Managing Quality

1. Managing Quality

2. What Is “Quality?” We all know what we mean by “quality” Yet it is often difficult to define Sometimes it is easier to use examples to translate the ideas, like metaphors… Example: Name a QUALITY automobile…

5. Definitions of Quality American Society for Quality (ASQ) defines quality as “the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs” We will accept the above as our working definition of quality Once you have introduced these definitions of quality, ask students to provide example of products that use them.Once you have introduced these definitions of quality, ask students to provide example of products that use them.

6. Definitions of Quality (cont.) User-Based: Quality “lies in the eye of the beholder”- quality is what the consumer says it is Manufacturing-Based: Degree to which a product conforms to design specification- “make it right the first time” Product-Based: Level of measurable product characteristic- “a precise and measurable variable”

7. Dimensions of Quality for Goods It may be most helpful to provide, or ask you students to provide, examples of products for which the notion of quality is based upon one or more of the dimensions listed.It may be most helpful to provide, or ask you students to provide, examples of products for which the notion of quality is based upon one or more of the dimensions listed.

8. Importance of Quality This slide simply illustrates the relationships between quality and other elements of the firm.This slide simply illustrates the relationships between quality and other elements of the firm.

9. Named after former Secretary of Commerce Established in 1988 by the U.S. government Designed to promote TQM practices Some criteria: Senior executive leadership Strategic planning Management of process quality Quality results Customer satisfaction Recent winners: Corning Inc., GTE, AT&T, Eastman Chemical, Cadillac, Ritz-Carlton Malcom Baldrige Award You might make the point that companies actually do consider this a prestigious award. For further information, visit the web site: http://www.quality.nist.govYou might make the point that companies actually do consider this a prestigious award. For further information, visit the web site: http://www.quality.nist.gov

10. International Quality Standards Industrial Standard Z8101-1981 (Japan) Specification for TQM ISO 9000 series (Europe/EC) Common quality standards for products sold in Europe (even if made in U.S.) ISO 14000 series (Europe/EC) Standards for recycling, labeling etc. ASQC Q90 series; MILSTD (U.S.) One of the most important points to be made from this slide is that quality standards are now international. Students might be asked to explain the benefits of international as opposed to national standards. They might also be asked to consider the limitations we would face if there were no such standards. The problems to be encountered in developing international standards also make for good discussion. Note to your students that Crosby has great reservations about the standard and the procedures building an effective quality program.One of the most important points to be made from this slide is that quality standards are now international. Students might be asked to explain the benefits of international as opposed to national standards. They might also be asked to consider the limitations we would face if there were no such standards. The problems to be encountered in developing international standards also make for good discussion. Note to your students that Crosby has great reservations about the standard and the procedures building an effective quality program.

11. ISO 14000 series EC environmental standards Core elements: Environmental management Auditing Performance evaluation Labeling Life-cycle assessment

12. Costs of poor quality “are huge, but the amounts are not known with precision. In most companies, the accounting system provides only a minority of the information needed to quantify this cost of poor quality” Joseph Juran on Quality (1992)

13. Philip Crosby on Quality (1980) The cost of quality is "the expense of nonconformance - the cost of doing things wrong"

14. Armand Feigenbaum on Quality The originator of Total Quality Control at MIT (1963) Developed the idea of “quality in source,” that each worker (including white-collar) should be responsible for performing their jobs with perfect quality

15. W. Edwards Deming on Quality Created a new quality philosophy with his 14 principles (1950) emphasizing: Do not sacrifice quality for the short term Production must be stable for quality Use of statistical process controls Kaizen Quality cannot “be inspected into products” Team work Workers must have the right tools Workers can only correct 15% of problems

16. Deming’s Fourteen Points Create consistency of purpose Lead to promote change Build quality into the products Build long term relationships Continuously improve product, quality, and service Start training Emphasize leadership One point to make here is that this list represents a recent expression of Demings 14 points - the list is still evolving. Students may notice that many of these fourteen points seem to be simply common sense. If they raise this issue - ask them to consider jobs they have held. Were these points emphasized or implemented by their employers? If not, why not? This part of the discussion can be used to raise again the issue that proper approaches to quality are not “programs,” with limited involvement and finite duration, but rather philosophies which must become ingrained throughout the organization. One point to make here is that this list represents a recent expression of Demings 14 points - the list is still evolving. Students may notice that many of these fourteen points seem to be simply common sense. If they raise this issue - ask them to consider jobs they have held. Were these points emphasized or implemented by their employers? If not, why not? This part of the discussion can be used to raise again the issue that proper approaches to quality are not “programs,” with limited involvement and finite duration, but rather philosophies which must become ingrained throughout the organization.

