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Quality Management Quality Management Henky S. Nugroho Quality & Production Management System Course Manufacturing Technology & System Research Groups Mechanical Engineering Faculty of Engineering Univ. of Indonesia

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Quality ManagementQuality Management

Henky S. Nugroho

Quality & Production Management System Course Manufacturing Technology & System Research Groups

Mechanical Engineering Faculty of Engineering Univ. of Indonesia

Meaning of QualityMeaning of Quality

�� Webster’s DictionaryWebster’s Dictionary�� degree of excellence of a thingdegree of excellence of a thing

�� American Society for QualityAmerican Society for Quality

Copyright 2006 John Wiley & Sons, Inc. 3-2

�� American Society for QualityAmerican Society for Quality�� totality of features and characteristics totality of features and characteristics

that satisfy needsthat satisfy needs�� Consumer’s and Producer’s Consumer’s and Producer’s

PerspectivePerspective

Meaning of Quality:Meaning of Quality:Consumer’s PerspectiveConsumer’s Perspective

�� Fitness for useFitness for use�� how well product or how well product or

service does what it is service does what it is supposed tosupposed to

Copyright 2006 John Wiley & Sons, Inc. 3-3

supposed tosupposed to

�� Quality of designQuality of design�� designing quality designing quality

characteristics into a characteristics into a product or serviceproduct or service

�� A Mercedes and a Ford are A Mercedes and a Ford are equally “fit for use,” but with equally “fit for use,” but with different design dimensionsdifferent design dimensions

Dimensions of Quality:Dimensions of Quality:Manufactured ProductsManufactured Products

�� Performance Performance �� basic operating characteristics of a product; how basic operating characteristics of a product; how

well a car is handled or its gas mileagewell a car is handled or its gas mileage�� Features Features

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�� Features Features �� “extra” items added to basic features, such as a “extra” items added to basic features, such as a

stereo CD or a leather interior in a carstereo CD or a leather interior in a car�� ReliabilityReliability

�� probability that a product will operate properly probability that a product will operate properly within an expected time frame; that is, a TV will within an expected time frame; that is, a TV will work without repair for about seven yearswork without repair for about seven years

�� ConformanceConformance�� degree to which a product meets predegree to which a product meets pre––established established

standardsstandards

Dimensions of Quality:Dimensions of Quality:Manufactured Products (cont.)Manufactured Products (cont.)

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standardsstandards�� DurabilityDurability

�� how long product lasts before replacementhow long product lasts before replacement�� ServiceabilityServiceability

�� ease of getting repairs, speed of repairs, courtesy ease of getting repairs, speed of repairs, courtesy and competence of repair personand competence of repair person

�� AestheticsAesthetics�� how a product looks, feels, sounds, how a product looks, feels, sounds,

smells, or tastessmells, or tastes�� Safety Safety

Dimensions of Quality:Dimensions of Quality:Manufactured Products (cont.)Manufactured Products (cont.)

Copyright 2006 John Wiley & Sons, Inc. 3-6

�� Safety Safety �� assurance that customer will not suffer assurance that customer will not suffer

injury or harm from a product; an injury or harm from a product; an especially important consideration for especially important consideration for automobilesautomobiles

�� PerceptionsPerceptions�� subjective perceptions based on brand subjective perceptions based on brand

name, advertising, and the likename, advertising, and the like

Dimensions of Quality:Dimensions of Quality:ServiceService

�� Time and TimelinessTime and Timeliness�� How long must a customer wait for service, How long must a customer wait for service,

and is it completed on time?and is it completed on time?

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and is it completed on time?and is it completed on time?�� Is an overnight package delivered overnight?Is an overnight package delivered overnight?

�� Completeness:Completeness:�� Is everything customer asked for provided?Is everything customer asked for provided?�� Is a mail order from a catalogue company Is a mail order from a catalogue company

complete when delivered?complete when delivered?

Dimensions of Quality:Dimensions of Quality:Service (cont.)Service (cont.)

�� Courtesy:Courtesy:�� How are customers treated by employees?How are customers treated by employees?�� Are catalogue phone operators nice and are Are catalogue phone operators nice and are

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�� Are catalogue phone operators nice and are Are catalogue phone operators nice and are their voices pleasant?their voices pleasant?

