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9-1 Management of Quality
CHAPTER
5
Quality Management & TQM
McGraw-Hill/Irwin
Operations Management, Eighth Edition, by William J. StevensonCopyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
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9-2 Management of Quality
Quality Management What does the term quality mean?
Quality is the ability of a product or service to
consistently meet or exceed customer
expectations.
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9-3 Management of Quality
Key Contributors to Quality ManagementContributor
Deming
Juran
Feignbaum
Crosby
Ishikawa
Taguchi
Known for
14 points; special & common causes of
variation
Quality is fitness for use; quality trilogy
Quality is a total field
Quality is free; zero defects
Cause-and effect diagrams; qualitycircles
Taguchi loss function
Quality
Table 9.2
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9-4 Management of Quality
Dimensions of QualityPerformance - main characteristics of theproduct/service
Aesthetics - appearance, feel, smell, taste
Special Features - extra characteristics
Conformance - how well product/serviceconforms to customers expectations
Reliability - consistency of performance
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9-5 Management of Quality
Dimensions of Quality (Contd)Durability - useful life of the product/service
Perceived Quality - indirect evaluation ofquality (e.g. reputation)
Serviceability - service after sale
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9-6 Management of Quality
Examples of Quality DimensionsDimension
1. Performance
2. Aesthetics
3. Special features
(Product)Automobile
Everything works, fit &finish
Ride, handling, grade ofmaterials usedInterior design, soft touch
Gauge/control placementCellular phone, CD
player
(Service)Auto Repair
All work done, at agreedprice
Friendliness, courtesy,Competency, quicknessClean work/waiting area
Location, call when readyComputer diagnostics
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9-7 Management of Quality
Examples of Quality Dimensions (Contd)Dimension
5. Reliability
6. Durability
7. Perceived
quality
8. Serviceability
(Product)Automobile
Infrequency of breakdowns
Useful life in miles, resistance
to rust & corrosion
Top-rated car
Handling ofcomplaints and/orrequests for information
(Service)Auto Repair
Work done correctly,
ready when promised
Work holds up over
time
Award-winning service
department
Handling of complaints
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9-8 Management of Quality
Service Quality
Tangibles Convenience
Reliability
Responsiveness
Time
Assurance
Courtesy
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9-9 Management of Quality
Examples of Service Quality
Dimension Examples
1. Tangibles Were the facilities clean, personnel neat?
2. Convenience Was the service center conveniently located?
3. Reliability Was the problem fixed?
4. Responsiveness Were customer service personnel willing and able
to answer questions?
5. Time How long did the customer wait?
6. Assurance Did the customer service personnel seem
knowledgeable about the repair?
7. Courtesy Were customer service personnel and the
cashierfriendly and courteous?
Table 9.4
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9-10 Management of Quality
Determinants of Quality
Service
Ease of
use
Conforms
to design
Design
9 11 M f Q l
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9-11 Management of Quality
Determinants of Quality (contd)
Quality of design Intension of designers to include or exclude
features in a product or service
Quality of conformance The degree to which goods or services
conform to the intent of the designers
9 12 M f Q li
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9-12 Management of Quality
Top management Design
Procurement
Production/operations Quality assurance
Packaging and shipping
Marketing and sales Customer service
Responsibility for Quality
9 13 M f Q li
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9-13 Management of Quality
Quality Awards
Baldr ige Award
Deming Prize
9 14 M t f Q lit
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9-14 Management of Quality
Malcolm Baldrige National Quality Award 1.0 Leadership (125 points)
2.0 Strategic Planning (85 points)
3.0 Customer and Market Focus (85 points)
4.0 Information and Analysis (85 points)
5.0 Human Resource Focus (85 points)
6.0 Process Management (85 points)
7.0 Business Results (450 points)
9 15 M t f Q lit
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9-15 Management of Quality
Benefits of Baldrige Competition
Financial success Winners share their knowledge
The process motivates employees
The process provides a well-designed qualitysystem
The process requires obtaining data
The process provides feedback
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9-16 Management of Quality
The Deming Prize Honoring W. Edwards Deming
Japans highly coveted award
Main focus on statistical quality control
Deming 14 points for Q
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9-17 Management of Quality
Quality Certification
ISO 9000:The International Organization for Standardization
(ISO)
Set of international standards on quality
management and quality assurance, critical to
international business
ISO 9000 Certification
First party certificationA firm audits itself.
