Chapter 9 Management of Quality

1. Chapter 9Management of Quality Saba Bahouth – UCO

2. Chapter 15 Quality Management • Quality management refers to systematic policies, methods, and procedures used to ensure that goods and services are produced with appropriate levels of quality to meet and exceed the needs of customers. • Organizations today integrate quality principles into their management systems, using tools such as Total Quality Management (TQM), Six Sigma, and Lean Operating Systems. • Understanding Quality • Quality can be a confusing concept, partly because people view quality in relation to differing criteria based on their individual roles in the value chain such as: • perfection, • doing it right the first time, and/or • consistency. Saba Bahouth – UCO

3. Chapter 15 Quality Management A Brief History of Quality Management • Historical uses of quality management include the precision involved in building of Egyptian pyramids, interchangeable parts during Industrial Revolution, and statistical tools used for quality control during World War II. • Dr. Joseph Juran and Dr. W. Edwards Deming were pioneers in the field (more later on these two quality gurus). • Japan integrated quality ideas and methods throughout their organizations and developed a culture of continuous improvement. • 1924 - Statistical process control charts • 1930 - Tables for acceptance sampling • 1940’s - Statistical sampling techniques • 1950’s - Quality assurance/TQC • 1960’s - Zero defects • 1970’s - Quality assurance in services Saba Bahouth – UCO

4. Chapter 15 Quality Management • Principles of Total Quality Management • A focus on customers and stakeholders. • A process focus supported by continuous improvement and learning. • Participation and teamwork by everyone in the organization. • Investment in Quality Yields Business Results • Increased employee participation • Improved product and service quality • Improved customer satisfaction • Improved productivity • Improved employee skills • Improved financial performance Saba Bahouth – UCO

5. Dimensions of Quality • Performance - main characteristics of the product/service • Aesthetics - appearance, feel, smell, taste • Special Features - extra characteristics • Conformance - how well a product/service meets expectations • Reliability - consistency of performance • Durability - useful life of the product/service • Perceived Quality - indirect evaluation of quality (e.g. reputation) • Serviceability - service after sale Saba Bahouth – UCO

6. W. Edwards Deming • Reducing variability in processes • ^ quality -> ^ productivity and V costs • “Chain Reaction” theory • “14 Points” management philosophy • Deming Cycle: Plan, Do, Study, and Act. PDSA Cycle • Joseph Juran • Quality Control Handbook (1951) • Defined quality as “fitness for use” • Advocated use of quality cost measurement • Quality Trilogy: quality planning - quality control - quality improvement • Philip B. Crosby • Quality is Free (1979) • Quality means conformance to requirements, not excellence. • Doing the job right the first time is always cheaper. • Measurement: the cost of quality = expense of nonconformance. • The only performance standard is Zero Defects (ZD). Feignbaum: Quality is a total field Ishigawa: Cause and Effect diagram; Quality Circles Taguchi: Taguchi Loss Function Ohno and Shingo: Continuous improvement (Toyota) Saba Bahouth – UCO

7. Select a process Document Study/document Evaluate Seek ways to Improve it Implement the Improved process Design an Improved process The Process Improvement Cycle Saba Bahouth – UCO

8. Chapter 15 Influential Leaders in Quality Management Deming’s Chain Reaction W. Edwards Deming 14 Points Point 1: Create Vision; Demonstrate Commitment Point 2: Learn the Philosophy Point 3: Understand Inspection Point 4: Stop Purely Cost Based Decision Point 5: Improve Constantly and Forever Point 6: Institute Training Point 7: Institute Leadership Point 8: Drive Out Fear Point 9: Optimize the Efforts of Teams Point 10: Eliminate Exhortation Point 11: Eliminate Numerical Quotas Point 12: Remove Barriers to Pride in Work Point 13: Reward Education / Self-Improvement Point 14: Take Action Saba Bahouth – UCO

9. Elements of TQM A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction. • Continual improvement • Competitive benchmarking • Employee empowerment • Team approach • Decisions based on facts • Knowledge of tools • Supplier quality • Champion • Quality at the source • Relationship with customers and suppliers Saba Bahouth – UCO

10. Chapter 15 Quality Management • Six Sigma • Six Sigma is a business improvement approach that seeks to find and eliminate causes of defects and errors. • Used by companies including Motorola, Allied Signal, Texas Instruments, and General Electric. • The Six Sigma concept characterizes quality performance by defects (or errors) per million opportunities – dpmoor epmo. • Statistically speaking: • 3 Sigma results in around 3 defects per thousand (old standard) • 6 Sigma results in around 3-4 defects per million Saba Bahouth – UCO

