Chapter 7 Quality Management

1. Chapter 7Quality Management

2. Total Quality Management Defined Quality Specifications and Costs Six Sigma Quality and Tools External Benchmarking ISO 9000 Service Quality Measurement

3. Definitions of Quality ASC: Product characteristics & features that affect customer satisfaction User-Based: What consumer says it is Manufacturing-Based: Degree to which a product conforms to design specification Product-Based: Level of measurable product characteristic 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.

4. 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.

5. Ways in Which Quality Can Improve Productivity Sales Gains Improved response Higher Prices Improved reputation This slide not only looks at the impact of quality on productivity - it also enables you to begin a discussion as to the meaning of quality (or perhaps the differing meanings among different people). To many people, the notion of �high quality� carries with it the assumption of �high price.� This slide provides an initial point to challenge that assumption.This slide not only looks at the impact of quality on productivity - it also enables you to begin a discussion as to the meaning of quality (or perhaps the differing meanings among different people). To many people, the notion of �high quality� carries with it the assumption of �high price.� This slide provides an initial point to challenge that assumption.

6. 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.

8. 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. Malcom Baldrige National Quality 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

9. Quality Specifications Design quality: Inherent value of the product in the marketplace Dimensions include: Performance, Features, Reliability, Durability, Serviceability, Response, Aesthetics, and Reputation. Conformance quality: Degree to which the product or service design specifications are met

10. Target Specification 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.

11. 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

12. Costs of Quality

13. Total Quality Management (TQM)Defined Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer

14. 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.

15. Achieving Total Quality Management Again, a point to be made here is the universality required to achieve TQM.Again, a point to be made here is the universality required to achieve TQM.

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 Points - continued 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. Concepts of TQM Continuous improvement Employee empowerment Benchmarking Just-in-time (JIT) Taguchi concepts Knowledge of 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.

19. Continuous Improvement 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.

20. Shewhart�s PDCA Model

21. 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

22. 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.

23. 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 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.

24. Resolving Customer ComplaintsBest Practices 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?�

25. Tools for TQM Quality Function Deployment House of Quality Taguchi technique Quality loss function Pareto charts Process charts Cause-and-effect diagrams Statistical process control 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.

26. Six Sigma Quality A philosophy and set of methods companies use to eliminate defects in their products and processes Seeks to reduce variation in the processes that lead to product defects The name, �six sigma� refers to the variation that exists within plus or minus three standard deviations of the process outputs

32. Six Sigma Quality (Continued) Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO)

33. Six Sigma Quality (Continued) Example of Defects Per Million Opportunities (DPMO) calculation. Suppose we observe 200 letters delivered incorrectly to the wrong addresses in a small city during a single day when a total of 200,000 letters were delivered. What is the DPMO in this situation?

34. Six Sigma Quality: DMAIC Cycle Define, Measure, Analyze, Improve, and Control (DMAIC) Developed by General Electric as a means of focusing effort on quality using a methodological approach Overall focus of the methodology is to understand and achieve what the customer wants DMAIC consists of five steps�.

35. Six Sigma Quality: DMAIC Cycle (Continued)

36. Example to illustrate the process� We are the maker of this cereal. Consumer Reports has just published an article that shows that we frequently have less than 15 ounces of cereal in a box. What should we do?

37. Step 1 - Define What is the critical-to-quality characteristic? The CTQ (critical-to-quality) characteristic in this case is the weight of the cereal in the box.

40. 2 - Measure How would we measure to evaluate the extent of the problem? What are acceptable limits on this measure? ??CTQ(Critical to Quality) ?????????????CTQ????????

41. 2 � Measure (continued) Let�s assume that the government says that we must be within � 5 percent of the weight advertised on the box. Upper Tolerance Limit = 16 + .05(16) = 16.8 ounces Lower Tolerance Limit = 16 � .05(16) = 15.2 ounces

42. 2. Measure (continued) We go out and buy 1,000 boxes of cereal and find that they weight an average of 15.875 ounces with a standard deviation of .529 ounces. What percentage of boxes are outside the tolerance limits?

