National School of Business Management

QUALITY MANAGEMENT
BScMGT 2208/ MGT 2309

Student Name Student No

 Feedback Form- Group Report Submission

No. Student Number Name Signature

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Total
Marks
Evaluation Criteria – Group Report Marks
Obtained
(%)
01. Introduction to the selected industries and quality 5
management tools.
02. Justification for the two selected quality 10
management tools in two industries.
03. Purpose and benefits of the selected quality tools 10
for the selected industries.
04. Application of the selected quality management 30
tools to the relevant industries.
05. Identify the applicability of the selected quality 25
tools in Sri Lankan context with relevant to the
same industry and other industries.
06. Recommendation for Sri Lankan sectors with 10
respect to selected quality management tools.
07. Formatting of the report. 5
08. Reference. 5
Other Comments

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 1. ACKNOWLEDGEMENT
We would like to convey our heartiest gratitude to the lecturers who have helped us
to build up our knowledge and provided the guidance and ideas to success this effort
in many ways. It was a great advantage for us to completing this assignment in a
proper manner.

Furthermore, we would like to express our thankfulness to National School of

Business Management for providing us with the opportunity to pursue this (Degree)
successfully. Also, convey our gratitude to respective families and our friends for
their unconditional support.

Finally, yet importantly, we would like to express acknowledge with sincere gratitude
for all other people who helped us to success this report in numerous ways.

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 2. EXECUTIVE SUMMARY
When people say "Quality", they are usually referring it to something "Good".
Organizations promote their products as "high quality" or "superior quality" in this
way without particularly specifying what "Quality" implies and as consumers we are
able to see it in almost all the marketing materials than in core business processes or
policy statements.

Many quality management professionals define quality as fulfilling a set of explicitly

or implicitly stated characteristic features. It essentially provides clients with items
or services that they demand. These features boost customer satisfaction and
enlighten client expectations resulting in higher income for the company. Of course,
it costs money to ensure quality by adding features that customers desire while
maintaining consistency and durability with each generation. But the cost of not
doing so is much higher such as losing market share, missing great opportunities,
brand degradation and recalls due to design and production errors.

Quality Management plays a vital role in this process by involve in planning and
controlling operations to make sure that the product or service is suited for use,
satisfies designed criteria and fulfills the demand of consumers. Quality control was
originally the focus of quality management with manufactured products being
examined and evaluated and poor ‘waste' product being discarded or sold at a cheaper
price. But in modern thought, on the other hand, dismisses this technique as wasteful
and profit-draining. As a result, a number of techniques and concepts have been
developed with the goal of focusing on and completely reducing quality costs.

This report discusses and analyzes a select research article in the food industry along
with quality management tool: Pareto Charts combining Six Sigma concept and
finally identifying the applicability of the selected quality tools in Sri Lankan context
with relevant to the same industry and other industries while providing
recommendations for Sri Lankan sectors with respect to selected quality management
tools.

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 Contents
1. Acknowledgement........................................................................................... 3

2. Executive Summary ........................................................................................ 4

3. Introduction to Food Industry and Pareto Charts .............................................. 7

3.1 Food Industry ............................................................................................... 7

3.2 Pareto Charts as a Quality Tool ..................................................................... 8

4. Justification for Pareto Charts in Food Industry ............................................... 9

5. Purpose & Benefits of Pareto Charts in Food Industry ................................... 10

6. Application of Pareto Charts to Food Industry ............................................... 12

7. Applicability of Pareto Charts in Food Industry in Sri Lankan Context .......... 15

8. Recommendation for Sri Lankan Food Industry ............................................ 16

9. References..................................................................................................... 18

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 Figures

Figure 1: Key Components of Food Industry………………………………………...7

Figure 2: Pareto Rule - 80-20 Rule………………………………………………….8

Figure 3: Pareto Chart……………………………………………………………….9

Figure 4: Benefits of Pareto Charts to Food Industry……………………………...11

Figure 5: Pareto Chart for Product Type – Taiwan Food Company……………….13

Figure 6: Pareto Chart for Customer Complaints – Taiwan Food Company……...13

Figure 7: Pareto Chart for Bun Type – Taiwan Food Company…………………..14

Figure 8: Fishbone Diagram of Shrinkage Defective – Taiwan Food Company….14

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 3. INTRODUCTION TO FOOD INDUSTRY AND PARETO
CHARTS
3.1 Food Industry
Food is a necessary element in our life. It is one of the basic needs of human beings.
Therefore, food industry is fundamental and vital regardless of nations. Of course,
the quality matters, as quality foods play an important role in living a long and healthy
life. It is extremely important for public health, food safety, food security, social
development and nutrition. In the food sector, product quality, health, and sanitation
are key concerns. Harvesting, food production and supply, processing, packing,
logistics, distribution, consumption and disposal are all covered by food industry
(Krapiva, et al., 2018). Food industry as a whole is made up of various sorts of
businesses that produce a wide range of food products addressing agriculture, food
production, processing, preservation, packaging, distribution, retail and catering
(Musina & Shchetinin, 2017). It is mainly comprised of the following elements.

