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Managing Quality

Dr. Richard Jerz

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Learning Objectives

• Understand Quality and its importance• Total Quality Management (TQM)• Describe the seven tools of TQM

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What does “Quality” Mean?

Quality is the ability of a product or service to consistently meet  or exceed customer expectations. 

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Dimensions of Quality

• Performance ‐main characteristics of the product/service

• Aesthetics ‐ appearance, feel, smell, taste• Special features ‐ extra characteristics• Conformance ‐ how well product/service conforms to customer’s expectations

• Safety ‐ Risk of injury• Reliability ‐ consistency of performance• (continued)

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Dimensions of Quality (Cont’d) 

• Durability ‐ useful life of the product/service• Perceived Quality ‐ indirect evaluation of quality (e.g. reputation)

• Service after sale ‐ handling of customer complaints or checking on customer satisfaction

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Different Views of Quality

• User‐based – better performance, more features

• Product‐based – specific and measurable attributes of the product 

• Manufacturing‐based – conformance to standards, making it right the first time

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Service Quality

• Convenience• Reliability• Responsiveness• Time• Assurance• Courtesy• Intangibles

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Quality and Strategy

• Managing quality supports differentiation, low cost, and response strategies

• Quality helps firms increase sales and reduce costs

• Building a quality organization is a demanding task

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Implications of Quality

• Company reputation• Perception of new products• Employment practices• Supplier relations

• Product liability• Reduce risk

• Global implications• Improved ability to compete

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Trade‐off Decisions

• What is quality worth?• Where should we invest money?

• Inspectors• Measurement devices• Product design/redesign• Supplier education• 100% (or more) inspection (how much, how often)

• Location of inspection

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Inspection

• Involves examining items to see if an item is good or defective

• Detect a defective product• Does not correct deficiencies in process or product

• It is expensive

• Issues• When to inspect• Where in process to inspect

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Inspection Questions

• How Much/How Often• Where/When • Centralized vs. On‐site

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Inputs Transformation Outputs

Acceptancesampling

Processcontrol

Acceptancesampling

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Costs of Quality

• Failure Costs ‐ costs incurred by defective parts/products or faulty services.

• Internal Failure Costs• Costs incurred to fix problems that are detected before the product/service is delivered to the customer.

• External Failure Costs• All costs incurred to fix problems that are detected after the product/service is delivered to the customer.

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Costs of Quality (continued)

• Appraisal Costs• All product and/or service inspection costs.

• Prevention Costs• All TQ training, TQ planning, customer assessment, process control, and quality improvement costs to prevent defects from occurring

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Who is Responsible for Quality? 

• Top management• Design• Procurement• Production/operations• Quality assurance• Packaging and shipping• Marketing and sales• Customer service

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Improved Quality

Increased Profits

Increased productivity

Lower rework and scrap costs

Lower warranty costs

Reduced Costs

Improved response

Higher Prices

Improved reputation

Sales Gains

Ways that Quality Improves Productivity 

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Evolution of Quality Management   

• 1924 ‐ Statistical process control charts• 1930 ‐ Tables for acceptance sampling• 1940’s ‐ Statistical sampling techniques• 1950’s ‐ Quality assurance/TQC• 1960’s ‐ Zero defects• 1970’s ‐ Quality assurance in services

• 1980 – TQM• 1991‐93 – Six Sigma

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Quality Gurus

Contributor Known ForDeming 14 points; special & common causes of

variation

Juran Quality is fitness for use; quality trilogy

Feignbaum Quality is a total field

Crosby Quality is free; zero defects

Ishikawa Cause-and effect diagrams; quality circles

Taguchi Taguchi loss function

Ohno and Shingo

Continuous improvement

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Deming’s Fourteen Points

1. Create consistency of purpose2. Lead to promote change3. Build quality into the product; stop 

depending on inspection4. Build long term relationships based on 

performance, not price5. Continuously improve product, quality, and 

service6. Start training7. Emphasize leadership

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Deming’s Fourteen Points

8. Drive out fear9. Break down barriers between departments10.Stop haranguing workers11.Support, help, improve12.Remove barriers to pride in work13.Institute a vigorous program of education 

and self‐improvement14.Put everybody in the company to work on 

the transformation

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Taguchi Concepts

• Experimental design methods to improve product and process design• Identify key component and process variables affecting product variation