45. Step 3 - Analyze - How can we improve the capability of our cereal box filling process? Decrease Variation Center Process Increase Specifications

46. Step 4 � Improve � How good is good enough?Motorola�s �Six Sigma� 6s minimum from process center to nearest spec

47. Motorola�s �Six Sigma� Implies 2 ppB �bad� with no process shift With 1.5s shift in either direction from center (process will move), implies 3.4 ppm �bad�.

48. Step 5 � Control Statistical Process Control (SPC) Use data from the actual process Estimate distributions Look at capability - is good quality possible Statistically monitor the process over time

49. Analytical Tools for Six Sigma and Continuous Improvement: Flow Chart

50. Tools 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

51. Analytical Tools for Six Sigma and Continuous Improvement: Run Chart

52. Analytical Tools for Six Sigma and Continuous Improvement: Pareto Analysis

53. Analytical Tools for Six Sigma and Continuous Improvement: Checksheet

54. Analytical Tools for Six Sigma and Continuous Improvement: Histogram

55. Analytical Tools for Six Sigma and Continuous Improvement: Cause & Effect Diagram

56. Cause and Effect Diagram Example

57. Cause and Effect Diagram Example

58. Cause and Effect Diagram Example

59. Cause and Effect Diagram Example

60. Analytical Tools for Six Sigma and Continuous Improvement: Control Charts

61. Other Six Sigma Tools Opportunity Flow Diagram used to graphically show those activities that add value from those that are performed (and maybe could be reduced or removed) that do not add value to the finished product Failure Mode and Effect Analysis (DMEA) is a structured approach to identify, estimate, prioritize, and evaluate risk of possible failures at each stage in the process Design of Experiments (DOE) a statistical test to determine cause-and-effect relationships between process variables and output

63. Six Sigma Roles and Responsibilities Executive leaders must champion the process of improvement Corporation-wide training in Six Sigma concepts and tools Setting stretch objectives for improvement Continuous reinforcement and rewards

69. The Shingo System: Fail-Safe Design Shingo�s argument: SQC methods do not prevent defects Defects arise when people make errors Defects can be prevented by providing workers with feedback on errors Poka-Yoke includes: Checklists Special tooling that prevents workers from making errors

70. ISO 9000 Series of standards agreed upon by the International Organization for Standardization (ISO) Adopted in 1987 More than 100 countries A prerequisite for global competition? ISO 9000 directs you to "document what you do and then do as you documented"

71. ISO ?? ISO??International Organization for Standardization????,??????????????????,??????????????ISO 9000????????????????????????1987?3????,??1994?7?1?????????ISO 9000???????????,?????????????????????,?????????????????????1990?3?16???????????CNS 12680????????,???ISO 9000???????????????ISO9000???????? ????????????????????????????????????????,?????????

72. ISO ?? ISO 9000?????9000, 9001, 9002, 9003?9004??????ISO9000?ISO 9004???????????????????,ISO 9001,ISO 9002?ISO 9003???????????????????????: ISO 9001 ????????????????????? ISO 9002 ??????????????? ISO 9003 ??????????????

73. ?????ISO 9000?????? ?ISO 9000?4.2???????????,???????????,???ISO 9000??????????????????????????????,???????????????????????

74. ?? ?????? ?? ?? ?? ?? ???? ??? ???? ??

75. ????? ??????????? ???:??????,???????,????????? ???:??????,????????????,???????????????????????-??,??? ???????,??????????,????�??�????,????�??�????,?????????? ???:??????????,??????????,?????,????,?????????????????,??????? ???:??????,?????????????

76. QS 9000 ???????????????????????????1994?9????QS�9000????,????????? ??: ??????(TIER ONE SUPPLIERS)?????QS 9000? ???????????????????OEM??? ?????????????????OEM??? ??????(TIER TWO SUPPLIERS OR SUB-CONTRACTORS)????QS 9000? ??:????????,???????/???????????????????????OEM???????????????????????????OEM??????????????????/??????????OEM???