�� ConsistencyConsistency�� Is the same level of service provided to each Is the same level of service provided to each

customer each time?customer each time?�� Is your newspaper delivered on time every Is your newspaper delivered on time every

morning?morning?

�� Accessibility and convenienceAccessibility and convenience�� How easy is it to obtain service?How easy is it to obtain service?�� Does a service representative answer you calls quickly?Does a service representative answer you calls quickly?

�� AccuracyAccuracy

Dimensions of Quality:Dimensions of Quality:Service (cont.)Service (cont.)

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�� AccuracyAccuracy�� Is the service performed right every time?Is the service performed right every time?�� Is your bank or credit card statement correct every month?Is your bank or credit card statement correct every month?

�� ResponsivenessResponsiveness�� How well does the company react to unusual situations?How well does the company react to unusual situations?�� How well is a telephone operator able to respond to a How well is a telephone operator able to respond to a

customer’s questions?customer’s questions?

Meaning of Quality:Meaning of Quality:Producer’s PerspectiveProducer’s Perspective

�� Quality of ConformanceQuality of Conformance�� Making sure a product or service is Making sure a product or service is

Copyright 2006 John Wiley & Sons, Inc. 3-10

�� Making sure a product or service is Making sure a product or service is produced according to designproduced according to design�� if new tires do not conform to specifications, they if new tires do not conform to specifications, they

wobblewobble�� if a hotel room is not clean when a guest checks if a hotel room is not clean when a guest checks

in, the hotel is not functioning according to in, the hotel is not functioning according to specifications of its designspecifications of its design

Meaning of Quality:Meaning of Quality:A Final PerspectiveA Final Perspective

�� Consumer’s and producer’s Consumer’s and producer’s perspectives depend on each otherperspectives depend on each other

Copyright 2006 John Wiley & Sons, Inc. 3-11

perspectives depend on each otherperspectives depend on each other�� Consumer’s perspective: PRICE Consumer’s perspective: PRICE �� Producer’s perspective: COSTProducer’s perspective: COST�� Consumer’s view must dominateConsumer’s view must dominate

Producer’s Perspective Consumer’s Perspective

Meaning of Quality

Meaning of QualityMeaning of Quality

3-12

Fitness forConsumer Use

Quality of Conformance

• Conformance to specifications

• Cost

Quality of Design

• Quality characteristics• Price

MarketingProduction

Total Quality ManagementTotal Quality Management

�� Commitment to quality throughout organizationCommitment to quality throughout organization

�� Principles of TQMPrinciples of TQM�� CustomerCustomer--orientedoriented

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�� CustomerCustomer--orientedoriented�� LeadershipLeadership�� Strategic planningStrategic planning�� Employee responsibilityEmployee responsibility�� Continuous improvementContinuous improvement�� CooperationCooperation�� Statistical methodsStatistical methods�� Training and educationTraining and education

Quality GurusQuality Gurus

�� Walter ShewartWalter Shewart�� In 1920s, developed control chartsIn 1920s, developed control charts�� Introduced the term “Introduced the term “quality assurance” quality assurance”

�� W. Edwards DemingW. Edwards Deming

Copyright 2006 John Wiley & Sons, Inc. 3-14

�� W. Edwards DemingW. Edwards Deming�� Developed courses during World War II to teach Developed courses during World War II to teach

statistical qualitystatistical quality--control techniques to engineers and control techniques to engineers and executives of companies that were military suppliersexecutives of companies that were military suppliers

�� After the war, began teaching statistical quality control After the war, began teaching statistical quality control to Japanese companiesto Japanese companies

�� Joseph M. JuranJoseph M. Juran�� Followed Deming to Japan in 1954Followed Deming to Japan in 1954�� Focused on strategic quality planning Focused on strategic quality planning

�� Armand V. FeigenbaumArmand V. Feigenbaum�� In 1951, introduced concepts of total quality control In 1951, introduced concepts of total quality control

and continuous quality improvementand continuous quality improvement�� Philip Crosby Philip Crosby

Quality Gurus (cont.)Quality Gurus (cont.)

