Ch 6-Managing Quality

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
Two Ways Quality Improves Profitability

The Flow of Activities

 Defining Quality

► An operations manager’s objective is to build a total quality management system that identifies and satisfies
customer needs
► The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or
implied needs

Different Views

1. User based: better performance, more features

2. Manufacturing based: conformance to standards, making it right the first time
3. Product based: specific and measurable attributes of the product
Implications of Quality

1. Company reputation : Perception of new products - Employment practices -Supplier relations

2. Product liability - Reduce risk
3. Global implications - Improved ability to compete

Malcolm Baldrige National Quality Award

► Established in 1988 by the U.S. government

► Designed to promote TQM practices
► Recent winners include.
Baldrige Criteria -Applicants are evaluated on:

Leadership, Strategic Planning, Recent winners include. , Customer Focus , Measurement, Analysis, and Knowledge
Management , Workforce Focus , Operations Focus , Results

ISO 9000 International Quality Standards

► International recognition
► Encourages quality management procedures, detailed documentation, work instructions, and recordkeeping
► 2015 revision gives greater emphasis to risk-based thinking
► Over one million certifications in 206 countries
► Critical for global business.
► Management principles
1) Top management leadership
2) Customer satisfaction
3) Continual improvement
4) Involvement of people
5) Process analysis
6) Use of data-driven decision making
7) A systems approach to management
8) Mutually beneficial supplier relationships

Costs of Quality

► . Prevention costs - reducing the potential for defects

► Appraisal costs - evaluating products, parts, and services
► Internal failure costs - producing defective parts or service before delivery
► External failure costs - defects discovered after delivery

Takumi

A Japanese character that symbolizes a broader dimension than quality, a deeper process than education, and a
more perfect method than persistence

Leaders in Quality

TABLE 6.1 Leaders in the Field of Quality Management

LEADER PHILOSOPHY/CONTRIBUTION
W. Edwards Deming Deming insisted management accept responsibility for building good systems. The
employee cannot produce products that on average exceed the quality of what the
process is capable of producing. His 14 points for implementing quality improvement are
presented in this chapter.
Joseph M. Juran A pioneer in teaching the Japanese how to improve quality, Juran believed strongly in top-
management commitment, support, and involvement in the quality effort. He was also a
believer in teams that continually seek to raise quality standards. Juran varies from
Deming somewhat in focusing on the customer and defining quality as fitness for use, not
necessarily the written specifications.
Armand Feigenbaum His 1961 book Total Quality Control laid out 40 steps to quality improvement processes.
He viewed quality not as a set of tools but as a total field that integrated the processes of
a company. His work in how people learn from each other’s successes led to the field of
cross-functional teamwork.
Philip B. Crosby Quality Is Free was Crosby’s attention-getting book published in 1979. Crosby believed
that in the traditional trade-off between the cost of improving quality and the cost of poor
quality, the cost of poor quality is understated. The cost of poor quality should include all
of the things that are involved in not doing the job right the first time. Crosby coined the
term zero defects and stated, “There is absolutely no reason for having errors or defects in
any product or service.”

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

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

1-Continuous Improvement

► Never-ending process of continuous improvement

► Covers people, equipment, suppliers, materials, procedures
► Every operation can be improved
► Kaizen describes the ongoing process of unending improvement
► TQM and zero defects also used to describe continuous improvement

Shewhart's PDCA Model

2-Six Sigma

► Two meanings
► Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)
► program designed to reduce defects, lower costs, save time, and improve customer satisfaction
► A comprehensive system for achieving and sustaining business success

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
► A set of 7 tools

DMAIC Approach
1. Defines the project’s purpose, scope, and outputs, then identifies the required process information keeping in
mind the customer’s definition of quality

2. Measures the process and collects data

3. Analyzes the data ensuring repeatability and reproducibility
4. Improves by modifying or redesigning existing processes and procedures
5. Controls the new process to make sure performance levels are maintained

Implementing Six Sigma

► Emphasize defects per million opportunities as a standard metric
► Provide extensive training
► Focus on top management leadership (Champion)
► 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