77. ISO 14000 SO 14000???????????????,?????????????????????????????????ISO 14001????????????????,???????????????????????????,????????????????????????????????????????????????????? ISO 14001???????????????????? ??ISO 14001?ISO 9000?????????,???????ISO 9000????????????????????????,??????

78. TL-9000?????? ??????????????(Amertech, AT&t, Bell Atlantic, SBC..ies.)????????(Siemens,3COM, 3M Telcom, Cisco, Fujitsu, ADC, Lucent, Motorola, NEC, Ericsson, Nokia,�Unisys ..more than 60 company)?1996???QuEST Forum,???????????????TL- 9000? TL-9000=ISO-9001+????????????

79. ?? ISO 9000: ????,ISO9000???????????????,?????????CNS12680 ISO 9001(1994): ????--??,??,??,????????????????????????????,???????(?????,??,??????????)?????????????????????1994???(???83??)???9001?????9002????????,?????????9001(??????)????9002,???????????????????????,????????????9001,????1?2??,???????,??9001???????,???????????????,????????????ISO9001??20???????????? CNS 12681.

80. ?? ISO 9002(1994):????--??,?????????????ISO9002??19???,??,?ISO9001???,????4.4,?9001??????????????,???????,?????,?????? ISO 9003(1994):????????????????ISO9001??,??4.4????,4.6????,4.9????,4.19??,?????????????,9003??????????,????????????,????????????????????CNS12683. ISO 9004-1(1994): ?????????????????:ISO9000?????????????????????CNS12684-1?

81. Three Forms of ISO Certification 1. First party: A firm audits itself against ISO 9000 standards 2. Second party: A customer audits its supplier 3. Third party: A "qualified" national or international standards or certifying agency serves as auditor

82. External Benchmarking Steps 1. Identify those processes needing improvement 2. Identify a firm that is the world leader in performing the process 3. Contact the managers of that company and make a personal visit to interview managers and workers 4. Analyze data

83. 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 Services industries 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.

84. Goods versus Services Can be resold Can be inventoried Some aspects of quality measurable Selling is distinct from production

85. Goods versus Services - continued Product is transportable Site of facility important for cost Often easy to automate Revenue generated primarily from tangible product

86. Service Quality Attributes This slide is a repeat of the earlier one on Service Quality Attributes as that topic appears at this point in the text.This slide is a repeat of the earlier one on Service Quality Attributes as that topic appears at this point in the text.

87. Service Quality Measurement:Servqual A perceived service quality questionnaire survey methodology Examines �Dimensions of Service Quality� including: Reliability, Responsiveness, Assurance, Empathy, and Tangibles (e.g., appearance of physical facilities, equipment, etc.)

88. ??????? (PZB; Parasuram, Zeithaml, Berry ) ???:????????????????????? ???:?????????????????????????????????;????????,???????????????????????????? ???:??????????,????????????? ???:???????????????????????:??????????????????????? ???:???????????????????????

89. ??????? ???:???????????????????????????????????????????????????????????????????:???????????????????????????????????????????? ???:?????????????????????,???????????,????????????????????????????????????,???????????????????????????????????????? ??? :?????????,???????????????????????,???????????????????????????????????????????????????? ???: ?????????????????,????????????????????? ???:???????????????????????,????????????????????,????????????????????????????

90. Service Quality Measurement: Servqual (Continued) New version of this methodology is called �e-Service Quality� dealing service on the Internet Dimensions of Service Quality on the e-Service methodology include: Reliability, Responsiveness, Access, Flexibility, Ease of Navigation, Efficiency, Assurance/Trust, Security/Privacy, Price Knowledge, Site Aesthetics, and Customization/Personalization

91. 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.

92. 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.

93. Inspection Points in Services As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services.As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services.

94. Inspection Points in Services

95. Inspection Points in Services