Quality Management Principles Quiz

Managing Quality

• PowerPoint presentation accompanies Heizer, Render, Munson's Operations Management (13th Global Edition) and Principles of Operations Management (11th Edition).
• Copyright © 2020 Pearson Education Ltd.
• Presentation slide number: 6-1

Final Exam of OM

• Exam Date & Time: December 9, 2029, 9-12 hrs
• Content: Managing Quality and Project Management
• Format: 40 multiple-choice questions
• Score: 100%
• Permitted items: Pen, pencil, eraser, student ID card, any type of calculator
• Allowed notes: No cheat sheet.

Outline

• Global Company Profile: Arnold Palmer Hospital
• Quality and Strategy
• Defining Quality
• Determinants of Product & Service Quality
• Cost of Quality
• Total Quality Management
• Tools of TQM
• The Role of Inspection
• Slide number: 6-2

Managing Quality Provides a Competitive Advantage

• Arnold Palmer Hospital delivers over 14,000 babies annually
• Virtually every type of quality tool is employed
• Continuous improvement
• Employee empowerment, benchmarking,
• Just-in-time (JIT)
• Quality tools
• Slide number: 6-3

Learning Objectives

• Define quality and TQM
• Describe the ISO international quality management system standards
• Explain Six Sigma
• Explain how benchmarking is used in TQM
• Use the seven tools of TQM
• Slide number: 6-4

Strategies for Competitive Advantage

• Differentiation – better or at least different
• Cost leadership – cheaper
• Response – more responsive
• Slide number: 6-5

Quality and Strategy

• Managing quality supports differentiation, low cost and response strategies
• Quality helps firms increase sales and reduce costs
• Building a quality organization is a demanding task
• Slide number: 6-6

Two Ways Quality Improves Profitability

• Improved Quality: Sales Gains via improved response, flexible pricing, improved reputation
• Reduced Costs via increased productivity, lower rework and scrap costs, lower warranty costs
• Figure 6.1
• Slide number: 6-7

The Flow of Activities

• Organizational Practices: Leadership, Mission Statement, Effective Operating Procedures, Staff Support, Training
• Quality Principles: Customer Focus, Continuous Improvement, Benchmarking, Just-in-Time, Tools of TQM
• Employee Fulfillment: Employee Motivation, Empowerment, Organizational Commitment
• Customer Satisfaction: Winning Orders, Repeat Customers
• Figure 6.2
• Slide number: 6-8

Defining Quality

• An operation manager's objective is to build a total quality management system that identifies and satisfies customer needs
• Slide number: 6-9

Defining Quality

• The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs
• Understanding customer needs is fundamental for effective management.
• Implied needs are those that are not explicitly communicated by customers.
• Slide number: 6-10

Different Views of Quality

• User-based: Better performance, more features
• Manufacturing-based: Conformance to standards, making it right the first time
• Product-based: Specific and measurable attributes of the product
• Slide number: 6-11

Determinants of Product Quality

• Performance: Primary operating characteristic
• Features: Secondary aspect of performance
• Reliability: Probability of malfunctioning
• Conformance: Meeting standards/specifications
• Durability: Product life
• Serviceability: Speed, ease of repair
• Aesthetics: Product looks, feels, etc.
• Perceived quality: Reputation, images

Determinants of Service Quality

• Consistency of Performance and Dependability
• Responsiveness: Employee willingness to provide service
• Competence: Possession of skills and knowledge
• Access: Approachability, ease of contact
• Courtesy: Politeness, respect, consideration
• Communication: Keeping customers informed, listening
• Credibility: Trustworthiness, honesty
• Security: Freedom from danger, risk, or doubt
• Understanding the customer: Understanding customer needs
• Tangibles: Physical evidence of the service

Outline (Bechtel Group)

• Global Company Profile: Bechtel Group
• The Importance of Project Management
• Project Planning
• Project Scheduling
• Project Controlling
• Project Management Techniques: CPM
• Determining the Project Schedule
• Slide number: 3-2

