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9-1 Management of Quality

Quality Management & TQM
Operations Management, Eighth Edition, by William J. Stevenson
Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
9-2 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
9-3 Management of Quality
Key Contributors to Quality Management







Known for
14 points; special & common causes of

Quality is fitness for use; quality trilogy

Quality is a total field

Quality is free; zero defects

Cause-and effect diagrams; quality

Taguchi loss function

Table 9.2
9-4 Management of Quality
Dimensions of Quality
- Performance - main characteristics of the
- Aesthetics - appearance, feel, smell, taste
- Special Features - extra characteristics
- Conformance - how well product/service
conforms to customers expectations
- Reliability - consistency of performance

9-5 Management of Quality
Dimensions of Quality (Contd)
- Durability - useful life of the product/service
- Perceived Quality - indirect evaluation of
quality (e.g. reputation)
- Serviceability - service after sale
9-6 Management of Quality
Examples of Quality Dimensions

1. Performance

2. Aesthetics

3. Special features

Everything works, fit &
Ride, handling, grade of
materials used
Interior design, soft touch

Gauge/control placement
Cellular phone, CD

Auto Repair

All work done, at agreed
Friendliness, courtesy,
Competency, quickness
Clean work/waiting area

Location, call when ready
Computer diagnostics

9-7 Management of Quality
Examples of Quality Dimensions (Contd)

5. Reliability

6. Durability

7. Perceived

8. Serviceability
Infrequency of breakdowns

Useful life in miles, resistance
to rust & corrosion

Top-rated car

Handling of complaints and/or
requests for information
Auto Repair
Work done correctly,
ready when promised

Work holds up over

Award-winning service

Handling of complaints

9-8 Management of Quality
Service Quality
- Tangibles
- Convenience
- Reliability
- Responsiveness
- Time
- Assurance
- Courtesy
9-9 Management of Quality
Examples of Service Quality
Dimension Examples
1. Tangibles Were the facilities clean, personnel neat?
2. Convenience Was the service center conveniently located?
3. Reliability Was the problem fixed?
4. Responsiveness Were customer service personnel willing and able
to answer questions?
5. Time How long did the customer wait?
6. Assurance Did the customer service personnel seem
knowledgeable about the repair?
7. Courtesy Were customer service personnel and the
cashierfriendly and courteous?
Table 9.4
9-10 Management of Quality
Determinants of Quality
Ease of
to design
9-11 Management of Quality
Determinants of Quality (contd)
- Quality of design
- Intension of designers to include or exclude
features in a product or service
- Quality of conformance
- The degree to which goods or services
conform to the intent of the designers
9-12 Management of Quality
- Top management
- Design
- Procurement
- Production/operations
- Quality assurance
- Packaging and shipping
- Marketing and sales
- Customer service
Responsibility for Quality
9-13 Management of Quality
Quality Awards
Baldrige Award
Deming Prize
9-14 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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Benefits of Baldrige Competition
- Financial success
- Winners share their knowledge
- The process motivates employees
- The process provides a well-designed quality
- The process requires obtaining data
- The process provides feedback
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The Deming Prize
- Honoring W. Edwards Deming
- Japans highly coveted award
- Main focus on statistical quality control
- Deming 14 points for Q

9-17 Management of Quality
Quality Certification
- ISO 9000:The International Organization for Standardization
- Set of international standards on quality
management and quality assurance, critical to
international business
- ISO 9000 Certification
- First party certificationA firm audits itself.
- Second party certificationCustomers audit their suppliers.
- Third party assessmentCompany is assessed by outside
registrars from ASQs Registration Accreditation Board (RAB).
- ISO 9000/Q90 Registration Process
- Application to registrar, Preliminary assessment, Full audit
9-18 Management of Quality
- ISO 14000 - A set of international standards
for assessing a companys environmental
- Standards in three major areas
- Management systems
- Operations
- Environmental systems
ISO 14000
9-19 Management of Quality
Total Quality Management
A philosophy that involves everyone in an
organization in a continual effort to improve
quality and achieve customer satisfaction.

9-20 Management of Quality
1. Find out what the customer wants
2. Design a product or service that meets or
exceeds customer wants
3. Design processes that facilitates doing the
job right the first time
4. Keep track of results
5. Extend these concepts to suppliers
The TQM Approach
9-21 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

9-22 Management of Quality
Quality at the Source
The philosophy of making each
worker responsible for the
quality of his or her work.
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- 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

Obstacles to Implementing TQM
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- Poor inter-organizational communication
- View of quality as a quick fix
- Emphasis on short-term financial results
- Internal political and turf wars
Obstacles to Implementing TQM
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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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Basic Steps in Problem Solving
1. Define the problem and establish an
improvement goal
2. Collect data
3. Analyze the problem
4. Generate potential solutions
5. Choose a solution
6. Implement the solution
7. Monitor the solution to see if it accomplishes
the goal
9-27 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
- Goals of Six Sigma
- To reduce process variation to the point where only 3.4 defects per million are
produced by a process that involves a high volume of manufactured units or
service transactions on a continuous basis.
- Provide a framework and methodologies to analyze and evaluate business
processes and reduce waste.
- Successful Implementation
- Training and selection of the workforce
- Impressive cost savings of program

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Six Sigma Programs
- Six Sigma programs
- Improve quality
- Save time
- Cut costs
- Employed in
- Design
- Production
- Service
- Inventory management
- Delivery
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Six Sigma Management-Formula
1, 000, 000 x
units of No. x
per error for
ies opportunit
of Number
defects of Number

Six Sigma allows managers to readily describe process performance using a
common metric: Defects Per Million Opportunities (DPMO)
9-30 Management of Quality
Six Sigma Process
- Define-Customers and their priorities
- Measure-Process and its performance
- Analyze-Causes of defects
- Improve-Remove causes of defects
- Control-Maintain quality

9-31 Management of Quality
7 Basic Tools
Flow Chart
Check Sheet
Pareto Chart
Scatter Diagram
Cause & Effect Diagram
Statistical Process Control