Professional Documents
Culture Documents
Operations Management
William J. Stevenson
8th edition
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9-2 Management of Quality
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9-3 Management of Quality
Quality Management
What does the term quality mean?
Quality is the ability of a product or service
to consistently meet or exceed customer
expectations.
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9-4 Management of Quality
Evolution of Quality
Management
1924 - Statistical process control charts
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9-5 Management of Quality
Quality Assurance vs. Strategic
Approach
Quality Assurance
Emphasis on finding and correcting defects
before reaching market
Strategic Approach
Proactive, focusing on preventing mistakes from
occurring
Greater emphasis on customer satisfaction
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9-6 Management of Quality
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9-7 Management of Quality
Key Contributors to Quality
Management
Table 9.2
Quality
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9-8 Management of Quality
Dimensions of Quality
Performance - main characteristics of the
product/service
Aesthetics - appearance, feel, smell, taste
Special Features - extra characteristics
Conformance - how well product/service conforms
to customer’s expectations
Reliability - consistency of performance
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9-9
Dimensions of Quality
Management of Quality
(Cont’d)
Durability - useful life of the
product/service
Perceived Quality - indirect evaluation of
quality (e.g. reputation)
Serviceability - service after sale
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Examples of Quality
9-10 Management of Quality
Dimensions
Dimension (Product) (Service)
Automobile Auto Repair
1. Performance Everything works, fit & All work done, at agreed
finish price
Ride, handling, grade of Friendliness, courtesy,
materials used Competency, quickness
2. Aesthetics Interior design, soft touchClean work/waiting area
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9-11 Management of Quality
Examples of Quality Dimensions
(Cont’d)
Dimension (Product) (Service)
Automobile Auto Repair
5. Reliability Infrequency of breakdowns W ork done correctly,
ready when promised
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9-12 Management of Quality
Service Quality
Tangibles
Convenience
Reliability
Responsiveness
Time
Assurance
Courtesy
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9-13 Management of Quality
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9-14 Management of Quality
Determinants of Quality
Ease of
Design
use
Conforms
to design Service
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9-15 Management of Quality
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The Consequences of Poor
9-16 Management of Quality
Quality
Loss of business
Liability
Productivity
Costs
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9-17 Management of Quality
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9-18 Management of Quality
Costs of Quality
Failure Costs - costs incurred by defective
parts/products or faulty services.
Internal Failure Costs
Costs incurred to fix problems that are detected
before the product/service is delivered to the
customer.
External Failure Costs
All costs incurred to fix problems that are detected
after the product/service is delivered to the
customer.
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9-19 Management of Quality
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9-20 Management of Quality
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9-21 Management of Quality
Quality Awards
Baldrige Award
Deming Prize
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9-22 Management of Quality
Malcolm Baldrige National
Quality Award
1.0 Leadership (125 points)
2.0 Strategic Planning (85 points)
3.0 Customer and Market Focus (85 points)
4.0 Information and Analysis (85 points)
5.0 Human Resource Focus (85 points)
6.0 Process Management (85 points)
7.0 Business Results (450 points)
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9-23 Management of Quality
Benefits of Baldrige
Competition
Financial success
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9-24 Management of Quality
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9-25 Management of Quality
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9-26 Management of Quality
Quality Certification
ISO 9000
Set of international standards on quality
management and quality assurance, critical to
international business
ISO 14000
A set of international standards for assessing a
company’s environmental performance
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9-27 Management of Quality
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9-28 Management of Quality
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9-29 Management of Quality
ISO 14000
ISO 14000 - A set of international
standards for assessing a company’s
environmental performance
Standards in three major areas
Management systems
Operations
Environmental systems
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9-30 Management of Quality
ISO 14000
Management systems
Systems development and integration of
environmental responsibilities into business
planning
Operations
Consumption of natural resources and energy
Environmental systems
Measuring, assessing and managing emissions,
effluents, and other waste
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9-31 Management of Quality
T Q M
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9-32 Management of Quality
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9-33 Management of Quality
Elements of TQM
Continual improvement
Competitive benchmarking
Employee empowerment
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Champion
Quality at the source
Suppliers
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9-34 Management of Quality
Continuous Improvement
Philosophy that seeks to make never-
ending improvements to the process of
converting inputs into outputs.
Kaizen: Japanese
word for continuous
improvement.
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9-35 Management of Quality
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9-36 Management of Quality
Six Sigma
Statistically
Having no more than 3.4 defects per million
Conceptually
Program designed to reduce defects
Requires the use of certain tools and
techniques
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9-37 Management of Quality
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9-38 Management of Quality
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9-39 Management of Quality
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9-40 Management of Quality
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9-41 Management of Quality
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9-42 Management of Quality
Obstacles to Implementing
TQM
Lack of:
Company-wide definition of quality
Strategic plan for change
Customer focus
Real employee empowerment
Strong strong motivation
Time to devote to quality initiatives
Leadership
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9-43 Management of Quality
Obstacles to Implementing
TQM
Poor inter-organizational communication
View of quality as a “quick fix”
Emphasis on short-term financial results
Internal political and “turf” wars
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9-44 Management of Quality
Criticisms of TQM
Blind pursuit of TQM programs
Programs may not be linked to strategies
Quality-related decisions may not be tied to
market performance
Failure to carefully plan a program
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9-45 Management of Quality
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9-46 Management of Quality
Act
Do
Study
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9-47 Management of Quality
Process Improvement
Process Improvement: A systematic
approach to improving a process
Process mapping
Analyze the process
Redesign the process
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9-48 Management of Quality
Document
Study/document
Evaluate
Seek ways to
Implement the
Improve it
Improved process
Design an
Improved process
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Process Improvement and
9-49 Management of Quality
Tools
Process improvement - a systematic approach to improving a process
Process mapping
Analyze the process
Redesign the process
Tools
There are a number of tools that can be used for problem solving and process
improvement
Tools aid in data collection and interpretation, and provide the basis for decision making
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9-50 Management of Quality
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9-51 Management of Quality
Check Sheet
Billing Errors Monday
Wrong Account
Wrong Amount
A/R Errors
Wrong Account
Wrong Amount
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9-52 Management of Quality
Pareto Analysis
80%
80% ofof the
the
problems
problems
may
may be
be
attributed
attributed to
Number of defects
to
20%
20% ofof the
the
causes.
causes.
Control Chart
Figure 9.11
1020
UCL
1010
1000
990
980
LCL
970
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
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9-54 Management of Quality
Cause-and-Effect Diagram
Figure 9.12
Methods Materials
Cause
Cause
Cause
Cause
Cause Cause
Environment Effect
Cause Cause
Cause Cause
Cause Cause
People Equipment
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9-55 Management of Quality
Run Chart
0.58
0.56
Diameter
0.54
0.52
0.5
0.48
0.46
0.44
1 2 3 4 5 6 7 8 9 10 11 12
Time (Ho urs )
Time (Hours)
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9-56 Management of Quality
Tracking Improvements
Figure 9-17
UCL UCL
UCL
LCL
LCL
Additional improvements
LCL Process centered made to the process
Process not centered and stable
and not stable
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9-57 Management of Quality
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9-58 Management of Quality
Quality Circles
Team approach
List reduction
Balance sheet
Paired comparisons
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9-59 Management of Quality
Benchmarking Process
Identify a critical process that needs
improving
Identify an organization that excels in this
process
Contact that organization
Analyze the data
Improve the critical process
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