17. Deming’s Fourteen Points (cont.) Drive out fear Break down barriers between departments Stop haranguing workers Support, help, improve Remove barriers to pride in work Institute a vigorous program of education and self-improvement Put everybody in the company to work on the transformation

18. Costs of Quality Prevention costs - reducing the potential for defects Appraisal costs - evaluating products Internal failure - of producing defective parts or service External costs - occur after delivery

19. Total Quality Management (TQM) Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing, company-wide, drive toward excellence in all aspects of products and services that are important to the customer A point to be made here is that TQM is not a program but a philosophy.A point to be made here is that TQM is not a program but a philosophy.

20. Flow of Activities to Achieve TQM Organizational Practices This slide simply introduces the four activities. Subsequent slides expand on each.This slide simply introduces the four activities. Subsequent slides expand on each.

21. Organizational Practices Leadership Mission statement Effective operating procedure Staff support Training Yields: What is important and what is to be accomplished One might begin discussion of this slide by introducing the difference between “leadership” and “management.” The point should also be made, again, about the need for involvement and commitment throughout the organization.One might begin discussion of this slide by introducing the difference between “leadership” and “management.” The point should also be made, again, about the need for involvement and commitment throughout the organization.

22. Quality Principles Customer focus Continuous improvement Employee empowerment Benchmarking Just-in-time Tools of TQM Yields: How to do what is important and to be accomplished Some students may find the notion of “continuous improvement” (Why can’t we do it right the first time?) and “employee empowerment” (Doesn’t this reduce or abrogate the role of the manager?) the most difficult to accept. If you have not done so already, this might be a good time to discuss each in some depth. The following slide may be used in a discussion of empowerment.Some students may find the notion of “continuous improvement” (Why can’t we do it right the first time?) and “employee empowerment” (Doesn’t this reduce or abrogate the role of the manager?) the most difficult to accept. If you have not done so already, this might be a good time to discuss each in some depth. The following slide may be used in a discussion of empowerment.

23. Employee Fulfillment Empowerment Organizational commitment Yields: Employees’ attitudes that they can accomplish what is important and to be accomplished This slide can be used to form the basis for a discussion of empowerment. If you wish to discuss empowerment - begin by asking students to define the term. You may find students are already comfortable with the term, in which case the discussion can be rather short; or, you may find they have unrealistic expectations (or desires?) - in which case you may wish to pursue the discussion at greater length. It may be helpful to ask students to identify the benefits and pitfalls to both management and worker. (For example, empowerment requires workers to assume greater responsibility.)This slide can be used to form the basis for a discussion of empowerment. If you wish to discuss empowerment - begin by asking students to define the term. You may find students are already comfortable with the term, in which case the discussion can be rather short; or, you may find they have unrealistic expectations (or desires?) - in which case you may wish to pursue the discussion at greater length. It may be helpful to ask students to identify the benefits and pitfalls to both management and worker. (For example, empowerment requires workers to assume greater responsibility.)

24. Customer Satisfaction Winning orders Repeat customers Yields: An effective organization with a competitive advantage The main point that one might make with this slide is that the customer is, ultimately, the most important person in your business.The main point that one might make with this slide is that the customer is, ultimately, the most important person in your business.

25. Concepts of TQM Continuous improvement Employee empowerment Benchmarking Just-in-time (JIT) Taguchi concepts Knowledge of TQM tools This slide simply introduces concepts of TQM. These concepts are expanded upon in subsequent slides.This slide simply introduces concepts of TQM. These concepts are expanded upon in subsequent slides.

26. Continuous Improvement Represents continual improvement of process & customer satisfaction Involves all operations & work units Kaizen: Students may have a number of questions with respect to the notion of continuous improvement. - Why do we need continuous improvement? Why can’t we do it right the first time? - Doesn’t implementation of continuous improvement introduce a certain instability? - Are we never “done”? - Etc.Students may have a number of questions with respect to the notion of continuous improvement. - Why do we need continuous improvement? Why can’t we do it right the first time? - Doesn’t implementation of continuous improvement introduce a certain instability? - Are we never “done”? - Etc.

