LN13 Quality Mgmt

8/8/2019 LN13 Quality Mgmt

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Quality ManagementQuality Management

Dr. Chandana PereraDr. Chandana Perera

Dept. of Management ofDept. of Management ofTechnologyTechnology

University of MoratuwaUniversity of Moratuwa


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Quality Definitions...Quality Definitions... from the Gurusfrom the Gurus

Crosby: conformance to requirementsCrosby: conformance to requirements

Feigenbaum: meeting customerFeigenbaum: meeting customer

expectationexpectation

Juran: fitness for useJuran: fitness for use

ASQC: the totality of features andASQC: the totality of features and

characteristics of a product or servicecharacteristics of a product or service

that bear on its ability to satisfy giventhat bear on its ability to satisfy givenneedsneeds


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Dimensions of QualityDimensions of Quality

Design qualityDesign quality: Inherent value of the: Inherent value of theproduct in the marketplaceproduct in the marketplace

Dimensions include: Performance, Features,Dimensions include: Performance, Features,

Reliability, Durability, Serviceability, Response,Reliability, Durability, Serviceability, Response,Aesthetics, and Reputation.Aesthetics, and Reputation.

Conformance qualityConformance quality: Degree to which: Degree to which

the product or service design specificationsthe product or service design specificationsare metare met


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Design QualityDesign Quality

1. Performance1. Performancebasic operating characteristicsbasic operating characteristics

2. Features2. Features

extra items added to basic featuresextra items added to basic features

3. Reliability3. Reliabilityprobability product will operate over timeprobability product will operate over time

5. Durability5. Durability

life span before replacementlife span before replacement


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6. Serviceability6. Serviceability

ease of getting repairs, speed & competence of repairsease of getting repairs, speed & competence of repairs

7. Aesthetics7. Aesthetics

look, feel, sound, smell or tastelook, feel, sound, smell or taste

8. Safety8. Safety

freedom from injury or harmfreedom from injury or harm

9. Other perceptions9. Other perceptions

subjective perceptions based on brand name, advertising, etcsubjective perceptions based on brand name, advertising, etc


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Quality Of ConformanceQuality Of Conformance

Ensuring product or service producedEnsuring product or service produced

according to designaccording to design

Depends onDepends ondesign of production processdesign of production process

performance of machineryperformance of machinery

materialsmaterials

trainingtraining


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The Meaning of Quality

Quality of Conformance Quality of Design

Producers Perspective Consumers Perspective

Fitness for

Consumer Use

Production MarketingConformance to

specificationsCost

Quality characteristicsPrice


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The Definitions of Quality and their Link to ProfitabilityThe Definitions of Quality and their Link to Profitability

Improved qualityof design

Higher perceived

value

Improved qualityof conformance

Lowermanufacturing and

service costs

Higher profitability

Increased market

share

Higher

prices

Increased

revenues


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Product and

service quality

Customer

satisfaction

Competitiveness

Organization

benefits

Reliability

On-time delivery

Error/defects

Overall satisfaction

Customer retention

Complaints

Costs

Cycle time

Turnover

Satisfaction

Safety & health

Productivity

Market share

Profits

What initiatives should

an organization take

to ensure quality

Quality, Customer Satisfaction, Competitiveness, and ProfitsQuality, Customer Satisfaction, Competitiveness, and Profits


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Dimensions of Service QualityDimensions of Service Quality

ReliabilityReliability: Perform promised service: Perform promised service

dependably and accurately.dependably and accurately.

ExampleExample: receive mail at same time: receive mail at same time

each day.each day. ResponsivenessResponsiveness: Willingness to help: Willingness to help

customers promptly.customers promptly. ExampleExample: avoid: avoid

keeping customers waiting for nokeeping customers waiting for noapparent reason.apparent reason.


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Dimensions of Service QualityDimensions of Service Quality

AssuranceAssurance: Ability to convey trust: Ability to convey trust

and confidence.and confidence.

EmpathyEmpathy

: Ability to be: Ability to be

approachable.approachable.

