Transcript Document

Chapter 20
Managing improvement – the TQM
approach
Source: Corbis/Munshi Ahmed
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Improvement using the ideas of total quality management
(TQM)
Managing
improvement
Operations
strategy
Design
Operations
management
Planning and
control
Improvement
Total quality
management
organizes process
improvement
Operations
process
improvement
makes processes
better
Failure
prevention and
recovery stop
processes
becoming worse
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Total quality management can be viewed as a natural extension
of earlier approaches to quality management
•Quality is strategic
•Teamwork
•Staff empowerment
•Involves customers and suppliers
Makes quality central
and strategic in the
organization
•Quality systems
•Quality costing
•Problem solving
•Quality planning
Broadens the
organizational responsibility
for quality
Solves the root
cause of quality
problems
Prevents ‘out of
specification’ products and
services reaching market
•Statistics
•Process analysis
•Quality standards
•Error detection
•Rectification
Inspection
Quality
control
Quality
assurance
Total Quality
Management
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
The internal customer–supplier concept involves
understanding the relationship between processes
Process 3
External
supplier
Process 1
Process 2
Process 6
External
customer
Process 5
Process 4
Between each process, the
requirements of the ‘customer’ process
must be understood and met by the
'supplier’ process
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Costs
The traditional cost of quality model
Optimum amount
of quality effort
Amount of quality effort
Cost of errors = costs of
prevention and appraisal
Total cost of quality
Cost of quality provision = costs
of internal and external failure
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Costs
The traditional cost of quality model with adjustments
to reflect TQM criticisms
Optimum amount
of quality effort
Amount of quality effort
Cost of errors = costs of
prevention and appraisal
Total cost of quality
Cost of quality provision = costs
of internal and external failure
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
The EFQM’s ‘Business Excellence’ model
People
results
People
Leadership
Policy and
strategy
Partnerships
and resources
Processes
Customer
results
Key
performance
results
Society
results
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
The quality gurus
Philip Crosby
Quality is free –
the optimum is zero defects
W. Edwards Deming
Deming’s 14 points
How to use statistics
Armand Feigenbaum
Total quality control
Kaoru Ishikawa
Quality circles and cause-and-effect
diagrams
Joseph Juran
Quality as fitness for use, rather than
conformance to specification
Genichi Taguchi
Loss function
Minimize variation
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Total Quality Management
Includes all parts of the organization
Includes all staff of the organization
Source: Corbis/Richard T Nowitz
Includes consideration of all costs
Includes every opportunity to get things right
Includes all the systems that affect quality
Never stops
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
The cost of rectifying errors increases more rapidly the longer
they remain uncorrected in the development and launch process
Cost of rectifying error
10000
1000
100
10
1
Concept
Design
Prototype
Pilot
Market use
production
Stage in development and launch process
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Increasing the effort spent on preventing errors occurring
in the first place brings a more than equivalent reduction
in other cost categories
Total cost of quality
Costs of quality
Appraisal
Internal failure
Appraisal
Prevention
Time
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Effectiveness of the TQM initiative
The pattern of some TQM programmes
which run out of enthusiasm
Introduction
Growth
Levelling off
Learning and
understanding
Increasing
enthusiasm
Starting to hit
the more difficult
problems
Disillusionment
Waning
enthusiasm
Repackaging
Attempts to
revitalize the
programme
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms Test
Total quality management (TQM)
A holistic approach to the management of quality that emphasizes
the role of all parts of an organization and all people within an
organization to influence and improve quality; heavily influenced
by various quality ‘gurus’, it reached its peak of popularity in the
1980s and 1990s.
Internal customers
Processes or individuals within an operation that are the customers
for other internal processes or individuals’ outputs.
Internal supplier
Processes or individuals within an operation that supply products or
services to other processes or individuals within the operation.
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms Test
Service-level agreements (SLAs)
Formal definitions of the dimensions and levels of service that
should be provided by one process or operation to another.
Quality
There are many different approaches to defining this. We define it
as consistent conformance to customers’ expectations.
Prevention costs
Those costs that are incurred in trying to prevent quality problems
and errors occurring; an element within quality-related costs.
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms Test
Appraisal costs
Those costs that are associated with checking, monitoring and
controlling quality to see whether problems or errors have
occurred; an element within quality-related costs.
Internal failure costs
Those costs that are associated with errors and failures that are
dealt with inside an operation but yet cause disruption; an
element within quality-related costs.
External failure costs
Those costs that are associated with an error or failure reaching a
customer; an element within quality-related costs.
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms Test
ISO 9000
A set of worldwide standards that established the requirements
for companies’ quality management systems, last revised in
2000. There are several sets of standards.
Six Sigma
An approach to improvement and quality management that
originated in the Motorola Company but that was widely
popularized by its adoption in the GE Company in America.
Although based on traditional statistical process control, it is
now a far broader ‘philosophy of improvement’ that
recommends a particular approach to measuring, improving
and managing quality and operations performance generally.
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Key Terms Test
European Quality Award (EQA)
A quality award organized by the European Foundation
for Quality Management (EFQM) and based on the
EFQM excellence model.
EFQM Excellence Model or Business Excellence
Model
A model that identifies the categories of activity that
supposedly ensure high levels of quality; now used
by many companies to examine their own qualityrelated procedures.
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007