3-15

�� Philip Crosby Philip Crosby �� In 1979, emphasized that costs of poor quality far In 1979, emphasized that costs of poor quality far

outweigh the cost of preventing poor qualityoutweigh the cost of preventing poor quality�� In 1984, defined absolutes of quality managementIn 1984, defined absolutes of quality management——

conformance to requirements, prevention, and “zero conformance to requirements, prevention, and “zero defects”defects”

�� Kaoru IshikawaKaoru Ishikawa�� Promoted use of quality circlesPromoted use of quality circles�� Developed “fishbone” diagram Developed “fishbone” diagram �� Emphasized importance of internal customerEmphasized importance of internal customer

Deming’s 14 PointsDeming’s 14 Points

1.1. Create constancy of purposeCreate constancy of purpose2.2. Adopt philosophy of preventionAdopt philosophy of prevention

Copyright 2006 John Wiley & Sons, Inc. 3-16

2.2. Adopt philosophy of preventionAdopt philosophy of prevention3.3. Cease mass inspectionCease mass inspection4.4. Select a few suppliers based on Select a few suppliers based on

qualityquality5.5. Constantly improve system and Constantly improve system and

workersworkers

6.6. Institute worker trainingInstitute worker training7.7. Instill leadership among Instill leadership among

Deming’s 14 Points (cont.)Deming’s 14 Points (cont.)

Copyright 2006 John Wiley & Sons, Inc. 3-17

supervisorssupervisors8.8. Eliminate fear among employeesEliminate fear among employees9.9. Eliminate barriers between Eliminate barriers between

departmentsdepartments10.10. Eliminate slogansEliminate slogans

11.11. Remove numerical quotasRemove numerical quotas12.12. Enhance worker prideEnhance worker pride

Deming’s 14 Points (cont.)Deming’s 14 Points (cont.)

Copyright 2006 John Wiley & Sons, Inc. 3-18

13.13. Institute vigorous training and Institute vigorous training and education programseducation programs

14.14. Develop a commitment from top Develop a commitment from top management to implement management to implement above 13 pointsabove 13 points

Deming Wheel: PDCA Deming Wheel: PDCA CycleCycle

1. PlanIdentify problem and develop plan for

4. ActInstitutionalize improvement; continue cycle.

Copyright 2006 John Wiley & Sons, Inc. 3-19

for improvement.

2. DoImplement plan on a test basis.

3. Study/CheckAssess plan; is it working?

cycle.

TQM and…TQM and…

�� … Partnering… Partnering�� a relationship between a company and a relationship between a company and

its supplier based on mutual quality its supplier based on mutual quality standardsstandards

Copyright 2006 John Wiley & Sons, Inc. 3-20

standardsstandards�� … Customers… Customers

�� system must measure customer system must measure customer satisfactionsatisfaction

�� … Information Technology… Information Technology�� infrastructure of hardware, networks, infrastructure of hardware, networks,

and software necessary to support a and software necessary to support a quality programquality program

Quality Improvement Quality Improvement and Role of Employeesand Role of Employees

�� Participative Participative problem solvingproblem solving

Copyright 2006 John Wiley & Sons, Inc. 3-21

problem solvingproblem solving�� employees involved in employees involved in

quality management quality management �� every employee has every employee has

undergone extensive undergone extensive training to provide quality training to provide quality service to Disney’s guestsservice to Disney’s guests

PresentationImplementation

Monitoring

TrainingGroup processes

Data collectionProblem analysis

Organization8-10 members

Same areaSupervisor/moderator

Quality CircleQuality Circle

Copyright 2006 John Wiley & Sons, Inc. 3-22

SolutionProblem results

Problem Analysis

Cause and effectData collection

and analysis

Problem IdentificationList alternatives

ConsensusBrainstorming

Strategic Implications of Strategic Implications of TQMTQM

��Strong leadershipStrong leadership��GoalsGoals, , visionvision, or , or missionmission

Copyright 2006 John Wiley & Sons, Inc. 3-23

��GoalsGoals, , visionvision, or , or missionmission��Operational plans and policiesOperational plans and policies��Mechanism for feedbackMechanism for feedback

Six SigmaSix Sigma

�� A process for developing and delivering A process for developing and delivering near perfect products and servicesnear perfect products and services