Second party certificationCustomers audit their suppliers.
Third party assessmentCompany is assessed by outside
registrars from ASQs Registration Accreditation Board (RAB).
ISO 9000/Q90 Registration Process
Application to registrar, Preliminary assessment, Full audit
9 18 Management of Quality
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9-18 Management of Quality
ISO 14000 - A set of international standardsfor assessing a companys environmental
performance
Standards in three major areas Management systems
Operations
Environmental systems
ISO 14000
9 19 Management of Quality
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9-19 Management of Quality
Total Quality Management
A philosophy that involves everyone in anorganization in a continual effort to improve
quality and achieve customer satisfaction.
T Q M
9 20 Management of Quality
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9-20 Management of Quality
1. Find out what the customer wants2. Design a product or service that meets or
exceeds customer wants
3. Design processes that facilitates doing thejob right the first time
4. Keep track of results
5. Extend these concepts to suppliers
The TQM Approach
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9-21 Management of Quality
Elements of TQM Continual improvement Competitive benchmarking
Employee empowerment
Team approach Decisions based on facts
Knowledge of tools
Supplier quality Champion
Quality at the source
Suppliers
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9-22 Management of Quality
Quality at the Source
The philosophy of making each
worker responsible for thequality of his or her work.
9-23 Management of Quality
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9 23 Management of Quality
Lack of: Company-wide definition of quality
Strategic plan for change
Customer focus Real employee empowerment
Strong strong motivation
Time to devote to quality initiatives
Leadership
Obstacles to Implementing TQM
9-24 Management of Quality
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9 24 Management of Quality
Poor inter-organizational communication View of quality as a quick fix
Emphasis on short-term financial results
Internal political and turf wars
Obstacles to Implementing TQM
9-25 Management of Quality
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9 25 Management of Quality
Criticisms of TQM
Blind pursuit of TQM programs Programs may not be linked to strategies
Quality-related decisions may not be tied to
market performance Failure to carefully plan a program
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9 26 Management of Quality
Basic Steps in Problem Solving1. Define the problem and establish animprovement goal
2. Collect data
3. Analyze the problem
4. Generate potential solutions
5. Choose a solution
6. Implement the solution
7. Monitor the solution to see if it accomplishesthe goal
9-27 Management of Quality
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g f Q y
Six Sigma
Statistically
Having no more than 3.4 defects per million
Conceptually
Program designed to reduce defects
Requires the use of certain tools and techniques
Goals of Six Sigma
To reduce process variation to the point where only 3.4 defects per million are
produced by a process that involves a high volume of manufactured units or
service transactions on a continuous basis.
Provide a framework and methodologies to analyze and evaluate business
processes and reduce waste.
Successful Implementation
Training and selection of the workforce
Impressive cost savings of program
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g f Q y
Six Sigma Programs
Six Sigma programs Improve quality
Save time
Cut costs Employed in
Design
Production
Service
Inventory management
Delivery
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g f Q y
Six Sigma Management-Formula
1,000,00x
unitsofNo.x
unit
pererrorforiesopportunitofNumber
defectsofNumber
DPMO
Six Sigma allows managers to readily describe process performance using a
common metric: Defects Per Million Opportunities (DPMO)
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g f Q y
Six Sigma Process
Define-Customers and their priorities Measure-Process and its performance
Analyze-Causes of defects
Improve-Remove causes of defects Control-Maintain quality
DMAIC
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g f Q y
7 Basic Tools
Flow Chart Check Sheet
Histogram
Pareto Chart Scatter Diagram
Cause & Effect Diagram
Statistical Process Control
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