Quality Management Lecture 6.

1. Quality Management Lecture 6. Quality of Products and Services

2. Concept of quality 1 • Totality of features and characteristics of a product or service that bears upon its ability to satisfy stated or implied needs. • These needs can be • Objective (determined in contracts, or in standards) – easy to measure • Subjective (usefulness) – it belongs to the custemer • What could be an objective and a subjective measure for the quality of a book? • Book jacket • Quality of the paper • publisher • Author • contents

3. Concept of quality 2 • Nowadays it has a strategic definition, because it not just mean the quality of a product, but it : „It is a basic business strategy, which means that products and services should totally meet both internal and external customers stated and latent needs. • Quality is defined as meeting customers requirements

4. 5 Approaches to Defining Quality – Garvin 1 • The Transcendent Approach: a quality cannot be defined precisely, we learn to recognize it only through experience • Innate excellence • Pictures of Picasso:

5. 5 Approaches to Defining Quality - Garvin 2 • The Product-based Approach: quality is precise and measurable variable, products can be ranked – quality products have more attributes (computer with more memory)

6. 5 Approaches to Defining Quality - Garvin 3 • The Manufacturing-based Approach: products or services meet stated requirements, • Manufacturing and engineering practise - Quality is measured by the manufacturer’s ability to target the requirements consistently with little variability

7. 5 Approaches to Defining Quality - Garvin 4 • The User-based Approach: quality of a product is determined by the consumer. There is widely varying individual preferences;

8. 5 Approaches to Defining Quality - Garvin 5 • The Value-based Approach: quality is defined in costs and prices. How much is the benefit of the good or servce outweigh the cost? • Did the costumer get his or her money’s worth?

9. Quality of Products

10. Quality of design – determined before the product is produced, to meet costumers’ needs • Quality of conformance – producing a product to meet qualifications. • The abilities: • Availability – continuity of a service to the customer Availability=uptime/(uptime+downtime) • Reliability – the length of time that a product can be used before it fails - MTBF • Maintainability – restoration of a product to service once it has failed – MTTR Availability=MTBF/(MTBF+MTTR) • Field service or customer service – warrenty and repair or replacement of a produt after it has been sold

11. 8 Dimensions of product quality - Garvin • Performance – refers to a products’ primary operating characteristics • Features – „bells and whistles” added to a products • Reliability – probability that the product will not fail in a specific period of time (MTPF – mean time between failure) • Conformance – the degree to which a product or service meets its specifications • Durability – a measure of the product life • Serviceability – this is the speed, the competence and easy of repair • Aesthetics – how the product looks, feels, sounds, tastes and smells. This is clearly a matter of personal judgment • Perceived quality – images, advertising, and brand names can be critical to give information about the product quality

12. Quality cycle Customer Specifies quality needs Marketing Interprets Customer needs Works with Customer to design product to fit operations Engineering Defines design concept Prepares specifications Defines quality characteristics Operations Produces the product or service Quality Control Plans and monitors quality

13. Quality of Services

14. HIPI priciples • Heterogenity (variability in the quality of service because services are provided by people, and people perform inconsistently) • Intangibility (there is no specimen ) • Perishability (vary in demand can occure difficulty in supply) • Inseparability (good service can’t be separated from bad service)

15. SERQUAL - quality dimensions of services • Reliability - service is performed with high accuracy and thoroughness • Responsiveness - the willingness of employees to provide the service and how fats the service is provided • Competence - possession of required skills, and knowledge • Access - approachability and ease of contact • Courtesy -comprises politeness, respect, friendliness • Communication - informing the customers in an understandable way and listening to them • Credibility - trustworthiness and honesty • Security - physical and financial safety • Understanding the customer - steps to know customer better • Tangibles - all physical products that are involved in service delivery

16. RATER model • Reliability • Assurance – Involves knowledge and courtesy of employees and their ability to inspire trust and confidence • Tangibles – • Empathy – Which is caring, individualized or customized attention the organization provides its customers • Responsiveness It is an efficient model in helping an organization shape up their efforts in bridging the gap between perceived and expected service.

17. GAP model • GAP 1 (Knowledge Gap) – the difference between guest’s expectation and management perceptions of those expectations, i. e. not knowing what consumer expect • GAP 2 (Standards Gap) – difference between managements perceptions of guest’s expectations and service quality specifications, i.e. improper service quality standards • GAP 3 (Delivery Gap) – difference between service quality specifications and service actually delivered, i.e. the service performance gap • GAP 4 (Communication Gap) – difference between service delivery and the communications to the guests about service delivery, i.e. whether promised match delivery? • GAP 5 (Overall Gap) – the difference between guests expectation and perceieved service.

