Download - OpMan-Chapter 6 - Quality
-
8/13/2019 OpMan-Chapter 6 - Quality
1/57
Chapter 6
Quality Management
-
8/13/2019 OpMan-Chapter 6 - Quality
2/57
Quality
The totality of features and characteristics of aproduct or service that bears on its ability to
satisfy stated or implied needs. American Society
for Quality (ASQ)
An operations managers objective is to build a
total quality management system that identifies
and satisfies customer needs.
-
8/13/2019 OpMan-Chapter 6 - Quality
3/57
Categories of Quality Definitions:
1. User based.
Higher quality means better performance,
nicer features, and other improvements.
2. Manufacturing based
Quality means conforming to standards
and making it right the first time.
3. Product based
Quality is viewed as a precise and
measureable variable, e.g., really good ice
cream has high butter fat levels.
-
8/13/2019 OpMan-Chapter 6 - Quality
4/57
The characteristics that connote quality must firstbe identified through research ( a user-based
approach to quality). These characteristics are
then translated into specific product attributes (a
product based approach to quality). Then, the
manufacturing process is organized to ensure that
products are made precisely to specifications (a
manufacturing-based approach to quality).
-
8/13/2019 OpMan-Chapter 6 - Quality
5/57
-
8/13/2019 OpMan-Chapter 6 - Quality
6/57
Total Quality Management (TQM)
A successful quality strategy begins with an
organization culture that fosters quality,
followed by an understanding of the principles
of quality, and then engaging employees in thenecessary activities to implement quality. When
these things are done well, the organization
typically satisfies its customers and obtains a
competitive advantage.
-
8/13/2019 OpMan-Chapter 6 - Quality
7/57
-
8/13/2019 OpMan-Chapter 6 - Quality
8/57
Implications of Quality
1. Company reputation
2. Product liability
3. Global implications
Malcolm Baldrige National Quality AwardUS
Deming Prize -- Japan
-
8/13/2019 OpMan-Chapter 6 - Quality
9/57
Cost of Quality (COQ)
1. Prevention costs. Costs associated with reducing
the potential for defective parts or services (e.g.,
training, quality improvement programs).
2. Appraisal costs. Costs related to evaluating
products, processes, parts and services (e.g.,
testing, labs, inspectors).
3. Internal failure. Costs that result from production
of defective parts or services before delivery to
customers (e.g., rework, scrap, downtime).4. External costs: Costs that occur after delivery of
defective parts or services (e.g., rework, returned
goods, liabilities, lost goodwill, costs to society).
-
8/13/2019 OpMan-Chapter 6 - Quality
10/57
International Quality StandardsISO 9000
A set of quality standards developed by the
international organization for standardization.ISO 14000
A series of environmental management standards
established by the international organization for
standardization (ISO).
Core elements of ISO 14000:
1. Environmental management
2. Auditing
3. Performance evaluation
4. Labeling
5. Life cycle assessment
-
8/13/2019 OpMan-Chapter 6 - Quality
11/57
Advantages of the ISO 14000:
Positive public image and reduced exposure to
liability.
Good systematic approach to pollution
prevention through the minimization ofecological impact of products and activities.
Compliance with regulatory requirement and
opportunities for competitive advantage.
Reduction in need for multiple audits.
-
8/13/2019 OpMan-Chapter 6 - Quality
12/57
Demings 14 points for implementing Quality
Improvement:1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop depending
on inspections to catch problems4. Build long-term relationships based on
performance instead of awarding business on
the basis of price.
5. Continuously improve product, quality and
service
6. Start training
-
8/13/2019 OpMan-Chapter 6 - Quality
13/57
Demings 14 points for implementing Quality
Improvement:
7. Emphasize leadership
8. Drive out fear
9. Break down business between departments
10. Stop haranguing workers
11. Support, help and improve
12. Remove barriers to pride in work
13. Institute a vigorous program of educationand self-improvement
14. Put everybody in the company to work on
the transformation
-
8/13/2019 OpMan-Chapter 6 - Quality
14/57
Total Quality Management
Management of an entire organization so
that it excels in all aspects of products and
services that are important to the customers.
- quality emphasis that encompasses theentire organization, from suppliers to customers.
-stresses a commitment by management
to have a continuing companywide drive toward
excellence in all aspects of products and servicesthat are important to the customer.
-
8/13/2019 OpMan-Chapter 6 - Quality
15/57
7 concepts for an effective TQM program:
1. Continuous improvement
2. Six sigma
3. Employee empowerment
4. Benchmarking5. Just-In-Time (JIT)
6. Taguchi concepts
7. Knowledge of TQM tools
-
8/13/2019 OpMan-Chapter 6 - Quality
16/57
1. Continuous Improvement
TQM requires a never-ending process of
continuous improvement that covers people,
equipment, suppliers, materials, and
procedures. The basis of the philosophy is thatevery aspect of an operation can be improved.
