chapter 17 | Quality (Business) | Perception

Chapter 17 Quality planning and control

Source: Archie Miles

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Quality planning and control

Quality planning and control The market requires … consistent quality of products and services The operation supplies … the consistent delivery of products and services at specification or above

Operations strategy Operations management

Design

Improvement

Planning and control

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

The various definitions of quality
The transcendent approach views quality as synonymous with innate excellence. The manufacturing-based approach assumes quality is all about making or providing error-free products or services. The user-based approach assumes quality is all about providing products or services that are fit for their purpose. The product-based approach views quality as a precise and measurable set of characteristics. The value-based approach defines quality in terms of ‘value’.

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

High quality puts costs down and revenue up
Quality up Rework and scrap costs down Service costs down Inspection and test costs down Processing time down

Image up

Inventory down

Sales volume up Price competition down

Complaint and warranty costs down Scale economies up

Capital costs down

Productivity up Operation costs down Profits up
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Revenue up

Perceived quality is governed by the gap between customers’ expectations and their perceptions of the product or service

Customers’ expectations for the product or service

Gap Customers’ perceptions of the product or service Customers’ Customers’ expectations perceptions of the for the product or product or service service

Gap Customers’ expectations for the product or service Customers’ perceptions of the product or service

Expectations > perceptions

Expectations = perceptions

Expectations < perceptions

Perceived quality is poor

Perceived quality is acceptable

Perceived quality is good

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

A ‘gap’ model of quality
Previous experience Word-of-mouth communications Customer’s expectations concerning a product or service Customer’s own specification of quality Gap 1 Management’s concept of the product or service Gap 2 Organization’s specification of quality Gap 3 The operation’s domain
Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Image of product or service Customer’s perceptions concerning the product or service Gap 4 The actual product or service

The customer’s domain

Gap ?

The perception–expectation gap
Action required to ensure high perceived quality Ensure consistency between internal quality specification and the expectations of customers Ensure internal specification meets its intended concept of design Ensure actual product or service conforms to internally specified quality level Ensure that promises made to customers concerning the product or service can really be delivered Main organizational responsibility Marketing, operations, product/service development Marketing, operations, product/service development Operations

Gap 1

Gap 2

Gap 3

Gap 4

Marketing

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Quality characteristics of goods and services
Functionality – how well the product or service does the job for which it was intended Appearance – the aesthetic appeal, look, feel, sound and smell of the product or service Reliability – the consistency of performance of the product or service over time Durability – the total useful life of the product or service Recovery – the ease with which problems with the product or service can be rectified or resolved Contact – the nature of the person-to-person contacts that take place

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Attribute and variable measures of quality

Attributes Defective or not defective? Light bulb works or does not work Number of defects in a turbine blade

Variables Measured on a continuous scale Diameter of bulb Length of bar

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Quality

Quality fitness for purpose

Reliability ability to continue working at accepted quality level

Quality of design degree to which design achieves purpose

Quality of conformance faithfulness with which the operation agrees with design

Variables things you can measure

Attributes things you can assess and accept or reject

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
Some aspect of the performance of a process is often measured over time
Question: “Why do we do this?”

Some measure of operations performance

Time

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
Some aspect of the performance of a process is often measured over time
Question: “How do we know if the variation in process performance is ‘natural’ in terms of being a result of random causes, or is indicative of some ‘assignable’ causes in the process?”

Some measure of operations performance

Time

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
The last point plotted on this chart seems to be unusually low. How do we know if this is just random variation or the result of some change in the process which we should investigate? Some kind of ‘guidelines’ or ‘control limits’ would be useful.

Elapsed time of call

Time

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting

0.8

2.2 After the first sample

3.6

0.8

2.2

3.6

After the second sample

0.8

2.2 3.6 Fitting a normal distribution to the histogram of sampled call times

0.8

2.2 3.6 By the end of the first day

0.8

2.2

3.6

By the end of the second day

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
99.7% of points –3 standard deviations –2 standard deviations 95.4% of points –1 standard deviation 68% of points A standard deviation +2 standard deviations +1 standard deviation +3 standard deviations

Frequency

Σ = sigma
40 100 Elapsed time of call (seconds) 160

The chances of measurement points deviating from the average are predictable in a normal distribution

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
If we understand the normal distribution, which describes random variation when the process is operating normally, then we can use the distribution to draw the control limits. In this case the final point is very likely to be caused by an ‘assignable’ cause, i.e. the process is likely to be out of control.

