Managing Quality

Quality at Fortis Hospital

 Virtually every type of quality tool is employed

 Continuous improvement
 Employee empowerment
 Benchmarking
 Just-in-time
 Quality tools
Quality and Strategy
 Managing quality supports
differentiation, low cost, and response
strategies
 Quality helps firms increase sales and
reduce costs
 Defining Quality
Itis the ability of a product or service to meet
customer needs.

Customer : Higher Quality Means

◦ Better performance and More features .
Production Manager
◦ Making it right the first time (RFT).
◦ Conforming the standards.
 How Quality
Improves Profitability

Sales Gains via

 Improved response
 Flexible pricing
 Improved reputation
Improved Increased
Quality Profits
Reduced Costs via
 Increased productivity
 Lower rework and scrap costs
 Lower warranty costs
 Implications of Quality
 Company reputation
 Perception of new products
 Employment practices
 Supplier relations
 Product liability
 Reduce risk
 Global implications
 Improved ability to compete
Key Dimensions of Quality

 Performance  Durability
 Features  Serviceability
 Reliability  Aesthetics
 Conformance  Perceived quality
 Value
 Costs of Quality
 Prevention costs –
 Cost associated with reducing the potential for defective parts or
services. E.g. : training, quality improvement
 Appraisal costs
 Related to evaluating products, parts, and services. E.g. :-
testing, labs, inspection.
 Internal failure –
 producing defective parts or service before delivery.
 E.g. : Scrap, downtime
 External costs –
 That occur after delivery of defective parts or services.
 E.g. : rework, returned goods, cost to society.
Costs of Quality
Total Total Cost
Cost
External Failure

Internal Failure

Prevention

Appraisal
Quality Improvement
International Quality Standards

 A set of quality standards developed by the

International Organisation for standarisation.
 ISO 9000 series
 ISO 14000 series
 An environmental management standards
 TQM

It is the management of an entire organization, (from supplier

to customer) so that it excels in all the aspects of products
and services that are important to the customer.

TQM is important as quality decisions influence each of the

10 decisions by operations manager.
The Flow of Activities necessary for TQM
Organizational Practices
Leadership, Mission statement, Effective operating procedures,
Staff support, Training
Yields: What is important and what is to be
accomplished
Quality Principles
Customer focus, Continuous improvement, Benchmarking, Just-in-
time, Tools of TQM
Yields: How to do what is important and to be
accomplished
Employee Fulfilment
Empowerment, Organizational commitment
Yields: Employee attitudes that can accomplish
what is important
Customer Satisfaction
Winning orders, Repeat customers
Yields: An effective organization with
a competitive advantage
Seven Concepts of effective TQM

 Continuous improvement
 Six Sigma
 Employee empowerment
 Benchmarking
 Just-in-time (JIT)
 Taguchi concepts
 Knowledge of TQM tools
Continuous Improvement

 It is a never ending process of

continuous improvement that covers
People, Equipment, Materials,
suppliers and procedures.
 The end goal is perfection, which is
never achieved but always sought.
Plan-Do-Check-Act

Japanese use the word Kaizen to describe the ongoing process of

unending improvement.
In U.S. TQM is Zero defect.
 Six Sigma
Six sigma has two meanings in TQM.
 Statistically, it is a process, product or service with an
extremely high capability, that is 99.9997%, accuracy.
3.4 defects per million opportunities (DPMO).
 Three sigma programme would result in 2700 DPMO.
 A program designed to reduce defects, lower costs, and
improve customer satisfaction
Six Sigma
 Two meanings
Lower limits Upper limits

 Statistical definition of a process that is

2,700 defects/million
99.9997% capable, 3.4 defects per million
3.4 defects/million
opportunities (DPMO)
 A program designed to reduce defects, lower
costs, and improve customer satisfaction
Mean

±3
±6
Figure 6.4
Six Sigma Program
 Originally developed by Motorola, adopted
and enhanced by Honeywell and GE
 Highly structured approach to process
improvement
 A strategy