27. Shewhart’s PDCA Model

28. Employee Empowerment If you have not done so already, you might at this point discuss: - why employee empowerment works - the role of information technology in enabling employee empowerment - the role of information technology in making employee empowerment a requirementIf you have not done so already, you might at this point discuss: - why employee empowerment works - the role of information technology in enabling employee empowerment - the role of information technology in making employee empowerment a requirement

29. Quality Circles You might discuss: - the benefits and the limitations of quality circles - the impact of quality circles on workers - requirements for quality circles to be successful - implementation of quality circles in the U.S.You might discuss: - the benefits and the limitations of quality circles - the impact of quality circles on workers - requirements for quality circles to be successful - implementation of quality circles in the U.S.

30. Benchmarking Selecting best practices to use as a standard for performance Determine what to benchmark Form a benchmark team Identify benchmarking partners Collect and analyze benchmarking information: Examine everyone who performs similar activities Determine who “does it best” Set the “best” as the standard: the benchmark Take action to match or exceed the benchmark Ask student to identify firms which they believe could serve as benchmarks. If students are unable to identify any firms - ask them to identify a college or university whose registration system or housing selection system could serve as a benchmark. Most students have enough knowledge of, or friends at,other colleges and universities so as to be able to respond to this question.Ask student to identify firms which they believe could serve as benchmarks. If students are unable to identify any firms - ask them to identify a college or university whose registration system or housing selection system could serve as a benchmark. Most students have enough knowledge of, or friends at,other colleges and universities so as to be able to respond to this question.

31. Best Practices in Customer Service Make it easy for clients to complain Respond quickly to complaints Resolve complaints on the first contact Use computers to manage complaints Recruit the best for customer service jobs One might ask students “Given that these suggestions seem to make intuitive sense, why would a company not wish to implement them?”One might ask students “Given that these suggestions seem to make intuitive sense, why would a company not wish to implement them?”

32. Just-in-Time (JIT) Relationship to quality: JIT cuts cost of quality JIT improves quality Better quality means less inventory and better, easier-to-employ JIT system Requires “zero” defects Allows for no underage or overage This slide introduces a discussion about JIT. Subsequent slides elaborate.This slide introduces a discussion about JIT. Subsequent slides elaborate.

33. Just-in-Time (JIT) ‘Pull’ system of production/purchasing Customer starts production with an order Involves ‘vendor partnership programs’ to improve quality of purchased items Reduces all inventory levels Inventory hides process & material problems Improves process & product quality This might be a good time to differentiate between “push”and “pull” systems. Subsequent slides elaborate on the role of JIT and inventory levels in hiding problems. This might be a good time to differentiate between “push”and “pull” systems. Subsequent slides elaborate on the role of JIT and inventory levels in hiding problems.

34. Just-In-Time (JIT) Example

35. Just-In-Time (JIT) Example Note that reducing inventory enables problems to be seen - it does not necessarily fix them.Note that reducing inventory enables problems to be seen - it does not necessarily fix them.

36. Six Major Tools for TQM Quality Function Deployment Taguchi techniques Pareto charts Process charts Cause-and-effect diagrams Statistical process controls This slide simply enables you to introduce the tools of TQM. Particular tools are elaborated upon in subsequent slides.This slide simply enables you to introduce the tools of TQM. Particular tools are elaborated upon in subsequent slides.

37. Quality Function Deployment Determines what will satisfy the customer Translates those customer desires into the target design Allows the company to assess its product offerings in relation to those of its rivals Formal process aids in continuous improvement

38. House of Quality

39. Taguchi Techniques Experimental design methods to improve product & process design Identify key component & process variables affecting product variation Taguchi Concepts Quality robust design Quality loss function Target-oriented quality

40. Ability to produce products uniformly and consistently regardless of adverse manufacturing and environmental conditions Put robustness in House of Quality matrices beside functionality Quality Robustness

41. Shows social cost ($) of deviation from target value Assumptions Most measurable quality characteristics (e.g., length, weight) have a target value Deviations from target value are undesirable Equation: L = D2C L = Loss ($) D = Deviation C = Cost Quality Loss Function One question to pose to your students: “Of what value is the notion of a “social cost?” How might a manager use this in decision making?One question to pose to your students: “Of what value is the notion of a “social cost?” How might a manager use this in decision making?