Elapsed time of call

Time

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process variability
A XP AP

X

On/off target – accuracy: A Scatter – precision: P

AP XX

AP

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
In addition to points falling outside the control limits, other unlikely sequences of points should be investigated.

UCL

C/L

LCL

Alternating and erratic behaviour – investigate!

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
In addition to points falling outside the control limits, other unlikely sequences of points should be investigated.

UCL

C/L

LCL

Suspiciously average behaviour – investigate!

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
In addition to points falling outside the control limits, other unlikely sequences of points should be investigated.

UCL

C/L

LCL

Two points near control limit – investigate!

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
In addition to points falling outside the control limits, other unlikely sequences of points should be investigated.

UCL

C/L

LCL

Five points on one side of centre line – investigate!

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
In addition to points falling outside the control limits, other unlikely sequences of points should be investigated.

UCL

C/L

LCL

Apparent trend in one direction – investigate!

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process control charting
In addition to points falling outside the control limits, other unlikely sequences of points should be investigated.

UCL

C/L

LCL

Sudden change in level – investigate!

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Low process variation allows changes in process performance to be readily detected
Process distribution A Process distribution B Process distribution A Process distribution B

A B

A B

Time

Time

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Process variation and its effect on process defects per million opportunities (DPMO)
Process variation LSL USL LSL Process variation USL LSL Process variation USL LSL Process variation USL

3 sigma process variation = 66800 defects per million opportunities

4 sigma process variation = 6200 defects per million opportunities

5 sigma process variation = 230 defects per million opportunities

6 sigma process variation = 3.4 defects per million opportunities

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Ideal and real operating characteristics
Producer’s risk (0.05)
1.0

Probability of accepting the batch

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 0.01

In this ideal operating characteristic, the probability of accepting the batch if it contains more than 0.04% defective items is zero, and the probability of accepting the batch if it contains less than 0.04% defective items is 1 In this real operating characteristic (where n = 250 and c = 1), both type 1 and type 2 errors will occur Type 1 error Type 2 error

AQL
0.02 0.03 0.04

LTPD
0.05 0.06

Consumer’s risk (1.0)
0.07 0.08

Percentage actual defective in the batch

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test
Quality Consistent conformance to customers’ expectations. Quality characteristics The various elements within the concept of quality, such as functionality, appearance, reliability, durability, recovery, etc. Quality sampling The practice of inspecting only a sample of products or services produced rather than every single one.

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test
Statistical process control (SPC) A technique that monitors processes as they produce products or services and attempts to distinguish between normal or natural variation in process performance and unusual or ‘assignable’ causes of variation. Acceptance sampling A technique of quality sampling that is used to decide whether to accept a whole batch of products (and occasionally services) on the basis of a sample; it is based on the operation’s willingness to risk rejecting a ‘good’ batch and accepting a ‘bad’ batch. Control charts The charts used within statistical process control to record process performance.

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test
Process capability An arithmetic measure of the acceptability of the variation of a process. Control limits The lines on a control chart used in statistical process control to indicate the extent of natural or common-cause variations; any points lying outside these control limits are deemed to indicate that the process is likely to be out of control. Quality loss function (QLF) A mathematical function devised by Genichi Taguchi that includes all the costs of deviating from a target performance.

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Key Terms Test
Six Sigma An approach to improvement and quality management that originated in the Motorola Company but was widely popularized by its adoption in the GE Company in America. Although based on traditional statistical process control, it is now a far broader ‘philosophy of improvement’ that recommends a particular approach to measuring, improving and managing quality and operations performance generally. Zero defect The idea that quality management should strive for perfection as its ultimate objective, even though in practice this will never be reached.

Slack, Chambers and Johnston, Operations Management 5th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.