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McGraw-Hill/Irwin Copyright 2007 by The McGraw-Hill Companies, Inc. All
99
Management
of Quality
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Learning ObjectivesLearning Objectives
Define the term quality. Explain why quality is important and the
consequences of poor quality.
Identify the determinants of quality. Describe the costs associated with quality.
Describe the quality awards.
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Learning ObjectivesLearning Objectives
Discuss the philosophies of quality gurus. Describe TQM.
Give an overview of problem solving.
Give an overview of process improvement.
Describe and use various quality tools.
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Quality ManagementQuality Management
What does the term qualitymean?
Qualityis the ability of a product or
service to consistently meet or exceedcustomer expectations.
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Evolution of Quality ManagementEvolution of Quality Management
1924 - Statistical process control charts 1930 - Tables for acceptance sampling
1940s - Statistical sampling techniques
1950s - Quality assurance/TQC
1960s - Zero defects
1970s - Quality assurance in services
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Quality Assurance vs. StrategicQuality Assurance vs. StrategicApproachApproach
Quality Assurance Emphasis on finding and correcting defects
before reaching market
Strategic Approach Proactive, focusing on preventing mistakes
from occurring
Greater emphasis on customer satisfaction
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The Quality GurusThe Quality Gurus
Walter Shewhart Father of statistical quality control
W. Edwards Deming
Joseph M. Juran Armand Feignbaum
Philip B. Crosby
Kaoru Ishikawa
Genichi Taguchi
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Key Contributors to QualityKey Contributors to Quality
ManagementManagement
Contrib
Deming
Table 9.2
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Dimensions of QualityDimensions of Quality
Performance - 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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Dimensions of Quality (Contd)Dimensions of Quality (Contd)
Durability- useful life of theproduct/service
Perceived Quality - indirect evaluation ofquality (e.g. reputation)
Serviceability - service after sale
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Examples of Quality DimensionsExamples of Quality Dimensions
Dimension
1. Performance
2. Aesthetics3. Special features
(Product)Automobile
Everything works, fit &finish
Ride, handling, grade ofmaterials usedInterior design, soft touchGauge/control placement
Cellular phone, CDplayer
(Service)Auto Repair
All work done, at agreedprice
Friendliness, courtesy,Competency, quicknessClean work/waiting areaLocation, call when read
Computer diagnostics
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Examples of Quality DimensionsExamples of Quality Dimensions
(Contd)(Contd)
Dimension
5. Reliability
6. Durab ility
7. Perceivedquality
8. Serviceability
(Product)Automobile
Infrequency of breakdowns
Useful life in miles, resistanceto rust & corrosion
Top-rated car
Handling ofcomplaints and/orrequests for information
(Service)Auto Repa ir
W ork done correctly,ready when promised
W ork holds up overtime
Award-winning servicedepartmentHand ling of com plaint
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Service QualityService Quality
Convenience
Reliability
Responsiveness
Time
Assurance
Courtesy
Tangibles
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Examples of Service QualityExamples of Service Quality
Dimension Examples1. Convenience Was the service center conveniently located?
2. Reliability Was the problem fixed?
3. Responsiveness Were customer service personnel willing and ableto answer questions?
4. Time How long did the customer wait?
5. Assurance Did the customer service personnel seem
knowledgeable about the repair?
6. Courtesy Were customer service personnel and thecashierfriendly and courteous?
7. Tangibles Were the facilities clean, personnel neat?
Table 9.4
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Challenges with Service QualityChallenges with Service Quality
Customer expectations often change
Different customers have different
expectations
Each customer contact is a moment of truth Customer participation can affect perception
of quality
Fail-safing must be designed into the system
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Determinants of QualityDeterminants of Quality
Service
Ease of
use
Conforms
to design
Design
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Determinants of Quality (contd)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
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The Consequences of PoorThe Consequences of Poor
QualityQuality
Loss of business
Liability
Productivity
Costs
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Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service
Responsibility for QualityResponsibility for Quality
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Costs of QualityCosts of Quality
Failure Costs - costs incurred by defectiveparts/products or faulty services.