�� Measure of how much a process Measure of how much a process

Copyright 2006 John Wiley & Sons, Inc. 3-24

�� Measure of how much a process Measure of how much a process deviates from perfectiondeviates from perfection

�� 3.4 defects per million opportunities3.4 defects per million opportunities�� ChampionChampion

�� an executive responsible for project successan executive responsible for project success

Black Belts and Black Belts and Green BeltsGreen Belts

�� Black BeltBlack Belt�� project leaderproject leader

�� Master Black BeltMaster Black Belt

Copyright 2006 John Wiley & Sons, Inc. 3-25

�� Master Black BeltMaster Black Belt�� a teacher and mentor a teacher and mentor

for Black Beltsfor Black Belts

�� Green BeltsGreen Belts�� project team project team

membersmembers

DEFINE CONTROLIMPROVEANALYZEMEASURE

Six Sigma: DMAICSix Sigma: DMAIC

Copyright 2006 John Wiley & Sons, Inc. 3-26

3.4 DPMO

67,000 DPMOcost = 25% of

sales

TQM in Service TQM in Service CompaniesCompanies

�� Principles of TQM apply equally well to Principles of TQM apply equally well to services and manufacturingservices and manufacturing

�� Services and manufacturing Services and manufacturing companies have similar inputs but companies have similar inputs but

Copyright 2006 John Wiley & Sons, Inc. 3-27

�� Services and manufacturing Services and manufacturing companies have similar inputs but companies have similar inputs but different processes and outputsdifferent processes and outputs

�� Services tend to be labor intensiveServices tend to be labor intensive�� Service defects are not always easy to Service defects are not always easy to

measure because service output is not measure because service output is not usually a tangible itemusually a tangible item

Quality Attributes in Quality Attributes in ServiceService

�� BenchmarkBenchmark�� “best” level of quality “best” level of quality

achievement one achievement one company or company or

Copyright 2006 John Wiley & Sons, Inc. 3-28

company or company or companies seek to companies seek to achieveachieve

�� TimelinessTimeliness�� how quickly a service how quickly a service

is providedis provided “quickest, friendliest, most “quickest, friendliest, most accurate service accurate service

available.”available.”

Cost of QualityCost of Quality

�� Cost of Achieving Good QualityCost of Achieving Good Quality�� Prevention costsPrevention costs

�� costs incurred during product designcosts incurred during product designAppraisal costsAppraisal costs

Copyright 2006 John Wiley & Sons, Inc. 3-29

�� Appraisal costsAppraisal costs�� costs of measuring, testing, and analyzingcosts of measuring, testing, and analyzing

�� Cost of Poor QualityCost of Poor Quality�� Internal failure costsInternal failure costs

�� include scrap, rework, process failure, downtime, include scrap, rework, process failure, downtime, and price reductionsand price reductions

�� External failure costsExternal failure costs�� include complaints, returns, warranty claims, include complaints, returns, warranty claims,

liability, and lost salesliability, and lost sales

Prevention CostsPrevention Costs

�� Quality planning costsQuality planning costs�� costs of developing and costs of developing and

implementing quality implementing quality management programmanagement program

�� ProductProduct--design costsdesign costs

�� Training costsTraining costs�� costs of developing and costs of developing and

putting on quality training putting on quality training programs for employees programs for employees

Copyright 2006 John Wiley & Sons, Inc. 3-30

�� ProductProduct--design costsdesign costs�� costs of designing costs of designing

products with quality products with quality characteristicscharacteristics

�� Process costsProcess costs�� costs expended to make costs expended to make

sure productive process sure productive process conforms to quality conforms to quality specificationsspecifications

programs for employees programs for employees and managementand management

�� Information costsInformation costs�� costs of acquiring and costs of acquiring and

maintaining data related maintaining data related to quality, and to quality, and development of reports on development of reports on quality performancequality performance

Appraisal CostsAppraisal Costs

�� Inspection and testingInspection and testing�� costs of testing and inspecting materials, parts, and costs of testing and inspecting materials, parts, and

product at various stages and at the end of a product at various stages and at the end of a processprocess

