Transcript (Textbook) Behavior in Organizations, 8ed (A. B. Shani)

Chapter 6
Quality:
Meeting Customer
Expectations
McGraw-Hill/Irwin
©The McGraw-Hill Companies, Inc. 2008
DEFINITION OF QUALITY
• PRODUCER’S DEFINITION --- CONFORMANCE – HOW A
PRODUCT OR SERVICE MEETS THE SPECIFICATIONS
• CONSUMER’S DEFINITION --- VALUE – HOW WELL THE
PRODUCT OR SERVICE SERVES ITS INTENDED
PURPOSE AT A PRICE THEY ARE WILLING TO PAY.
6-2
Definitions of Quality
• ASQ: 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
6-3
WHO IS TO BLAME FOR QUALITY?
EIGHTY FIVE PERCENT OF THE REASONS FOR
FAILURE TO MEET CUSTOMERS’ EXPECTATIONS
ARE RELATED TO DEFICIENCIES IN SYSTEMS
AND PROCESS RATHER THAN THE EMPLOYEES.
THE ROLE OF THE MANAGEMENT IS TO CHANGE
THE PROCESS RATHER THAN BADGERING
INDIVIDUALS TO DO BETTER.
6-4
Dimensions of Product Quality*
•
•
•
•
Performance
– What are the desirable characteristics of the product? (Car:
acceleration, fuel consumption, braking, etc.)
Features
– What additional characteristics of the product are possible?
(GPS, backup camera, collision sensor)
Reliability
– Is the product dependable? Does it accomplish what it
promises? (average time between faults)
Durability
– How long will the product last? (life of a product)
6-5
Dimensions of Product Quality*
• Serviceability
– Can the product be easily and inexpensively repaired?
• Aesthetics
– Does the product satisfy subjective requirements?
• Response
– Is the interaction between the customer and the product
provider pleasant and appropriate?
• Reputation
– What does information on past performance say about
the company?
6-6
Dimensions of Service Quality
• Assurance
– Can the employees generate customer trust and confidence?
• Empathy
– Are employees approachable and sensitive to individual
customers?
• Tangibles
– Do the physical facilities, equipment, and written materials
show care and attention? (is the product kept clean, is
instruction easy to follow, etc.)
6-7
Dimensions of Product and Service Quality
6-8
FIVE Reasons Why Quality is Important
•
•
•
•
•
Company reputation
Costs and market share
Product liability
Global implications
Productivity
6-9
6-10
Ways in Which Quality Can Improve
Productivity
Market Gains
Improved
Quality
– Improved response
– Economies of Scale
– Improved reputation
Reduced Costs
Increased
Profits
Increased productivity
Lower rework and scrap
costs
¨ Lower warranty costs
¨
¨
6-11
International Quality Standards
• Industrial Standard Z8101-1981 (Japan)
– Specification for TQM
• ISO 9000 series (Europe/EC)
– Common quality standards for products sold in Europe
(even if made in U.S.)
• ISO 14000 series (Europe/EC)
– Standards for recycling, labeling etc.
• ASQ Q90 series; MILSTD (U.S.)
6-12
What ISO's name means?
Because "International Organization for Standardization"
would have different abbreviations in different
languages ("IOS" in English, "OIN" in French for
Organisation internationale de normalisation), it was
decided at the outset to use a word derived from the
Greek isos, meaning "equal". Therefore, whatever the
country, whatever the language, the short form of the
organization's name is always ISO.
6-13
ISO 9000 SERIES
The ISO 9000 series is actually made up of five separate standard: ISO
9000, 9001, 9002, 9003, and 9004. Standards 9000 and 9004 are
interpretive guidelines, and the remaining three are the standards
for different types of business operations, as noted below.
•
ISO 9000. Provides guidelines and definitions used to select the
standard most applicable for a given organizations road map to the
other standards.
6-14
ISO 9000 SERIES (CONT)
• ISO 9001. Provides a quality assurance model for assuring
conformance in design, development, production, installation,
and servicing. This is the most comprehensive standard and is
intended for use by those who design and develop their own
products.