6
 A discipline - DMAIC
 Six Sigma DMAIC Approach

1. Define critical outputs

and identify gaps for improvement.
2. Measure the work and
collect process data.
3. Analyze the data.
4. Improve the process.
5. Control the new process to make sure new
performance is maintained.
 Employee Empowerment
 Getting employees involved in product and process
improvements
 85% of quality problems are due
to process and material

 Techniques
 Build communication networks
that include employees
 Develop open, supportive supervisors
 Move responsibility to employees
 Build a high-morale organization
 Create formal team structures

Quality Circle : is a group of employees who meet regularly to solve work

related problems.
 Benchmarking
It involves selecting a demonstrated standard of performance,
that represent the very best performance for a process or
activity. Steps for developing benchmarks are
t e r nal f
in i
 Determine what to Use marking ugh
h no
b e nc e b i g e
benchmark you
’r

 Form a benchmark team

 Identify benchmarking partners
 Collect and analyze benchmarking information
 Take action to match or exceed the benchmark
 Benchmarking Factors for
Web Sites
Use of meta tags Yes: 70%, No: 30%

Meaningful homepage title Yes: 97%, No: 3%

Unique domain name Yes: 91%, No: 9%

Search engine registration Above 96%

Average loading speed 28K: 19.31, 56K: 10.88,

T1: 2.59
Average number of spelling errors 0.16

Visibility of contact information Yes: 74%, No: 26%

Presence of search engine Yes: 59%, No: 41%

Translation to multiple languages Yes: 11%, No: 89%

Just-in-Time (JIT)
JIT system are designed to produce or deliver goods just
as they are needed. Relationship of JIT to quality:

 JIT cuts the cost of quality

 JIT improves quality
Just-in-Time (JIT)

 ‘Pull’ system of production scheduling

including supply management
 Production only when signaled

 Allows reduced inventory levels

 Inventory costs money and hides process and material problems

 Encourages improved process and product

quality
Just-In-Time (JIT) Example

Work in process
inventory level
(hides problems)

Unreliable Capacity Imbalances

Vendors Scrap
Just-In-Time (JIT) Example
Reducing inventory reveals
problems so they can be solved

Unreliable Capacity Imbalances

Vendors Scrap
 Taguchi Concepts
 As quality problems are the result of product and
process design. It is an Engineering and
experimental design to improve product and
process design.
 Identify key component and process variables affecting
product variation
 Taguchi Concepts
 Quality robustness
 Quality loss function
 Target-oriented quality
Quality Robustness
 Ability to produce products uniformly in
adverse manufacturing and environmental
conditions.
 Remove the effects of adverse conditions
 Small variations in materials and process do
not destroy product quality
 Target-
oriented
Quality Loss Function quality
 It is a mathematical function that identify all
costs connected with poor quality and show how
these cost increase as product quality moves
from what the customer wants.
 L = D2C
 L = loss of society
 D2 = Square of the distance from the target
value.
 C = cost of deviation at the specific limit.
 Quality Loss Function
High loss
L = D2C
Unacceptable where
Loss (to L= loss to
producing Poor society
organization,
Fair D= distance
customer, and from target value
society) Good
C= cost of
Best deviation
Low loss Target-oriented quality
yields more product in the
“best” category
Target-oriented quality
brings product toward the
Frequency target value
Conformance-oriented
quality keeps products
within 3 standard deviations

Lower Target Upper

Specification
Tools of TQM
 Tools for Generating Ideas
 Check sheets
 Scatter diagrams
 Cause-and-effect diagrams
 Tools to Organize the Data
 Pareto charts
 Flowcharts
 Tools for Identifying Problems
 Histogram
 Statistical process control chart
Check Sheet
Check sheet is any kind of form that is used to record data.
It helps analysts to find the facts and patterns of operational
processes. E.g. : check sheet of customer complaints
Hour
Defect 1 2 3 4 5 6 7 8
A /// / / / / /// /
B // / / / // ///
C / // // ////
 Scatter Diagram
Scatter diagram shows the relationship between two measurements.
A graph of the value of one variable vs. another variable.
e.g. Impact of absenteeism on productivity
Productivity

Absenteeism
 Cause-and-Effect Diagram
A Schematic technique used to discover possible locations of quality
problems. Operations manager starts with four categories : material,
machinery, manpower and method. It provide a good checklist for
initial analysis.