11. Chapter 15 Quality Management Six Sigma’s DMAIC Process Define: identify customer and priorities, identify and define a suitable project, identify CTQs (critical to quality characteristics). Measure:determine how to measure the process, identify key internal processes that influence CTQs. Analyze:determine likely causes of defects and understand why defects are generated by identifying key variables that cause process variation. Improve: identify means to remove defects, confirm key variables, modify the process to stay within acceptable range. Control: determine how to maintain improvements, put tools in place to ensure that key variables remain within acceptance ranges under the modified process. Saba Bahouth – UCO

12. Chapter 15 Quality Management Implementing Six Sigma Six Sigma teams are comprised of: • Champions - senior-level managers who promote and lead the deployment of Six Sigma. • Master Black Belts- full-time Six Sigma experts who are responsible for Six Sigma strategy, training, mentoring, deployment, and results. • Black Belts- fully-trained Six Sigma experts with up to 160 hours of training who perform much of the technical analyses required of Six Sigma projects, usually on afull-time basis. • Green Belts– functional employees who are trained in introductory Six Sigma tools and methodology and work on projects on a part-time basis, assisting Black Belts while developing their own knowledge and expertise. • Team Membersare individuals from various functional areas who support specific projects. Saba Bahouth – UCO

13. Chapter 15 Quality Management • Cost of Quality Measurements • Cost of quality: costs associated with avoiding poor quality or those incurred as a result of poor quality. • Prevention costs: expended to keep nonconforming goods and services from being made and reaching the customer – Training cost. • Appraisal costs: expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems. • Internal-failure costs: costs incurred as a result of unsatisfactory quality that is found before delivery of good or service to the customer. • External-failure costs: incurred after poor-quality goods or services reach the customer. Quality is Free Saba Bahouth – UCO

14. Chapter 15 Quality Management • ISO 9000:2000 • Quality standards 1987, 1994, 2000 to improve the quality of operation’s processes, and provide confidence to organizations and customers. • Internationally recognized - required in certain countries. • Standardizes key terms in quality; provides a set of basic principles for initiating quality management systems. • Customer focus • Leadership • People involvement • Process approach • A systems approach to management • Continual improvement • Factual approach to decision making • Mutually beneficial supplier relationships Saba Bahouth – UCO

15. The Deming Prize • Honoring W. Edwards Deming • Japan’s highly coveted award • Main focus on statistical quality control Malcolm Baldrige National Quality Award • Leadership (125 points) • Strategic Planning (85 points) • Customer and Market Focus (85 points) • Information and Analysis (85 points) • Human Resource Focus (85 points) • Process Management (85 points) • Business Results (450 points) Saba Bahouth – UCO

16. Chapter 15 Quality Management • Continuous Improvement (Kaizen):focuses on small, gradual, and frequent improvements over the long term with participation by everyone in the organization. • Poka-Yoke (Mistake-Proofing):an approach using automatic devices or methods to avoid simple human error. • French fries are prepackaged for a particular size of a fryer. • A flash memory with the beveled corner. • Windows: Are you sure? Saba Bahouth – UCO

17. Responsibility for Quality • Top management • Design • Procurement • Production/operations • Quality assurance • Packaging and shipping • Marketing and sales • Customer service Saba Bahouth – UCO

18. TQM Tools – 7 Tools Flowcharts Visual representation of the process - logical sequential flow Check sheets A tabular or graphical method making data easier to understand Run charts A graphical approach for tracking performance over time Pareto analysis VilfredoPareto (Italian): few factors account for a large percentage Cause-and-effect Ishikawa - Fishbone diagrams: grouping causes in categories Histograms Showing the frequency of events Control charts A statistical tool for identifying non-randomness in a process Saba Bahouth – UCO

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20. Customer’s Satisfaction Flowchart for a Restaurant Identify the problem Warm Welcome Dissatisfied Rectify Need for order assistance Identify # of guestsand match with table availability Satisfied or not Fulfill Order/Need Routine Need help Satisfied Suggestions Check and farewell Enter into guest history profile and initiate a letter if necessary Complete the “Guest’s Suggestion Form” Daily Report Saba Bahouth – UCO

21. Check Sheet Saba Bahouth – UCO

22. An Example of a Run Chart Saba Bahouth – UCO

23. Pareto Chart Saba Bahouth – UCO

24. Cause and Effect (Fishbone) Diagram Saba Bahouth – UCO

25. Histogram Saba Bahouth – UCO

26. Control Chart Saba Bahouth – UCO

27. Service Quality • Challenges with Service Quality: • Customer expectations often change • Different customers have different expectations • Each customer contact is a “moment of truth” • Customer participation can affect perception of quality • “Fail-safe” must be designed into the system Many Moments of Truth