Transcript PRODUCTION AND OPERATIONS MANAGEMENT

PRODUCTION AND
OPERATIONS
MANAGEMENT
Ch. 4: Managing Quality
POM - J. Galván
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Learning Objectives

Definition of quality in a
productive environment
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Ways in Which Quality Can
Improve Productivity
Market Gains
Improved response
• Economies of Scale
• 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 can
accomplish what is important and to
be accomplished

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Customer Satisfaction
Meeting customer needs
 Repeat customers
Yields: An effective organization with a
competitive advantage
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Definitions of Quality
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ASQC: Product characteristics & features
that affect customer satisfaction
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User-Based: What consumer says it is
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Manufacturing-Based: Degree to which a
product conforms to design specification
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Product-Based: Level of measurable
product characteristic
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Dimensions of Quality for
Goods
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Operation
Reliability & durability
Conformance
Serviceability
Appearance
Perceived quality
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Quality
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Three Reasons Quality is
Important
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Company reputation
Product liability
Global implications
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PROBLEM
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How can a company assure the
manufacturing of quality products?
Implementing the organization and
the procedures that will guarantee
that products are well done
• What kind of organization?
• What type of procedures and practices?
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ANSWER: Implement quality
management standards
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How do quality management
standards work

UNDERLYING PRINCIPLE:
• If things are done well once the system
is OK
• If things are always done the same way
they are well done
• Thus if the procedures are defined and
documented, the final outcome will
always be the same
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International Quality Standards
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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.
ASQC Q90 series; MILSTD (U.S.)
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ISO 9000