TangiblesTangibles: Physical facilities and: Physical facilities and

facilitating goods.facilitating goods.


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Gaps in QualityGaps in Quality

Word -of-mouthcommunications

Personal needs Past experience

Expected quality

External communications

to consumers

Perceived qulity

Service delivery (including

pre- and post-contacts)

Translation of perceptions into

quality specifications

Management perceptions of

consumer expectations

GAP 5

GAP 3

GAP 2

GAP 1 GAP 4

Customer

Provider


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2 %

5 %

% defectives

Sporadic problem

Chronic

problem

Two Issues in Quality Management


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The Quality Hierarchy (Evolution)The Quality Hierarchy (Evolution)

Inspection

Quality Control (QC)

Quality Assurance (QA)

Total Quality Management (TQM)PreventionStop problems atSource; greaterDesign emphasis

(proactive)

DetectionFinding and fixingMistakes

(Reactive)

incorporates QC/QA activities intoa company-wide system aimed atsatisfying the customer.(involves all organizational functions)

planned and systematic actions toinsure that products or servicesconform to company requirements(example: reliability analysis)

operational techniques to makeinspection more efficient & to reducethe costs of quality. (example: SPC)

inspect products


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Factors Influencing Quality at the Firm LevelFactors Influencing Quality at the Firm Level

The 4P and 3C Framework for Total Quality Management (TQM)

Planning

Cultu

re

Communica

tion

CommitmentPeople

Performance

Process


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What is Total Quality Management?What is Total Quality Management?

Total quality management (TQM) may very Total quality management (TQM) may verysimply be defined as,simply be defined as,

continuously improving customercontinuously improving customer

satisfaction levels and simultaneouslysatisfaction levels and simultaneouslyimproving business performance byimproving business performance bygaining the commitment andgaining the commitment andinvolvement of all employees in aninvolvement of all employees in an

organizationorganization


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Total Quality ManagementTotal Quality Management

1. Customer defined quality1. Customer defined quality

2. Top management leadership2. Top management leadership

3. Quality as a strategic issue3. Quality as a strategic issue

4. All employees responsible for quality4. All employees responsible for quality

5. Continuous improvement5. Continuous improvement

6. Shared problem solving6. Shared problem solving

7. Statistical quality control7. Statistical quality control

8. Training & education for all employees8. Training & education for all employees


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TQM Throughout TheTQM Throughout The

OrganizationOrganization Marketing, sales, R&DMarketing, sales, R&D

EngineeringEngineering

PurchasingPurchasing PersonnelPersonnel

ManagementManagement

Packing, storing, shippingPacking, storing, shipping Customer serviceCustomer service


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The Deming WheelThe Deming Wheel

(or P-D-C-A Cycle)(or P-D-C-A Cycle)

Identify problem

Develop plan for

improvement

Implement plan on

test basis

Is the plan working

Institutionalize

improvement

Continue cycle

1. Plan

2. Do

3. Study / Check

4. ActP

DC

A


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Assessing the Cost of QualityAssessing the Cost of Quality Quality costs can be consideredQuality costs can be considered

under four categories (Juransunder four categories (JuransQuality Handbook, Section 8)Quality Handbook, Section 8)

Internal failure costsInternal failure costs

External failure costsExternal failure costs

Appraisal costsAppraisal costs

Prevention costsPrevention costs


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Internal failure costsInternal failure costs

Failure to meet customer requirements andFailure to meet customer requirements andneedsneeds Scrap at siteScrap at site

Scrap at supplier endScrap at supplier end

Rework at siteRework at site

Rework at supplier endRework at supplier end Failure analysisFailure analysis

100% inspection100% inspection

Reinspection and retestReinspection and retest

Changing incorrect processesChanging incorrect processes

Redesign of hardware and software to correctRedesign of hardware and software to correctdeficienciesdeficiencies

Scrapping of obsolete productsScrapping of obsolete products

Discounting prices due to quality problemsDiscounting prices due to quality problems


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Internal failure costs (continued)Internal failure costs (continued) Cost of inefficient processesCost of inefficient processes

Variability of product characteristicsVariability of product characteristics

Process variation from best practicesProcess variation from best practices

Unplanned downtime of plant andUnplanned downtime of plant andequipmentequipment

Inventory (shortage or excess)Inventory (shortage or excess)

Non-value stages in the processNon-value stages in the process


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External failure costsExternal failure costs Failure to meet customer requirements andFailure to meet customer requirements and

needsneeds Cost of investigationsCost of investigations

Warranty chargesWarranty charges

Returned materialReturned material

Penalties for poor quality such as late payments,Penalties for poor quality such as late payments,

lost discounts at supplier end etc.lost discounts at supplier end etc.