Copyright 2006 John Wiley & Sons, Inc. 3-31

processprocess

�� Test equipment costsTest equipment costs�� costs of maintaining equipment used in testing costs of maintaining equipment used in testing

quality characteristics of productsquality characteristics of products

�� Operator costsOperator costs�� costs of time spent by operators to gar data for costs of time spent by operators to gar data for

testing product quality, to make equipment testing product quality, to make equipment adjustments to maintain quality, and to stop work to adjustments to maintain quality, and to stop work to assess qualityassess quality

Internal Failure CostsInternal Failure Costs

�� Scrap costsScrap costs�� costs of poorcosts of poor--quality quality

products that must be products that must be discarded, including labor, discarded, including labor, material, and indirect costsmaterial, and indirect costs

�� Process downtime costsProcess downtime costs�� costs of shutting down costs of shutting down

productive process to fix productive process to fix problemproblem

Copyright 2006 John Wiley & Sons, Inc. 3-32

material, and indirect costsmaterial, and indirect costs�� Rework costsRework costs

�� costs of fixing defective costs of fixing defective products to conform to products to conform to quality specificationsquality specifications

�� Process failure costsProcess failure costs�� costs of determining why costs of determining why

production process is production process is producing poorproducing poor--quality quality productsproducts

problemproblem

�� PricePrice--downgrading costsdowngrading costs�� costs of discounting poorcosts of discounting poor--

quality productsquality products——that is, that is, selling products as selling products as “seconds”“seconds”

External Failure CostsExternal Failure Costs

�� Customer complaint costsCustomer complaint costs�� costs of investigating and costs of investigating and

satisfactorily responding to a satisfactorily responding to a customer complaint resulting customer complaint resulting from a poorfrom a poor--quality productquality product

�� Product liability costsProduct liability costs�� litigation costs litigation costs

resulting from product resulting from product liability and customer liability and customer

Copyright 2006 John Wiley & Sons, Inc. 3-33

from a poorfrom a poor--quality productquality product�� Product return costsProduct return costs

�� costs of handling and replacing costs of handling and replacing poorpoor--quality products returned quality products returned by customerby customer

�� Warranty claims costsWarranty claims costs�� costs of complying with costs of complying with

product warrantiesproduct warranties

liability and customer liability and customer injuryinjury

�� Lost sales costsLost sales costs�� costs incurred costs incurred

because customers because customers are dissatisfied with are dissatisfied with poor quality products poor quality products and do not make and do not make additional purchasesadditional purchases

Measuring and Measuring and Reporting Quality CostsReporting Quality Costs

�� Index numbersIndex numbers�� ratios that measure quality costs against a ratios that measure quality costs against a

base valuebase valuelabor indexlabor index

Copyright 2006 John Wiley & Sons, Inc. 3-34

�� labor indexlabor index�� ratio of quality cost to labor hoursratio of quality cost to labor hours

�� cost indexcost index�� ratio of quality cost to manufacturing costratio of quality cost to manufacturing cost

�� sales indexsales index�� ratio of quality cost to salesratio of quality cost to sales

�� production indexproduction index�� ratio of quality cost to units of final productratio of quality cost to units of final product

QualityQuality––Cost RelationshipCost Relationship

�� Cost of qualityCost of quality�� Difference between price of Difference between price of

nonconformance and conformancenonconformance and conformance

Copyright 2006 John Wiley & Sons, Inc. 3-35

nonconformance and conformancenonconformance and conformance�� Cost of doing things wrongCost of doing things wrong

�� 20 to 35% of revenues20 to 35% of revenues

�� Cost of doing things rightCost of doing things right�� 3 to 4% of revenues3 to 4% of revenues

�� Profitability Profitability �� In the long run, quality is freeIn the long run, quality is free

Quality Management Quality Management and Productivityand Productivity

�� ProductivityProductivity�� ratio of output to inputratio of output to input

�� Yield: Yield: a measure of productivitya measure of productivity

Copyright 2006 John Wiley & Sons, Inc. 3-36

�� Yield: Yield: a measure of productivitya measure of productivity

Yield=(total input)(% good units) + (total input)(1 -%good units)(% reworked)

or

Y=(I)(%G)+(I)(1Y=(I)(%G)+(I)(1--%G)(%R)%G)(%R)