Series of standards agreed upon by the
International Organization for
Standardization (ISO)
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Adopted in 1987
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More than 100 countries
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A prerequisite for global competition?
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ISO 9000 directs you to "document what
you do and then do as you documented."
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CERTIFICATION
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Who decides that a company applies
quality management standards?
Someone that examines the
company and CERTIFIES that it
follows the correct organizational and
procedural rules established in the
standard
Who is able to certify?
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Three Forms of ISO
Certification
First party: A firm audits itself
against ISO 9000 standards.
Second party: A customer audits its
supplier.
Third party: A "qualified" national or
international standards or certifying
agency serves as auditor.
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ISO 9001:2000 Quality
Management System
Comprises the following processes:
1. The Quality Management System process itself and contributory processes for
2. Resource Management
3. Regulatory Research
4. Market Research
5. Product Design
6. Purchasing
7. Production
8. Service Provision
9. Product Protection
10. Customer Needs Assessment
11. Customer Communications
12. Internal Communications
13. Document Control
14. Record Keeping
15. Planning
16. Training
17. Internal Audit
18. Management Review
19. Monitoring and Measuring
20. Nonconformance Management
21. Continual Improvement
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Traditional
Quality Process
(Manufacturing)
Customer
Marketing
Engineering
Operations
Specifies
Need
Interprets
Need
Designs
Product
Produces
Product
Defines
Quality
Plans
Quality
Quality is
customer driven!
Monitors
Quality
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TQM
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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
Organizational
Practices
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What to Do
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Concepts of TQM
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Continuous improvement
Employee empowerment
Benchmarking
Just-in-time (JIT)
Knowledge of tools
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Continuous Improvement
¨ Represents continual improvement of
process & customer satisfaction
¨ Involves all operations
& work units
¨ Other names
Kaizen (Japanese)
¨ Zero-defects
¨ Six sigma
¨
© 1984-1994 T/Maker Co.
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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
¨
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Benchmarking
Selecting best practices to use
as a standard for performance
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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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Resolving Customer Complaints
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Make it easy for clients to complain
Respond quickly to complaints
Resolve complaints on the first
contact
Use computers to manage complaints
Recruit the best for customer service
jobs
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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)
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‘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
Scrap
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Capacity
Imbalances
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Just-In-Time (JIT) Example
Reducing inventory reveals
problems so they can be solved.
Unreliable
Vendors
Scrap
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Capacity
Imbalances
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Quality Specifications
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Design quality: Inherent value of the product in
the marketplace
• Dimensions include:
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Performance,
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Features,
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Reliability,
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Durability,
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Serviceability,
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Response,
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Aesthetics, and
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Reputation.
Conformance quality: Degree to which the
product or service design specifications are met
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Costs of Quality
Appraisal Costs
External Failure
Costs
Costs of
Quality
Prevention Costs
Internal Failure
Costs
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Continuous Improvement (CI)
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Management's view of performance standards of
the organization
• performance level of the firm as something to
be "continuously challenged and incrementally
upgraded."
The way management views the contribution and
role of its workforce
• believe employee involvement and team
efforts are the key to improvement
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CI Methodology: PDCA Cycle
(Deming Wheel)
1. Plan a change
aimed at
improvement.
4. Institutionalize
the change or
abandon or
do it again.
4. Act
1. Plan
3. Check
2. Do
3. Study the results;
did it work?
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2. Execute the
change.
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Example: Process Flow Chart
Material
Received
from
Supplier
No,
Continue…
Inspect
Material for
Defects
Defects
found?
Yes
Can be used to find
quality problems.
Return to
Supplier for
Credit
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Example: Pareto Analysis
80%
Frequency
Can be used
to find when
80% of the
problems may
be attributed
to 20% of the
causes.
Assy.
Design
Purch.
Training Other
Instruct.
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Diameter
Example: Run Chart
Can be used to identify
when equipment or
processes are not behaving
according to specifications.
0.58
0.56
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0.5
0.48
0.46
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Time (Hours)
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Number of Lots
Example: Histogram
Can be used to identify the frequency of quality
defect occurrence and display quality performance.
0
1
2
Data Ranges
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Defects
in lot
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Defects
Example: Scatter Diagram
Can be used to illustrate the
relationships between quality
behavior and training.
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10
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0
0
10
20
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Hours of Training
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Example: Checksheet
Monday
Can be used to keep track of
defects or used to make sure
people collect data in a correct
manner.
Billing Errors
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
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Example: Cause & Effect
Diagram
Possible causes:
Machine
Man
The results
or effect.
Effect
Environment
Method
Material
Can be used to systematically track backwards to find
a possible cause of a quality problem (or effect).
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Example: Control Charts
Can be used to monitor ongoing production process quality
and quality conformance to stated standards of quality.
1020
UCL
1010
1000
990
LCL
980
970
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Benchmarking
1. Identify those processes needing
improvement.
2. Identify a firm that is the world leader in
performing the process.
3. Contact the managers of that company
and make a personal visit to interview
managers and workers.
4. Analyze data.
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The Shingo System: Fail-Safe
Design
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Shingo’s argument:
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SQC methods do not prevent defects
Defects arise when people make errors
Defects can be prevented by providing
workers with feedback on errors
Poka-Yoke includes:
• Checklists
• Special tooling that prevents workers
from making errors
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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
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Control Chart Example
UCL
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Time
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7
5
LCL
3
1
80
60
40
20
0
X
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Inspection
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Involves examining items to see if
an item is good or defective
Detect a defective product
• Does
not correct deficiencies in
process or product
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Issues
• When
to inspect
• Where in process to inspect
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When and Where to Inspect
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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
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When and Where to Inspect
in Services
Business
Where
Variable
Bank
Teller station Speed,courtesy
Checking
Accuracy
Store
Stockrooms Stock rotation
Display areas Attractiveness
Counters
Courtesy,
knowledge
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TQM In Services
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Service quality is more difficult to
measure than for goods
Service quality perceptions depend
on
• Expectations
vs. reality
• Process & outcome
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Types of service quality
• Normal:
Routine service delivery
• Exceptional: How problems are handled
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Service Quality Attributes
Reliability
Responsiveness
Tangibles
Competence
Understanding
Access
Security
Courtesy
© 1995 Corel Corp.
Credibility
Communication
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