Rework of billing and other support operationsRework of billing and other support operations

Lost opportunities for sales revenueLost opportunities for sales revenue

Customer defectionCustomer defection Loss of potential customers due to poor reputationLoss of potential customers due to poor reputation

Increased complexity of doing business withIncreased complexity of doing business with

remaining customersremaining customers


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Appraisal CostsAppraisal Costs Incoming inspection and testIncoming inspection and test

In-process inspection and testIn-process inspection and test

Final inspection and testFinal inspection and test

Customer document reviewCustomer document review Product quality auditsProduct quality audits

Maintaining test equipmentMaintaining test equipment

Checking test material potencyChecking test material potency Checking products in field storageChecking products in field storage


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Prevention costs (planning, review,Prevention costs (planning, review,

and analysis costs)and analysis costs) Quality planningQuality planning

New product review (design review)New product review (design review)

Process planningProcess planning Process controlProcess control

Quality auditsQuality audits

Supplier quality evaluation and supportSupplier quality evaluation and supportTraining of employeesTraining of employees


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Some guidelines for applying the quality costSome guidelines for applying the quality cost

modelmodel Develop cost elements relevant to your organizationDevelop cost elements relevant to your organization

Reach agreement as to what categories of cost toReach agreement as to what categories of cost toinclude and how data is to be collectedinclude and how data is to be collected

This data should become part of the organizations MISThis data should become part of the organizations MIS

Pay special attention to the failure cost elements andPay special attention to the failure cost elements and

then to appraisal coststhen to appraisal costs

When evaluating any cost element do not justify it asWhen evaluating any cost element do not justify it asinevitable because they could well be due to poorinevitable because they could well be due to poor

qualityquality

It should be made clear that assessment of costs is notIt should be made clear that assessment of costs is not

to find fault or accuse managers or employees but toto find fault or accuse managers or employees but to

improve the existing situationimprove the existing situation


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Expected Effects of Identifying Cost of QualityExpected Effects of Identifying Cost of Quality

Essential

first-time work

Prevention

Appraisal

Rework/failure

Savings

Increase in essential

first-time work to

improve quality

Manage by better

prevention

Less Appraisal

Much less

rework/failure

Current Setting ImprovementsReduced Costs and

Improved Quality

Cost of

Quality

Cost ofQuality


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Figure shows only the savings due toFigure shows only the savings due to

reduction in the cost of quality.reduction in the cost of quality.

However, profits also increase due toHowever, profits also increase due to Greater throughputGreater throughput

Increased sales due to better reputationIncreased sales due to better reputation Lower per unit cost of productionLower per unit cost of production

Ability to charge a higher price in selectedAbility to charge a higher price in selected

market segments due to enhanced qualitymarket segments due to enhanced quality

reputationreputation


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Quality And ProductivityQuality And Productivity

Productivity = output / inputProductivity = output / input

Fewer defects increase outputFewer defects increase output

Quality improvement reduces inputsQuality improvement reduces inputs


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Employees & QualityEmployees & Quality

ImprovementImprovement Quality circlesQuality circles

Employee suggestionsEmployee suggestions

Process improvement teamsProcess improvement teams Self-managed work teamsSelf-managed work teams


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The Quality Circle ProcessThe Quality Circle Process

Organization8-10 members

Same areaModerator

Presentation

ImplementationMonitoring

SolutionProblem results Problem analysisCause & effect

Data collection &analysis

Problem ID

List alternativesConsensusBrainstorming

TrainingGroup processes

Data collectionProblem analysis


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Seven Quality Control ToolsSeven Quality Control Tools