• ISO 9002. Provides a quality assurance model for
conformance in production and installation. This standard is
appropriate for firms that manufacture products to another
firm's design specifications and have no responsibility for
servicing.
6-15
ISA 9000 SERIES (CONT)
• ISO 9003. Provides a model for conformance in final
test and inspection procedures, appropriate for use in
firm such as commodity suppliers, etc.
• ISO 9004. Provides guidance in the establishment and
internal documentation of a quality system. It assists
in identifying and developing the relationships
between inputs necessary to assure quality.
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Quality Certification Programs:
ISO
6-17
ISO and Suppliers
• Buyers have immediate visibility that a supplier have received
registration.
• ISO 9000 certification replaces individual certification
program
• Certified suppliers are listed in a master list of companies
• ISO certified supplier can easily meet ANSI standards
• ISO certification opens doors to foreign markets
ANSI = American National Standards Institute Mission -To enhance both the
global competitiveness of U.S. business and the U.S. quality of life by
promoting and facilitating voluntary consensus standards and conformity
assessment systems, and safeguarding their integrity.
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BUYER AND ISO
• ISO certification saves time and money for buyers
• Suppliers pay for all the ISO certification
• ISO certification makes it easier to select supplier
6-19
EC Environmental Standard
ISO 14000
Core Elements:
–
–
–
–
–
Environmental management
Auditing
Performance evaluation
Labeling
Life-cycle assessment
6-20
Malcolm Baldrige National Quality Award
• Established in 1988 by the U.S. government –
Public Law 100-107 (August 20, 87)
• Designed to promote TQM practices
• Some criteria
– Senior executive leadership; strategic planning;
management of process quality.
– Quality results; customer satisfaction
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Quality Awards
•
The Malcolm Baldrige National Quality Award,
managed by the Department of Commerce, provides an
excellent structure for developing a quality-driven
organization.
6-22
Malcolm Baldrige National Quality Award
•
•
•
•
•
•
•
•
•
•
The Malcolm Baldrige National Quality Award (MBNQA) is presented annually by the
President of the United States to organizations that demonstrate quality and performance
excellence. Three awards may be given annually in each of six categories:
Manufacturing
Service company
Small business
Education
Healthcare
Nonprofit
Established by Congress in 1987 for manufacturers, service businesses and small
businesses, the Baldrige Award was designed to raise awareness of quality management
and recognize U.S. companies that have implemented successful quality-management
systems.
The education and healthcare categories were added in 1999. A government and nonprofit
category was added in 2007.
The Baldrige Award is named after the late Secretary of Commerce Malcolm Baldrige, a
proponent of quality management. The U.S. Commerce Department's National Institute of
Standards and Technology manages the award and ASQ administers it.
6-23
Malcolm Baldrige National Quality Award
Organizations that apply for the MBNQA are judged by an independent board of examiners. Recipients are
selected based on achievement and improvement in seven areas, known as the Baldrige Criteria for
Performance Excellence:
•
Leadership: How upper management leads the organization, and how the organization leads within the
community.
•
Strategic planning: How the organization establishes and plans to implement strategic directions.
•
Customer and market focus: How the organization builds and maintains strong, lasting relationships with
customers.
•
Measurement, analysis, and knowledge management: How the organization uses data to support key
processes and manage performance.
•
Human resource focus: How the organization empowers and involves its workforce.
•
Process management: How the organization designs, manages and improves key processes.
•
Business/organizational performance results: How the organization performs in terms of customer
satisfaction, finances, human resources, supplier and partner performance, operations, governance and social
responsibility, and how the organization compares to its competitors.
