Quality and Process Improvement

• Quality relates to consumer choice and competitive success
• It is important to assess the dimensions of quality for goods and services
• Total Quality Management (TQM) should be defined to understand its benefits
• Six Sigma needs defining, including the types of process variation
• Key quality tools include:
  • Process capability analysis
  • Statistical process control
  • Cause-and-effect analysis

Process Improvement Trio

• Lean focuses on waste reduction

• Six Sigma focuses on reducing variance

• Theory of Constraints focuses on alleviating constraints

• Quality promotes cycle time reduction and variability reduction

• Quality also promotes better management

• Quality management can affect a company's future

• Quality is subjective

• Lululemon's mistakes included blaming suppliers and customers

• They also unwisely celebrated failure and only finally accepted responsibility

Eight Quality Dimensions of Products

• Performance: Does the product do what the user wants?
• Features: Does the product have features the user seeks?
• Reliability: Does the product perform consistently over time?
• Conformance: Does the product conform to design specifications?
• Durability: How long will the product perform or last, and under what conditions?
• Serviceability: Is the product relatively easy to maintain and repair?
• Aesthetics: Does the product look, sound, taste, and/or smell as it should?
• Perception: Does the product seem like a high-quality product, regarding aspects that cannot be directly observed?

Five Quality Dimensions of Service

• Tangibles: How pleasing is the appearance of the physical facilities, equipment, personnel, and communication materials?

• Reliability: How dependably can the service provider provide the promised service?

• Responsiveness: How willing, able, and promptly is the service provider to help?

• Assurance: How knowledgeable and courteous are the service employees and how well do they convey trust and confidence?

• Empathy: How well does the service provider provide caring, individualized attention to its customers?

• Achieving Quality at the Source involves focus on prevention, personal responsibility, and standardization

Costs of Quality

• Prevention Costs: Costs of designing and maintaining the quality management system to prevent quality problems like quality planning, training and quality assurance
• Appraisal Costs: Costs of measuring and monitoring activities like verifying equipment or supplies, calibration, or supplier rating
• Internal Failure Costs: Costs of failures detected before transfer to the customer which includes waste, scrap, rework, and failure analysis
• External Failure Costs: Costs of failures discovered by the customer which includes repair service, warranty claims, complaints, returns, and environmental impacts

ISO's Core Principles of Total Quality Management

• Focus on customer

• Employee Involvement

• Process Centered

• Integrated System

• Strategic and Systematic Approach

• Continuous Improvement

• Communication

• Decision making based on facts

• Six Sigma is a systematic, data-driven approach to achieving nearly zero defects

Six Sigma Details

• Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects
• It employs statistical analysis to improve business processes
• It aims to understand and achieve what the customer wants
• Motorola developed it to focus effort on quality using a methodological approach

Six Sigma Quality Details

• It is a philosophy and set of methods for eliminating defects

• It seeks to reduce variation in processes leading to defects

• The name "six sigma" relates to variation within plus or minus six standard deviations of process outputs

• The goal of Six Sigma is about 3.4 defects per million opportunities

• Specification limits are the values products or services should operate between

• Limits are set based on customer requirements

Achieving Six Sigma Quality involves:

• Variance reduction
• Dealing with common cause variation
• Dealing with special cause variation

Improving Process Capability involves:

• Modifying the process

• Outsourcing

• Common causes of variability are present when a process is in statistical control

• These are system causes, normal variability, natural variability, or random variation

• They are part of the process itself and require changing the process to affect them

• They affect observations in a random way

• Special causes of variability occur when a process is out of statistical control

• These are abnormal or assignable causes and affect some observations

• They cause changes in the distribution of interest over time in a non-random way

• These can be changed without changing the process

Process Control Charts

• Upper Control Limit (UCL) and Lower Control Limit (LCL) help determine special cause variation

• The Mean helps determine common cause variation

• A process is considered out of control if: a single point plots outside the control limits

• A process is considered out of control if: two out of three successive points are on the same side of the centerline and farther than 2σ from it

• A process is considered out of control if: four out of five successive points are on the same side of the centerline and farther than 1σ from it

• A process is considered out of control if: a run of eight in a row are on the same side of the centerline

• A process is considered out of control if: any consistent or persistent pattern tells you that your process includes systematic variation

• The Ishikawa Cause-and-Effect Diagram helps in determining root causes

Causes of variation include:

• People
• Machines
• Materials
• Methods
• Measurement
• Environment