Agriculture

• This is the process of turning raw materials into food and other
desired products. Crop cultivation, animal raising and fish farming
are all included in this.

Food Processing

• It is the process of converting raw materials into marketable food

items. The significant number of agricultural products are perishable
and seasonal.

Food Distribution

• Transporting, preserving and promoting food products to consumers

are all part of this process. The food industry requires a transport
network to link its various components. For an example,
a wholesaler buys and sells it to a variety of customers.

Regulation

• Food regulations are there to ensure quality and safety of food

products. These are limitations imposed by the government. A food
business must comply with several regulatory standards in order to
function.
Figure 1: Key Components of Food Industry
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3.2 Pareto Charts as a Quality Tool
Anyone working in quality control management or concerned with process
improvement needs to be able to detect and resolve quality related concerns
efficiently and quickly. No matter what industry a company serves, it still can
effectively manage the quality of their products or processes with such quality tools
in the hands (Priyanto, 2014).

The Pareto Charts are one of those key quality tools developed by Italian economist
named Vilfredo Pareto. The Pareto chart follows the 80-20 rule when used as a
quality control tool. This concept believes that in any sequence of operations, 20% of
the important elements, sometimes known as the "essential few" are responsible for
80% of the problems. Eighty percent of minor factors are responsible for the
remaining 20% of problems. The Pareto chart is a blend of a bar and line graphs that
shows individual values in descending order using bars and the aggregate total using
a line. The Pareto chart's aim is to demonstrate the relative importance of various
parameters helping users to pinpoint and focus the efforts on the elements that have
the greatest impact on a particular area of a process or system (Alkiayat, 2021).

Figure 2: Pareto Rule - 80-20 Rule

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 4. JUSTIFICATION FOR PARETO CHARTS IN FOOD
INDUSTRY
Food and Quality are closed spoken topics in today’s business world. Because when
people say "Quality", they are usually referring it to something "Good". Therefore,
they tend to search for quality foods once they enter in to a marketplace. That is why
food industry nowadays strives to improve their quality by applying and assessing
quality levels on a frequent basis. Because, they know unless they adopt such tactics
to ensure the quality levels of the products that they offer to their clientele, they
cannot survive and win their loyalty. In fact, modern customers are much more
knowledgeable than traditional ones because they even tend to predict a product’s
quality by its price. If the price of a particular product is low, they assume as it has a
poor quality. Because they already are aware of that in order to ensure quality by
adding features while maintaining consistency and durability, organizations may
have to incur a considerable high cost and so pricing strategy is somewhat
competitive than cheaper goods. This is the main reason why we have chosen the
Food Industry as the chosen industry.

The food business is confronted with a number of challenges. It has been criticized
in various aspects and the industry now tries hard to dismiss its criticisms. Climate
changes, pollution, waste disposal, soil and water damage, deforestation,
environmental degradation and the scarcity on natural resources are all pressuring
every country to develop a more sustainable food system (Parikh, et al., 2014). Pareto

Figure 3: Pareto Chart

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Charts have a massive role in it because it assumes that in any sequence of operations,
20% of the important elements are responsible for 80% of the defects. Eighty percent
of minor factors are responsible for the remaining 20% of problems.

It is a practically relevant concept to almost all the industries as it helps the

organizations to quickly figure out where the deviations occurred. That is why we
have chosen Pareto Charts out of many quality tools practiced in the real industries.
It also plays a vital role in minimizing rework in food industry.

5. PURPOSE & BENEFITS OF PARETO CHARTS IN FOOD

INDUSTRY
In recent years, a growing number of businesses have implemented various sorts of
quality programs in attempt to improve internal and external customer satisfaction
while also lowering quality costs. Six Sigma is likely the most widely recognized
initiative among all of these techniques with a wide spectrum of organizations
adopting it. Six Sigma is a statistically based quality improvement process that aids
in the improvement of business processes by decreasing waste and expenses
associated with poor quality as well as increasing process efficiency and productivity
of an organization (P Rasalkar, 2019). In the selected research article, it is applying
Six Sigma to manufacturing processes in the food industry in order to reduce quality
cost with the aid of pareto charts.

