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Managing Quality

PowerPoint presentation to accompany

Heizer and Render

Operations Management, Eleventh EditionPrinciples of Operations Management, Ninth Edition

PowerPoint slides y !eff Heyl

66

2014 Pearson Education, Inc.

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Outline

"loal #ompany Profile$Arnold Palmer Hospital

Quality and trate!y

"e#inin! Quality

$otal Quality %ana!ement

$ools o# $Q% $&e 'ole o# Inspection

$Q% in er(ices

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%earning O&ectives

'hen you complete this chapter youshould e ale to$

() *efine*uality and $Q%

+) *escriet&e I+ international *ualitystandards

) E-plain&at i i!ma is

.) E-plain&o enc&mar/in! is used in $Q%

/) E-plain*uality roust products and$a!uc&i concepts

0) 1set&e se(en tools o# $Q%

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Managing Quality Provides a

#ompetitive 2dvantageArnold Palmer Hospital

"eli(er o(er 12,000 aies annually

irtually e(ery type o# *uality tool isemployed

ontinuous impro(ement

Employee empoerment enc&mar/in!

3ust-in-time

Quality tools 2014 Pearson Education, Inc.

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Quality and 3trategy

%ana!in! *uality supportsdi##erentiation, lo cost, and

response strate!ies Quality &elps #irms increase sales

and reduce costs

uildin! a *uality or!ani5ation is ademandin! tas/

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4wo 'ays Quality

5mproves Profitaility

Impro(edQuality

IncreasedPro#its

Increased producti(ity

7oer reor/ and scrap costs

7oer arranty costs

'educed osts (ia

Impro(ed response

8leile pricin! Impro(ed reputation

ales 9ains (ia

8i!ure 6.1

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4he 6low of 2ctivities

Organizational Practices7eaders&ip, %ission statement, E##ecti(e operatin!procedures, ta## support, $rainin!Yields: What is important and what is to be

accomplished

Quality Principles

ustomer #ocus, ontinuous impro(ement, enc&mar/in!,3ust-in-time, $ools o# $Q%Yields: How to do what is important and to be

accomplished

Employee 6ulfillmentEmpoerment, +r!ani5ational commitment

Yields: Employee attitudes that can accomplishwhat is important

#ustomer 3atisfaction;innin! orders, 'epeat customersYields: An effective organization with

a competitive advantage

8i!ure 6.2

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*efining Quality

$&e totality o# #eatures and

c&aracteristics o# a product or ser(icet&at ears on its aility to satis#y

stated or implied needs

American Society for Quality

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*ifferent 9iews

>ser-ased? etter per#ormance,more #eatures

%anu#acturin!-ased? con#ormanceto standards, ma/in! it ri!&t t&e #irsttime

Product-ased? speci#ic andmeasurale attriutes o# t&e product

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5mplications of Quality

1. ompany reputation

Perception o# ne products

Employment practices

upplier relations

2. Product liaility

'educe ris/

). 9loal implications

Impro(ed aility to compete

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Malcolm :aldrige NationalQuality 2ward

Estalis&ed in 1=..!o(ernment

"esi!ned to promote $Q% practices 'ecent inners include

7oc/&eed %artin %issiles and 8ire ontrol, %EA

Products Inc., @ort& %ississippi Healt& er(ices, ityo# Ir(in!, oncordia Pulis&in! House, Henry 8ord

Healt& ystem, %E"'A", @estl Purina Petare

o., %ont!omery ounty Pulic c&ools

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:aldrige #riteria

Applicants are e(aluated on?

CATEGORIES POINTS

Leadership 120

Strategic Planning 85Customer Focus 85

Measurement, Analsis, and!no"ledge Management

#0

$or%&orce Focus 85'perations Focus 85

(esults )50

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53O ;

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#osts of Quality

Prevention costs - reducin! t&epotential #or de#ects

Appraisal costs - e(aluatin! products,

parts, and ser(ices Internal failure costs - producin!

de#ecti(e parts or ser(ice e#ore

deli(ery External failure costs - de#ects

disco(ered a#ter deli(ery

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Eternal 8ailure

Internal 8ailure

#osts of Quality

$otal

ost

Quality Impro(ement

$otal ost

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%eaders in Quality

$A7E 6.1 7eaders in t&e 8ield o# Quality %ana!ement

%E2*ER PH5%O3OPH>?#ON4R5:145ON

;. Edards "emin! "emin! insisted mana!ement accept responsiility #or uildin!!ood systems. $&e employee cannot produce products t&at ona(era!e eceed t&e *uality o# &at t&e process is capale o#

producin!. His 14 points #or implementin! *uality impro(ementare presented in t&is c&apter.

3osep& %. 3uran A pioneer in teac&in! t&e 3apanese &o to impro(e *uality,3uran elie(ed stron!ly in top-mana!ement commitment,support, and in(ol(ement in t&e *uality e##ort. He as also aelie(er in teams t&at continually see/ to raise *uality standards.