42. Target-Oriented Quality This slide may help clarify the differences between conformance and target-based quality control.This slide may help clarify the differences between conformance and target-based quality control.

43. Target-Oriented Quality Example This slide probably deserves some discussion. Some students will probably question whether consumers could tell the difference between the two. You should stress that they can tell the difference and that this will have an impact on their buying decisions.This slide probably deserves some discussion. Some students will probably question whether consumers could tell the difference between the two. You should stress that they can tell the difference and that this will have an impact on their buying decisions.

44. Tools of TQM Tools for generating ideas Check sheet Scatter diagram Cause and effect diagram Tools to organize data Pareto charts Process charts (Flow diagrams) Tools for identifying problems Histograms Statistical process control chart

45. Tools of TQM (cont.)

46. Pareto Analysis of Wine Glass Defects (Total Defects = 75) This slide probably deserves more discussion than most of us would tend to allot it. Students need to understand the cost of “going the extra mile,” - the difference between something which may be very good, and something which is perfect. The students also need to recognize that Pareto charts suggest where to place effort - on the item that looms largest on the chart. After progress is made on that item, then one performs a Pareto analysis on the remaining items, and repeats the procedure..This slide probably deserves more discussion than most of us would tend to allot it. Students need to understand the cost of “going the extra mile,” - the difference between something which may be very good, and something which is perfect. The students also need to recognize that Pareto charts suggest where to place effort - on the item that looms largest on the chart. After progress is made on that item, then one performs a Pareto analysis on the remaining items, and repeats the procedure..

47. Shows sequence of events in process Depicts activity relationships Has many uses: Identify data collection points Find problem sources Identify places for improvement Identify where travel distances can be reduced Process Chart This slide can be used to introduce Process Charts.This slide can be used to introduce Process Charts.

48. Process Chart Example You can use this slide as an example of a process chart; use it to guide students in developing their own charts for some common activity.You can use this slide as an example of a process chart; use it to guide students in developing their own charts for some common activity.

49. Used to find problem sources/solutions Other names Fish-bone diagram, Ishikawa diagram Steps Identify problem to correct Draw main causes for problem as ‘bones’ Ask ‘What could have caused problems in these areas?’ Repeat for each sub-area. Cause and Effect Diagram This slide introduces the Cause and Effect Diagram. The next several slide show the development of a simple example. If time is available, it would be helpful to ask students to develop their own examples.This slide introduces the Cause and Effect Diagram. The next several slide show the development of a simple example. If time is available, it would be helpful to ask students to develop their own examples.

50. Ishikawa Diagram Example

51. Ishikawa Diagram Example

52. Ishikawa Diagram Example

53. Ishikawa Diagram Example

54. Airline Customer Service Example This slide illustrates a Cause and Effect Chart for a practical problem.This slide illustrates a Cause and Effect Chart for a practical problem.

55. Uses statistics & control charts to tell when to adjust process Developed by Shewhart in 1920’s Involves: Creating standards (upper & lower limits) Measuring sample output (e.g. mean wgt.) Taking corrective action (if necessary) Done while product is being produced Statistical Process Control (SPC) This slide introduces the process of Statistical Process Control. Slides illustrating the mechanics will be found in the presentation for supplement 6S. At some point, you may wish to illustrate or discuss the connection between Statistical Process Control and the Target and Conformance-based quality control discussed earlier.This slide introduces the process of Statistical Process Control. Slides illustrating the mechanics will be found in the presentation for supplement 6S. At some point, you may wish to illustrate or discuss the connection between Statistical Process Control and the Target and Conformance-based quality control discussed earlier.

56. Show changes in data pattern e.g., trends Make corrections before process is out of control Show causes of changes in data Assignable causes Data outside control limits or trend in data Natural causes Random variations around average Control Chart Purposes

57. SPC Charts Control charts are used to indicate when a production process may have changed to the degree to affect quality Variable charts (X, R) track variations in measurements within samples Attribute charts (p, c) track whether attributes exist within samples

58. Control Chart Types This slide simply introduces the various types of control charts.This slide simply introduces the various types of control charts.

