Transcript Quality Management - Winthrop University College of

Chapter 3
Quality Management
Operations Management - 5th Edition
Roberta Russell & Bernard W. Taylor, III
Copyright 2006 John Wiley & Sons, Inc.
Beni Asllani
University of Tennessee at Chattanooga
Outline
 Meaning of Quality
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Dimensions of quality
Specifications and conformance quality
Cost of quality
Levels of quality improvement
Total quality management (TQM)
Copyright 2006 John Wiley & Sons, Inc.
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Outline (2)
 Quality management approaches
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Six sigma
Baldrige Award
ISO 9000
Plan-do-check-act cycle (part 2 handout)
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Quality tools
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Meaning of Quality
 American Society for Quality: Quality is
"the totality of features and
characteristics that satisfy customer
needs"
 Customer-based quality: meeting
customer expectations or requirements
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Affected by product positioning
Different for different target markets
Different for different customers in the same
target market
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Meaning of Quality (2)
 Fitness for use: the product or service
performs as intended
 Features: extra items added to basic
characteristics
 Quality of design: the degree to which quality
characteristics are designed into a good or
service
 Value: Product or service is superior to
competitors with similar prices.
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Meaning of Quality (3)
 Perceived quality: the quality that the customer
thinks she got
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Differs by customer
 Producer-based quality: conformance to
specifications.
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Specifications must be based on customer
expectations or requirements
Specifications will change over time
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Dimensions of Product Quality
(Garvin – page 80)
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Performance
Features
Reliability
Conformance to
specifications
 Durability
Copyright 2006 John Wiley & Sons, Inc.
 Serviceability and
quality of service
 Aesthetics
 Safety
 Other perceptions
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Dimensions of Service Quality
(pages 81-82)
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Time and timeliness
Completeness
Courtesy
Consistency
Accessibility and convenience
Accuracy
Responsiveness
Physical elements of the service
Copyright 2006 John Wiley & Sons, Inc.
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Meaning of Quality (3)
Meaning of Quality
Producer’s Perspective
Quality of Conformance
Production
• Conformance to
specifications
• Cost
Consumer’s Perspective
Quality of Design
• Quality characteristics
• Price
• Value
Fitness for
Use
Marketing
Product or Service Specification
 Characteristics of the product or service which
will be measured to determine quality
 Target values for each characteristic
 Should be based on customer expectations
 Should meet any legal requirements
If a product or service consistently meets
specifications, it has conformance quality.
Copyright 2006 John Wiley & Sons, Inc.
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Measuring Service Quality
 Absolute measures are based on a fixed standard.
 Timeliness
 % of transactions without errors.
 Perceptual measures are based on customers’
opinions.
 How important was this characteristic to the
customer?
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How satisfied was the customer?
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Product
launch
activities:
Revise
periodically
Customer Requirements
Product Specifications
Process Specifications
Statistical Process Control:
Measure & monitor quality
Ongoing
Activities
Meets
Specifications?
Yes
Conformance Quality
No
Fix process
or inputs
Achieving Conformance Quality
 Product or service design
 Process technology and equipment
 Purchasing and materials management
 Planning and scheduling
 Hiring, training, and supervision
 Measurement and control
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Cost of Quality
 Cost of good quality
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Prevention costs
Appraisal costs
 Cost of poor quality
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Internal failure costs
External failure costs
 See pages 99-100
Copyright 2006 John Wiley & Sons, Inc.
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Quality–Cost Relationship
 Cost of quality
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Difference between price of
nonconformance and conformance
Cost of doing things wrong
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Cost of doing things right
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20 to 35% of revenues
3 to 4% of revenues
Profitability
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In the long run, quality is free
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Levels of quality improvement
 Incremental: many small improvements add up
to major improvements at modest cost
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Uses Plan-Do-Check-Act cycle and quality tools
 Breakthrough improvements: large
improvements required to meet business
objectives
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Re-engineer the process
Six Sigma is often used
New technology is often needed
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Total Quality Management
 Commitment to quality throughout organization
 Principles of TQM
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Customer-oriented
Leadership
Strategic planning
Employee responsibility
Continuous improvement
Cooperation
Statistical methods
Training and education
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Six Sigma(1)
1. A process for developing and delivering
near perfect products and services
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Measure of how much a process deviates
from perfection
Maximum allowed defects: 3.4 defects per
million opportunities
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Six Sigma(2)
2.
Six Sigma is a business improvement
methodology that focuses an organization on:
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Understanding and managing customer
requirements
Aligning key business processes to achieve those
requirements
Utilizing rigorous data analysis to minimize variation
in those processes
Driving rapid and sustainable improvement to
business processes
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Six Sigma(3)
3.
A high performance management system that helps
an organization
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Align their business strategy to critical
improvement efforts
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Mobilize teams to attack high impact projects
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Accelerate improved business results
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Govern efforts to ensure improvements are
sustained
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DMAIC
 A process improvement strategy used in
six sigma
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Define opportunity
Measure performance
Analyze opportunity
Improve performance
Control performance
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Design for Six Sigma (DFSS)
 A proactive approach for designing Six
Sigma quality into a product, service, or
process
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Black Belts and
Green Belts
 Black Belt
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project leader
 Master Black Belt
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a teacher and mentor
for Black Belts
 Green Belts
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project team
members
Six Sigma: DMAIC
DEFINE
MEASURE
67,000 DPMO
cost = 25% of
sales
ANALYZE
IMPROVE
CONTROL
3.4 DPMO
Baldrige Award
 Competitive quality award presented by
U. S. government
 5 award categories: Manufacturing, services,
small business, health care, education
 All written applications are reviewed by trained
examiners
 Site visits to leading candidates
 Maximum of 2 awards per category
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Baldrige Award Criteria Framework
A Systems Perspective
Total =
1,000 pts
Leadership
(120 pts)
Organizational Profile
Strategic
Planning
(85 pts)
Human Resource
Development
& Mgmt. (85 pts)
Customer &
Market Focus
(85 pts)
Process
Mgmt. (85 pts)
Business
Results
(450 pts)
Measurement, analysis, & knowledge management (90 pts)
Baldrige Award - Business Results
 Customer-focused results
 Product and service performance
 Financial and market results
 Human resource results
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ISO 9000 Standards
 International quality certification program
guided by the International Standards
Organization (ISO)
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Any firm that passes an ISO standards audit will be
certified.
 U. S. participates in the development of these
standards:
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American National Standards Institute (ANSI)
American Society for Quality (ASQ)
Professional organizations
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ISO 9000
 ISO 9000 standards audits must be performed
by a registrar, a firm that is certified to do ISO
9000 audits
 Some companies require their suppliers to be
certified
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Be sure that your registrar is acceptable to your
customers
 Firms must be re-certified periodically.
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