3-Employee Empowerment

► Getting employees involved in product and process improvements

► 85% of quality problems are due to materials and process
► 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

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

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

Internal Benchmarking
▶ When the organization is large enough
▶ Data more accessible
▶ Can and should be established in a variety of areas
5-Just-in-Time (JIT)

► Pull' system of production scheduling including supply management

► Production only when signaled
► Allows reduced inventory levels
► Inventory costs money and hides process and material problems
► Encourages improved process and product quality

Relationship to quality:
► JIT cuts the cost of quality
► JIT improves quality
► Better quality means less inventory and better, easier-to-employ JIT system
 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 Target-oriented quality Quality loss function

Quality Robustness
► Ability to produce products uniformly in adverse manufacturing and environmental conditions
► Remove the effects of adverse conditions
► Small variations in materials and process do not destroy product quality

Quality Loss Function

► Shows that costs increase as the product moves away from what the customer wants
► Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society
► Traditional conformance specifications are too simplistic
 7-TQM Tools

1-Tools for Generating Ideas

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

Seven Tools of TQM

1-Check Sheet: An organized method of recording data

2-Scatter Diagram: A graph of the value of one variable vs. another variable y = bx+a

3-Cause-and-Effect Diagram: A tool that identifies process elements (causes) that may effect an outcome
4-Pareto Chart: A graph to identify and plot problems or defects in descending order of frequency

5-Flowchart (Process Diagram): A chart that describes the steps in a process

6-Histogram: A distribution showing the frequency of occurrences of a variable

7-Statistical Process Control Chart: A chart with time on the horizontal axis to plot values of a statistic
Statistical Process Control (SPC)
► Uses statistics and control charts to tell when to take corrective action
► Drives process improvement
► Four key steps
1. Measure the process
2. When a change is indicated, find the assignable cause
3. Eliminate or incorporate the cause
4. Restart the revised process

Inspection

► Involves examining items to see if an item is good or defective

► Detect a defective product
► Does not correct deficiencies in process or product
► It is expensive
► Issues
► When to inspect
► Where in process to inspect
►
When and Where to Inspect
1. At the supplier’s plant while the supplier is producing
2. At your facility upon receipt of goods from your supplier
3. Before costly or irreversible processes
4. During the step-by-step production process
5. When production or service is complete
6. Before delivery to your customer
7. At the point of customer contact

► Many problems
► Worker fatigue
► Measurement error
► Process variability
► Cannot inspect quality into a product
► Robust design, empowered employees, and sound processes are better solutions

Source Inspection
► Also known as source control
► The next step in the process is your customer
► Ensure perfect product to your customer
► Poka-yoke is the concept of foolproof devices or techniques designed to pass only acceptable products
► Checklists ensure consistency and completeness
 Attributes Versus Variables

► Attributes
► Items are either good or bad, acceptable or unacceptable
► Does not address degree of failure
► Variables
► Measures dimensions such as weight, speed, height, or strength
► Falls within an acceptable range
► Use different statistical techniques

TQM In Services

► Service quality is more difficult to measure than the quality of goods

► Service quality perceptions depend on
1) Intangible differences between products
2) Intangible expectations customers have of those products
Service Quality

The operations manager must recognize:

► The tangible component of services is important
► The service process is important
► The service is judged against the customer’s expectations
► Exceptions will occur

Service Recovery Strategy

► Managers should have a plan for when services fail

► Marriott's LEARN routine
► Listen
► Empathize
► Apologize
► React
► Notify
Deming's 14 Points for Implementing Quality Improvement 4 ‫حفظ‬
1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop depending on inspections to catch problems
4. Build long-term relationships based on performance instead of awarding business on price
5. Continuously improve product, quality, and service
6. Start training
7. Emphasize leadership
8. Drive out fear
9. Break down barriers between departments
10. Stop haranguing workers
11. Support, help, and improve
12. Remove barriers to pride in work
13. Institute a vigorous program of education and self-improvement
14. Put everyone in the company to work on the transformation
JORY Almohammdi.…Good luck