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Management of Quality

Operations ManagementSession 4

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Objectives

By the end of this session, student will be able to: – Assess the importance of quality– Understand the history and the development of quality

management– Understand the various definitions of quality– Understand how quality promotes strategic objectives– Understand the principles of TQM– Be able to implement TQM – Understand need to promote continuous improvement

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Topics

• History of quality management

• Zero defects/TQM/Six Sigma

• JIT

• House of Quality

• Taguchi – robustness

• Taguchi – fish-bone diagram

• Quality in service industries

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Ways in Which Quality Can Improve Productivity

Market Gains– Improved response– Economies of Scale– Improved reputation

Reduced Costs– Increased productivity– Lower rework and scrap

costs– Lower warranty costs

Increased Profits

Improved Quality

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Traditional Quality Process (Manufacturing)

Specifies

Need

Customer

Interprets

Need

Marketing

DesignsProduct

DefinesQuality

Engineering

ProducesProduct

MonitorsQuality

Operations

Who should define quality?

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The Quality Gurus• W Edwards Deming (1950s)

– workers must know what quality work is and be given the means to achieve it – use of statistical techniques

• Joseph Juran (1960s – 1970s) – ‘cost of quality’. Quality = ‘fitness for purpose’. As defects decrease cost increases so zero defects is impossible

• Philip B Crosby (1980s) – Quality = ‘conformance to requirements’. As quality improves, costs fall. So, “Quality is free!”

• Kaoru Ishikawa (1960s)- Company wide quality. Quality circles.

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Deming’s Fourteen Points

1. Create consistency of purpose2. Lead to promote change3. Build quality into the products4. Build long term relationships5. Continuously improve product, quality, and

service6. Start training7. Emphasize leadership

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Deming’s Points – cont.

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 to work on the

transformation

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TQM

• Encompasses entire organization, from supplier to customer

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

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Flow of Activities Necessary to Achieve TQM

Organizational Practices

Quality Principles

Employee Fulfillment

Customer Satisfaction

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Organizational Practices

• Leadership

• Mission statement

• Effective operating procedure

• Staff support

• Training

Yields: What is important and what is to be accomplished

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Quality Principles

• Customer focus• Continuous improvement• Employee empowerment• Benchmarking• Just-in-time• Tools of TQM

Yields: How to do what is important and to be accomplished

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Organizational Practices

Quality Principles

Employee Fulfillment

Attitudes (e.g., Commitment)

How to Do

What to Do

EffectiveBusiness

EffectiveBusiness

CustomerSatisfaction

CustomerSatisfaction

Achieving Total Quality Management

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Concepts of TQM

• Continuous improvement

• Employee empowerment

• Benchmarking

• Just-in-time (JIT)

• Knowledge of tools

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Continuous Improvement

• Represents continual improvement of process & customer satisfaction

• Involves all operations & work units

• Other names– Kaizen (Japanese)– Zero-defects– Six Sigma

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Employee Empowerment

© 1995 Corel Corp.

• Getting employees involved in product & process improvements– 85% of quality problems are due to process &

material

• Techniques– Support workers– Let workers make decisions– Build teams & quality circles

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• Group of 6-12 employees from same work area

• Meet regularly to solve work-related problems– 4 hours/month

• Facilitator trains & helps with meetings

Quality Circles

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Benchmarking

Selecting best practices to use as a standard for performance

• Determine what to benchmark

• Form a benchmark team

• Identify benchmarking partners

• Collect and analyze benchmarking information

• Take action to match or exceed the benchmark

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Six Sigma

• Pioneered by Bill Smith at Motorola in 1986 • Aims to reduce defect levels below 3.4 Defects

Per (one) Million Opportunities (DPMO) • DMAIC - used to improve an existing business

process• DMADV - used to create new product designs or

process designs for more predictable, mature and defect free performance

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Just-in-Time (JIT)

Relationship to quality:– JIT cuts cost of quality– JIT improves quality– Better quality means less inventory and

better, easier-to-employ JIT system

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Just-in-Time (JIT)

• ‘Pull’ system of production/purchasing– Customer starts production with an order

• Involves ‘vendor partnership programs’ to improve quality of purchased items

• Reduces all inventory levels– Inventory hides process & material problems

• Improves process & product quality

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Just-In-Time (JIT) Example

Scrap

Work in process inventory levelWork in process inventory level(hides problems)(hides problems)

Unreliable Vendors

Capacity Imbalances

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Just-In-Time (JIT) Example

Scrap

Reducing inventory revealsproblems so they can be solved.

Unreliable Vendors

Capacity Imbalances

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Quality Function Deployment(QFD)

• Determines what will satisfy the customer

• Translates customer preferences into specific product characteristics

• Product design process using cross-functional teamseg. marketing/engineering/manufacturing

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House of Quality

• House of Quality is a QFD technique

• Involves creating 4 tabular ‘Matrices’ or ‘Houses’- breaks down product design into increasing levels of detail

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To Build House of Quality

• Identify customer wants• Identify how the good/service will satisfy

customer wants.• Relate the customer’s wants to the

product’s hows.• Identify relationships between the firm’s

hows.• Develop importance ratings• Evaluate competing products

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House of Quality Sequence

DesignCharacteristics

Quality Plan

ProductionProcess

SpecificComponents

Des

ign

Cha

ract

eris

tics

Spe

cific

Com

pon

ents

Pro

duc

tion

Pro

cess

Cus

tom

erR

equi

rem

ents

House2

House1

House3

House4

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Taguchi Techniques

• Experimental design methods to improve product & process design– Identify key component & process variables

affecting product variation

• Taguchi Concepts– Quality robustness– Quality loss function– Target specifications

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• Ability to produce products uniformly regardless of manufacturing conditions

• Robustness is more a function of design than control of manufacture

• Put robustness in House of Quality matrices besides functionality

• Quality losses result mainly from product failure after sale

© 1984-1994 T/Maker Co.

© 1995 Corel Corp.

Quality Robustness

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Fish-Bone Diagram

A tool of TQM

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• Used to find problem sources/solutions

• Other names– Fish-bone diagram, Ishikawa diagram

• Steps– Identify problem to correct– Draw main causes for problem as ‘bones’– Ask ‘What could have caused problems in

these areas?’ Repeat for each sub-area.

Cause and Effect Diagram

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Too many defects

Problem

Cause and Effect Diagram Example

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Method Manpower

Material Machinery

Too many defects

Main Cause

Main Cause

Cause and Effect Diagram Example

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Method Manpower

Material Machinery

DrillOverOverTimeTime

Steel

Wood

Lathe

Too many defects

Sub-Cause

Cause and Effect Diagram Example

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Method Manpower

Material

Machinery

DrillOverTime

Steel

Wood

Lathe

Too many defects

Tired

Old

Slow

Cause and Effect Diagram Example

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• Service quality perceptions depend on comparison of expectations with reality

• Perception of service quality derived from process as well as outcome

• Types of service quality– Normal: Routine service delivery– Exceptional: How problems are handled

TQM In Services

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Determinants of Service Quality

• Reliability

• Responsiveness

• Competence

• Access

• Courtesy

• Communication

• Credibility

• Security

• Understanding/knowing the customer

• Tangibles