Chapter 14 Quality Management Sales Order Management Aggregate Planning Master Scheduling Production Activity Control Quality Control Distribution Mngt

Chapter 14

Quality Management

Sales Order Management

AggregatePlanning

MasterScheduling

Production ActivityControl

QualityControl

DistributionMngt. © 2001 Victor E. Sower, Ph.D., C.Q.E.

Business Processes

Ch 3 - 2© 2000 by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e

What Is Quality?

• “The degree of excellence of a thing” (Webster’s Dictionary)

• “The totality of features and characteristics that satisfy needs” ( ASQ)

• Fitness for use (Juran)


Dimensions Of Product Quality (Garvin)

1. Performance –basic operating characteristics

2. Features –“extra” items added to basic features

3. Reliability –probability product will operate over time


4. Conformance –meeting pre-established standards

5. Durability –life span before replacement

6. Serviceability –ease of getting repairs, speed & competence of repairs


7. Aesthetics–look, feel, sound, smell or taste

8. Safety–freedom from injury or harm

9. Other perceptions–subjective perceptions based on brand name, advertising, etc


Service Quality

1. Time & Timeliness –customer waiting time, completed on time

2. Completeness –customer gets all they asked for

3. Courtesy–treatment by employees


4. Consistency

–same level of service for all customers

5. Accessibility & Convenience –ease of obtaining service

6. Accuracy–performed right every time

7. Responsiveness–reactions to unusual situations


Quality Of Conformance

• Ensuring product or service produced according to design

• Depends on–design of production process–performance of machinery–materials–training


The Meaning of Quality

Quality of Conformance Quality of Design

Producer’s Perspective Consumer’s Perspective

Fitness forConsumer Use

Production Marketing•Conformance to specifications•Cost

•Quality characteristics•Price


Quality Philosophers

• Walter Shewhart• W. Edwards Deming• Joseph Juran• Philip Crosby• Armand Feigenbaum


Deming’s 14 Points

1. Create constancy of purpose2. Adopt philosophy of prevention3. Cease mass inspection4. Select a few suppliers based on quality5. Constantly improve system and workers6. Institute worker training


7. Instill leadership among supervisors8. Eliminate fear among employees9. Eliminate barriers between departments10. Eliminate slogans11. Remove numerical quotas12. Enhance worker pride13. Institute vigorous training & education

programs14. Implement these 13 points


The Deming Wheel(or P-D-C-A Cycle)

Identify problemDevelop plan for improvement

Implement plan on test basis

Is the plan working

Institutionalize improvementContinue cycle

1. Plan

2. Do

3. Study / Check

4. Act


Total Quality Management

1. Customer defined quality2. Top management leadership3. Quality as a strategic issue4. All employees responsible for quality5. Continuous improvement6. Shared problem solving7. Statistical quality control8. Training & education for all employees


TQM Throughout The Organization

• Marketing, sales, R&D• Engineering• Purchasing• Personnel• Management• Packing, storing, shipping• Customer service


Strategic Implications Of TQM

• Quality is key to effective strategy• Clear strategic goal, vision, mission• High quality goals• Operational plans & policies• Feedback mechanism• Strong leadership


TQM In Service Companies

• Inputs similar to manufacturing• Processes & outputs are different• Services tend to be labor intensive• Quality measurement is harder• Timeliness is important measure• TQM principles apply to services


Cost Of Quality

• Cost of achieving good quality–Prevention–Appraisal

• Cost of poor quality–Internal failure costs–External failure costs


Quality Indexes• Labor index

–quality cost / labor hours• Cost index

–quality cost / manufacturing cost• Sales index

–quality cost / sales• Production index

–quality cost / units produced


Quality Is...

• An important determinant of business profitability

• Positively & significantly related to higher return on investment


Quality And Productivity

• Productivity = output / input

• Fewer defects increase output

• Quality improvement reduces inputs


Employees & Quality Improvement

• Quality circles• Employee suggestions• Process improvement teams• Self-managed work teams


The Quality Circle Process

Organization 8-10 members

Same area ModeratorPresentation

Implementation Monitoring

Solution Problem results Problem analysis

Cause & effect Data collection &

analysis

Problem ID List alternatives

Consensus Brainstorming

Training Group processes Data collection

Problem analysis


Seven Quality Control Tools

1. Pareto analysis2. Flowcharts3. Check sheets4. Histograms5. Scatter diagrams6. Control charts7. Fishbone diagram


A Pareto Chart

Per

cent

fro

m e

ach

caus

e

Causes of poor quality

Mac

hine

cal

ibra

tions

Defec

tive

parts

Wro

ng d

imen

sions

Poor D

esig

n

Ope

rato

r erro

rsDef

ectiv

e m

ater

ials

Surfa

ce a

bras

ions

0

10

20

30

40

50

60

70(64)

(13)(10)

(6)(3) (2) (2)


A Flowchart


Check Sheet

COMPONENTS REPLACED BY LABTIME PERIOD: 22 Feb to 27 Feb 1998REPAIR TECHNICIAN: Bob

TV SET MODEL 1013

Integrated Circuits ||||

Capacitors |||| |||| |||| |||| |||| ||

Resistors ||

Transformers ||||

CommandsCRT |


Histogram

0

510152025303540

1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1


Scatter Diagram

.


Control Chart

18

12

6

3

9

15

21

24

27

2 4 6 8 10 12 14 16

Sample number

Num

ber

of d

efec

ts

UCL = 23.35

LCL = 1.99

c = 12.67


Fishbone Diagram

QualityProblem

MachinesMeasurement Human

ProcessEnvironment Materials

Faulty testing equipment

Incorrect specifications

Improper methods

Poor supervision

Lack of concentration

Inadequate training

Out of adjustment

Tooling problems

Old/worn

Defective from vendor

Not to specifications

Material-handling problems

Deficienciesin product design

Ineffective qualitymanagement

Poor process design

Inaccuratetemperature control

Dust and Dirt


Quality Awards And Certifications

• The Malcolm Baldrige Award• The Deming Prize• Industry, regional, and company awards

–Institute of Industrial Engineers–NASA–European Quality Award


ISO 9000 CategoriesPrior to 2000

• ISO 9001 ~ Suppliers and Designers

• ISO 9002 ~ Production

• ISO 9003 ~ Inspection and Test

• ISO 9004 ~ Quality Management


ISO 9000-2000 Categories

• ISO 9001 ~ Quality Management SystemsRequirements

• ISO 9004 ~ Quality Management Systems—Guidelines for PerformanceImprovements

Ch 3 - 47© 2000by Prentice-Hall IncRussell/Taylor Oper Mgt 3/e

Implications Of ISO 9000

• Truly international in scope• Certification required by many foreign firms• U.S. firms export > $100 billion/yr to Europe• Adopted by U.S. Navy, DuPont, 3M, AT&T, &

others


ISO Accreditation

• European registration–3rd party registrar assesses quality program–European Conformity (CE) mark authorized

• United States 3rd party registrars–American National Standards Institute (ANSI)–American Society for Quality Control (ASQC)–Registrar Accreditation Board (RAB)

Documents

Chapter 14 Quality Management Sales Order Management Aggregate Planning Master Scheduling Production Activity Control Quality Control Distribution Mngt