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Introduction to Quality

Chapters 9

Management of Quality

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Quality Management

• What does the term quality mean?

• Quality is the ability of a product or service to consistently meet or exceed customer expectations.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Dimensions of Quality• Performance - main characteristics of the

product/service• Aesthetics - appearance, feel, smell, taste• Special features - extra characteristics• Conformance - how well product/service conforms to

customer’s expectations• Safety - Risk of injury• Reliability - consistency of performance

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Dimensions of Quality (Cont’d)

• Durability - useful life of the product/service

• Perceived Quality - indirect evaluation of quality (e.g. reputation)

• Service after sale - handling of customer complaints or checking on customer satisfaction

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Examples of Quality Dimensions

Dimension

1. Performance

2. Aesthetics

3. Special features Convenience High tech

4. Safety

(Product)AutomobileEverything works, fit &finishRide, handling, grade ofmaterials usedInterior design, soft touch

Gauge/control placementCellular phone, CDplayer

Antilock brakes, airbags

(Service)Auto RepairAll work done, at agreedpriceFriendliness, courtesy,Competency, quicknessClean work/waiting area

Location, call when readyComputer diagnostics

Separate waiting area

Table 9-1

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Examples of Quality Dimensions (Cont’d)

Dimension

5. Reliability

6. Durability

7. Perceived quality

8. Service after sale

(Product) Automobile Infrequency of breakdowns

Useful life in miles, resistanceto rust & corrosion

Top-rated car

Handling of complaints and/orrequests for information

(Service) Auto Repair Work done correctly,ready when promised

Work holds up overtime

Award-winning servicedepartment

Handling of complaints

Table 9-1

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

TOTAL QUALITY INTERFACES

QUALITY

QUALITY OF PERFORMANCE

QUALITY OF DESIGN

QUALITY OF CONFORMANCE

CONSUMER NEEDS/REQUIREMENTS

WORK PROCESS/SYSTEM

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

The Costs of Poor The Costs of Poor QualityQuality Prevention CostsPrevention Costs Appraisal CostsAppraisal Costs Internal Failure CostsInternal Failure Costs External Failure CostsExternal Failure Costs

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Costs of quality assurancePrevention Costs

• QC administration and systems planning• Quality training• Quality planning (QC engineering work) Incoming, in-

process, final inspection• Special processes planning• Quality data analysis• Procurement planning• Vendor surveys• Reliability studies• Quality measurement and control equipment• Qualification of material

Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Costs of quality assuranceAppraisal Costs

• Testing• Inspection• Quality audits• Incoming test and inspection and laboratory acceptance• Checking labor• Laboratory or other measurement service• Setup for test and inspection• Test and inspection material• Outside endorsement• Maintenance and calibration• Product engineering review and shipping release• Field testing

Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Costs of quality assuranceInternal Failure Costs

• Scrap, at full shop cost• Rework, at full shop cost• Scrap and rework , fault of vendor• Material procurement• Factory contact engineering• QC investigations (of failures)• Material review activity• Repair and troubleshooting

Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Costs of quality assuranceExternal Failure Costs

• Complaints and loss of customer goodwill• Warranty costs• Field maintenance and product service• Returned material processing and repair• Replacement inventories• Strained distributor relations

Source: Adapted form J. W. Gavett, Production and Operations Management (New York: Harcourt Brace Jovanovich

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Costs of Detecting DefectsCosts of Detecting DefectsC

ost o

f det

ectio

n an

d co

rrec

tion

Process Final testing CustomerWhere defect is detected

Figure 6.3

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Percentage Cost Distribution by Category: Watches

External failure52%

Internal failure29%

Appraisal16% Prevention

3%

Fourth-Quarter Indexes

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Hidden costs of poor Quality

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Total Quality Management

A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

• Find out what the customer wants• Design a product or service that meets

or exceeds customer wants• Design processes that facilitates doing

the job right the first time• Keep track of results• Extend these concepts to suppliers

The TQM Approach

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

TQMTQMWheelWheel

Customer satisfaction

Figure 6.1

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Elements of TQM• Continual improvement• Competitive benchmarking• Employee empowerment• Team approach• Decisions based on facts• Knowledge of tools• Supplier quality• Champion

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Introduction to Quality

Continuous Improvement

• Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs.