Internal Failure Costs
Costs incurred to fix problems that are detectedbefore the product/service is delivered to thecustomer.
External Failure Costs
All costs incurred to fix problems that aredetected after the product/service is delivered tothe customer.
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Costs of Quality (continued)Costs of Quality (continued)
Appraisal Costs Costs of activities designed to ensure
quality or uncover defects
Prevention Costs All TQ training, TQ planning, customer
assessment, process control, and qualityimprovement costs to prevent defects from
occurring
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Substandard work
Defective products
Substandard service
Poor designs
Shoddy workmanship
Substandard parts and materials
Ethics and QualityEthics and Quality
Having knowledge of this and failing to correct
and report it in a timely manner is unethical.
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Quality AwardsQuality Awards
Baldrige Award
Deming Prize
M l l B ld i N ti lM l l B ld i N ti l
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Malcolm Baldrige NationalMalcolm Baldrige National
Quality AwardQuality Award1.0 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)
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Benefits of Baldrige CompetitionBenefits of Baldrige Competition
Financial success Winners share their knowledge
The process motivates employees
The process provides a well-designedquality system
The process requires obtaining data
The process provides feedback
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European Quality AwardEuropean Quality Award
Prizes intended to identify role models Leadership
Customer focus
Corporate social responsibility People development and involvement
Results orientation
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The Deming PrizeThe Deming Prize
Honoring W. Edwards Deming
Japans highly coveted award
Main focus on statistical qualitycontrol
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Quality CertificationQuality Certification
ISO 9000 Set of international standards on quality
management and quality assurance, critical to
international business
ISO 14000 A set of international standards for
assessing a companys environmental
performance
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ISO 9000 StandardsISO 9000 Standards
Requirements
System requirements
Management
Resource
Realization
Remedial
ISO 9000 Q lit M tISO 9000 Q lit M t
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ISO 9000 Quality ManagementISO 9000 Quality Management
PrinciplesPrinciples
Customer focus
Leadership
People involvement
Process approach
A systems approach to management
Continual improvement Factual approach to decision making
Mutually beneficial supplier relationships
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ISO 14000 - A set of international
standards for assessing a companys
environmental performance
Standards in three major areas Management systems
Operations
Environmental systems
ISO 14000ISO 14000
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Management systems Systems development and integration of
environmental responsibilities into business
planning Operations
Consumption of natural resources andenergy
Environmental systems Measuring, assessing and managing
emissions, effluents, and other waste
ISO 14000ISO 14000
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Total Quality ManagementTotal Quality Management
A philosophy that involves everyone inan organization in a continual effort to
improve quality and achieve customer
satisfaction.
T Q M
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1.Find out what the customer wants
2.Design a product or service that meets
or exceeds customer wants
3.Design processes that facilitates doing
the job right the first time
4.Keep track of results
5.Extend these concepts to suppliers
The TQM ApproachThe TQM Approach
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Elements of TQMElements of TQM
1. Continual improvement2. Competitive benchmarking
3. Employee empowerment
4. Team approach5. Decisions based on facts
6. Knowledge of tools
7. Supplier quality8. Champion
9. Quality at the source
10.Suppliers
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Continuous ImprovementContinuous Improvement
Philosophy that seeks to make never-ending improvements to the process ofconverting inputs into outputs.
Kaizen: Japaneseword for continuousimprovement.
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Quality at the SourceQuality at the Source
The philosophy of making eachworker responsible for thequality of his or her work.
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Six SigmaSix 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
Six sigma: A business process for improving
quality, reducing costs, and increasing
customer satisfaction.