The Pareto Chart is a combination of a bar and a line graph that displays individual
values in descending order with bars and the cumulative with a line. The purpose of
the Pareto chart is to show the relative importance of various characteristics allowing
organizations to define and concentrate their efforts on the variables that have the
biggest effect on a certain section of a process or a system. It is one of the key quality
tools that most of the organizations use to assess and detect their quality defects.
Because it provides a clear justification on as to how and what elements caused the
defects within the organizational processes and systems. Therefore, pareto chart is a
visual representation of efficiency. It is all about doing less and getting more
(Srivastava, et al., 2020). It is a tool that allows organizations to prioritize tasks and
concentrate on the most important ones and then there will be no or less room for
defects. Because it proves that 20% of the important elements are responsible for 80%

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of the problems. Eighty percent of minor factors are responsible for the remaining
20% of problems.

Every industry has time and resource limitations and so, managers needs to prioritize
resource utilization for optimum performance. Industries nowadays are dealing with
numerous challenges on projects and are unable to allocate sufficient resources to all
of them. To achieve the greatest result, they must identify the most important or
frequent problems that can be resolved with the fewest resources (Chiarini, 2011). A
pareto chart helps them achieve in this objective. The term "vital few" in pareto charts
refers to the elements that have the most impact on the outcome. In quality
management and Six Sigma, a pareto chart plays an essential tool whereas the vertical
bar displays a prioritized list of issues or opportunities. The categories are listed in
decreasing order and include mutually exclusive things. This diagram separates the
issues allowing us to identify their roots causes. After that, we can devote all efforts
to those causes and solve the majority of the issues. That is how pareto chart aids to
detect deviations in the processes and systems.

Therefore, pareto charts are known to be scientific. As a result, food sector decision
makers can start with the 20% that yields an 80% result. Moreover, pareto charts also
aid in the prioritization of various tasks in the production process (Kim, 2019).

Make team and physical resource allocation a top priority.

Voting can be used to prioritize product requirements.

Prioritized product backlog items (User stories).

Prioritize funding for processes.

Individual process vulnerabilities are prioritized.

Prioritizing stakeholders in multi-stakeholder initiatives.

Figure 4: Benefits of Pareto Charts to Food Industry

Moreover, it helps in prioritizing tasks on a regular basis by assessing and adjusting

as needed while finding and implementing the optimal priority approach for the tasks.

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Furthermore, it helps in differentiating high-level strategic initiatives, particularly
those connected to the important success criteria of the processes. On top of that,
creating a Pareto chart is easy. It is an effective visual communication tool since it
aids in the visualization of problems (Priyanto, 2014).

6. APPLICATION OF PARETO CHARTS TO FOOD

INDUSTRY
The applicability of Pareto charts to any industry is vital. Most importantly, when it
comes to food industry, zero or lesser defects ensures a healthy and quality final
product. For improved customer satisfaction and increased profitability, quality
assurance is a must. Because, nowadays people as consumers are more concerned of
product’s quality rather than quantity. Also, at a glance, they seem to judge a
product’s quality by looking at its price, packaging, appearance and sometimes on
ingredients as well. It is regarding their healthy life that they are concerned about.
Therefore, the term “Quality” and “Food Industry” are closely related terms with
compared to other industries.

Quality cannot be achieved unless it is integrated into the organizational processes,

practices, techniques and most importantly culture. Most of the world’s leading food
manufacturers are proved to known to be quality guarantors. While reaching that
quality levels, they may have adopted many quality tools in their processes and of
course Pareto charts is likely the most widely recognized initiative among all of those
tools with a wide range of organizations adopting it (Abdulrahman Alsaleh, 2007).

According to the selected research article, it applies pareto charts to manufacturing

processes to reduce quality costs. Not only that, it can be used to minimize rework.
Rework minimization contributes to outputs that boost the company's productivity
and profitability in the long run. Most importantly, it enhances the crucial operational
process's performance resulting in improved resource utilization, fewer fluctuations,
and consistent quality of the process output. Finally, the manufacturing sector can
improve its productivity and profitability. It also cuts down on costs and production
time (Tabatorovich, 2018).

The below graph indicates how a food manufacturing company in Taiwan, exporting
frozen prepared eel food products tried to reduce quality costs using Pareto charts.

