Transcript Chapter_6

Operations
Management
Managing Quality
Chapter 6
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Outline
 Tools of TQM
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Check sheets
Scatter Diagrams
Cause-and-Effect Diagram
Pareto Charts
Process Charts
Histogram
 The Role of Inspection
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
When and where to Inspect
Source Inspection
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Service Industry Inspection
Inspection of Attributes vs Variables
 TQM in Services
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Process Charts
Histogram
 The Role of Inspection
 Total Quality Management in Services

Knowledge of TQM Tools
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Learning Objectives
When you complete this chapter, you should be
able to :
Identify or Define:
Quality
 Malcolm Baldrige National Quality Award
 Demings, Juran, and Crosby
 Taguchi Concepts

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Learning Objectives - continued
When you complete this chapter, you should be
able to :
Explain:
Why quality is important
 Total Quality Management (TQM)
 Pareto charts
 Process charts
 Quality robust products
 Inspection

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To Make the Quality Focus Work
Motorola:
Aggressively began a worldwide education program
to be sure that employees understood quality and
statistical process control
 Established goals
 Established extensive employee participation and
employee teams

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Ways in Which Quality Can
Improve Productivity
Sales Gains
Improved response
 Higher Prices
 Improved reputation

Improved
Quality
Reduced Costs
Increased
Profits
Increased productivity
 Lower rework and scrap costs
 Lower warranty costs

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Flow of Activities Necessary to
Achieve Total Quality Management
Organizational Practices
Quality Principles
Employee Fulfillment
Customer Satisfaction
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Organizational Practices
Leadership
Mission statement
Effective operating procedure
Staff support
Training
Yields: What is important and what is to be
accomplished
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Quality Principles
Customer focus
Continuous improvement
Employee empowerment
Benchmarking
Just-in-time
Tools of TQM
Yields: How to do what is important and to be
accomplished
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Employment Fulfillment
Empowerment
Organizational commitment
Yields: Employees’ attitudes that they can
accomplish what is important and to be
accomplished
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Customer Satisfaction
Winning orders
Repeat customers
Yields: An effective organization with a
competitive advantage
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Definitions of Quality
 ASC: Product characteristics & features that
affect customer satisfaction
 User-Based: What consumer says it is
 Manufacturing-Based: Degree to which a
product conforms to design specification
 Product-Based: Level of measurable product
characteristic
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Dimensions of Quality for Goods
 Operation
 Reliability & durability
 Conformance
 Serviceability
 Appearance
 Perceived quality
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Quality
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Importance of Quality
 Costs & market
share
 Company’s
reputation
 Product
liability
 International
implications
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Market Gains
Reputation
Volume
Price
Increased
Profits
Improved
Quality
Lower Costs
Productivity
Rework/Scrap
Warranty
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Malcom Baldrige National Quality
Award
 Established in 1988 by the U.S. government
 Designed to promote TQM practices
 Some criteria
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Senior executive leadership; strategic planning;
management. of process quality
Quality results; customer satisfaction
 Recent winners
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Corning Inc.; GTE; AT&T; Eastman Chemical.
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Baldrige Award Criteria Framework
SYSTEM
Management of
quality assurance
system
140 pts.
DRIVER
Leadership
90 pts
Human resource
development and
management
150 pts.
Strategic quality
planning
60 pts.
Quality information
benchmarks and
analysis
60 pts.
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G OAL
Customer satisfaction
Customer satisfaction
relative to competitors
Customer retention
Market share gain
300 pts.
MEASURES OF PROG RESS
P roduct & service quality
P roductivity improvement
Waste reduction/
elimination
Supplier performance
Financial results
180 pts.
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Costs of Quality
Prevention costs - reducing the potential for
defects
Appraisal costs - evaluating products
Internal failure - of producing defective parts
or service
External costs - occur after delivery
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EC Environmental Standard
ISO 14000
Core Elements:
Environmental management
 Auditing
 Performance evaluation
 Labeling
 Life-cycle assessment

