Operations and Supply Chain Management: Chase - Shankar - Jacobs

14e
Operations and
Supply Chain
Management
CHASE | SHANKAR | JACOBS
12–1
Quality
Management & Six
Sigma
Chapter Eight
McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
12–2
Copyright © 2014 by McGraw Hill Education (India) Private Limited. All rights reserved.
Learning Objectives
• LO12–01: Explain the scope of total quality
management in a firm.
• LO12–02: Understand the Six Sigma approach

to improving quality and productivity.
• LO12–03: Illustrate globally recognized

quality benchmarks.
12–3
Total Quality Management (TQM)
• Total quality management: managing the entire
organization so that it excels on all dimensions
of products and services that are important to
the customer
• Two fundamental operational goals

– Careful design of the product or service
– Ensuring that the organization’s systems can
consistently produce the design
12–4
Malcolm Baldrige National
Quality Award
• An award established by the U.S. Department of
Commerce given annually to companies that
excel in quality.
• The Baldrige Quality Award is given to

organizations that have demonstrated outstanding
quality in their products and processes.
12–5
Malcolm Baldrige National
Quality Award
• The award program is administered by the National
Institute of Standards and Technology, an agency of
the U.S. Department of Commerce.
• A total of up to 18 awards may be given annually in

these categories: manufacturing, service, small
business, education and health care, and not-for-
profit.
12–6
What It Takes to Apply for
Baldrige
• Candidates for the award must submit an application of
up to 50 pages that details the approach, deployment, and
results of their quality activities under seven major
categories:
– Leadership
– Strategic Planning
– Customer and Market Focus
– Information and Analysis
– Human Resource Focus
– Process Management
– Business Results
12–7
Baldrige – Scoring
• Applications are scored on total points out of
1,000.
• Those >650 get selected for site visits, which
decide the final winner.
• Other benefits:
– Feedback from the Baldrige examiners
– “An audit report of the firm’s practices.”
• Many states use Baldrige Criteria as the basis for
their own awards.
12–8
Discrimination: Adult joke!The Black Bra : A
Story by a Married Woman....I had lunch with 2
of my unmarried friends. One is engaged, one
The Quality Gurus
is in a love relation, and I have been married
for 5+ years. We were chatting about our
relationships and decided to amaze our men by
greeting them at the door wearing a black bra,
stiletto heels and a mask over our eyes. We
agreed to meet in a few days to exchange
notes.Here's how it all went....My engaged
friend : The other night when my boyfriend
came over he found me with a black leather
bodice, tall stilettos and a mask. He saw me
and said, 'You are the woman of my dreams. I
love you..' Then we made passionate love all
night long.The one in Love Relation : Me too !
The other night I met my boy friend at his
office and I was wearing a raincoat, under it
only the black bra, heels and mask over my
eyes. When I opened the raincoat he didn't say
a word, but he started to tremble and we had
wild sex all night.Then I had to share my :
When my husband came home I was wearing
the black bra, black stockings, stilettos and a
mask over my eyes. When he came in the door 12–9
Quality Specifications and
Quality Costs
• Design quality:
inherent value of the
Performance Features
product in the
marketplace
Reliability/
Serviceability
• Conformance Durability
quality: degree to
which the product or
service design Aesthetics Perceived Quality
specifications are
met
12–10
Costs of Quality
Appraisal costs – costs of the
inspection and testing to Prevention costs – sum of all
ensure that the product or the costs to prevent defects
process is acceptable
Quality Costs
Internal failure costs – costs External failure costs – costs

for defects incurred within for defects that pass through
the system the system
12–11
Six Sigma
• A philosophy and set of methods companies

use to eliminate defects in their products and
processes
• Seeks to reduce variation in the processes that
lead to product defects
• The name, “Six Sigma,” refers to the goal of
no more than four defects per million units
12–12
Six Sigma Methodology
Developed by General
Define, measure, analyze, Electric as a means of
improve, and control focusing effort on quality
(DMAIC) using a methodological
approach
Overall focus of the

Seeks to reduce the
methodology is to
variation in the processes
understand and achieve
that lead to these defects
what the customer wants
12–13
DMAIC Cycle
Define - identify customers and their priorities
Measure - determine how to measure the process and

how it is performing
Analyze - determine the most likely causes of defects
Improve - identify means to remove the causes of

defects
Control - determine how to maintain the improvements
12–14
Six Sigma Analytical Tools
Flowchart - a diagram Pareto chart - help to
Run chart - depict
of the sequence of break down a problem
trends in data over time
operations into components
Cause-and-effect Opportunity flow

Checksheet - basic
diagram - show diagram - used to
form to standardize
relationships between separate value-added
data collection
causes and problems from non-value-added
Process control chart -

used to assure that
processes are in
statistical control
12–15
Flowchart
12–16
Run Chart
12–17
Checksheet
12–18
(Fishbone Diagram)
Cause-and-Effect Diagram
12–19
Opportunity Flow Diagram
12–20
Process Control Chart
12–21
Additional Six Sigma Tools
• Failure mode and effect analysis (FMEA): is a
structured approach to identify, estimate, prioritize,
and evaluate risk of possible failures at each stage in
the process
• Design of experiments (DOE): a statistical

methodology to determine cause-and-effect
relationships between process variables and output
– Permits experimentation with many variables
simultaneously
12–22
Six Sigma Roles and Responsibilities
• Executive leaders must champion the process

of improvement
• Corporation-wide training in Six Sigma

concepts and tools
• Set stretch objectives for improvement
• Continuous reinforcement and rewards

12–23
The Shingo System: Fail-Safe Design
• Shingo’s argument:
– Defects arise when people make errors
• Defects can be prevented by providing workers with
feedback on errors.
– Successive check
– Self-check
– Source inspection
• Poka-yoke includes:
– Checklists
– Special tooling that prevents workers from making errors
12–24
ISO 9000 and ISO 14000
• Series of standards agreed upon by the International
Organization for Standardization (ISO)
– Adopted in 1987
– Used in more than 160 countries
• A prerequisite for global competition?
• ISO 9000 an international reference for quality; ISO
14000 primarily concerned with environmental
management
12–25
Three Forms of ISO
Certification
• First party: a firm audits itself against ISO
9000 standards
• Second party: a customer audits its supplier
• Third party: a "qualified" national or

international standards or certifying agency
serves as auditor
12–26
External Benchmarking Steps
• Identify those processes needing improvement.
• Identify a firm that is the world leader in performing

the process.
• Contact the managers of that company and make a

personal visit to interview managers and workers.
• Analyze data.
12–27

Operations and Supply Chain Management: Chase - Shankar - Jacobs

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Operations and Supply Chain Management: Chase - Shankar - Jacobs

Uploaded by

Copyright:

Available Formats

14e

• LO12–02: Understand the Six Sigma approach

• LO12–03: Illustrate globally recognized

• Two fundamental operational goals

• The Baldrige Quality Award is given to

• A total of up to 18 awards may be given annually in

Internal failure costs – costs External failure costs – costs

• A philosophy and set of methods companies

Overall focus of the

Measure - determine how to measure the process and

Analyze - determine the most likely causes of defects

Improve - identify means to remove the causes of

Control - determine how to maintain the improvements

Cause-and-effect Opportunity flow

Process control chart -

• Design of experiments (DOE): a statistical

• Executive leaders must champion the process

• Corporation-wide training in Six Sigma

• Set stretch objectives for improvement

• Continuous reinforcement and rewards

• Second party: a customer audits its supplier

• Third party: a "qualified" national or

• Identify a firm that is the world leader in performing

• Contact the managers of that company and make a

You might also like