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 Figure 5: Pareto Chart for Product Type – Taiwan Food Company

They applied Six Sigma concept to their manufacturing process to deal with the
improvement. The project scope was narrowed down with three Pareto charts. The
first step was to determine which product defect rates needed to be addressed. Buns
were chosen as the project's product because they had the most serious flaws out of
all of the company's frozen food products (Hung & Sung, 2011).

Figure 6: Pareto Chart for Customer Complaints – Taiwan Food Company

Despite the fact that there were various flaws with the buns to improve on, it is critical
that any project does not become unmanageable or overly complicated. Therefore,
the biggest Consumer Complaints that the buns tended to collapse was picked as the
project's second layer narrow down focus (Hung & Sung, 2011).

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 Figure 7: Pareto Chart for Bun Type – Taiwan Food Company

However, because the company makes a variety of buns all of which have various
shrinkage rates, the third layer chosen to concentrate the research on the firm's 32 g
little Custard Buns which were the most subjected to this problem (Hung & Sung,
2011).

In fact, Pareto chart itself does not provide sufficient evidence to find the cause and
effect of a particular quality defect. Therefore, the above mentioned company has
used Fishbone diagram also known as Cause and Effect diagram and Ishikawa
diagram developed by Japanese Professor Kaoru Ishikawa to break down root causes
that potentially contribute to the particular effect.

Figure 8: Fishbone Diagram of Shrinkage Defective – Taiwan Food

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Factors were further categorized into three kinds: Major, Medium and Minor.
Likewise, Pareto charts backed by Fishbone Diagram helped the company to
successfully detect the shrinkage defectives is an example of the extent to which its
applicability to Food Industry.

Food industries, as well as many other industries of the world have made waste
elimination as a priority in recent years. Particularly, when it comes to canned food
products. Many researches have been conducted up to date has shown as to how to
improve quality, reduce quality costs, minimize rework, eliminate waste using Pareto
Charts. Therefore, applicability of Pareto charts as a key quality tool in quality
management cannot be underestimated or ignored particularly in food industry.

7. APPLICABILITY OF PARETO CHARTS IN FOOD

INDUSTRY IN SRI LANKAN CONTEXT
Applicability of Pareto charts has no limit a particular region or an industry. In Sri
Lanka, there are many food manufacturers present such as Keells Foods, Cargills
Ceylon, Maliban Biscuits, Elephant House, Dilmah, Harischandra Mills, Uswatte,
Kandos and Ceylon Tobacco and so on. They range from food and beverages to
tobacco. Most of them have expertise in the food industry more than decades and
have considerably owned high market share due to incorporating local and
international quality standards.

In Sri Lanka, food safety is regarded as the most important feature of all food items
and as a result, the food industry and the government are making every effort to
ensure food safety in all of commercial food products. Governments also have mostly
focused on raising domestic paddy output to meet the growing population's
nutritional needs (SAMARAJEEWA, 1994). Safety comes with a quality final
product. If the products are produced in a quality manner and complied with quality
standards, the tendency for a quality output is considerably high. In Sri Lankan
context as well, customers are more concerned with quality products when they visit
marketplace to purchase food products for their own consumption. Because, many
studies have been discovered that most of the critical illnesses such as sugar, blood
pressure even cancers are occurring due to unhealthy fast food items. Therefore,
people as consumers now are running towards organic foods rather than spending
time searching for fast food items.

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Because of the above scenario, many food manufacturers in Sri Lanka invest hugely
in quality management in order to ensure and guarantee quality products. Most of the
companies have been adopted many quality techniques such as Total Quality
Management, Lean Manufacturing and 5S and so on. Not only, they apply such
techniques to improve process quality but also to enhance product quality. Enhancing
product quality is followed by improving existing processes and systems within the
organization.

Quality itself means a cost. Vice versa not having quality is much more cost. In Sri
Lanka also quality assurance section of production department in food manufacturing
companies uses Pareto concept to lower the cost of quality, cut down on rework as in
the long run, rework minimization adds to outputs that increase the company's
production and profitability. Most significantly, it improves the performance of a
critical operational process resulting in better resource utilization, fewer variations
and constant process output quality. Finally, the manufacturing industry can boost its
output and profits (Gunasekera, et al., 2017). It also reduces production costs and
time. Therefore, its applicability in Sri Lankan context also much appreciate.

8. RECOMMENDATION FOR SRI LANKAN FOOD

INDUSTRY
Many quality management professionals define quality as fulfilling a set of explicitly
or implicitly stated characteristic features. It essentially provides clients with items
or services that they demand. These features boost customer satisfaction and
enlighten client expectations resulting in higher income for the company (Wijesinghe
& Weerahewa, 2017). For further improvements in the food industry in Sri Lanka,
below recommendations would like to suggest.