The end good is perfection.
-
8/13/2019 OpMan-Chapter 6 - Quality
17/57
Plan-Do-Check-Act (PDCA) by Walter Showhart
PDCAA continuous improvement model of
plan, do, check, act.
-
8/13/2019 OpMan-Chapter 6 - Quality
18/57
2. Six Sigma
Popularized by Motorola, Honeywell and G.E.
In statistical sense, it describes a product, process
or service with an extremely high capacity
(99.9997% accuracy).
3.4 out of 1,000,000 (6)
2,700 out of 1,000,000 (3)
-
8/13/2019 OpMan-Chapter 6 - Quality
19/57
TQM definition of six sigmaa program designed
to reduce defects to help lower costs, save time,and improve customer satisfaction. Six sigma is a
comprehensive systema strategy, a discipline
and a set of toolsfor achieving and sustaining
business success.
It is a strategy because it focus on total customer
satisfaction.
-
8/13/2019 OpMan-Chapter 6 - Quality
20/57
It is a discipline because it follows the formal SixSigma Improvement Model known as DMAIC
1. Define
2. Measures
3. Analyzes
4. Improves
5. Controls
-
8/13/2019 OpMan-Chapter 6 - Quality
21/57
7 set of tools of Six Sigma
1. Check Sheets
2. Scatter Diagrams
3. Cause-and-Effect Diagrams
4. Pareto Charts5. Flowcharts
6. Histograms
7. Statistical Process Control
-
8/13/2019 OpMan-Chapter 6 - Quality
22/57
3. Employee Empowerment
Enlarging employee jobs so that the added
responsibility and authority is move to the
lowest level possible in the organization.
It involves employees in every step of the
production process.
-
8/13/2019 OpMan-Chapter 6 - Quality
23/57
Techniques for building employee empowerment
1. Building communication networks that include
employee
2. Developing open, supportive supervisors
3. Moving responsibility from both managers andstaff to production employees
4. Building high-morale organization
5. Creating such formal organization structures as
teams and quality circles
-
8/13/2019 OpMan-Chapter 6 - Quality
24/57
Quality Circlea group of employees meeting
regularly with a facilitator to solve work-related
problems in their work area.
The members receive training in group planning,
problem solving and statistical quality control.
Generally meet once a week.Not rewarded financially, but received recognition.
Facilitator, a specially trained member, helps train
the members and keeps the meetings running
smoothly.Teams with a quality focus have proven to be a cost-
effective way to increase productivity as well as
quality.
-
8/13/2019 OpMan-Chapter 6 - Quality
25/57
4. Benchmarking
Selecting a demonstrated standard of
performance that represents the very best
performance for a process or an activity.
Develop a target at which to shoot and then
to develop a standard or benchmark against
which to compare your performance.
-
8/13/2019 OpMan-Chapter 6 - Quality
26/57
Steps for developing benchmarks
1. Determine what to benchmark2. Form a benchmark team
3. Identify benchmarking partners
4. Collect and analyze benchmarking
information
5. Take action to match or exceed the
benchmark
Internal benchmarking
-
8/13/2019 OpMan-Chapter 6 - Quality
27/57
7 concepts for an effective TQM program:
1. Continuous improvement
2. Six sigma
3. Employee empowerment
4. Benchmarking5. Just-In-Time (JIT)
6. Taguchi concepts
7. Knowledge of TQM tools
-
8/13/2019 OpMan-Chapter 6 - Quality
28/57
5. Just-In-Time (JIT)
The philosophy behind just-in-time (JIT) is
one of continuing improvement and
enforced problem solving.
JIT systems are designed to produce or
deliver goods just as they are needed.
-
8/13/2019 OpMan-Chapter 6 - Quality
29/57
JIT is related to quality in three ways:
1. JIT cuts the cost of qualityThis occurs because scrap, rework, inventory
investment and damage costs are directly related to
inventory on hand. Because there is less inventory on
hand with JIT, cost are lower. In addition, inventory hidesbad quality, whereas JIT immediately exposes bad quality.
2. JIT improves quality
As JIT shrinks lead time it keeps evidence of errors
fresh and limits the number of potential sources of error.
JIT creates an early warming system for quality problems,
both within the firm and with vendors.
-
8/13/2019 OpMan-Chapter 6 - Quality
30/57
3. Better quality means less inventory and a better,easier-to-employ JIT system.
Often the purpose of keeping inventory is to protect
against poor production performance resulting from
unreliable quality. If consistent quality exist, JIT allows
firms to reduce all the costs associated with inventory.
-
8/13/2019 OpMan-Chapter 6 - Quality
31/57
-
8/13/2019 OpMan-Chapter 6 - Quality
32/57
Quality Loss Function (QLF)
A mathematical function that identifies all costs
connected with poor quality and shows how costsincreases as product quality moves from what the
customer wants
L = loss to society
D2= square of the distance from the target value
C = cost of the deviation at the specification limit
-
8/13/2019 OpMan-Chapter 6 - Quality
33/57
-
8/13/2019 OpMan-Chapter 6 - Quality
34/57
Target-oriented quality.