Cause

Materials Methods
Effect

Manpower Machinery
Cause-and-Effect Diagrams
Material Method
(ball) (shooting process)
Grain/Feel Aiming point
(grip)
Size of ball
Air pressure Bend knees
Hand position
Balance
Lopsidedness
Follow-through
Missed
Training
free-throws
Rim size

Conditioning Motivation Rim height

Consistency Rim alignment Backboard

stability
Concentration

Machine
Manpower
(hoop &
(shooter)
backboard)
 Pareto Chart
A graph to identify and plot problems or defects in descending order of
frequency
Frequency

Percent
A B C D E
General Manager of a hotel received the complaints in the following order :
Poor Room service (72%), check-in (16%), Pool hours (5%), Mini bar (4%), Misc (3%),

5.1,5.3,5.7b,5.12,5.13
Flowchart (Process Diagram
A chart that describes the steps in a process

5.6,5.15
Flow Charts
MRI Flowchart
1. Physician schedules MRI 7. If unsatisfactory, repeat
2. Patient taken to MRI 8. Patient taken back to room
3. Patient signs in 9. MRI read by radiologist
4. Patient is prepared 10. MRI report transferred to physician
5. Technician carries out MRI 11. Patient and physician discuss
6. Technician inspects film

8
80%
1 2 3 4 5 6 7 11
9 10
20%
Histogram

A distribution showing the frequency of occurrences of a

variable.
Distribution
Frequency

Repair time (minutes)

Statistical Process Control (SPC)
A process used to monitor the standards, make
measurement and take corrective action as a
product or service is being produced.
 Four key steps
 Measure the process
 When a change is indicated, find the assignable cause
 Eliminate or incorporate the cause
 Restart the revised process
Statistical Process Control Chart
Control Charts : are the graphical representation of data over
time (horizontal axis) that shows upper and lower limit for the
processes we want to control.

Upper control limit

Target value

Lower control limit

Time
 The role of Inspection
 It is a mean to ensure that an operation is
producing at the quality level expected.
 Involves examining items to see if an item is
good or defective
 Detect a defective product
 Does not correct deficiencies in process or
product
 It is expensive
 Issues
 When to inspect
 Where in process to inspect
When and Where to Inspect
1. At the supplier’s plant while the supplier is
producing
2. At your facility upon receipt of goods from the
supplier
3. Before costly or irreversible processes
4. During the step-by-step production process
5. When production or service is complete
6. Before delivery to your customer
7. At the point of customer contact
Service Industry Inspection

What is
Organization Standard
Inspected

Jones Law Office Receptionist Is phone answered by the

performance second ring
Billing Accurate, timely, and
correct format
Attorney Promptness in returning
calls

Table 6.5
Service Industry Inspection
What is
Organization Standard
Inspected
Arnold Palmer Billing Accurate, timely, and
Hospital correct format.
Pharmacy Prescription accuracy,
inventory accuracy
Lab Audit for lab-test accuracy
Nurses Charts immediately
updated
Admissions Data entered correctly and
completely
TQM In Services
 Service quality is more difficult to
measure than the quality of goods
 Service quality perceptions depend on
 Intangible differences between products
 Intangible expectations customers have of
those products
Service Quality
The Operations Manager must
recognize:
1. The tangible component of services is
important
2. The service process is important
3. The service is judged against the
customer’s expectations
4. Exceptions will occur
Service
Specifications
at UPS
 Determinants of Service Quality
 Reliability : Consistency of performance and dependability.
 Responsiveness :
 concerns the readiness of employees to provide the
services. That is timeliness of services.
 Competence
 Means the possession of required skills and knowledge.
 Access
 Approachability and ease of content.
 Courtesy
 Politeness, respect, consideration and friendliness
 .

 Communication
 Keeping customer informed in language they can
understand.
 Credibility
 Trustworthiness, believability and honesty. That is having
the customer’s best interest at the heart.
 Knowing the customer
 Making the efforts to understand customer’s needs.
 Tangibles
 Physical evidence of the services.