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© Wiley 2007 1
Chapter 5
Total Quality Management
© Wiley 2007 2
OUTLINE
Defining Quality Cost of Quality The evolution of TQM Quality and Standards Why TQM Efforts Fail
Defining Quality
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Defining Quality Definition of quality is dependent on the
people defining it There is a lack of a single, universal
definition of quality 5 common definitions include
Conformance to specifications Fitness for use Value for price paid Support services Psychological criteria
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Defining Quality – 5 Ways Conformance to specifications
Does product/service meet targets and tolerances defined by designers?
Fitness for use Evaluates performance for intended use
Value for price paid Evaluation of usefulness vs. price paid
Support services Quality of support after sale
Psychological e.g. Ambiance(格調 ), prestige(名聲 ), friendly staff
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Manufacturing Quality vs. Service Quality
Manufacturing quality focuses on tangible product features Conformance, performance, reliability, features
Service organizations produce intangible products that must be experienced Quality often defined by perceptional factors
like courtesy, friendliness, promptness, waiting time, consistency
Cost of Quality
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Cost of Quality Quality affects all aspects of the
organization Quality has dramatic cost implications
of; Quality control costs
Prevention costs Appraisal costs
Quality failure costs Internal failure costs External failure costs
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Cost of Quality – 4 Categories
Early detection/prevention is less costly May be less by a factor of 10
The evolution of TQM
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Evolution of TQM – New Focus
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Quality Gurus
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TQM Philosophy
TQM Focuses on identifying quality problem root causes
Encompasses the entire organization Involves the technical as well as people Relies on seven basic concepts of
Customer focus Continuous improvement Employee empowerment Use of quality tools Product design Process management Managing supplier quality
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TQM Philosophy - concepts
Focus on Customer Identify and meet customer needs Stay tuned to changing needs, e.g. fashion
styles Continuous Improvement
Continuous learning and problem solving, e.g. Kaizen, 6 sigma
Benchmarking Employee Empowerment
Empower all employees; external and internal customers
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TQM Philosophy– Concepts (continued)
Team Approach Teams formed around processes – 8 to 10
people Meet weekly to analyze and solve problems
Understanding Quality Tools Ongoing training on analysis, assessment,
and correction, & implementation tools Studying practices at “best in class”
companies Plan-Do-Study-Act
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Ways of Improving Quality Plan-Do-Study-Act Cycle (PDSA)
Also called the Deming Wheel after originator Circular, never ending problem solving process
Seven Tools of Quality Control Tools typically taught to problem solving teams
Quality Function Deployment Used to translate customer preferences to
design
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PDSA Details Plan
Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance
objectives Do
Implement the plan – trial basis Study
Collect data and evaluate against objectives Act
Communicate the results from trial If successful, implement new process
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PDSA (continued)
Cycle is repeated After act phase, start planning and repeat
process
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Seven Tools of Quality Control
Cause-and-Effect Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms
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Cause-and-Effect Diagrams Called Fishbone Diagram Focused on solving identified quality problem
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Flowcharts Used to document the detailed steps in a
process Often the first step in Process Re-Engineering
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Checklist Simple data check-off sheet designed to
identify type of quality problems at each work station; per shift, per machine, per operator
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Control Charts Important tool used in Statistical Process
Control – Chapter 6 The UCL and LCL are calculated limits used
to show when process is in or out of control
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Scatter Diagrams A graph that shows how two variables
are related to one another Data can be used in a regression analysis
to establish equation for the relationship
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Pareto Analysis Technique that displays the degree of importance for each
element Named after the 19th century Italian economist Often called the 80-20 Rule Principle is that quality problems are the result of only a few
problems e.g. 80% of the problems caused by 20% of causes
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Histograms A chart that shows the frequency distribution of
observed values of a variable like service time at a bank drive-up window
Displays whether the distribution is symmetrical (normal) or skewed
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Product Design - Quality Function Deployment Critical to ensure product design meets
customer expectations Useful tool for translating customer
specifications into technical requirements is Quality Function Deployment (QFD)
QFD encompasses Customer requirements Competitive evaluation Product characteristics Relationship matrix Trade-off matrix Setting Targets
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Quality Function Deployment(QFD) Details Process used to ensure that the product meets
customer specifications
Voice of theengineer
Voice of the
customer
Customer-basedbenchmarks
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QFD - House of Quality
Adding trade-offs, targets & developing product specifications
Trade-offs
Targets
TechnicalBenchmarks
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Reliability – critical to quality
Reliability is the probability that the product, service or part will function as expected
No product is 100% certain to function properly
Reliability is a probability function dependent on sub-parts or components
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Reliability – critical to quality Reliability of a system is the product
of component reliabilitiesRS = (R1) (R2) (R3) . . . (Rn)
RS = reliability of the product or system
R1 = reliability of the components
Increase reliability by placing components in parallel
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Reliability – critical to quality
Increase reliability by placing components in parallel
Parallel components allow system to operate if one or the other fails
RS = R1 + (R2* Probability of needing 2nd component)
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Process Management Quality products come from quality
sources Quality must be built into the
process Quality at the source is belief that it
is better to uncover source of quality problems and correct it
TQM extends to quality of product from company’s suppliers
Quality and Standards
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Quality Awards and Standards
Malcolm Baldrige National Quality Award (MBNQA)
The Deming Prize ISO 9000 Certification ISO 14000 Standards
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MBNQA- What Is It? Award named after the former Secretary
of Commerce – Regan Administration Intended to reward and stimulate quality
initiatives Given to no more that two companies in
each of three categories; manufacturing, service, and small business
Past winners; Motorola Corp., Xerox, FedEx, 3M, IBM, Ritz-Carlton
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The Deming Prize
Given by the Union of Japanese Scientists
and Engineers since 1951
Named after W. Edwards Deming who
worked to improve Japanese quality after
WWII
Not open to foreign companies until 1984
Florida P & L was first US company winner
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ISO Standards ISO 9000 Standards:
Certification developed by International Organization for Standardization
Set of internationally recognized quality standards
Companies are periodically audited & certified ISO 9000:2000 QMS – Fundamentals and Standards ISO 9001:2000 QMS – Requirements ISO 9004:2000 QMS - Guidelines for Performance More than 40,000 companies have been certified
ISO 14000: Focuses on a company’s environmental
responsibility
Why TQM Efforts Fail
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Why TQM Efforts Fail
Lack of a genuine quality culture
Lack of top management support and commitment
Over- and under-reliance on SPC methods
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TQM Within OM TQM is broad sweeping organizational change TQM impacts
Marketing – providing key inputs of customer information
Finance – evaluating and monitoring financial impact Accounting – provides exact costing Engineering – translate customer requirements into
specific engineering terms Purchasing – acquiring materials to support product
development Human Resources – hire employees with skills necessary Information systems – increased need for accessible
information
END OF LECTURE
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