6-24
Malcolm Baldrige National Quality Award
Purposes :
• Raising awareness of performance excellence as a
competitive tool
• Recognizing performance excellence and identifying
role models
• Encouraging the sharing of best practices
• Establishing a consensus standard criteria for
assessment
http://www.marlow.com/AboutMarlow/Quality/faqbaldrige.htm
6-25
Baldrige Criteria
6-26
Malcolm Baldrige Award (1,000 Points)
1.0 Leadership (90 pts): This category examines senior executives' personal
leadership and involvement in creating and sustaining a customer focus and
clear and visible quality values. Also examined is how the values and
expectations are integrated into the company's management system, including
how the company addresses its public responsibilities and corporate citizenship.
1.1 Senior Executive Leadership (45)
1.2 Leadership System and Organization (25)
1.3 Public Responsibility and Corporate Citizenship (20)
6-27
Malcolm Baldrige Award (1,000 Points)
2.0 Information and Analysis (75 pts): This category examines the scope,
validity, analysis, management, and use of data and information to drive quality
excellence and improve competitive performance. Also examined is the
adequacy of the company's data, information, and analysis system to support
improvement of the company's customer focus, products, services, and internal
operations.
2.1 Management of Information and Data (20)
2.2 Competitive Comparisons and Benchmarking (15)
2.3 Analysis and Use of Company-Level Data (40)
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Malcolm Baldrige Award (1,000 Points)
3.0 Strategic Planning (55 pts): This category examines
the company's planning process and how all key quality
requirements are integrated into overall business planning. Also
examined are the company's short- and longer-term plans and how
quality and performance requirements are deployed to work units.
3.1 Strategy Development (35)
3.2 Strategy Deployment (20)
6-29
Malcolm Baldrige Award (1,000 Points)
4.0 Human Resource Development and Management (140 pts):
This category examines how the workforce is enabled to develop and utilize its
full potential, aligned with the company's performance objectives. Also
examined are the company's efforts to build and maintain an environment
conducive to performance excellence, full participation, and personal and
organizational growth.
4.1 Human Resource Planning and Evaluation (20)
4.2 High Performance Work Systems (45)
4.3 Employee Education, Training and Development (50)
4.4 Employee Well-Being and Satisfaction (25)
6-30
Malcolm Baldrige Award (1,000 Points)
5.0 Process Management (140 pts): This category examines the key aspects
of process management, including' customer-focused design, product and
service delivery processes, support services and supply management involving
all work units, including research and development The category examines how
key processes are designed, effectively managed, and improved to achieve
higher performance.
5.1 Design and Introduction of Products and Services (40)
5.2 Process Management: Product and Service Production and Delivery
(40)
5.3 Process Management: Support Services (30)
5.4 Management of Supplier Performance (30)
6-31
Malcolm Baldrige Award (1,000 Points)
6.0 Business Results (250 pts): This category examines the company's
performance and improvement in key business areas: product and service
quality, productivity and operational effectiveness, supply quality, and financial
performance indicators linked to these areas relative to those of competitors.
6.1 Product and Service Quality Results (75)
6.2 Company Operational and Financial Results (130)
6.3 Supplier Performance Results (45)
6-32
Malcolm Baldrige Award (1,000 Points)
7.0 Customer Focus and Satisfaction (250 pts): This category examines
the company's systems for customer learning and for building and maintaining
customer relationships. Also examined are levels and trends in key measures of
business success: customer satisfaction and retention, market share, and
satisfaction relative to competitors.
7.1 Customer and Market Knowledge (30)
7.2 Customer Relationship Management (30)
7.3 Customer Satisfaction Determination (30)
7.4 Customer Satisfaction Results (100)
7.5 Customer Satisfaction Comparison (60)
6-33
6-34
Malcolm Baldrige National Quality Award
Baldrige award winners, the Baldrige index, have performed
about 2-5 times better than the S&P 500 index.