Product CostProduct Cost

Y

RKIK rd ))(())(( +=Product Cost

Copyright 2006 John Wiley & Sons, Inc. 3-37

Ywhere:Kd = direct manufacturing cost per unitI = inputKr = rework cost per unitR = reworked unitsY = yield

Computing ProductComputing ProductYield for Multistage ProcessesYield for Multistage Processes

Y = (I)(%g1)(%g2) … (%gn)

Copyright 2006 John Wiley & Sons, Inc. 3-38

where:I = input of items to the production process that will result in finished productsgi = good-quality, work-in-process products at stage i

QualityQuality––Productivity RatioProductivity Ratio

QPRQPR�� productivity index that includes productivity and productivity index that includes productivity and

quality costsquality costs

Copyright 2006 John Wiley & Sons, Inc. 3-39

quality costsquality costs

QPR =(non-defective units)

(input) (processing cost) + (defective units) (reworked cost)

Seven Quality Control ToolsSeven Quality Control Tools

�� Pareto AnalysisPareto Analysis �� Scatter DiagramScatter Diagram

Copyright 2006 John Wiley & Sons, Inc. 3-40

�� Pareto AnalysisPareto Analysis�� Flow ChartFlow Chart�� Check SheetCheck Sheet�� HistogramHistogram

�� Scatter DiagramScatter Diagram�� SPC ChartSPC Chart�� CauseCause--andand--Effect Effect

DiagramDiagram

NUMBER OFNUMBER OFCAUSECAUSE DEFECTSDEFECTS PERCENTAGEPERCENTAGE

Poor designPoor design 8080 6464 %%

Pareto AnalysisPareto Analysis

Copyright 2006 John Wiley & Sons, Inc. 3-41

Poor designPoor design 8080 6464 %%Wrong part dimensionsWrong part dimensions 1616 1313Defective partsDefective parts 1212 1010Incorrect machine calibrationIncorrect machine calibration 77 66Operator errorsOperator errors 44 33Defective materialDefective material 33 22Surface abrasionsSurface abrasions 33 22

125125 100100 %%

Per

cent

from

eac

h ca

use

Per

cent

from

eac

h ca

use

3030

4040

5050

6060

7070(64)(64)

Pareto ChartPareto Chart

Copyright 2006 John Wiley & Sons, Inc. 3-42

Per

cent

from

eac

h ca

use

Per

cent

from

eac

h ca

use

Causes of poor qualityCauses of poor quality

00

1010

2020(13)(13)

(10)(10)(6)(6)

(3)(3) (2)(2) (2)(2)

Flow ChartFlow Chart

Operation DecisionStart/ Finish OperationOperation

Copyright 2006 John Wiley & Sons, Inc. 3-43

Start/ Finish

OperationOperation

Decision

Check SheetCheck Sheet

COMPONENTS REPLACED BY LABTIME PERIOD: 22 Feb to 27 Feb 2002REPAIR TECHNICIAN: Bob

Copyright 2006 John Wiley & Sons, Inc. 3-44

TV SET MODEL 1013

Integrated Circuits ||||Capacitors |||| |||| |||| |||| |||| ||Resistors ||Transformers ||||CommandsCRT |