• Kaizen: Japanese word for continuous improvement.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Benchmarking• Benchmarking is the process of

measuring an organization’s performance against that best in the same or another industry.

• Types of benchmarking– Internal – Competitive– Functional

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Introduction to Quality

Six Sigma Management

• Providing strong leadership• Defining performance metris• Selecting projects likely to succeed• Selecting and training appropriate

people

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Introduction to Quality

Six Sigma Technical

• Improving process performance• Reducing variation• Utilizing statistical models• Designing a structured improvement

strategy

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Six Sigma Team

• Top management• Program champions• Master “black belts”• “Black belts”• “Green belts”

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Six Sigma Process

• Define• Measure• Analyze• Improve• Control

DMAIC

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Basic Steps in Problem Solving

• Define the problem and establish an improvement goal

• Collect data• Analyze the problem• Generate potential solutions• Choose a solution• Implement the solution• Monitor the solution to see if it accomplishes the

goal

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

A(Act)

P(Plan)

(Check)C

(Do)D

Quality

Never-ending

improvement

Continuous ImprovementThe Deming (PDCA) Cycle

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

• Process Improvement: A systematic approach to improving a process

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

The Process Improvement Cycle

Implement theImproved process

Select aprocess

Study/document

Seek ways toImprove it

Design anImproved process

Evaluate

Document

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Process Improvement and Tools

• Process improvement - a systematic approach to improving a process– Process mapping– Analyze the process– Redesign the process

• Tools– There are a number of tools that can be used for problem solving and

process improvement– Tools aid in data collection and interpretation, and provide the basis for

decision making

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Basic Quality Tools

• Flowcharts• Check sheets• Histograms• Pareto Charts• Scatter diagrams• Control charts• Cause-and-effect diagrams• Run charts

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Pareto Charts

Figure 4.10Figure 4.10

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Checker Board Airlines

Passenger processing at gatePassenger processing at gate

Late cabin cleanersLate cabin cleaners

Unavailable cockpit crewUnavailable cockpit crew

Late cabin crewLate cabin crew

Personnel

Aircraft late to gateAircraft late to gate

Mechanical failuresMechanical failures

Equipment

Procedures

Waiting for late passengersWaiting for late passengers

Weight/balance sheet lateWeight/balance sheet late

Poor announcement of departuresPoor announcement of departures

Delayed check-in procedureDelayed check-in procedure

Delayed flight departures

Materials

Late food serviceLate food service

Late fuelLate fuel

Late baggage to aircraftLate baggage to aircraft

Contractor not providedContractor not provided updated scheduleupdated schedule

Figure 4.11Figure 4.11

WeatherWeather

Air traffic delaysAir traffic delays

Other

Source: Adapted from D. Daryl Wyckoff, “New Tools for Achieving Service Quality.” The Cornell Hotel and Restaurant Administration Quarterly, November 1984, pg. 89. © 1984 Cornell H.R.A. Quarterly. Used by permission. All rights reserved.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Quality Awards

Baldrige Award

Deming Prize

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

Malcolm Baldrige National Quality Award

• 1.0 Leadership• 2.0 Strategic Planning• 3.0 Customer and Market Focus• 4.0 Information and Analysis• 5.0 Human Resource Development and

Management• 6.0 Process Management• 7.0 Business Results

Table 9-7

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Introduction to Quality

The Deming Prize

• Honoring W. Edwards Deming

• Japan’s highly coveted award

• Main focus on statistical quality control

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Introduction to Quality

Quality Certification

• ISO 9000

• Set of international standards on quality management and Quality assurance, critical to international Business

• ISO 9000 series standards, briefly, require firms to document their quality-control systems at every step (incoming raw materials, product design, in-process monitoring and so forth) so that they’ll be able to identify those areas that are causing quality problems and correct them.

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McGraw-Hill/IrwinOperations Management, Seventh Edition, by William J. StevensonCopyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction to Quality

The ISO 9000 Series Standards

• ISO 9000 requires companies to document everything they do that affects the quality of goods and services.

– Hierarchical approach to documentation of the Quality Management System

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Introduction to Quality

• ISO 14000 - A set of international standards for assessing a company’s environmental performance

• Standards in three major areas– Management systems– Operations– Environmental systems

ISO 14000