http://www.quality.nist.gov/
6-35
Baldrige Item Not Covered by ISO 9000
•
•
•
•
•
•
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•
Public responsibility
Competitive comparisons and benchmarks
Analysis and uses of company-level data
Strategic quality and company performance planning process
Quality and performance plans
Employee involvement
Employee well-being and morale and services
Quality assessment
Product and service quality results
Company operational results
Business process and support service results
Customer relationship management
Commitment to customers
Customer satisfaction determination, results, and comparison
Continuous improvement
6-36
Baldrige Items covered by ISO 9000
•
•
•
•
•
•
•
•
•
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•
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Senior executive leadership
Management for quality
Scope and management of quality
Performance data and information
Human resource management
Employee education and training
Employee performance and recognition
Design and introduction of quality products
Process management-product and service delivery processes
Production and delivery processes
Process management-business processes and support services
Supplier quality and results
Future requirements and expectations
6-37
COST OF QUALITY
Prevention Cost: The cost incurred in the process
of trying to prevent defects and errors from occurring. It consists
of such elements:
- Planning the quality control process
- Training for quality
- Educating the firm's suppliers
- Designing the product for quality.
- Designing the production process for quality
- Preventive maintenance
6-38
COST OF QUALITY (CONTINUED)
Appraisal cost: The cost of determining the current quality
of the production process. It consists of factors such as:
- Measuring and testing parts and material
- Running special test laboratories
- Acquiring special testing equipment
- Conducting statistical process control programs
- Receiving inspection
- Reporting on quality
6-39
COST OF QUALITY
(CONTINUED)
Internal cost of defects: The cost incurred when
defects and errors are found before shipment/delivery to the
customer. It consists of elements such as:
- Labor and Material going into scrap
- Engineering change notices
- Rework and retesting to correct defects
- Profit losses on downgraded products/services
- Yield losses from malfunctioning equipment or improperly trained
workers
- Expecting to get customer orders of appropriate quality delivered
on time
6-40
COST OF QUALITY
(CONTINUED)
External cost of defects: The cost of trying to correct
defects and errors after receipt by the customer. It includes items
such as:
- Quick response to complaints
- Adjustment to correct the problem
- Lost goodwill of the customer
- Recalls to correct the problem for other customers
- Warranty, insurance, and legal suit settlements
6-41
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6-45
6-46
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
6-47
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 selfimprovement
• Put everybody in the company to work on the
transformation
4-27
©
6-48
TOTAL QUALITY MANAGEMENT
IT CONVEYS A TOTAL, COMPANYWIDE EFFORT
TO ACHIEVE CUSTOMER’S SATISFACTION
THROUGH FULL INVOLVEMENT OF THE ENTIRE
WORKFORCE AS WELL AS CUSTOMERS AND
SUPPLIERS, WITH A FOCUS ON CONTINUOUS
IMPROVEMENT
6-49
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.
6-50
Concepts of TQM
•
•
•
•
•
Continuous improvement
Employee empowerment - Quality Circle
Benchmarking
Just-in-time (JIT)
Knowledge of tools
6-51
Continuous Improvement
¨ Represents continual improvement of
process & customer satisfaction
¨ Involves all operations
& work units
¨ Other names
Kaizen (Japanese)
¨ Zero-defects
¨ Six sigma
¨
©
6-52
Employee Empowerment
¨ Getting employees involved in product
& process improvements
¨
85% of quality problems are due to process
& material
¨ Techniques
© 1995 Corel Corp.
Support workers
¨ Let workers make decisions
¨ Build teams & quality circles
¨
6-53
Quality Circles
¨ Group of 6-12 employees from same
work area
¨ Meet regularly to solve work-related
problems
¨ 4 hours/month
¨ Facilitator trains
& helps with
meetings
6-54
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
6-55
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
6-56
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
6-57
Just-In-Time (JIT) Example
Work in process inventory level
(hides problems)
Unreliable
Vendors
Scrap
Capacity
Imbalances
6-58
Just-In-Time (JIT) Example
Reducing inventory reveals
problems so they can be solved.
Unreliable
Vendors
Scrap
Capacity
Imbalances
6-59
Tools for TQM
• Taguchi technique
©
6-60
Taguchi Techniques
• Experimental design methods to improve product &
process design
– Identify key component & process variables affecting product
variation
• Taguchi Concepts
– Quality robustness
– Quality loss function
– Target specifications
6-61
Quality Robustness
• Ability to produce products
uniformly regardless of
manufacturing conditions
• Put robustness in House of
Quality matrices besides
functionality
© 1995 Corel Corp.
