Management of Quality

1. Management of Quality Operations ManagementSession 4

2. Objectives By the end of this session, student will be able to: • Assess the importance of quality • Understand the history and the development of quality management • Understand the various definitions of quality • Understand how quality promotes strategic objectives • Understand the principles of TQM • Be able to implement TQM • Understand need to promote continuous improvement

3. Topics • History of quality management • Zero defects/TQM/Six Sigma • JIT • House of Quality • Taguchi – robustness • Taguchi – fish-bone diagram • Quality in service industries

4. Ways in Which Quality Can Improve Productivity Market Gains • Improved response • Economies of Scale • Improved reputation Improved Quality Increased Profits • Reduced Costs • Increased productivity • Lower rework and scrap costs • Lower warranty costs

5. Traditional Quality Process (Manufacturing) MonitorsQuality Customer Marketing Engineering Operations Specifies Interprets Designs Produces Product Product Need Need DefinesQuality Who should define quality?

6. The Quality Gurus • W Edwards Deming (1950s) – workers must know what quality work is and be given the means to achieve it – use of statistical techniques • Joseph Juran (1960s – 1970s) – ‘cost of quality’.Quality = ‘fitness for purpose’. As defects decrease cost increases so zero defects is impossible • Philip B Crosby (1980s) – Quality = ‘conformance to requirements’. As quality improves, costs fall. So, “Quality is free!” • Kaoru Ishikawa (1960s)- Company wide quality. Quality circles.

7. 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

8. Deming’s 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 to work on the transformation

9. 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.

10. Flow of Activities Necessary to Achieve TQM Organizational Practices Quality Principles Employee Fulfillment Customer Satisfaction

11. Organizational Practices • Leadership • Mission statement • Effective operating procedure • Staff support • Training Yields: What is important and what is to be accomplished

12. 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

13. Achieving Total Quality Management CustomerSatisfaction EffectiveBusiness Attitudes (e.g., Commitment) Employee Fulfillment How to Do Quality Principles What to Do Organizational Practices

14. Concepts of TQM • Continuous improvement • Employee empowerment • Benchmarking • Just-in-time (JIT) • Knowledge of tools

15. Continuous Improvement • Represents continual improvement of process & customer satisfaction • Involves all operations & work units • Other names • Kaizen (Japanese) • Zero-defects • Six Sigma

16. Employee Empowerment • Getting employees involved in product & process improvements • 85% of quality problems are due to process & material • Techniques • Support workers • Let workers make decisions • Build teams & quality circles © 1995 Corel Corp.

17. Quality Circles • Group of 6-12 employees from same work area • Meet regularly to solve work-related problems • 4 hours/month • Facilitator trains & helps with meetings

18. 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 • Take action to match or exceed the benchmark

19. Six Sigma • Pioneered by Bill Smith at Motorola in 1986 • Aims to reduce defect levels below 3.4 Defects Per (one) Million Opportunities (DPMO) • DMAIC - used to improve an existing business process • DMADV - used to create new product designs or process designs for more predictable, mature and defect free performance

20. 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

21. 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

22. Just-In-Time (JIT) Example Work in process inventory level(hides problems) Unreliable Vendors Capacity Imbalances Scrap

23. Reducing inventory revealsproblems so they can be solved. Unreliable Vendors Capacity Imbalances Scrap Just-In-Time (JIT) Example

24. Quality Function Deployment(QFD) • Determines what will satisfy the customer • Translates customer preferences into specific product characteristics • Product design process using cross-functional teamseg. marketing/engineering/manufacturing

25. House of Quality • House of Quality is a QFD technique • Involves creating 4 tabular ‘Matrices’ or ‘Houses’- breaks down product design into increasing levels of detail

26. To Build House of Quality • Identify customer wants • Identify how the good/service will satisfy customer wants. • Relate the customer’s wants to the product’s hows. • Identify relationships between the firm’s hows. • Develop importance ratings • Evaluate competing products

27. Quality Plan Production Process House 4 Specific Components Production Process House 3 Specific Components Design Characteristics Design Characteristics House 2 House 1 Customer Requirements House of Quality Sequence

28. Taguchi Techniques • Experimental design methods to improve product & process design • Identify key component & process variables affecting product variation • Taguchi Concepts • Quality robustness • Quality loss function • Target specifications

29. © 1995 Corel Corp. © 1984-1994 T/Maker Co. Quality Robustness • Ability to produce products uniformly regardless of manufacturing conditions • Robustness is more a function of design than control of manufacture • Put robustness in House of Quality matrices besides functionality • Quality losses result mainly from product failure after sale

30. Fish-Bone Diagram A tool of TQM

31. Cause and Effect Diagram • 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.

32. Cause and Effect Diagram Example Problem Too many defects

33. Cause and Effect Diagram Example Method Manpower Main Cause Too many defects Material Machinery Main Cause

34. Cause and Effect Diagram Example Method Manpower Drill OverTime Too many defects Wood Steel Lathe Material Machinery Sub-Cause

35. Manpower Method Tired Drill Over Slow Time Too many defects Old Wood Steel Lathe Material Machinery Cause and Effect Diagram Example

36. TQM In Services • Service quality perceptions depend on comparison of expectations with reality • Perception of service quality derived from process as well as outcome • Types of service quality • Normal: Routine service delivery • Exceptional: How problems are handled

37. Reliability Responsiveness Competence Access Courtesy Communication Credibility Security Understanding/knowing the customer Tangibles Determinants of Service Quality