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Management of Quality

Management of Quality. Chapter 9 PP. 233-270 June 27, 2012. Learning objectives. LO 1 – define the term quality LO 2 – understand the evolution of quality management LO 3 – be familiar with most common quality tools LO 4 – understand the cost of quality. What is Quality?.

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Management of Quality

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  1. Management of Quality Chapter 9 PP. 233-270 June 27, 2012

  2. Learning objectives • LO 1 – define the term quality • LO 2 – understand the evolution of quality management • LO 3 – be familiar with most common quality tools • LO 4 – understand the cost of quality

  3. What is Quality? • Oxford American Dictionary • a degree or level of excellence • American Society for Quality • the totality of features and characteristics that satisfy needs without deficiencies

  4. What is Quality? • Consumer’s perspective • Fitness for use • Quality of design

  5. What is Quality? • Manufacturer’s perspective • Performance • mpg • Features • Sirrius, OnStar • Reliability • Expected life time • Conformance • Meets standards

  6. What is Quality? • Manufacturer’s perspective • Durability • LL Bean boots • Serviceability • Repair “experience” • Aesthetics • looks • Safety • customers • Perceptions • Brand and image

  7. What is Quality? • Service’s perspective • Time and timeliness • When customer wants it • Completeness • Dell • Courtesy • Shown customers • Consistency • Accessibility and convenience • Accuracy • Responsiveness

  8. What is Quality? • Service’s perspective • Consistency • McDonalds • Accessibility and convenience • Return calls • Sears!!!! • Accuracy • First time, every time • Responsiveness • To your satisfaction?

  9. What is Quality • At the end of the day…… • Customer’s and producer’s perspectives depend on each other • Producer’s perspective: • production process and COST • Customer’s perspective: • fitness for use and PRICE • Customer’s view must dominate

  10. The Gurus • Deming • Quality up, costs up • Quality down, costs down • Quality up, costs down

  11. The Gurus • Deming • Open system • Focus on quality • less waste • rework • lower turnover • greater customer loyalty • Focus on costs • quality declines • opposite of above

  12. The Gurus • 14 Principles • #3: “quality at the source” • 7 Deadly sins • Lack of constancy of purpose • Emphasis on short-term profits • Performance reviews, merit rating, etc • Mobility of management • Running a company on visible figures alone • Excessive medical costs • Excessive costs of warranty

  13. The Deming (PDCA) Cycle

  14. Quality Tools • Process flow chart

  15. Quality Tools • Process flow chart • Check sheet • Histogram • Pareto analysis

  16. Quality Tools - Pareto Analysis

  17. Quality Tools • Process flow chart • Check sheet • Histogram • Pareto analysis • Scatter diagram • Process control chart

  18. Quality Tools – Control Chart 17 2

  19. Quality Tools • Process flow chart • Check sheet • Histogram • Pareto analysis • Scatter diagram • Process control chart • Fishbone (“cause and effect”)

  20. Quality Tools – Fishbone

  21. Quality Awards • Baldrige Award • http://www.youtube.com/watch?v=Ng8YrYiI8Vk

  22. Quality Certification • ISO 9000 • ISO 14000 • ISO 24700 • ISO 26000

  23. Six Sigma • measurement-based strategy for process improvement and variation reduction • Focus on: • improving existing system • developing new processes or products at Six Sigma quality levels. • $230,000 savings per project • 4-6 projects per year. • General Electric $10 billion during the first fivea.

  24. Six Sigma Projects • Large chemical site had significant losses due to power outages • Large number of changes from client after approving engineering design • Amount of product out of spec and being automatically removed is high • Sharp differences in sales performance of people?

  25. Variation in Sales Performance • Define: Why is there such a difference is the sales performance of people? • Measure: Top people have 10X volume of the bottom 25%. • Failure to meet sales quotas is a defect.

  26. Variation in Sales Performance • Analyze: Education, training, time in job, product line, sales area, profiles. • Improve: Able to identify by profile 72% of the top sales people. • Use this tool to select new people into this function. • Control: Use profiles for new hires and continue to monitor performance levels.

  27. Six Sigma

  28. Why bother??? • cost of doing things right • 3 to 4% of revenues • cost of doing things wrong • 20 to 35% of revenues • And then there’s this……… • http://www.youtube.com/watch?v=7rUQbTsc_ms

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