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Chapter 14

Chapter 14. Quality Management. Sales Order Management. Aggregate Planning. Master Scheduling. Production Activity Control. Quality Control. Distribution Mngt. Business Processes. © 2001 Victor E. Sower, Ph.D., C.Q.E. What Is Quality?.

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Chapter 14

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  1. Chapter 14 Quality Management

  2. Sales Order Management Aggregate Planning Master Scheduling Production Activity Control Quality Control Distribution Mngt. Business Processes © 2001 Victor E. Sower, Ph.D., C.Q.E.

  3. What Is Quality? • “The degree of excellence of a thing” (Webster’s Dictionary) • “The totality of features and characteristics that satisfy needs” ( ASQ) • Fitness for use (Juran) © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 2

  4. Dimensions Of Product Quality (Garvin) 1. Performance • basic operating characteristics 2. Features • “extra” items added to basic features 3. Reliability • probability product will operate over time © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 3

  5. 4. Conformance • meeting pre-established standards 5. Durability • life span before replacement 6. Serviceability • ease of getting repairs, speed & competence of repairs © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 4

  6. 7. Aesthetics • look, feel, sound, smell or taste 8. Safety • freedom from injury or harm 9. Other perceptions • subjective perceptions based on brand name, advertising, etc © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 5

  7. Service Quality 1. Time & Timeliness • customer waiting time, completed on time 2. Completeness • customer gets all they asked for 3. Courtesy • treatment by employees © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 6

  8. 4. Consistency • same level of service for all customers 5. Accessibility & Convenience • ease of obtaining service 6. Accuracy • performed right every time 7. Responsiveness • reactions to unusual situations © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 7

  9. Quality Of Conformance • Ensuring product or service produced according to design • Depends on • design of production process • performance of machinery • materials • training © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 8

  10. The Meaning of Quality Producer’s Perspective Consumer’s Perspective Quality of Conformance Quality of Design Production Marketing • Quality characteristics • Price • Conformance to • specifications • Cost Fitness for Consumer Use © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 9

  11. Quality Philosophers • Walter Shewhart • W. Edwards Deming • Joseph Juran • Philip Crosby • Armand Feigenbaum © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 10

  12. Deming’s 14 Points 1. Create constancy of purpose 2. Adopt philosophy of prevention 3. Cease mass inspection 4. Select a few suppliers based on quality 5. Constantly improve system and workers 6. Institute worker training © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 11

  13. 7. Instill leadership among supervisors 8. Eliminate fear among employees 9. Eliminate barriers between departments 10. Eliminate slogans 11. Remove numerical quotas 12. Enhance worker pride 13. Institute vigorous training & education programs 14. Implement these 13 points © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 12

  14. The Deming Wheel(or P-D-C-A Cycle) Identify problem Develop plan for improvement 1. Plan Institutionalize improvement Continue cycle 4. Act Implement plan on test basis 2. Do 3. Study / Check Is the plan working © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 13

  15. Total Quality Management 1. Customer defined quality 2. Top management leadership 3. Quality as a strategic issue 4. All employees responsible for quality 5. Continuous improvement 6. Shared problem solving 7. Statistical quality control 8. Training & education for all employees © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 14

  16. TQM Throughout The Organization • Marketing, sales, R&D • Engineering • Purchasing • Personnel • Management • Packing, storing, shipping • Customer service © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 15

  17. Strategic Implications Of TQM • Quality is key to effective strategy • Clear strategic goal, vision, mission • High quality goals • Operational plans & policies • Feedback mechanism • Strong leadership © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 16

  18. TQM In Service Companies • Inputs similar to manufacturing • Processes & outputs are different • Services tend to be labor intensive • Quality measurement is harder • Timeliness is important measure • TQM principles apply to services © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 17

  19. Cost Of Quality • Cost of achieving good quality • Prevention • Appraisal • Cost of poor quality • Internal failure costs • External failure costs © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 18

  20. Quality Indexes • Labor index • quality cost / labor hours • Cost index • quality cost / manufacturing cost • Sales index • quality cost / sales • Production index • quality cost / units produced © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 19

  21. Quality Is... • An important determinant of business profitability • Positively & significantly related to higher return on investment © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 22

  22. Quality And Productivity • Productivity = output / input • Fewer defects increase output • Quality improvement reduces inputs © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 23

  23. Employees & Quality Improvement • Quality circles • Employee suggestions • Process improvement teams • Self-managed work teams © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 35

  24. The Quality Circle Process © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 36

  25. Seven Quality Control Tools 1. Pareto analysis 2. Flowcharts 3. Check sheets 4. Histograms 5. Scatter diagrams 6. Control charts 7. Fishbone diagram © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 37

  26. 70 60 50 40 30 20 10 0 A Pareto Chart (64) Percent from each cause (13) (10) (6) (3) (2) (2) Poor Design Defective parts Operator errors Machine calibrations Defective materials Surface abrasions Wrong dimensions Causes of poor quality © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 38

  27. A Flowchart © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 39

  28. COMPONENTS REPLACED BY LAB TIME PERIOD: 22 Feb to 27 Feb 1998 REPAIR TECHNICIAN: Bob TV SET MODEL 1013 Integrated Circuits|||| Capacitors |||| |||| |||| |||| |||| || Resistors || Transformers|||| Commands CRT | Check Sheet © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 40

  29. 40 35 30 25 20 15 10 5 0 1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1 Histogram © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 41

  30. Scatter Diagram . © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 42

  31. 27 24 UCL = 23.35 21 c = 12.67 18 15 Number of defects 12 9 6 LCL = 1.99 3 2 4 6 8 10 12 14 16 Sample number Control Chart © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 43

  32. Fishbone Diagram Measurement Human Machines Out of adjustment Faulty testing equipment Poor supervision Tooling problems Incorrect specifications Lack of concentration Improper methods Old/worn Inadequate training Quality Problem Inaccurate temperature control Defective from vendor Poor process design Ineffective quality management Not to specifications Dust and Dirt Deficiencies in product design Material- handling problems Environment Materials Process © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 44

  33. Quality Awards And Certifications • The Malcolm Baldrige Award • The Deming Prize • Industry, regional, and company awards • Institute of Industrial Engineers • NASA • European Quality Award © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 45

  34. ISO 9000 CategoriesPrior to 2000 • ISO 9001 ~ Suppliers and Designers • ISO 9002 ~ Production • ISO 9003 ~ Inspection and Test • ISO 9004 ~ Quality Management © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 46

  35. ISO 9000-2000 Categories • ISO 9001 ~ Quality Management Systems Requirements • ISO 9004 ~ Quality Management Systems— Guidelines for Performance Improvements © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 46

  36. Implications Of ISO 9000 • Truly international in scope • Certification required by many foreign firms • U.S. firms export > $100 billion/yr to Europe • Adopted by U.S. Navy, DuPont, 3M, AT&T, & others © 2000by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 47

  37. ISO Accreditation • European registration • 3rd party registrar assesses quality program • European Conformity (CE) mark authorized • United States 3rd party registrars • American National Standards Institute (ANSI) • American Society for Quality Control (ASQC) • Registrar Accreditation Board (RAB) © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Ch 3 - 48

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