© 1984-1994 T/Maker Co.
6-62
Tools for TQM
• Taguchi technique
• Quality loss function
6-63
Quality Loss Function Graph
Loss = (Actual X - Target)2 • (Cost of Deviation)
Loss
LSL
Greater deviation,
more people are
dissatisfied, higher
cost
T a rg e t
Lower (upper)
specification limit
USL
X
Measurement
6-64
Quality Loss Function Example
The specifications for the diameter
of a gear are 25.00 ± 0.25 mm.
If the diameter is out of
specification, the gear must be
scrapped at a cost of $4.00. What is
the loss function?
© 1984-1994 T/Maker Co.
6-65
Quality Loss Function Solution
• L = D2 • C = (X - Target)2 • C
– L = Loss ($); D = Deviation; C = Cost
• 4.00 = (25.25 - 25.00)2 • C
– Item scrapped if greater than 25.25
(USL = 25.00 + 0.25) with a cost of $4.00
• C = 4.00 / (25.25 - 25.00)2 = 64
• L = D2 • 64 = (X - 25.00)2 • 64
– Enter various X values to obtain L & plot
©
6-66
Tools for TQM
• Taguchi technique
• Quality loss function
• Check Sheet
6-67
Check Sheet
• Definition: A simple data collection form consisting of multiple
categories with definitions. Data are entered on the form with a
simple tally mark each time one of the categories occurs.
• Purpose: To facilitate the collection and analysis of data.
A check sheet is a simple means of data collection. The most
straightforward check sheet is simply to make a list of items that
you expect will appear in a process and to mark a check beside each
item when it does appear. This type of data collection can be used
for almost anything, from checking off the occurrence of particular
types of defects to the counting of expected items (e.g., the number
of times the telephone rings before being answered).
new
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6-69
Tools for TQM
•
•
•
•
Taguchi technique
Quality loss function
Check Sheet
Pareto charts
6-70
Pareto Chart
• A Pareto chart is a bar graph. The lengths of the bars
represent frequency or cost (time or money), and are
arranged with longest bars on the left and the shortest to
the right. In this way the chart visually depicts which
situations are more significant.
• new
6-71
Pareto Chart
Pareto charts are used to display the Pareto principle in
action, arranging data so that the few vital factors that are
causing most of the problems reveal themselves.
The Pareto effect even operates in quality improvement:
80% of problems usually stem from 20% of the causes.
Concentrating improvement efforts on these few will have
a greater impact and be more cost-effective than
undirected efforts.
new
6-72
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Pareto Analysis of Wine Glass Defects
Frequency (number)
70
60
50
54
40
30
20
12
10
0
Scratches
72%
Porosity
16%
5%
5
4
Nicks
Contamination
4%
2
Misc
3%
Causes, by percent of total defects
6-74
Pareto Chart of Customer Complaints
6-75
Tools for TQM
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Taguchi technique
Quality loss function
Check Sheet
Pareto charts
Process chart
6-76
Process Chart
• Shows sequence of events in process
• Depicts activity relationships
• Has many uses
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–
–
–
Identify data collection points
Find problem sources
Identify places for improvement
Identify where travel distances can be reduced
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Process Chart Example
SUBJECT: Request tool purchase
Dist (ft) Tim e (m in) Sym bol
Description
  D W rite order
    On desk
75
  D To buyer
  D Exam ine
¡ = Operation; ð = Transport; o = Inspect;
D = Delay; Ñ = Storage
6-78
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Tools for TQM
•
•
•
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•
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Taguchi technique
Quality loss function
Check Sheet
Pareto charts
Process charts
Cause-and-effect diagrams
6-80
Cause and Effect Diagram
• Used to find problem sources/solutions
• Other names
– Fish-bone diagram, Ishikawa diagram
• Steps
– Identify problem to correct
– Draw main causes for problem as ‘bones’
– Ask ‘What could have caused problems in these areas?’