Paddy is vital but so are the other food crops. To improve the quality of production,
excellent seeds should be distributed at reasonable prices. Then the current scenario
will alter to some extent and people will be forced to consume more beans and pulse
related food products. Not only that, it is vital to improve agriculture extension
services in order to expand paddy and subsidiary crop production and consumption
in accordance with current socioeconomic and technical conditions. Quality practices
are closely associated with the commercial food processing industry. The food
processing industry, on the other hand, has a status for being traditional and reluctant

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to change. Awareness of food processing quality procedures necessitates an
understanding of how the consumer is, nature of the food products and regulatory
environment interact to influence the industry. Quality improvement initiatives in Sri
Lanka typically face challenges due to a lack of experience, low human competency
and unfamiliarity with quality improvement methods. Therefore, it is the authority’s
or company’s responsibility to give proper training for the smooth application of such
quality tools in the organizational processes, practices, systems and culture.

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 9. REFERENCES
Abdulrahman Alsaleh, N., 2007. Application of quality tools by the Saudi food
industry. The TQM Magazine, 19(2), pp. 150-161.

Alkiayat, M., 2021. A Practical Guide to Creating a Pareto Chart as a Quality

Improvement Tool. Global Journal on Quality and Safety in Healthcare, 4(2), pp.
83-84.

Chiarini, A., 2011. Japanese total quality control, TQM, Deming's system of
profound knowledge, BPR, Lean and Six Sigma. International Journal of Lean Six
Sigma, 4(2), pp. 332-355.

Gunasekera, U. C., Muralithas, M. & Baumann, M. P. O., 2017. Food safety

monitoring and surveillance system for Sri Lanka. Sri Lanka Veterinary Journal,
63(2), p. 31.

Hung, H.-C. & Sung, M.-H., 2011. Applying six sigma to manufacturing processes
in the. Academic Journals, 6(3), pp. 580-591.

Kim, S., 2019. Time and Motion Study of Cutting Tool Production: Process Charts
and Layouts (I). International Journal of Innovative Research in Computer Science
& Technology, 7(3), pp. 27-31.

Krapiva, T., Koksharov, A. & Majurnikova, L., 2018. Japanese Cuisine Quality Level
Evaluation at the Food Industry Enterprises in Kemerovo. Food Industry, 3(1).

Musina, O. & Shchetinin, M., 2017. The Concept of Safety Protection and Food
Quality on the Russian Consumer Market. Food Industry, 2(4).

P Rasalkar, D. K., 2019. Six Sigma: Tool for Quality and Cost Effectiveness. Journal
of Medical Science And clinical Research, 7(10).

Parikh, A., Park, A. & Sumfest, J., 2014. Cumulative summation (CUSUM) charts in
the monitoring of hypospadias outcomes: A tool for quality improvement initiative.
Journal of Pediatric Urology, 10(2), pp. 306-311.

Priyanto, M., 2014. TOTAL QUALITY MANAGEMENT USING PARETO

DIAGRAMS AND STATISTICAL PROCESS CONTROL CHARTS (SPC)
APPLIED TO PRECAST BEAMS. Proceedings of International Structural
Engineering and Construction, 1(1).

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Priyanto, M., 2014. TOTAL QUALITY MANAGEMENT USING PARETO
DIAGRAMS AND STATISTICAL PROCESS CONTROL CHARTS (SPC)
APPLIED TO PRECAST BEAMS. Proceedings of International Structural
Engineering and Construction, 1(1).

SAMARAJEEWA, U., 1994. TRENDS IN THE APPLICATION OF

BIOTECHNOLOGY IN THE FOOD INDUSTRY. Journal of the National Science
Foundation of Sri Lanka, Volume 22, p. 25.

Srivastava, P., Alrasheedi, M., Kaushik, P. & Sharma, S., 2020. Reducing cost of
poor quality and improving process output by adopting Six Sigma DMAIC tool: a
case study. International Journal of Six Sigma and Competitive Advantage, 1(1), p.
1.

Tabatorovich, A., 2018. Chemical Composition and Quality Study of Pumpkin

Prepared Food for Confectionery Manufacture. Food Industry, 3(1), pp. 11-19.

Wijesinghe, A. & Weerahewa, J., 2017. Structure, conduct and performance of the
rice milling industry of Sri Lanka: evidence from selected cases. Sri Lanka Journal
of Economic Research, 4(2), p. 71.

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