Operations Management Quality Strategies

This presentation accompanies Heizer and Render's Operations Management (11th Edition) and Principles of Operations Management (9th Edition).
The slides were created by Jeff Heyl.

An operations manager aims to establish a total quality management system identifying and satisfying customer needs.
Quality management supports differentiation, low cost, and response strategies.
Quality management improves sales and reduces costs.

Improved quality leads to sales gains via improved response, flexible pricing, and enhanced reputation.
Improved quality also reduces costs through increased productivity, reduced rework and scrap costs, and decreased warranty costs.
This ultimately increases profitability.

Quality comprises all features and characteristics of a product or service that satisfy stated or implied needs.
This definition is provided by the American Society for Quality.

User-based quality focuses on better performance and more features.
Manufacturing-based quality emphasizes conformance to standards, aiming for first-time quality.
Product-based quality considers specific and measurable attributes of the product.

Prevention costs aim to reduce the possibility of defects.
Appraisal costs evaluate products, parts, and services.
Internal failure costs result from defective products discovered before delivery.
External failure costs arise from defects detected after delivery.

Operations managers must deliver healthy, safe, and high-quality products and services.
Poor quality can lead to injuries, lawsuits, recalls, and regulations.
Ethical conduct must be central to the response to problems.
All stakeholders must be considered.

TQM encompasses the entire organization, from suppliers to customers.
Management commitment to continuous improvement in all aspects of products and services important to customers is fundamental.

Continuous improvement represents ongoing process improvement in all areas, including operations, work centers, suppliers, and customers.
This encompasses people, equipment, materials, and procedures.
Kaizen is a key concept, representing the ongoing process of unending improvement.
TQM and zero defects are also associated with continuous improvement.

Plan-Do-Check-Act (PDCA) is a cyclical model for continuous improvement.
- Plan: Identify patterns and determine a plan.
- Do: Test the plan.
- Check: Assess whether the plan is working.
- Act: Implement and document the plan.

Six Sigma has two meanings:
- Statistical meaning: A process is 99.9997% capable, with 3.4 defects per million opportunities (DPMO).
- Program meaning: A program designed for defect reduction, cost-lowering, increased efficiency, and improved customer satisfaction; this is often used as a comprehensive system for driving business success.
The Six Sigma Program was originally developed by Motorola and later enhanced by Honeywell and GE.
It follows the DMAIC methodology (Define, Measure, Analyze, Improve, Control).

Emphasize defects per million opportunities as a standard metric.
Extensive training is crucial.
Corporate sponsor support (Champions) is critical.
Create qualified process improvement experts (e.g., Black Belts and Green Belts).
Set stretch objectives.

Involving employees in product and process improvements is critical. This approach can resolve 85% of quality problems.
Effective techniques include building communication networks, developing supportive supervisors, empowering employees, building a positive organizational culture, and creating formal team structure.

Quality circles are employee groups that regularly meet to solve problems.
Circle members receive training in planning, problem-solving, and statistical methods.
Facilitators often guide these circles.
These circles are very effective when executed well.

Taguchi methods use engineering and experimental design to enhance product and process design.
- Identify key variables impacting product variation in components and processes.
- Taguchi Concepts include quality robustness, quality loss function, and target-oriented quality.

Tools for Generating Ideas:
- Check Sheet
- Scatter Diagram
- Cause-and-Effect Diagram
Tools to Organize the Data:
- Pareto Chart
- Flowchart (Process Diagram)
Tools for Identifying Problems:
- Histogram
- Statistical Process Control Chart

Check Sheet: An organized method of recording data.
Scatter Diagram: A graph showing the relationship between two variables.
Cause-and-Effect Diagram (Fishbone Diagram): Identifies potential causes for an outcome.
Pareto Chart: A graph ordering problems or defects by frequency.
Flowchart: A chart illustrating the steps in a process.
Histogram: A distribution showing frequency of occurrences of a variable.
Statistical Process Control Chart: Charts variation of data over time against upper/lower limits.

Service quality measurement is more challenging than measuring good quality.
Customer perceptions of service quality are frequently dependent on intangible differences.