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In Total Quality Management (TQM), preventing failures through proactive measures such as quality planning, training, and process improvement leads to a lower overall cost of the product. Preventive actions reduce the incidence of defects, rework, and warranty claims, resulting in higher efficiency, better product quality, and cost savings over the product lifecycle.References:

• "Total Quality Management (TQM) Principles." ASQ (American Society for Quality).
• "Cost of Quality: Prevention vs. Failure Costs." Quality Progress Magazine.

A lean supply chain transformation requires the commitment and active involvement of top management. This commitment ensures that necessary resources are allocated and that there is a strategic alignment with the organization's goals. Top management sets the vision and provides leadership, which is critical for overcoming resistance to change and for fostering a culture that embraces continuous improvement. While external resources (A), social responsibility (C), and positive ROI (D) are beneficial, they are not as fundamental as top management's commitment to the successful implementation and sustainability of lean practices.

References:

• Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill.
• Womack, J. P., Jones, D. T., & Roos, D. (2007). The Machine That Changed the World: The Story of Lean Production. Free Press.

Sharing product demand forecasts with the subcontractor is most likely to reduce the risk of product shortages for several reasons:

• Demand Visibility: By providing the subcontractor with accurate and timely demand forecasts, the subcontractor gains visibility into the expected demand for the products. This allows them to plan their production schedules, allocate resources efficiently, and ensure they have the necessary materials and workforce to meet the anticipated demand.
• Production Planning: With access to demand forecasts, the subcontractor can synchronize their production plans with the company's needs. This alignment helps in minimizing production delays and ensuring a steady flow of products to meet market demand.
• Inventory Management: Demand forecasts enable the subcontractor to manage their inventory more effectively, reducing the likelihood of stockouts or overproduction. This balance helps in maintaining a smooth supply chain operation.
• Collaboration and Communication: Sharing forecasts fosters a collaborative relationship between the company and the subcontractor. Open communication channels can lead to better problem-solving and quicker responses to potential disruptions.
• Risk Mitigation: Proactively sharing demand information helps in identifying potential bottlenecks and capacity constraints in advance, allowing both parties to take corrective actions before they escalate into shortages.

References

• Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
• Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain: Concepts, Strategies, and Case Studies. McGraw-Hill Education.

Sales and Operations Planning (S&OP) is a process that aligns the sales, marketing, operations, and finance departments to create a unified plan for meeting customer demand. The key objectives of S&OP are to balance supply and demand, align the company’s strategic plans with its operational capabilities, and improve communication across departments. In the given scenario, the marketing department's sales promotion led to an increase in backorders because the purchasing and planning departments were not informed. Implementing an S&OP process would ensure that all departments collaborate and share information regularly, helping to prevent such issues in the future by synchronizing promotional activities with production and inventory planning.

References:

• Wallace, T. F., & Stahl, R. A. (2008). Sales & Operations Planning: The How-To Handbook. T. F. Wallace & Co.
• Grimson, J. A., & Pyke, D. F. (2007). Sales and Operations Planning: An Exploratory Study and Framework. The International Journal of Logistics Management.