S S
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Six Sigma ProgramsSix Sigma Programs
Six Sigma programs Improve quality
Save time
Cut costs
Employed in Design
Production
Service
Inventory management
Delivery
Si Si M
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Six Sigma ManagementSix Sigma Management
Providing strong leadership
Defining performance metrics
Selecting projects likely to succeed
Selecting and training appropriate people
Si Si T h i l
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Six Sigma TechnicalSix Sigma Technical
Improving process performance Reducing variation
Utilizing statistical models
Designing a structured improvementstrategy
S SSi Si T
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Six Sigma TeamSix Sigma Team
Top management Program champions
Master black belts
Black belts Green belts
Si Si PSi Si P
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Six Sigma ProcessSix Sigma Process
Define Measure
Analyze
Improve Control
DMAIC
Ob l I l i TQMOb t l t I l ti TQM
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Lack of: Company-wide definition of quality
Strategic plan for change
Customer focus
Real employee empowerment
Strong motivation
Time to devote to quality initiatives
Leadership
Obstacles to Implementing TQMObstacles to Implementing TQM
O Q
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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 TQMObstacles to Implementing TQM
C iti i f TQMC iti i f TQM
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Criticisms of TQMCriticisms of TQM
1. Blind pursuit of TQM programs2. Programs may not be linked to strategies
3. Quality-related decisions may not be tied
to market performance4. Failure to carefully plan a program
B i St i P bl S l iB i St i P bl S l i
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Basic Steps in Problem SolvingBasic Steps in Problem Solving
1.Define the problem and establish animprovement goal
2.Define measures and collect data
3.Analyze the problem4.Generate potential solutions
5.Choose a solution
6.Implement the solution7.Monitor the solution to see if it
accomplishes the goal
Th PDSA C lTh PDSA C l
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The PDSA CycleThe PDSA Cycle
Plan
Do
Study
Act
Figure 9.2
The Process Improvement CycleThe Process Improvement Cycle
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The Process Improvement CycleThe Process Improvement Cycle
Implement the
Improved process
Select a
process
Study/document
Seek ways to
Improve it
Design an
Improved process
Evaluate
Document
Figure. 9.3
P IP I t
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Process Improvement: A systematicapproach to improving a process
Process mapping
Analyze the process
Redesign the process
Process ImprovementProcess Improvement
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Process Improvement and ToolsProcess Improvement and Tools
Process improvement - a systematic approach to improving a
process Process mapping
Analyze the process
Redesign the process
Tools
There are a number of tools that can be used for problem solving andprocess improvement
Tools aid in data collection and interpretation, and provide the basis fordecision making
B i Q lit T lB i Q lit T l
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Basic Quality ToolsBasic Quality Tools
Flowcharts
Check sheets
Histograms
Pareto Charts
Scatter diagrams
Control charts
Cause-and-effect diagrams
Run charts
Ch k Sh tCh k Sh t
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Check SheetCheck Sheet
Billing Errors
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
Monday
P t A l iP t A l i
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Pareto AnalysisPareto Analysis
80% of theproblems
may be
attributed to
20% of thecauses.
80% of theproblems
may be
attributed to
20% of thecauses.
Smeared
print
N
umb
erof
de
fects
Off
center
Missing
label
Loose Other
C t l Ch tC t l Ch t
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Control ChartControl Chart
970
980
990
1000
1010
1020
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
UCL
LCL
Figure 9.11
C d Eff t DiC d Eff t Di
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Cause-and-Effect DiagramCause-and-Effect DiagramFigure 9.12
Effect
MaterialsMethods
EquipmentPeople
Environment
Cause
Cause
Cause
Cause
Cause
CauseCause
Cause
CauseCause
Cause
Cause
R Ch tRun Chart
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Run ChartRun Chart
0.44
0.46
0.48
0.5
0.52
0.54
0.560.58
1 2 3 4 5 6 7 8 9 10 11 12
Time (Hours)
Di
am
eter
T ki I tTracking Improvements
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Tracking ImprovementsTracking Improvements
UCL
LCL
LCLLCL
UCLUCL
Process not centered
and not stable
Process centered
and stable
Additional improvements
made to the process
Figure 9-18
M th d f G ti IdM th d f G ti Id
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Methods for Generating IdeasMethods for Generating Ideas
Brainstorming
Quality circles
Interviewing
Benchmarking
5W2H
Q lit Ci lQ lit Ci l
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Team approach List reduction
Balance sheet
Paired comparisons
Quality CirclesQuality Circles
B h ki PBenchmarking Process
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Identify a critical process that needsimproving
Identify an organization that excels in
this process Contact that organization
Analyze the data
Improve the critical process
Benchmarking ProcessBenchmarking Process