19. Developing of Quality Systems

20. Quality Check (QCh) • Method: testing product at the end of a process, compare with stated specifications • It regards to products • Goals: detecting defections, a separate refuse • Result: prevent refuse from moving to another step of production

21. Statistical Qualty Control (SQC) • Goals: ensure that mistakes can not arise again • It regards to processes • Method: continuous improvement of processes: PDCA cycle – Plan, Do, Check, Act • Results: prevent mistakes from arising again,

22. Quality Management System (QMS) • Goals: ensure that mistakes can not arise at all • It regards to the whole system: organization, processes, resources, • Method: regular audits, when compare the whole system with specifications stated in documentations • Results: the product and operation are optimized to the customers’ requirements (the best possible soultion)

23. Total Quality Management - TQM • Management approach for an organization • General Principles of TQM: • Customer Focus: both actions and functions are designed and performed with the aim os meeting the needs of customers, this will ensure long-term success • Continouos process improvement • Commitment and personnel involvement: employees assume responsibilities to achive quality accomplishing their task, and actively take part in the process of continuous improvement.

24. International Standardization Organization - ISO • ISO 9000 is a family of standards for quality management systems. • In 1994, 2000 and 2008 the rules are updated, as the requirements motivate changes over time. • It can be audited by internal or external experts. • Under the 1994 version, the question was broadly "Are you doing what the manual says you should be doing?", whereas under the 2000 version, the question is more "Will this process help you achieve your stated objectives? Is it a good process or is there a way to do it better?"

25. Cost of quality

26. Control Costs (CC) • related to the activities which remove defects from the production stream. • Prevention: include activities such as quality planning, new-product reviews, training, engineering analysis. These activities prevent defects before they occure. • Appraisal: eliminating deffects after they occure but before the product reach the customer

27. Failure Costs (FC) • internal faliure cost incurres during the production process. Include rework, quality downgradeing, machine downtime • external failure cost incurres after the product is shipped. Includes warranty charges, returned goods, allowances. • TC=CC+FC=PC+AC+IFC+EFC

28. Total Cost cost Total cost Cost of failures Minimum cost Cost of control Number of defects produced

29. Excercise • Cost of failure: F=1500+40X • Cost of control C=3080/X X-percent defective What is the minimum cost of quality, and the optimal percent deffective?

30. Solution • TC=FC+CC= 1500+40X+3080/X • TC/dX=40-3080/X2=0 • 40X2=3080 • X2=77 • X=8,77 • TCmin=2202 F(x)=xn F(x)/dx=n*x(n-1)

31. Seminar - Excercise

32. Scaling Procedure Based on the Method of Paired Comparsion • Attributes of products are not equally important for customers • We have to discover the rank of these features and thus we can focuse on the main needs of customers.

33. Exercise • Coffee: • Hot (I1) • Milky (I2) • Sweet (I3) • Strenght (I4) • Create pairs (1-2; 4-1; 3-2; 1-3;2-4; 3-4;) • Rank them randomly or use Ross-method • Compare them, underline the preferred item

34. Create Preference Matrix – this contains preferences. Both in the rows and in the cols the dimensons are presented. When someone prefer item in row to item in col there is 1, otherwise 0. • In the last col there is the sum of the value being in the row. This means how often the row item was preferred to the others.

35. Consistency test • There are 3 item: A, B, C • If A>B and B>C then A>C • When decision maker is not consistent then this statement is not true. • Consistency coeeficient: • Where dmax is the maximum number of incosistent decisions • If n is odd number • If n is even number:

36. Example • dmax=(27-3)/24=1 • d=4(4-1)(8-1)/12-(4+4+4)/2=7-6=1 • K=1-1/1=0% • This is an inconsistent decision maker. • The decision maker consistent when K>85%

37. Creation of weighted number • Preference fraction: Where „m” is the number of decision makers. To get the weighted number we have to transform Pa value into a normal distribution or simply calculate the percentage value of it. if m=14

38. Totalized preference matrix

39. Kedall coefficient of concordance (W) • Rj is the sum of the colums in the totalized preference matrix • is the mean of Rj-s • Δ is the squared distance • m is the number of decision maker • n is the number of items

40. Meaning of the Kendall Coefficient • Kendall's coefficient of concordance is used traditionally in statistics for measuring agreement between k orderings. • If it is 1 there is total concordance. • If it is 0 there is no concordance at all. But it even occure in that case when there is two group of decision maker with opposite oppinion. Then cluster analyize should be used to discover the groups.

41. Thank You for Attention