59. Characteristics that either exist, or do not Classify products as either ‘good’ or ‘bad’, or count # defects e.g., radio works or does not Categorical or discrete random variables SPC Quality Characteristics Once the categories are outlined, students may be asked to provide examples of items for which variable or attribute inspection might be appropriate. They might also be asked to provide examples of products for which both characteristics might be important at different stages of the production process.Once the categories are outlined, students may be asked to provide examples of items for which variable or attribute inspection might be appropriate. They might also be asked to provide examples of products for which both characteristics might be important at different stages of the production process.

60. Statistical Process Control Steps

61. Process Control Chart

62. Control Chart Example:

63. Patterns in Control Charts This chart enables you to discuss some of the information which can be obtained from the Process Control Charts.This chart enables you to discuss some of the information which can be obtained from the Process Control Charts.

64. Type of variables control chart Interval or ratio scaled numerical data e.g., dimensions, weight, etc. Shows sample means over time Monitors process average Example: Weigh samples of coffee & compute means of samples; Plot ?X Chart

65. ?X Chart Control Limits The following slide provides much of the data from Table S6.1.The following slide provides much of the data from Table S6.1.

66. Type of variables control chart Interval or ratio scaled numerical data Shows sample ranges over time Difference between smallest & largest values in inspection sample Monitors variability in process Example: Weigh samples of coffee & compute ranges of samples; Plot R Chart

67. R Chart Control Limits

68. Control Chart Factors (p. 227)

69. X and R Charts Example A control process consists of 12 samples (with 20 units in a sample) with different means and sample ranges:

70. X and R Charts Example Construct: X Chart R Chart Use the following factors: A2 = 0.18 D3 = 0.41 D4 = 1.59 Is the process in control?

71. POM for Windows Results

72. POM for Windows X Chart

73. POM for Windows R Chart

74. Type of attributes control chart Nominally scaled categorical data e.g., good-bad Shows % of nonconforming items Example: Count # defective chairs & divide by total chairs inspected; Plot Chair is either defective or not defective p Chart

75. p Chart Control Limits

76. Type of attributes control chart Discrete quantitative data Shows number of nonconformities (defects) in a unit Unit may be chair, steel sheet, car etc. Size of unit must be constant Example: Count # defects (scratches, chips etc.) in each chair of a sample of 100 chairs; Plot c Chart

77. c Chart Control Limits

78. p and c Charts Example (p. 231) Data entry clerks key in thousands of records each day. Samples of the work of 20 clerks are shown here. 100 records by each clerk were carefully examined to make sure they contained no errors. Construct a control chart with a 99.7 % level of confidence. Is the process in control?

79. POM for Windows Results

80. POM for Windows p Chart

81. Deciding Which Chart to Use Using an X and R chart: Observations are variables Collect 20-25 samples of n=4, or n=5, or more each from a stable process and compute the mean for the X chart and range for the R chart. Track samples of n observations each.

82. Deciding Which Chart to Use Using the P-Chart: We deal with fraction, proportion, or percent defectives Observations are attributes that can be categorized in two states Have several samples, each with many observations Assume a binomial distribution unless the number of samples is very large – then assume a normal distribution. Using a C-Chart: Observations are attributes whose defects per unit of output can be counted The number counted is often a small part of the possible occurrences Assume a Poisson distribution Defects such as: number of blemishes on a desk, number of typos in a page of text, flaws in a bolt of cloth

83. Involves examining items to see if an item is good or defective Detect a defective product Does not correct deficiencies in process or product Issues When to inspect Where in process to inspect Inspection This slide introduces the concept of inspection. At this point, one should probably stress the role of inspection in the overall quality control process. Some students seem to have the notion that inspection is quality control.This slide introduces the concept of inspection. At this point, one should probably stress the role of inspection in the overall quality control process. Some students seem to have the notion that inspection is quality control.

84. When and Where to Inspect At the supplier’s plant while the supplier is producing At your facility upon receipt of goods from the supplier Before costly or irreversible processes During the step-by-step production processes When production or service is complete Before delivery from your facility At the point of customer contact This slide can be used to frame a discussion about when to inspect. If your students have documented an actual production process from a local business, one of these documented processes can serve as an example. This slide can be used to frame a discussion about when to inspect. If your students have documented an actual production process from a local business, one of these documented processes can serve as an example.