HistogramHistogram

15

20

Copyright 2006 John Wiley & Sons, Inc. 3-45

0

5

10

1 2 6 13 10 16 19 17 12 16 2017 13 5 6 2 1

Scatter DiagramScatter Diagram

YY

Copyright 2006 John Wiley & Sons, Inc. 3-46

XX

Control ChartControl Chart

1818

1515

2121

2424N

umbe

r of

def

ects

Num

ber

of d

efec

tsUCL = 23.35

c = 12.67

Copyright 2006 John Wiley & Sons, Inc. 3-47

1212

66

33

99

22 44 66 88 1010 1212 1414 1616

Sample numberSample number

Num

ber

of d

efec

tsN

umbe

r of

def

ects

LCL = 1.99

CauseCause--andand--Effect Diagram Effect Diagram

Out of adjustmentOut of adjustment

Tooling problemsTooling problems

Old / wornOld / worn

MachinesFaultyFaultytesting equipmenttesting equipment

Incorrect specificationsIncorrect specifications

Improper methodsImproper methods

Measurement

Poor supervisionPoor supervision

Lack of concentrationLack of concentration

Inadequate trainingInadequate training

Human

Copyright 2006 John Wiley & Sons, Inc. 3-48

QualityProblem

DeficienciesDeficienciesin product designin product design

Ineffective qualityIneffective qualitymanagementmanagement

Poor process designPoor process design

Process

InaccurateInaccuratetemperature temperature controlcontrol

Dust and DirtDust and Dirt

Environment

Defective from vendorDefective from vendor

Not to specificationsNot to specifications

MaterialMaterial--handling problemshandling problems

Materials

Baldrige AwardBaldrige Award

�� Created in 1987 to stimulate growth of Created in 1987 to stimulate growth of quality management in the United Statesquality management in the United States

�� CategoriesCategoriesLeadershipLeadership

Copyright 2006 John Wiley & Sons, Inc. 3-49

�� LeadershipLeadership�� Information and analysisInformation and analysis�� Strategic planningStrategic planning�� Human resourceHuman resource�� FocusFocus�� Process managementProcess management�� Business resultsBusiness results�� Customer and market focusCustomer and market focus

Other Awards for QualityOther Awards for Quality

�� National individual National individual awardsawards�� Armand V. Feigenbaum Armand V. Feigenbaum

MedalMedal

�� International awardsInternational awards�� European Quality AwardEuropean Quality Award�� Canadian Quality AwardCanadian Quality Award

Copyright 2006 John Wiley & Sons, Inc. 3-50

MedalMedal�� Deming MedalDeming Medal�� E. Jack Lancaster MedalE. Jack Lancaster Medal�� Edwards MedalEdwards Medal�� Shewart MedalShewart Medal�� Ishikawa MedalIshikawa Medal

�� Australian Business Australian Business Excellence AwardExcellence Award

�� Deming Prize from JapanDeming Prize from Japan

American Customer American Customer Satisfaction Index (ACSI)Satisfaction Index (ACSI)

�� Measures customer satisfactionMeasures customer satisfaction�� Established in 1994Established in 1994

Copyright 2006 John Wiley & Sons, Inc. 3-51

�� Web site: Web site: www.acsi.orgwww.acsi.org�� Examples (in 2003)Examples (in 2003)

�� Amazon.com scored 88 (highest in service)Amazon.com scored 88 (highest in service)�� Dell scored of 78 (highest in computer industry)Dell scored of 78 (highest in computer industry)�� Cadillac scored 87 (highest in car industry)Cadillac scored 87 (highest in car industry)

ISO 9000ISO 9000

�� A set of procedures and A set of procedures and policies for international policies for international quality certification of quality certification of supplierssuppliers

�� ISO 9001:2000ISO 9001:2000�� Quality Management Quality Management

SystemsSystems——RequirementsRequirements�� standard to assess ability to standard to assess ability to

Copyright 2006 John Wiley & Sons, Inc. 3-52

�� StandardsStandards�� ISO 9000:2000ISO 9000:2000

�� Quality Management Quality Management SystemsSystems——Fundamentals Fundamentals and Vocabularyand Vocabulary

�� defines fundamental defines fundamental terms and definitions terms and definitions used in ISO 9000 family used in ISO 9000 family

�� standard to assess ability to standard to assess ability to achieve customer satisfactionachieve customer satisfaction

�� ISO 9004:2000ISO 9004:2000�� Quality Management Quality Management

SystemsSystems——Guidelines for Guidelines for Performance ImprovementsPerformance Improvements

�� guidance to a company for guidance to a company for continual improvement of its continual improvement of its qualityquality--management systemmanagement system

Implications of ISO 9000 for U.S. Implications of ISO 9000 for U.S. CompaniesCompanies

�� Many overseas companies Many overseas companies will not do business with a will not do business with a supplier unless it has ISO supplier unless it has ISO 9000 certification9000 certification

Copyright 2006 John Wiley & Sons, Inc. 3-53

9000 certification9000 certification�� ISO 9000 accreditationISO 9000 accreditation�� ISO registrarsISO registrars�� A total commitment to quality A total commitment to quality

is required throughout an is required throughout an organizationorganization