AMBO UNIVERSITY

INSTITUTE OF TECHNOLOGY
DEPARTMENT OF INDUSTRIAL ENGINEERING
TOTAL QUALITY MANAGEMENT (TQM) COURSE
FOR FOURTH YEAR STUDENTS
BY
INSTRUCTOR NEGASA FEYISA
 CHAPTER THREE
Design, Reliability and Costs

Reliability

Reliability is the probability that a product will continue

to work normally over a specified interval of time, under
specified condtion.
 Product/ service design
Stages of product/service design:
Functional design (form, shape, size, materials,
etc.)
Process design (processing technology and tooling)
Production design (production line & plant layout)

Impact of product/service design

 Product/service quality
 Production/delivery cost
 Customer satisfaction
 Product/ service design and development
1.Developing New Products/Services
 Sources of Product Innovation
 Getting Them to Market Faster
 Designing and Developing New Services

2. Improving Current/existing Products/Services

 Designing for Ease of Production
 Designing for Quality
 Steps in developing new products
1. Technical and economic feasibility studies
2. Prototype design
3. Performance testing of prototype
4. Market sensing/evaluation and economic
evaluation of the prototype
5. Design of production model
6. Market/performance/process testing and
economic evaluation of production model
7. Continuous modification of production model
 Steps in developing new products
1. Technical and Economic Feasibility Studies
• Determine the advisability of establishing a project for
developing the product
• If initial feasibility studies are favorable, engineers
prepare an initial prototype design
2. Prototype Design
• This design should exhibit the basic form, fit, and
function of the final product
• It will not necessarily be identical to the production
model
 Conti…
3. Performance Testing of Prototype
• Performance testing and redesign of the prototype
continues until this design-test-redesign process produces
a satisfactorily performing prototype
4. Market Sensing/Evaluation and Economic
Evaluation of the Prototype
• Accomplished by demonstrations to potential
customers, market test, or market surveys
• If the response to the prototype is favorable, economic
evaluation of the prototype is performed to estimate
production volume, costs, and profits
• If the economic evaluation is favorable, the project
enters the production design phase.
 Conti…
5. Design of Production Model
• The initial design of the production model will not be
the final design; the model will evolve
6. Market/Performance/Process Testing and
Economic Evaluation of Production Model
• The production model should exhibit:
 low cost
 reliable quality
 superior performance
 the ability to be produced in the desired quantities on the
intended equipment
 Conti…
7. Continuous Modification of Production Model
• Production designs are continuously modified to:
Adapt to changing market conditions
Adapt to changing production technology
Allow for manufacturing improvements
 Getting new product to market faster
1. Speed creates competitive advantages
2. Speed saves money
Tools to improve speed:
Autonomous design and development teams
Computer-aided design/computer-aided
manufacturing (CAD/CAM)
Simultaneous (concurrent) engineering
 Getting new product to market faster

1. Autonomous Design and Development Teams

Teams are given decision-making responsibility and
more freedom to design and introduce new
products/services
Time-to-market has been slashed dramatically
Enormous sums of money have been saved
 Conti…

2. Computer-Aided Design/Computer-Aided
Manufacturing (CAD/CAM)
Engineers, using CAD/CAM, can generate many views
of parts, rotate images, magnify views, and check for
interference between parts
Part designs can be stored in a data base for use on
other products
When it is time for manufacturing, the product design
is retrieved, translated into a language that production
machinery understands, and then the production
system can be automatically set up.
3. Simultaneous (Concurrent) Engineering
 Improving the Design of Existing
Products/Services
 Focus is improving performance, quality, and cost
 Objective is maintaining or improving market share of
maturing products/services
 Little changes can be significant
 Small, steady (continuous) improvements can add up to
huge long-term improvements
 Value analysis is practiced, meaning design features are
examined in terms of their cost/benefit (value).
 Designing for Ease of Production
Ease of Production (Manufacturability)
 Specifications - Precise information about the
characteristics of the product
 Tolerances - Minimum & maximum limits on a
dimension that allows the item to function as designed
 Standardization - Reduce variety among a group of
products or parts
 Simplification - Reduce or eliminate the complexity of
a part or product
 Designing for Quality

 Crucial element of product design is its impact

on quality
 Quality is determined by the customer’s
perception of the degree of excellence of the
product/service’s characteristics
Designing and Developing New Services
Three general dimensions of service design are:
 Degree of Standardization of the Service
 Custom-fashioned for particular customers or basically
the same for all customers?
 Degree of Customer Contact in Delivering the Service
 High level of contact (dress boutique) or low level (fast-
food restaurant)?
 Mix of Physical Goods and Intangible Services
 Mix dominated by physical goods (tailor’s shop) or by
intangible services (university)?
 Designing and Developing New Services

Differences Between New Service and New Product

Development
 Unless services are dominated by physical goods, their
development usually does not require engineering,
testing, and prototype building.
 Because many service businesses involve intangible
services, market sensing tends to be more by surveys
rather than by market tests and demonstrations.
 Major Factors Affecting Process Designs