3uran (aries #rom "emin! some&at in #ocusin! on t&ecustomer and de#inin! *uality as #itness #or use, not necessarilyt&e ritten speci#ications.

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%eaders in Quality

$A7E 6.1 7eaders in t&e 8ield o# Quality %ana!ement

%E2*ER PH5%O3OPH>?#ON4R5:145ON

Amarnd 8ei!enaum His 1=61 oo/ $otal Quality ontrol laid out 40 steps to *ualityimpro(ement processes. He (ieed *uality not as a set o# toolsut as a total #ield t&at inte!rated t&e processes o# a company.

His or/ in &o people learn #rom eac& ot&erBs successes led tot&e #ield o# cross-#unctional teamor/.

P&ilip . rosy Quality Is Free as rosyBs attention-!ettin! oo/ pulis&ed in1=:=. rosy elie(ed t&at in t&e traditional trade-o## eteent&e cost o# impro(in! *uality and t&e cost o# poor *uality, t&e costo# poor *uality is understated. $&e cost o# poor *uality s&ould

include all o# t&e t&in!s t&at are in(ol(ed in not doin! t&e Co ri!&tt&e #irst time. rosy coined t&e term zero defects and stated,D$&ere is asolutely no reason #or &a(in! errors or de#ects in anyproduct or ser(ice.

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Ethics and Quality

Management +perations mana!ers must deli(er

&ealt&y, sa#e, *uality products and

ser(ices Poor *uality ris/s inCuries, lasuits,

recalls, and re!ulation

Et&ical conduct must dictate responseto prolems

All sta/e&olders muc& e considered

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4otal Quality Management

Encompasses entire or!ani5ation #romsupplier to customer

tresses a commitment ymana!ement to &a(e a continuin!companyide dri(e toard ecellencein all aspects o# products and ser(icest&at are important to t&e customer

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*eming7s 6ourteen Points

$A7E 6.2 "emin!Bs 14 Points #or Implementin! Quality Impro(ement

1. reate consistency o# purpose

2. 7ead to promote c&an!e

). uild *uality into t&e productF stop dependin! on inspections to catc&prolems

4. uild lon!-term relations&ips ased on per#ormance instead o#aardin! usiness on price

. ontinuously impro(e product, *uality, and ser(ice

6. tart trainin!:. Emp&asi5e leaders&ip

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*eming7s 6ourteen Points

$A7E 6.2 "emin!Bs 14 Points #or Implementin! Quality Impro(ement

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3even #oncepts of 4QM

1. ontinuous impro(ement

2. i i!ma

). Employee empoerment4. enc&mar/in!

. 3ust-in-time G3I$

6. $a!uc&i concepts

:. noled!e o# $Q% tools

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#ontinuous 5mprovement

@e(er-endin! process o# continualimpro(ement

o(ers people, e*uipment, materials,procedures

E(ery operation can e impro(ed

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.) 2ct

Implementt&e plan,

document

+) *o

$est t&eplan

) #hec=

Is t&e planor/in!J

() Plan

Identi#y t&epattern and

ma/e a plan

3hewhart7s P*#2 Model

8i!ure 6.)

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3i- 3igma

$o meanin!s Statisticalde#inition o# a process t&at is

==.===:K capale, ).4 de#ects per

million opportunities G"P%+ Aprogramdesi!ned to reduce de#ects,

loer costs, sa(e time, and impro(ecustomer satis#action

A compre&ensi(e system #or ac&ie(in!and sustainin! usiness success

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3i- 3igma

$o meanin!s Statisticalde#inition o# a process t&at is

==.===:K capale, ).4 de#ects per

million opportunities G"P%+ Aprogramdesi!ned to reduce de#ects,

loer costs, sa(e time, and impro(ecustomer satis#action

A compre&ensi(e system #or ac&ie(in!and sustainin! usiness success

%ean

7oer limits >pper limits

).4 de#ectsLmillion

M6

2,:00 de#ectsLmillion

M)

8i!ure 6.4

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3i- 3igma Program

+ri!inally de(eloped y %otorola,adopted and en&anced y Honeyelland 9E

Hi!&ly structured approac& to processimpro(ement A strate!y

A discipline N "%AI A set o# : tools 6

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3i- 3igma

1. efinest&e proCectBs purpose, scope, and outputs,identi#ies t&e re*uired process in#ormation /eepin!in mind t&e customerBs de#inition o# *uality

!. "easurest&e process and collects data

#. Analyzes t&e data ensurin!repeataility and reproduciility

$. Improvesy modi#yin! orredesi!nin! eistin!

processes and procedures%. &ontrolst&e ne process

to ma/e sure per#ormancele(els are maintained

"%AIApproac&

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5mplementing 3i- 3igma

Emp&asi5e de#ects per million opportunitiesas a standard metric

Pro(ide etensi(e trainin!