• Taguchi Concepts• Quality robustness• Quality loss function• Target‐oriented quality

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Quality Robustness

• Ability to produce products uniformly in adverse manufacturing and environmental conditions• Remove the effects of adverse conditions• Small variations in materials and process do not destroy product quality

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Total Quality Management

• A philosophy that involves  everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

• Stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer

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T Q M

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The TQM Approach

1. Find out what the customer wants2. Design a product or service that meets or 

exceeds customer wants3. Design processes that facilitates doing the 

job right the first time4. Keep track of results5. Extend these concepts to suppliers

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Seven Concepts of TQM

• Continuous improvement• Six Sigma• Employee empowerment• Benchmarking• Just‐in‐time (JIT)• Taguchi concepts• Knowledge of TQM tools

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Six Sigma

• Originally developed by Motorola, Six Sigma refers to an extremely high measure of process capability

• A Six Sigma capable process will return no more than 3.4 defects per million operations (DPMO)

• Highly structured approach to process improvement

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DMAIC Approach

Six Sigma

• Define critical outputs and identify gaps for improvement

• Measure the work and collect process data

• Analyze the data• Improve the process• Control the new process to make sure new performance is maintained

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The Japanese

• Quality cars & electronics

• JIT• Quality circles• Simplification (product designs and process designs)

• Low inventory

• Other countries

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International Quality Standards 

• Industrial Standard Z8101‐1981 (Japan)• Specification for TQM

• ISO 9000 series (Europe/EC)• Common quality standards for products sold in Europe (even if made in U.S.)

• 2000 update places greater emphasis on leadership and customer satisfaction

• ISO 14000 series (Europe/EC)

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Quality Certification: ISO9000 

• A series of standards that require firms to document their quality‐control systems at every step (incoming raw materials, product design, in‐process monitoring and so forth) so that they’ll be able to identify those areas that are causing quality problems and correct them.

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Quality Awards

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Baldrige Award

Deming Prize

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Seven Tools for TQM

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Check Sheet

• An organized method of recording data

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/

/

/ / /// /

// ///

// ////

///

//

/

Hour

Defect 1 2 3 4 5 6 7 8

A

B

C

/

/

//

/

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Scatter Diagram

• A graph of the value of one variable vs. another variable

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Absenteeism

Pro

du

ctiv

ity

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Cause and Effect Diagram

• A tool that identifies process elements (causes) that might effect an outcome

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Cause

Materials Methods

Manpower Machinery

Effect

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C/E Diagram Example

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Material Machinery

Methods Manpower

Inadequate

supply of magazines

Inadequate special

meals on-board

Ins

uff

icie

nt

clea

n p

illo

ws

& b

lan

kets

o

n-b

oar

d

Broken luggage

carousel

Mechanical delay

on plane

Dei

cin

g

equ

ipm

ent

no

t av

aila

ble

Overbooking policies

Bumping policies

Mis

tag

ged

bag

s

Po

or

chec

k-in

po

licie

s

Understaffed

ticket counters

Understaffed

crew

Po

orl

y tr

ain

ed

att

end

ants

Dissatisfied Airline Customer

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Pareto Charts

• A graph to identify and plot problems or defects in descending order of frequency

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Fre

qu

ency

Per

cen

t

A B C D E

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Flow Charts (Process Diagrams)  

• A chart that describes the steps in a process

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Flow Chart Example

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Histogram

• A distribution showing the frequency of occurrence of a variable

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Statistical Process Control Chart

• A chart with time on the horizontal axis to plot values of a statistic

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Statistical Process Control (SPC) 

• Uses statistics and control charts to tell when to take corrective action

• Drives process improvement• Four key steps

• Measure the process• When a change is indicated, find the assignable cause

• Eliminate or incorporate the cause• Restart the revised process

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Project: 7 TQM Tools in Excel

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