Managing Quality

CHAPTER SIX

McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

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Case ReviewCase ReviewCase ReviewCase Review

American Vinyl Products

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What Is Quality?What Is Quality?What Is Quality?What Is Quality?

Real world example: http://www.youtube.com/watch?v=VgIIuBw9EbE

Oxford American Dictionarya degree or level of excellence

American Society for Quality totality of features and characteristics that satisfy

needs without deficiencies Joseph Juran

Fitness for use

Dimensions of Quality for Goods and ServicesDimensions of Quality for Goods and Services

6–6–44Figure 6-1

Dimensions of Product Quality

Description forTangible Good

Description forIntangible Service

Performance

Features

Reliability Operating time before repair Dependable & accurate

Durability

Conformance

Aesthetics Look, feel, sound, taste or smellFacilities, equipment, personnel and communication materials

Support/ Responsiveness

Installation, information, maintenance or repair

Willingness to help and prompt service

Perceived Quality (Reputation/Assurance/Empathy)

Image, advertising, brand name, reputation, etc. not directly associated with attributes

Knowledge & courtesy of employees; ability to convey trust, confidence, caring and

individual attention

Degree to which meets or exceeds certain operating characteristics

Presence of unique characteristics supplementing basic features

Product life or amount of use on gets until deterioration

Degree to which design specifications are met

Cost of Quality (COQ)Cost of Quality (COQ)

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Costs associated with inspection to assess quality levels (e.g. staff, tools, training, etc.)

Costs from defects found before delivery to the customer (e.g., rework, scrap, etc.)

Costs associated with defects found after delivery to customer (e.g., warranty, recall, etc.)

Costs associated with preventing defects and limiting failure and appraisal costs (e.g., training, improvement projects, data gathering, analysis)

Appraisal Costs

Internal Failure Costs

External Failure Costs

Prevention Costs

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Quality–Cost Relationship Quality–Cost Relationship

• Cost of quality–difference between price of nonconformance and conformance

–cost of doing things wrong•20 to 35% of revenues

–cost of doing things right•3 to 4% of revenues

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Quality GurusQuality Gurus

• W. Edwards Deming

(Real world example: Toyota)

• Joseph M. Juran

• Philip B. Crosby

• Imai

Quality GurusQuality Gurus

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Deming Holistic view of responsibility for qualityVariability as source of most problemsImportance of customer

Juran Broadened definition of qualityFocus on change managementcost of quality analysis

Crosby Quality is freeZero defectsFocus on incremental change

Imai Kaizen system of continuous improvementIntense process-oriented viewHeavy dependence on frontline worker insightsEmphasis on worker training and development

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Deming’s 14 PointsDeming’s 14 Points

1. Create constancy of purpose2. Adopt philosophy of prevention3. Understand inspection4. Select a few suppliers based on

quality5. Constantly improve system and

workers

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6. Institute worker training

7. Instill leadership among supervisors

8. Eliminate fear among employees

9. Eliminate barriers between departments

10. Eliminate slogans

Deming’s 14 Points (cont.)Deming’s 14 Points (cont.)

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11. Remove numerical quotas

12. Enhance worker pride

13. Institute vigorous training and education programs

14. Develop a commitment from top management to implement above 13 points

Deming’s 14 Points (cont.)Deming’s 14 Points (cont.)

Inverted View of ManagementInverted View of Management

6–6–1212Figure 6-1

Quality Improvement ToolsQuality Improvement Tools

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Histogram uncover patterns in data

IssueIssue

PeopleEquipmentMaterial

Process Environment

Possible causes

Management

Cause and Effect Analysis uncover contributors to a problem

Defects in JeansDefect type Tally Total

A. Tears in fabric //// 4

B. Discolored fabric /// 3

C. Broken //// //// //// //////// //// //// / 36

//// // 7

Total 50

Defect type Tally Total

A. Tears in fabric //// 4

B. Discolored fabric /// 3

C. Broken zipper //// //// //// //////// //// //// / 36

D. Ragged seams //// // 7

Total 50

Check Sheets frequency and location of problems

Fre

qu

en

cy

Item3

Cu

mu

lativ

e P

erc

en

tag

e

Item5

Item1

Item6

Item4

Pareto AnalysisIdentify critical (frequent) problems

Quality Improvement Tools cont’dQuality Improvement Tools cont’d

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Scatter Diagrams determine variable relationships