 Nature of product/service demand

 Degree of vertical integration
 Production flexibility
 Degree of automation
 Product/Service quality
Nature of Product Demand

Demand: fluctuates over time and is affected by

product price, so pricing decisions and the choice
of processes must be synchronized.
Therefore,
Production processes must have adequate capacity
to produce the volume of the products that
customers need.
Provisions must be made for expanding or
contracting capacity to keep pace with demand
patterns.
Some types of processes are more easily expanded
and contracted than others.
 Degree of Vertical Integration
 Vertical integration is the amount of the
production and distribution chain that is brought
under the ownership of a company.
 This determines how many production processes
need to be planned and designed.
 Decision of integration is based on cost,
availability of capital, quality, technological
capability, and more.
 Strategic outsourcing (lower degree of
integration) is the outsourcing of processes in
order to react quicker to changes in customer
needs, competitor actions, and technology.
 Product flexibility

Product flexibility -- ability of the production (or

delivery) system to quickly change from producing
(delivering) one product (or service) to another.
Volume flexibility -- ability to quickly increase or
reduce the volume of product( or service) produced
(or delivered).
Degree of automation
Advantages of automation
• Improves product quality
• Improves product flexibility
• Reduces labor and related costs
Disadvantages of automation
• Equipment can be very expensive
• Integration into existing operations can be difficult
Product/service quality

Old viewpoint
• High-quality products must be made in small quantities
by expert craftsmen
New viewpoint
• High-quality products can be mass-produced using
automated machinery
• Automated machinery can produce products of
incredible uniformity
• The choice of design of production processes is
affected by the need for superior quality.
 Types of process design
1. Product-Focused
2. Process-Focused
3. Group Technology/Cellular Manufacturing
 1. Product-focused
• Processes (conversions) are arranged based on
the sequence of operations required to
produce a product or provide a service
• Also called “production line,” “assembly line,”
and flow line
• Two general forms
Discrete unit – automobiles, dishwashers
Process (Continuous) – petrochemicals, paper
Product-focused
 Product-focused
Advantages
Lower labor-skill requirements
Reduced worker training
Reduced supervision
Ease of planning and controlling production
Disadvantages
Higher initial investment level
Relatively low product flexibility
 2. Process-Focused
 Processes (conversions) are arranged based on the
type of process, i.e., similar processes are grouped
together
 Products/services (jobs) move from department
(process group) to department based on that
particular job’s processing requirements
 Also called “job shop” or “intermittent
production”
Examples
• Machine shop
• Auto body repair
• Custom woodworking shop
 Process focused

 Advantages
• High product flexibility
• Lower initial investment level
 Disadvantages
• Higher labor-skill requirements
• More worker training
• More supervision
• More complex production planning and controlling
 3. Group technology / cellular manufacturing
 Group Technology
• Each part produced receives a multi-digit code that
describes the physical characteristics of the part.
• Parts with similar characteristics are grouped into
part families
• Parts in a part family are typically made on the same
machines with similar tooling
 Conti…

 Cellular Manufacturing
• Some part families (those requiring significant
batch sizes) can be assigned to manufacturing
cells.
• The organization of the shop floor into cells is
referred to as cellular manufacturing.
• Flow of parts within cells tend to be more like
product-focused systems
 Conti…

Advantages (relative to a job shop)

•Process changeovers simplified
•Variability of tasks reduced (less training needed)
•More direct routes through the system
•Quality control is improved
•Production planning and control simpler
•Automation simpler
Disadvantages
•Duplication of equipment
•Under-utilization of facilities
•Processing of items that do not fit into a family may be
inefficient
 Quality function deployment (QFD)
• Quality Function Deployment (QFD) is a structured
approach to defining customer needs or requirements and
translating them into specific plans to produce products to
meet those needs.
• Quality function deployment (QFD) is a way to evaluate
how well the service or product design and the operations
process meet or exceed the needs of customers.
• The "voice of the customer" is the term to describe these
stated and unstated customer needs or requirements.
• It is a planning tool used to fulfill customer expectation
 Conti…

• The voice of the customer is captured in a variety of ways:

direct discussion or interviews, surveys, focus groups,
customer specifications, observation, warranty data,
field reports, etc.
• This understanding of the customer needs is then
summarized in a product planning matrix or "house of
quality".
• These matrices are used to translate higher level "what's"
or needs into lower level "how's" - product requirements or
technical characteristics to satisfy these needs.
Conti…
Example T-shirt
example
 Conti…