Repeat for each sub-area.
6-81
Cause and Effect Diagram Example
Problem
Too many
defects
6-82
Cause and Effect Diagram Example
Method
Manpower
Main Cause
Too many
defects
Material
Machinery
Main Cause
6-83
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
Drill
Slow
Manpower
Tired
Over
Time
Old
Wood
Steel
Material
Too many
defects
Lathe
Machinery
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Tools for TQM
•
•
•
•
•
•
•
Taguchi technique
Quality loss function
Check sheet
Pareto charts
Process charts
Cause-and-effect diagrams
Statistical process control
6-87
Statistical Process Control (SPC)
• Uses statistics & control charts to tell when to adjust
process
• Developed by Shewhart in 1920’s
• Involves
– Creating standards (upper & lower limits)
– Measuring sample output (e.g. mean wgt.)
– Taking corrective action (if necessary)
• Done while product is being produced
6-88
Statistical Process Control Steps
Start
Produce Good
Provide Service
Take Sample
No
Assign.
Causes?
Yes
Inspect Sample
Stop Process
Create
Control Chart
Find Out Why
6-89
Control Chart Example
UCL
11
Time
9
7
5
LCL
3
1
80
60
40
20
0
X
6-90
How TQM Accomplishes Its Principles
TQM’s
supportive
approaches
3 Principles
Of Quality
6-91
Service Quality Attributes
Reliability
Responsiveness
Tangibles
Competence
Understanding
Access
Security
Courtesy
© 1995 Corel Corp.
Credibility
Communication
6-92
WAYS TO IMPROVE QUALITY
• DESIGN THE PRODUCT – STANDARDIZE
PARTS, SIMPLIFY ASSEMBLY PROCESS,
SPECIFY PROCESS
• EDUCATE CONSUMER
• ADOPT LONG TERM PERSPECTIVE
• DEMAND QUALITY FROM SUPPLIER
• USE STATISTICAL METHODS TO IDENTIFY THE
SOURCES OF POOR QUALITY AND ACT TO
SOLVE THEM
• IMPROVE SUPERVISION
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WAYS TO IMPROVE QUALITY
(cont.)
• DO NOT EMPHASIZE OUTPUT AT THE EXPENSE
OF GOOD QUALITY
• MAKE SURE THAT EMPLOYEES HAVE THE
PROPER TRAINING TO DO THEIR JOB
• MAKE IT RIGHT THE FIRST TIME
• IMPROVE PURCHASING METHODS – RAW
MATERIAL
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Inspection
• Involves examining items to see if an item is good
or defective
• Detect a defective product
– Does not correct deficiencies in process or product
• Issues
– When to inspect
– Where in process to inspect
6-95
When and Where to Inspect
•
•
•
•
•
•
•
At the supplier’s plant while the supplier is producing
At your plant upon receipt of goods from the supplier
Before costly or irreversible processes
During the step-by-step production processes
When production is complete
Before shipment from your plant
At the point of customer contact
6-96
When and Where to Inspect
in Services
Business
Where
Variable
Bank
Teller station
Speed, courtesy
Checking Accuracy
Store
Stockrooms
Display areas
Counters
Stock rotation
Attractiveness
Courtesy,
knowledge
6-97
Decision Making Process
(non-Shewhart’s cycle)
• Plan – identify problems, understand problems and clearly defined
problems.
• Causes – List all possible reasons causing the problems. Identify
interrelated reasons and the root causes of the problems
• Solution – Identify solutions
• Do – Implement the solutions
• Check or Evaluate – Check the problems again after a certain
period to make sure the desired outcomes have been achieved.
new
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Plan, Do, Check, ACT (PDCA) Cycle and
Quality Improvement (QI)
6-99
Obtaining Continuous Improvement:
The Plan-Do-Check-Act (PDCA) Cycle
Plan: Identify the
problem, understand it,
and find its root cause.
Act: standardize
the change
throughout the
business.
Do: Take action
to fix the
problem.
Check: See if
things have
improved.
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