8ocus on corporate sponsor supportG&ampions

reate *uali#ied process impro(ementeperts Glac/ elts, 9reen elts, etc.

et stretc& oCecti(es'(is cannot )e accomplis(ed *it(out ama+or commitment from top level

management

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Employee Empowerment

9ettin! employees in(ol(ed in product andprocess impro(ements

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Quality #ircles

9roup o# employees &o meetre!ularly to sol(e prolems

$rained in plannin!, prolemsol(in!, and statistical met&ods

+#ten led y a facilitator

ery e##ecti(e &en done properly

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:enchmar=ing

electin! est practices to use as astandard #or per#ormance

1. "etermine &at to enc&mar/

2. 8orm a enc&mar/ team

). Identi#y enc&mar/in! partners

4. ollect and analy5e enc&mar/in!

in#ormation. $a/e action to matc& or eceed t&e

enc&mar/

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:est Practices for Resolving

#ustomer #omplaints$ale 6.)

:E34 PR2#45#E !134565#245ON

%a/e it easy #or clients to complain It is #ree mar/et researc&'espond *uic/ly to complaints It adds customers and loyalty

'esol(e complaints on #irst contact It reduces cost

>se computers to mana!e complaints "isco(er trends, s&are t&em, and ali!nyour ser(ices

'ecruit t&e est #or customer ser(iceCos

It s&ould e part o# #ormal trainin! andcareer ad(ancement

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!ust@in@4ime A!54B

'elations&ip to *uality?

3I$ cuts t&e cost o# *uality

3I$ impro(es *uality

etter *uality means lessin(entory and etter, easier-to-employ 3I$ system

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!ust@in@4ime A!54B

OPullB system o# production sc&edulin!includin! supply mana!ement

Production only &en si!naled

Allos reduced in(entory le(els In(entory costs money and &ides

process and material prolems

Encoura!es impro(ed process andproduct *uality

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4aguchi #oncepts

En!ineerin! and eperimental desi!nmet&ods to impro(e product andprocess desi!n

Identi#y /ey component and process(ariales a##ectin! product (ariation

$a!uc&i oncepts Quality roustness

Quality loss #unction

$ar!et-oriented *uality

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Quality Roustness

Aility to produce products uni#ormlyin ad(erse manu#acturin! and

en(ironmental conditions 'emo(e t&e effectso# ad(erse

conditions

mall (ariations in materials and

process do not destroy product *uality

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Quality %oss 6unction

&os t&at costs increase as t&eproduct mo(es aay #rom &at t&ecustomer ants

osts include customerdissatis#action, arrantyand ser(ice, internalscrap and repair, and costs tosociety

$raditional con#ormancespeci#ications are too simplistic

$ar!et-

oriented*uality

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>nacceptale

Poor

9ood

est

8air

Quality %oss 6unction

Hi!& loss

7oss Gtoproducin!or!ani5ation,customer,and society

7o loss

8i!ure 6.

, 2

&&ere

, loss tosociety

2 s*uare o#t&e distance #romtar!et (alue

& cost o#de(iation

8re*uency

7oer $ar!et >pper

peci#ication

$ar!et-oriented *ualityyields more product int&e Dest cate!ory

$ar!et-oriented *ualityrin!s product toardt&e tar!et (alue

on#ormance-oriented*uality /eeps productsit&in ) standardde(iations

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4QM 4ools

$ools #or 9eneratin! Ideas &ec/ &eet

catter "ia!ram

ause-and-E##ect "ia!ram

$ools to +r!ani5e t&e "ata

Pareto &art 8loc&art GProcess "ia!ram

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4QM 4ools

$ools #or Identi#yin! Prolems Histo!ram

tatistical Process ontrol &art

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Hour

"e#ect 1 2 ) 4 6 : se di##erent statistical tec&ni*ues

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3ervice Quality

$&e +perations %ana!er mustreco!ni5e?

$&e tan!ile component o# ser(icesis important

$&e ser(ice process is important

$&e ser(ice is Cud!ed a!ainst t&e

customerBs epectations Eceptions ill occur

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3ervice 3pecifications

*eterminants of 3ervice

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*eterminants of 3ervice

Quality

4ale 0)/

Reliailityin(ol(es consistency o# per#ormance and dependaility

Responsivenessconcerns t&e illin!ness or readiness o# employees to pro(ide ser(ice

#ompetencemeans possession o# t&e re*uired s/ills and /noled!e to per#orm t&e

ser(ice2ccessin(ol(es approac&aility and ease o# contact

#ourtesyin(ol(es politeness, respect, consideration, and #riendliness

#ommunicationmeans /eepin! customers in#ormed and listenin! to t&em

#rediilityin(ol(es trustort&iness, elie(aility, and &onesty

3ecurityis t&e #reedom #rom dan!er, ris/, or dout

1nderstanding?=nowing the customer in(ol(es ma/in! t&e e##ort to understand t&ecustomerBs needs

4angilesinclude t&e p&ysical e(idence o# t&e ser(ice

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3ervice Recovery 3trategy

%ana!ers s&ould &a(e a plan #or&en ser(ices #ail

%arriottBs 7EA'@ routine 7isten

Empat&i5e

Apolo!i5e

'eact

@oti#y

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