Process Flow Analysisdisplay and analyze process steps

Process Control Chartmonitor if operating normally

Y

X

LCL

UCL

CL

Process Capability Analysiscompare specifications to variability

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Total Quality ManagementTotal Quality Management

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

T Q M

TQM ValuesTQM Values

• TQM values–Holistic view of quality–Emphasis on customer–Extended process view of operations–Emphasis on prevention, not inspection–Disdain for variability–Data (not opinion) based decision making–Employee empowerment

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TQM ValuesTQM Values

• TQM values–Top Management support–Supplier quality (involvement )–Continuous improvement–Bench marking–Champion–Quality at the source–Team approach

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Quality CirclesQuality Circles

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PresentationImplementation

Monitoring

SolutionProblem results

Problem Analysis

Cause and effectData collection and analysis

Problem IdentificationList alternatives

ConsensusBrainstorming

TrainingGroup processes

Data collectionProblem analysis

Organization8-10 members

Same areaSupervisor/moderator

• Quality circle– group of

workers and supervisors from same area who address quality problems

Guiding Methodologies: PDCAGuiding Methodologies: PDCA

• Plan-do-check-act cycle (Deming wheel or cycle):

sequence to solve problems and improve over time–Plan: identify problem and actions for improvement–Do: implement formulated plan–Check: monitor results–Act: take corrective action and institutionalize changes

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Act

Check Do

Plan

Figure 6-2

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Six SigmaSix Sigma

• A process for developing and delivering virtually perfect products and services

• Measure of how much a process deviates from perfection

• 3.4 defects per million opportunities• Six Sigma Process

–four basic steps of Six Sigma—align, mobilize, accelerate, and govern

• Champion–an executive responsible for project success

Guiding Methodologies: 6σGuiding Methodologies: 6σ

• Six Sigma: quality improvement through elimination of defects and variation

• Standard deviation: statistical measure of variation

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Sigma Level Defects per Million2σ 308,537

3σ 66,807

4σ 6,210

5σ 233

6σ 3.4

Guiding Methodologies: 6σ cont’dGuiding Methodologies: 6σ cont’d

• Sigma level of quality

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Lowerspecification Mean Upper

specification

Four sigma

Six sigma

Two sigma

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Six SigmaSix Sigma

• Master Black Belt–a teacher and mentor for Black Belt

• Black Belts–Project leader

• Green Belts–project team members

Guiding Methodologies: DMAICGuiding Methodologies: DMAIC

• Define: determine Critical to Quality (CTQ) characteristics from customer’s perspective

• Measure: gather data on CTQ processes

• Analyze: determine cause of defects

• Improve: modify processes

• Control: ensure improvements are maintained

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Quality AwardsQuality Awards

Baldrige Award

Deming Prize

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The Deming PrizeThe Deming Prize

• Honoring W. Edwards Deming

• Japan’s highly coveted award

• Main focus:

• First U.S. company to win: Florida Power and Light in 1989

• Second U.S. company to win: AT&T Power Systems unit of AT&T Microelectronics in 1994

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Malcolm Baldrige Award Malcolm Baldrige Award

Created in 1987 to stimulate growth of quality management in United States

Select six industries.

http://www.youtube.com/watch?v=kHWDc7D9G-E Malcolm Baldrige,

former U.S. Secretary of Commerce

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Malcolm Baldrige Award Malcolm Baldrige Award

Criteria for award1.0 Leadership (125 points)

2.0 Strategic Planning (85 points)

3.0 Customer and Market Focus (85 points)

4.0 Information and Analysis (85 points)

5.0 Human Resource Focus (85 points)

6.0 Process Management (85 points)

7.0 Business Results (450 points)

ISO 9000ISO 9000

• ISO 9000: internationally accepted standards for quality management systems

• What an organization does to fulfill:

–the customer's quality requirements, and

–applicable regulatory requirements, while aiming to

–enhance customer satisfaction, and

–achieve continual improvement of its performance in pursuit of these objectives.

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http://www.iso.org

ISO 9000 and ISO 14000ISO 9000 and ISO 14000

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• For all types of organizations• Application and audit• International standard• Required by many customers• Certification maintenance

requires periodic auditing

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

ISO 9000 ISO 14000

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ISO 9000 Certification,Implications, and Registrars

ISO 9000 Certification,Implications, and Registrars

Homework problems on ch6Homework problems on ch6

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• Do problems 1,2, and 3 on page 180