Critical Path and Slack Times for Milwaukee Paper

• This figure displays a project network diagram with estimated time values for each activity.
• List of paths: A-C-F-H, A-C-E-G-H, A-D-G-H, B-D-G-H
• Critical path: A-C-E-G-H
• Figure 3.16
• Slide number: 3-66

Implications of Quality

• Company reputation: perception of new products, employment practices, supplier relations
• Product liability: reduce risk
• Global implications: improved ability to compete
• Slide number: 6-14

Malcolm Baldrige National Quality Award

• Established in 1988 by the US government
• Designed to promote TQM practices
• Any type of organization can apply for assessment
• Slide number: 6-15

Baldrige Criteria

• Evaluated on: Leadership, Strategic Planning, Customer Focus, Measurement, Analysis, and Knowledge Management, Workforce Focus, Operations Focus, Results
• Factors used by US Government
• Points for each category: Leadership (120), Strategic Planning (85), Customer Focus (85), Measurement, Analysis, and Knowledge Management (90), Workforce Focus (85), Operations Focus (85), Results (450)
• Categories used: 1. Leadership (120), 2. Strategic Planning (85), 3. Customer Focus (85), 4. Measurement, Analysis, and Knowledge Management (90), 5. Workforce Focus (85), 6. Operations Focus (85), 7. Results (450)

ISO 9000 International Quality Management System Standards

• Recognizes standards, encourages detailed procedures, documentation, and recordkeeping.
• 2015 revision emphasizes risk-based thinking.
• Over 1.6 million certifications in many countries.
• Important for global business
• Slide number: 6-17

ISO 9000: Quality Management System

• Quality Management Principles (QMP) -QMP1 – Customer Focus -QMP2 – Leadership -QMP3 – Engagement of People -QMP4 – Process Approach -QMP5 - Improvement -QMP6 – Evidence-based Decision Making -QMP7 – Relationship Management
• Slide number: 6-18

A Comparison Between Baldrige Award and ISO 9000

• Comparing Baldrige Award criteria and ISO 9001 QMP
• Slide number: 6-19

ISO 9000: Family of Standards

• ISO 9000:2015 Quality Management Systems Fundamentals and Vocabulary
• ISO 9001:2015 Quality Management Systems Requirements
• ISO 9004:2018 Quality Management, guidance for achieving sustained success
• ISO 19011:2018 Guidelines for auditing managment systems

ISO 9001: Quality Management Systems - Requirements

• ISO 9001:1987, ISO 9001:1994, ISO 9001:2000, ISO 9001:2008, ISO 9001:2015 (current edition)
• Focus on conforming to procedures rather than on management process; variety reduction
• Risk-based thinking, emphasis on leadership, and increased flexibility
• Slide number: 6-21

ISO 9001: Quality Management Systems - Requirements

• Consisting of 11 clauses
• Clauses: Introduction, Scope, References, Terms and Definitions, Context of the organization, Leadership, Planning for the QMS, Support, Operational Planning and Control, Performance evaluation, Improvement
• Slide number: 6-22

Costs of Quality

• Prevention costs: Reducing potential defects (training, design, maintenance costs)
• Appraisal costs: Evaluating products, parts, and services (testing, inspecting, calibrating costs)
• Internal failure costs: Producing defective parts before delivery (repair, rework, downgrade costs)
• External failure costs: Defects discovered after delivery (replacement, warranty, lawsuit)
• Slide number: 6-23

Costs of Quality

• Prevention Costs
• Appraisal Costs
• Failure Costs (Internal & External).
• In a cost of quality graph, the prevention and appraisal costs go down as variation increases.
• Slide Number: 6-24

Leaders in Quality

• W. Edwards Deming: Management accepting responsibility for building good systems. 14 points for implementing quality improvment
• Joseph M. Juran: Top-management commitment, support, and involvement; Teams that continually seek to raise standards; Define quality as fitness for use, not written specifications

Leaders in Quality

• Armand Feigenbaum: Total Quality Control, integrated processes, learning from each other's successes.
• Philip B. Crosby: Quality Is Free, Cost of poor quality is understated, zero defects
• Slide number: 6-25, 6-26, 6-27