• While the Quality Function Deployment matrices are a

good communication tool at each step in the process,
the matrices are the means and not the end.
• The real value is in the process of communicating and
decision-making with QFD. QFD is oriented toward
involving a team of people representing the various
functional departments that have involvement in product
development: Marketing, Design Engineering, Quality
Assurance, Manufacturing/ Manufacturing Engineering,
Test Engineering, Finance, Product Support, etc.
 Explanation of QFD
Rows: listed left of the central matrix are customer
requirements, these are what customers think is
important about the product(the product whats).
Importance to customer: the six whats have been
rank ordered 1-6 by customer preference; pilling
resistance is rated the highest; medium size is resistance
is rated the highest; medium size is rated lowest.
Columns: along the top of the central matrix, listed in
the columns are the technical attributes Of the product,
these are ways the product can meet customer
requirements (the product how).
 Conti…
Central matrix: inside the central matrix are symbols showing the
strength of the relationship between the what's and the how's
(strong positive, positive, negative, strong negative).For example
Pilling resistance has a strong positive relationship to the good
appearance of the shirt and as well as to the types of fibers used
to make shirt.
Note that each relationship as a numerical weighing 1,3,and7.
Importance weighing: the weighing's of the relationships in each
column are summed to determine the relative importance of the
technical attributes. Thus, the most important technical attribute
is types of fiber used to make shirt(weight of 15) followed by GSM
of the fabric and good appearance (weight 11 each).
 Conti…
Gobbled roof: the roof on the house shows the correlations
among the technical attributes. For Example types of fibers
used to make shirt has a strong correlation with the fixation
of color.
Target values: the numerical or quantitative descriptions
shown in the basement of the house are design targets set
for the technical attributes. one target of the design, for
example is to keep the GSM of shirt within130-150.
 The QFD team
Two types of team; A. new product and B. improving existing product. The teams consists of
members from marketing, design, finance, production and quality
Benefits of QFD

• Customer Driven
• Reduces Implementation Time
• Promotes Teamwork
• Provides Documentation
 Quality cost
Many organizations now formally evaluate the cost associated with quality
There are several reasons why the cost of quality should be explicitly
considered in an organization. These include the following:

1. The increase in the cost of quality because of the increase in the

complexity of manufactured products associated with advances in
technology

2. Increasing awareness of life-cycle costs, including maintenance, spare

parts, and the cost of field failures

3. Quality engineers and managers can most effectively communicate

quality issues in a way that management understands.
Every time work is redone, the cost of quality increases. Examples include:
 The reworking of a manufactured item
 The retesting of rework product
 The rebuilding of a process
 Conti…
Many manufacturing and service organizations use four categories
of quality costs: prevention costs, appraisal costs, internal
failure costs, and external failure costs which are defined by
American society of quality control (ASQC) (1971).
1. Prevention cost
The costs of all activities specifically designed to prevent poor
quality in products or services (Broadly speaking, prevention
costs are all costs incurred in an effort to “make it right the first
time.”) such as:
 Quality planning
Costs associated with the creation of the overall quality plan, the
inspection plan, the reliability plan, the data system, and all
specialized plans and activities of the quality-assurance function.
the preparation of manuals and procedures used to communicate
the quality plan; and the costs of auditing the system.
 Conti…
 New products review
cost incurred during design and development of new product
 Product/process design.
Costs incurred during the design of the product or the selection of the
production processes that are intended to improve the overall quality
of the product.
 Process control
The cost of process-control techniques, such as control charts.
 Training
The cost of developing, preparing, implementing, operating, and
maintaining formal training programs for quality.
 Quality data acquisition and analysis. Conti…
The cost of running the quality data system to acquire data
on product and process performance; also the cost of
analyzing these data to identify problems. It includes the
work of summarizing and publishing quality information
for management.
2. Appraisal costs: are those costs associated with
measuring, evaluating, or auditing products, components,
and purchased materials to ensure conformance to the
standards and performance requirements that have been
imposed.
 Inspection and test of incoming material
Costs associated with the inspection and testing of all material.
 Product inspection and test
Conti…
The cost of checking the conformance of the product throughout its
various stages of manufacturing.
 Materials and services consumed

The cost of material and products consumed in a destructive test.

 Maintaining accuracy of test equipment

The cost of operating a system that keeps the measuring instruments

and equipment in calibration.
 Conti…
3. Failure costs: are costs resulting from products or
services not conforming to requirements or
customers’ needs. Failure costs are divided into
internal and external failure categories.
3.1 Internal Failure Costs
Internal failure costs are incurred when products,
components, materials, and services fail to meet quality
requirements, and this failure is discovered prior to
delivery of the product to the customer.
 Scarp: The net loss of labor, material, and overhead
resulting from defective product that cannot economically
be repaired or used.
 Conti…
 Rework:
The cost of correcting nonconforming units so that they
meet specifications.
 Retest:
The cost of reinspection (retesting) of products that have
undergone rework or other modifications.
 Failure analysis:
The cost incurred to determine the causes of product
failures.
 Downtime:
The cost of idle production facilities that results from
nonconformance to requirements.
 Conti…
3.2 External failure: costs occur when the product does not
perform satisfactorily after it is delivered to the customer.
 Complaint adjustment :
All costs of investigation and adjustment of justified complaints
attributable to the nonconforming product.
 Returned product/material.
All costs associated with receipt, handling, and replacement of the
nonconforming product or material that is returned from the field.
 Warranty charges:
All costs involved in service to customers under warranty contracts.
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