85. Form of quality testing used for incoming materials or finished goods e.g., purchased material & components Procedure Take one or more samples at random from a lot (shipment) of items Inspect each of the items in the sample Decide whether to reject the whole lot based on the inspection results What Is Acceptance Sampling? Here again it is useful to stress that acceptance sampling relates to the aggregate, not the individual unit. You might also discuss the decision as to whether one should take only a single sample, or whether multiple samples are required.Here again it is useful to stress that acceptance sampling relates to the aggregate, not the individual unit. You might also discuss the decision as to whether one should take only a single sample, or whether multiple samples are required.

86. Set of procedures for inspecting incoming materials or finished goods Identifies Type of sample Sample size (n) Criteria (c) used to reject or accept a lot Producer (supplier) & consumer (buyer) must negotiate What Is an Acceptance Plan?

87. Shows how well a sampling plan discriminates between good & bad lots (shipments) Shows the relationship between the probability of accepting a lot & its quality Operating Characteristics Curve You can use this and the next several slides to begin a discussion of the “quality” of the acceptance sampling plans. You will find additional slides on “consumer’s” and “producer’s” risk to pursue the issue in a more formal manner in subsequent slides.You can use this and the next several slides to begin a discussion of the “quality” of the acceptance sampling plans. You will find additional slides on “consumer’s” and “producer’s” risk to pursue the issue in a more formal manner in subsequent slides.

88. Acceptable quality level (AQL) Quality level of a good lot Producer (supplier) does not want lots with fewer defects than AQL rejected Lot tolerance percent defective (LTPD) Quality level of a bad lot Consumer (buyer) does not want lots with more defects than LTPD accepted AQL & LTPD Once the students understand the definition of these terms, have them consider how one would go about choosing values for AQL and LTPD. Once the students understand the definition of these terms, have them consider how one would go about choosing values for AQL and LTPD.

89. Producer's risk (?) Probability of rejecting a good lot Probability of rejecting a lot when fraction defective is AQL Consumer's risk (ß) Probability of accepting a bad lot Probability of accepting a lot when fraction defective is LTPD Producer’s & Consumer’s Risk This slide introduces the concept of “producer’s” risk and “consumer’s” risk. The following slide explores these concepts graphically.This slide introduces the concept of “producer’s” risk and “consumer’s” risk. The following slide explores these concepts graphically.

90. An Operating Characteristic (OC) Curve Showing Risks

91. Average Outgoing Quality It is probably important to stress that AOQ is the average percent defective, not the average percent acceptable.It is probably important to stress that AOQ is the average percent defective, not the average percent acceptable.

92. Service quality is more difficult to measure than for goods Service quality perceptions depend on Expectations versus reality Process and outcome Types of service quality Normal: Routine service delivery Exceptional: How problems are handled TQM In Services At this point, you might consider going back to the slides illustrating the differences between goods and services. Those slides are provided next. If you do not wish to use them, simply skip to the final slide in the sequence.At this point, you might consider going back to the slides illustrating the differences between goods and services. Those slides are provided next. If you do not wish to use them, simply skip to the final slide in the sequence.

93. Goods vs. Services Can be resold Can be inventoried Some aspects of quality measurable Selling is distinct from production Again, it is helpful to look at the differences between goods and services. Have your students identify the consequences of some of these differences.Again, it is helpful to look at the differences between goods and services. Have your students identify the consequences of some of these differences.

94. Goods vs. Services (cont.) Product is transportable Site of facility important for cost Often easy to automate Revenue generated primarily from tangible product

95. Determinants of Service Quality Reliability – consistency and dependability Responsiveness – willingness/readiness of employees to provide service; timeliness Competence – possession of skills and knowledge required to perform service Access – approachability and ease of contact Courtesy – politeness, respect, consideration, friendliness of contact personnel

96. Determinants of Service Quality Communication – keeping customers informed in languages they understand Credibility – trustworthiness, believability, honesty Security – freedom from danger, risk or doubt Understanding/knowing the customer – making the effort to understands the customer’s needs Tangibles – the physical evidence of the service