Deming's Fourteen Points

• Consistency of purpose, Promote Change, Building quality into product, long-term relationships, continuous improvement, training, emphasize leadership
• Drive out fear, breakdown barriers, stop haranguing workers, support, work without rating, education & improvement, transformation
• Slide number: 6-28, 6-29

Ethics and Quality Management

• Operations managers must deliver healthy, safe, quality products and services
• Poor quality risks (injuries, lawsuits, recalls, violations)
• Ethical conduct must dictate response and actions
• All stakeholders must be considered
• Slide number: 6-30

Total Quality Management

• Encompasses entire organization from supplier to customer
• Stresses a commitment by management to have a continuous companywide drive toward excellence in all aspects of products and services that are important to the customer
• Slide number: 6-31

Related Concepts of TQM

• Continuous improvement
• Six Sigma
• Employee empowerment
• Benchmarking
• Just-in-time (JIT)
• Knowledge of TQM tools (logical order: big picture, data collection, data analysis, problem identification, prioritization)

Continuous Improvement

• Never-ending process of improvement
• Covers people, equipment, suppliers, materials, and procedures.
• Every operation can be improved.

Shewhart's PDCA Model (Plan-Do-Check-Act)

• Plan: Identify the pattern; make a plan.
• Do: Test the plan.
• Check: Is the plan working?
• Act: Implement the plan; document
• Figure 6.3
• Slide number: 6-34

Continuous Improvement (Kaizen)

• Ongoing process of unending improvement (incremental quality improvement)
• TQM and zero defects used to describe continuous improvement.
• “Kaizen” in Japanese.

Quality Improvement: Kaizen, Kaikaku, Kakushin

• Kaizen: Incremental Improvement
• Kaikaku: Breakthrough Improvement
• Kakushin: Transformational Innovation

Pareto Charts

• Graph plotting problems or defects in descending frequency order
• 80-20 Rule: Roughly 80% of effects come from 20% of causes.
• Slide number: 6-79, 6-80, 6-81

Inspection

• Examining items to determine if they are good or defective
• Detecting defective products does not correct process or product deficiencies. Inspection is expensive.
• Issues: When to inspect, where in the process to inspect.

When and Where to Inspect

• Supplier's plant
• Facility upon receipt
• Before costly processes
• During production steps
• After production/service completion
• Before delivery to the customer
• Point of customer contact

When and Where to Inspect (Samsung Smartphone example)

• Durability, Visual Inspection, X-ray, Charge & Discharge, Organic Pollution, Disassembling, Accelerated Usage, Volatility

Inspection

• Problems: Work fatigue, measurement errors, process variability.
• Better solutions: Robust design, empowered employees, processes.

Source Inspection

• Techniques to reduce inspection: Source control (Poka-yoke)
• Next step: Customer. Ensure perfect product.

Poka-Yoke

• Foolproof devices or techniques
• Pass only acceptable products
• Use tools to detect human error

Poka-Yoke in Process Design

• Concept in total quality management
• Restricting errors at the beginning (cradle) (mistake-proofing or fail-safe)
• Elimination (eliminate); Replacement (replace with error-proofing); Facilitation (easier action)

Source Inspection: Checklists

• Checklists ensure consistency and completeness.

Service Industry Inspection

• Examples of inspection in services: Alaska Airlines, Jones Law Office, Hard Rock Hotel, Arnold Palmer Hospital, Olive Garden Restaurant, and Nordstrom Department Store.
• Specific areas/tasks inspected and standards for each organization.

TQM in Services

• Service quality is more difficult to measure than the quality of goods.
• Intangible differences between products and intangible expectations.

Service Quality

• Tangible component of services is important.
• Service process is important.
• Services judged against customer expectations.
• Exceptions will occur.

Service Specifications (Alaska Airlines example)

• Aircraft boarding, flight attendants, baggage, cargo, on-board check-in, final load closeout, doors closed

Service Recovery Strategy

• Have a plan for when services fail (Marriott's LEARN): Listen, Empathize, Apologize, React, Notify.

Cause-and-Effect Diagrams

• Tools for identifying process elements (causes) that may affect an outcome. (Fishbone Diagram)

Pareto Charts

• 80/20 rule (roughly 80% of effects from 20% of causes)