Quality Management PDF

Quality Management © 2014 Pearson Education 6-1  Quality and Strategy An operations manager’s objective is to build a total quality management system that identifies and satisfies customer needs © 2014 Pearson Education...

Quality Management © 2014 Pearson Education 6-1  Quality and Strategy An operations manager’s objective is to build a total quality management system that identifies and satisfies customer needs © 2014 Pearson Education 6-2  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 © 2014 Pearson Education 6-3  Two Ways Quality Improves Profitability Sales Gains via  Improved response  Flexible pricing  Improved reputation Improved Increased Quality Profits Reduced Costs via  Increased productivity  Lower rework and scrap costs  Lower warranty costs © 2014 Pearson Education 6-4  Defining Quality The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs American Society for Quality © 2014 Pearson Education 6-5  Different Views  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 © 2014 Pearson Education 6-6  Key Dimensions of Quality  Performance  Durability  Features  Serviceability  Reliability  visuals  Conformance  Perceived quality  Value © 2014 Pearson Education 6-7  Costs of Quality ► Appraisal costs - evaluating products, parts, and services ► Prevention costs - reducing the potential for defects ► Internal failure costs - producing defective parts or service before delivery ► External failure costs - defects discovered after delivery © 2014 Pearson Education 6-8  Costs of Quality Total Total Cost Cost External Failure Internal Failure Prevention Appraisal Quality Improvement © 2014 Pearson Education 6-9  Total Quality Management ► Encompasses entire organization from supplier to customer ► Stresses a commitment by management to have a continuing companywide drive toward excellence in all aspects of products and services that are important to the customer © 2014 Pearson Education 6 - 10  Seven Concepts of TQM 1. Continuous improvement 2. Six Sigma 3. Employee empowerment 4. Benchmarking 5. Just-in-time (JIT) 6. Taguchi concepts 7. Knowledge of TQM tools © 2014 Pearson Education 6 - 11  1- Continuous Improvement  Represents continual improvement of all processes  Involves all operations and work centers including suppliers and customers  People, Equipment, Materials, Procedures © 2014 Pearson Education 6 - 12  Shewhart’s PDCA Model 4. Act 1.Plan Implement Identify the the plan pattern and document make a plan 3. Check 2. Do Is the plan Test the working? plan © 2014 Pearson Education 6 - 13  2- Six Sigma  Two meanings  Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)  A program designed to reduce defects, lower costs, and improve customer satisfaction © 2014 Pearson Education 6 - 14  Six Sigma Lower limits Upper limits 3.4 defects/million 2,700 defects/million Mean ±6 ±3 Figure 6.4 © 2014 Pearson Education 6 - 15  Six Sigma Program  Originally developed by Motorola, adopted and enhanced by Honeywell and GE  Highly structured approach to process improvement  A strategy  A discipline - DMAIC 6 © 2014 Pearson Education 6 - 16  Six Sigma 1. Define critical outputs and identify gaps for improvement DMAIC Approach 2. Measure the work and collect process data 3. Analyze the data 4. Improve the process 5. Control the new process to make sure new performance is maintained © 2014 Pearson Education 6 - 17  Six Sigma Implementation  Emphasize defects per million opportunities as a standard metric  Provide extensive training  Focus on corporate sponsor support (Champions)  Create qualified process improvement experts (Black Belts, Green Belts, etc.)  Set stretch objectives This cannot be accomplished without a major commitment from top level management © 2014 Pearson Education © 2011 Pearson Education, Inc. publishing 6 - 18 as Prentice Hall  3. Employee Empowerment ► Getting employees involved in product and process improvements ► 85% of quality problems are due to process and material ► Techniques 1) Build communication networks that include employees 2) Develop open, supportive supervisors 3) Move responsibility to employees 4) Build a high-morale organization 5) Create formal team structures © 2014 Pearson Education 6 - 19  Quality Circles ► Group of employees who meet regularly to solve problems ► Trained in planning, problem solving, and statistical methods ► Often led by a facilitator ► Very effective when done properly © 2014 Pearson Education 6 - 20  4- Benchmarking Selecting best practices to use as a standard for performance 1. Determine what to benchmark 2. Form a benchmark team 3. Identify benchmarking partners 4. Collect and analyze benchmarking information 5. Take action to match or exceed the benchmark © 2014 Pearson Education 6 - 21  5- Just-in-Time (JIT) Relationship to quality:  JIT cuts the cost of quality  JIT improves quality  Better quality means less inventory and better, easier-to- employ JIT system © 2014 Pearson Education 6 - 22  6- Taguchi Concepts  Engineering and experimental design methods to improve product and process design  Identify key component and process variables affecting product variation  Taguchi Concepts  Quality robustness  Quality loss function  Target-oriented quality © 2014 Pearson Education 6 - 23  7. TQM Tools ► 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 © 2014 Pearson Education 6 - 24  Seven Tools of TQM (a) Check Sheet: An organized method of recording data Hour Defect 1 2 3 4 5 6 7 8 A /// / / / / /// / B // / / / // /// C / // // //// © 2014 Pearson Education 6 - 25  Seven Tools of TQM (b) Scatter Diagram: A graph of the value of one variable vs. another variable Productivity Absenteeism © 2014 Pearson Education 6 - 26  Seven Tools of TQM (c) Cause-and-Effect Diagram (fishbone): A tool that identifies process elements (causes) that might effect an outcome Cause Materials Methods Effect Manpower Machinery © 2014 Pearson Education 6 - 27  Seven Tools of TQM (d) Pareto Chart: A graph to identify and plot problems or defects in descending order of frequency Frequency Percent A B C D E © 2014 Pearson Education 6 - 28  Seven Tools of TQM (e) Flowchart (Process Diagram): A chart that describes the steps in a process © 2014 Pearson Education 6 - 29  Seven Tools of TQM (f) Histogram: A distribution showing the frequency of occurrences of a variable Distribution Frequency Repair time (minutes) © 2014 Pearson Education 6 - 30  Seven Tools of TQM (g) Statistical Process Control Chart: A chart with time on the horizontal axis to plot values of a statistic Upper control limit Target value Lower control limit Time © 2014 Pearson Education 6 - 31  Control Charts 40% Upper control limit 20% Coach’s target value 0% | | | | | | | | | Lower control limit 1 2 3 4 5 6 7 8 9 Game number © 2014 Pearson Education 6 - 32  TQM In Services  Service quality is more difficult to measure than the quality of goods  Service quality perceptions depend on  Intangible differences between products  Intangible expectations customers have of those products © 2014 Pearson Education 6 - 33  The End © 2014 Pearson Education 6 - 34