Chapter 6 Quality

- An operations manager’s objective is to build a total quality management system that identifies
and satisfies customer needs
- Managing quality supports differentiation, low cost, and response strategies
- Quality helps firms increase sales and reduce costs
- Building a quality organization is a demanding task
- Managing quality helps build successful strategies in differentiation, low cost and response
- Improvements in quality helps firms increase sales and reduce cost, which increases profit
- Increase in sales happens when firm speeds response increase or lower selling prices etc
-

Defining Quality

- The totality of features and characteristics of a product or service that bears on its ability
to satisfy stated or implied needs
- Ability for good and services to meet customers needs
- Total quality management takes care of customers
- To production managers quality is manufacturing based, believe that quality mean conforming
to standards and making it right the first time

Different Views

- User-based: better performance, more features, lies under the eye of the beholder, higher
quality better performance
- Manufacturing-based: conformance to standards, making it right the first time
- Product-based: specific and measurable attributes of the product

Cost of Quality

- Prevention costs – reducing the potential for defects or services (training, quality improvement
programs)
- Appraisal costs – evaluating products, parts, and services before delivery to customer (testing
labs, inspectors)
- Internal failure – producing defective parts or service before delivery (scrap, downtime, rework)
- External costs – defects discovered after delivery (returned goods, liabilities, lost goodwill, cost
to society)

International Quality Standards

- ISO 9000 series (Europe/EC): Set of quality standards developed by the international
Organization for Standardization (ISO)
- Common quality standards for products sold in Europe (even if made in U.S.)
- 2008 update places greater emphasis on leadership and customer requirements and
satisfaction
- ISO 14000 series (Europe/EC): series of environmental management standards that contain 5
elements
 - (1) environmental management, (2) auditing (3), performance evaluation (4) labelling (5) life
cycle assessment

Total Quality Management

- Management of an entire organization so that it excels in all aspects of products and services
that are important t the customer
- Refers to quality encompasses entire organization, from supplier to customer
- Stresses a commitment by management to have a continuing, companywide drive toward all
aspects of product and services are important to customers
- excellence in all aspects of products and services that are important to the customer

Continuous Improvement

- Represents continual improvement of all processes

- Involves all operations and work centers including suppliers and customers
- People, Equipment, Materials, Procedures

Shewhart’s PDCA Model

- Plan, Do, Check, Act

- As a circle to stress the continuous nature of the improvement process
- Plan: Identify the problem and plan
- Do: test the plan
- Check: is the plan working
- Act: Implement the plan document

JIT (Just in Time)

- One of continuing improvement and enforced problem solving

- JIT systems are designed to produce or deliver goods just as their needed
- Its related in 3 ways:
- ‘Pull’ system of production scheduling including supply management
o Production only when signaled
- Allows reduced inventory levels
o Inventory costs money and hides process and material problems
- Encourages improved process and product quality

Tools of TQM

- Tools for Generating Ideas

o Check sheets: any kind of form that is designed for recording data, help analysts find the
facts or patterns that may aid subsequent analysis
o Scatter diagrams: Show the relationship between 2 measurements, ex is the positive
relationship between length of a service call and the number of trips a repair person
makes back to the truck parts
o Cause-and-effect diagrams: used to discover possible locations of quality problems, also
known as fish bone diagram
- Tools to Organize the Data
o Pareto charts: Graphics that identify the few critical items as opposed to many less
important ones
o Flowcharts: Block diagrams that describe a process or system
- Tools for identifying Problems
o Histogram
o Statistical process control chart

Management Leadership
Morning Market
(Case Study)

 Daily focus on business objectives, value stream

 Urgency of problem solving, material flow

 Engages cross-functional teams in rapid formal problem solving efforts

 Engages Six Sigma resources in direct problem-solving efforts

 Identifies opportunities for Improvement, Kaizen events, Six Sigma projects, etc.

Reflection on past period (shift, day etc)

Discuss defects
Discuss issues (eg safety, news, changes)
Review plan to execute for the next period starting (shift, day etc)
- Morning Market (asaichi in Japanese) refers to “the first thing in the morning”.
- It’s a daily process, led by operations.
- Each morning problems that occurred during the last 24 hours are brought to the table.
- By making defects and problems ‘visible’ an urgency is created to find a solution.
- It is not just for problems. It may reflect your previous day…how things worked, what to focus
on today
- It serves as a game plan for all to focus on for today, so all work in same direction
- Should not wait until Morning Market to address defects- address immediately…but share
and continue at morning market.
-