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International Quality Standards
 Industrial Standard Z8101-1981 (Japan)
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Specification for TQM
 ISO 9000 series (Europe/EC)
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Common quality standards for products sold in
Europe (even if made in U.S.)
 ISO 14000 series (Europe/EC)
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Standards for recycling, labeling etc.
 ASQC Q90 series; MILSTD (U.S.)
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Traditional
Quality Process (Manufacturing)
Customer
Marketing
Engineering
Operations
Specifies
Need
Interprets
Need
Designs
Product
Produces
Product
Defines
Quality
Plans
Quality
Monitors
Quality
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TQM
Encompasses entire organization, from
supplier to customer
Stresses a commitment by management to
have a continuing company-wide drive
toward excellence in all aspects of products
and services that are important to the
customer.
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Achieving
Total Quality Management
Customer
Satisfaction
Effective
Business
Attitudes
(e.g., Commitment)
Employee
Fulfillment
How to Do
Quality
Principles
What to Do
Organizational
Practices
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Deming’s Fourteen Points
 Create consistency of purpose
 Lead to promote change
 Build quality into the products
 Build long term relationships
 Continuously improve product, quality, and
service
 Start training
 Emphasize leadership
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Deming’s Points - continued
 Drive out fear
 Break down barriers between departments
 Stop haranguing workers
 Support, help, improve
 Remove barriers to pride in work
 Institute a vigorous program of education and
self-improvement
 Put everybody in the company to work on the
transformation
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Concepts of TQM
Continuous improvement
Employee empowerment
Benchmarking
Just-in-time (JIT)
Taguchi concepts
Knowledge of tools
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Continuous Improvement
 Represents continual improvement of
process & customer satisfaction
 Involves all operations
& work units
 Other names
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
Kaizen (Japanese)
Zero-defects
Six sigma
© 1984-1994 T/Maker Co.
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Shewhart’s PDCA Model
4.Act
1.Plan
3.Check
2.Do
Implement Identify the
improvement and
the plan
make a plan
Is the plan
working
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Test the plan
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Employee Empowerment
 Getting employees involved in product &
process improvements

85% of quality problems are due to process &
material
 Techniques
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© 1995 Corel Corp.
Support workers
Let workers make decisions
Build teams & quality circles
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Benchmarking
Selecting best practices to use
as a standard for performance
 Determine what to benchmark
 Form a benchmark team
 Identify benchmarking partners
 Collect and analyze benchmarking information
 Take action to match or exceed the benchmark
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Just-in-Time (JIT)
Relationship to quality:
JIT cuts cost of quality
 JIT improves quality
 Better quality means less inventory and better,
easier-to-employ JIT system

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Just-in-Time (JIT)
 ‘Pull’ system of production/purchasing

Customer starts production with an order
 Involves ‘vendor partnership programs’ to
improve quality of purchased items
 Reduces all inventory levels

Inventory hides process & material problems
 Improves process & product quality
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Just-In-Time (JIT) Example
Work in process inventory level
(hides problems)
Unreliable
Vendors
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Capacity
Imbalances
Scrap
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Just-In-Time (JIT) Example
Reducing inventory reveals
problems so they can be solved.
Unreliable
Vendors
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Capacity
Imbalances
Scrap
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Tools for TQM
Quality Function Deployment

House of Quality
Quality loss function
Pareto charts
Process charts
Cause-and-effect diagrams
Statistical process control
Poke-Yoke, (error proofing)
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Cause and Effect Diagram
Example
Problem
Too many
defects
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Cause and Effect Diagram
Example
Method
Manpower
Main Cause
Too many
defects
Material
Machinery
Main Cause
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Cause and Effect Diagram
Example
Method
Drill
Manpower
Over
Time
Too many
defects
Wood
Steel
Material
Lathe
Machinery
Sub-Cause
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Cause and Effect Diagram
Example
Method
Manpower
Tired
Drill
Slow
Over
Time
Old
Wood
Steel
Material
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Too many
defects
Lathe
Machinery
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Fishbone Chart - Problems with
Airline Customer Service
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