A philosophy of continuous improvement to
bring a product exactly on target.
-
8/13/2019 OpMan-Chapter 6 - Quality
35/57
7. TQM Tools
1) Check Sheets
2) Scatter Diagrams
3) Cause-and-Effect Diagrams
4) Pareto Charts5) Flow Charts
6) Histograms
7) Statistical Process Control (SPC)
-
8/13/2019 OpMan-Chapter 6 - Quality
36/57
Check Sheet
A fact-finding tool for tallying the number ofdefects for a list of previously identified problem
causes.
-
8/13/2019 OpMan-Chapter 6 - Quality
37/57
Scatter Diagram
A graph showing the relationship between
two variables in a process; identifies apattern that may cause a quality problem.
-
8/13/2019 OpMan-Chapter 6 - Quality
38/57
Cause-and-Effect Diagram
(Ishikawa diagram or Fish-bone Chart)
A graph of causes of a quality problem dic=videdinto categories.
-
8/13/2019 OpMan-Chapter 6 - Quality
39/57
-
8/13/2019 OpMan-Chapter 6 - Quality
40/57
Pareto Chart
A diagram for tallying the percentage of defectsresulting from different causes to identify major
quality problems.
-
8/13/2019 OpMan-Chapter 6 - Quality
41/57
-
8/13/2019 OpMan-Chapter 6 - Quality
42/57
Flow Chart
A diagram of the steps in a process;
helps focus on where in a process a
quality problem might exist.
-
8/13/2019 OpMan-Chapter 6 - Quality
43/57
-
8/13/2019 OpMan-Chapter 6 - Quality
44/57
-
8/13/2019 OpMan-Chapter 6 - Quality
45/57
-
8/13/2019 OpMan-Chapter 6 - Quality
46/57
-
8/13/2019 OpMan-Chapter 6 - Quality
47/57
-
8/13/2019 OpMan-Chapter 6 - Quality
48/57
Statistical Process Control (SPC)
A chart with statistical upper and lower limits; if
process stays between these limits over time it is
in control and a problem does not exist.
-
8/13/2019 OpMan-Chapter 6 - Quality
49/57
The role of inspection
Inspection can involve measurement,tasting, touching, weighing or testing of product.
Its goal is to detect a bad process immediately.
Inspection does not correct deficiencies in
the system or defects in the products; nor does it
change a product or increase its value. Inspection
only finds deficiencies and defects. Moreover,
inspections are expensive and do not add value to
the product.
-
8/13/2019 OpMan-Chapter 6 - Quality
50/57
Two critical points of inspection
1. When to inspect
2. Where to inspect
Inspections can take place at:
1. At your suppliers plant while the supplier is
producing.2. At you facility upon receipt of goods from
your supplier.
3. Before costly or irreversible processes.
4. During step-by-step production process.5. When production or service is complete.
6. Before delivery to your customer
7. At the point of customer contact.
-
8/13/2019 OpMan-Chapter 6 - Quality
51/57
Source Inspection
Controlling or monitoring at the point ofproduction or purchaseat the source.
The best inspection can be thought of as no
inspection at all; this inspection is always doneat the sourceit is just doing the job properly
with the operator ensuring that it is so.
The idea is that each supplier, process, employeetreats the next step in the process as the
customer, ensuring the perfect product to the
next customer.
-
8/13/2019 OpMan-Chapter 6 - Quality
52/57
Poke-yoke.
Literally translated foolproof.
It has come to mean a device or technique thatensures the production of a good unit every time.
Example: Diesel gas pump nozzle will not fit into
unleaded gas tank.
MacDonalds French fry scoop.
The packaged surgical coverings that contain
exactly the items needed for a medical procedure.
Checklists.
-
8/13/2019 OpMan-Chapter 6 - Quality
53/57
Service Industry Inspection
-
8/13/2019 OpMan-Chapter 6 - Quality
54/57
Determinants of Service Quality
-
8/13/2019 OpMan-Chapter 6 - Quality
55/57
TQM in Services
Major aspects of service quality
1. The tangible component of many services is
important.How well the service is designed and produced
does make a difference. This might be how
accurate, clean and complete your checkout
bill at the hotel is, how the food at Taco Bell, orhow well your car runs after you pick it up at
the shop.
-
8/13/2019 OpMan-Chapter 6 - Quality
56/57
2. The process
9 out of 10 determinants of service quality arerelated to service process.
3. Customers expectations are the standard
against which the service is judged.
4. The manager must expect exceptions e.g.,
computer crash
-
8/13/2019 OpMan-Chapter 6 - Quality
57/57
Reference:
Operations Management by Jay Heizer and Barry
Render, 10thedition, 2011
Operations Management by Russell and Taylor