe not only increase production in a faster way but also to create jobs for many.…...

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