1.1. FlowchartsFlowcharts

2.2. HistogramsHistograms

3.3. Fishbone diagramFishbone diagram

4.4. Pareto analysisPareto analysis

5.5. Check sheetsCheck sheets

6.6. Scatter diagramsScatter diagrams

7.7. Control chartsControl charts


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FlowchartFlowchart


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HistogramHistogram

0

5

10

1520

25

30

35

40

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


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Fishbone DiagramFishbone 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

Deficiencies

in product design

Ineffective quality

management

Poor process design

Inaccurate

temperature

control

Dust and Dirt


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Pareto ChartPareto Chart

Percentfrom

eachcau

se

Causes of poor quality

Machine

calib

rations

Defec

tivep

arts

Wrong

dime

nsion

s

Poor

Design

Operato

rerro

rs

Defec

tivem

aterials

Surfa

ceabrasio

ns0

10

20

30

40

50

60

70(64)

(13)(10)

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


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Check SheetCheck Sheet

COMPONENTS REPLACED BY LAB

TIME PERIOD: 22 Feb to 27 Feb 1998

REPAIR TECHNICIAN: Bob

TV SET MODEL 1013

Integrated Circuits ||||

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

Resistors||

Transformers ||||

Commands

CRT |


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Scatter DiagramScatter Diagram

.


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Control ChartControl Chart

18

12

6

3

9

15

21

24

27

2 4 6 8 10 12 14 16

Sample number

Numberofd

efects

UCL = 23.35

LCL = 1.99

c = 12.67


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Quality Awards And CertificationsQuality Awards And Certifications

AwardsAwards The Malcolm Baldrige Award The Malcolm Baldrige Award

The Deming PrizeThe Deming Prize

Industry, regional, and company awardsIndustry, regional, and company awards Institute of Industrial EngineersInstitute of Industrial Engineers

NASANASA

European Quality AwardEuropean Quality Award

CertificationCertificationISO 9000ISO 9000

SLSSLS


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The Malcolm BaldrigeThe Malcolm Baldrige

National Quality AwardNational Quality Award

The Malcolm BaldrigeThe Malcolm Baldrige

National Quality AwardNational Quality Award

Baldrige Award Framework

4

Information and analysis

3

Customer and

market focus

6

Process

management

1

Leadership

7

Business

results

2

Strategic

planning

5

HR develop. &

management

Customer and Market Focused

Strategy and Action Plans

Si Si


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Six-SigmaSix-Sigma

Six-sigma is nothing new. The concepts it uses is foundSix-sigma is nothing new. The concepts it uses is foundin TQM.in TQM.

However, its chief merit lies in the fact that it attemptsHowever, its chief merit lies in the fact that it attempts

to deliver breakthrough benefits in the short term.to deliver breakthrough benefits in the short term.

Its chief difference with TQM lies in the intensity ofIts chief difference with TQM lies in the intensity ofinterventions and the demand for a rapid pace ofinterventions and the demand for a rapid pace ofchange.change.

Essentially Six-Sigma will allow at the most 3.4 defectsEssentially Six-Sigma will allow at the most 3.4 defectsper million opportunitiesper million opportunities


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To bring about this rapid change To bring about this rapid change

to bring about breakthroughto bring about breakthrough

performance Six-Sigma uses aperformance Six-Sigma uses amodified PDCA cycle called themodified PDCA cycle called the

DMAIC approachDMAIC approach

1.1. DefineDefine

2.2. MeasureMeasure

3.3. AnalyzeAnalyze4.4. ImproveImprove

5.5. ControlControl


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To implement Six-Sigma in an organization, To implement Six-Sigma in an organization,the following interventions are used:the following interventions are used: Emphasize dpm as a standard metricEmphasize dpm as a standard metric

Set stretch objectivesSet stretch objectives Provide extensive trainingProvide extensive training Focus on corporate sponsor support (through aFocus on corporate sponsor support (through a

leadership group/council, steering committee,leadership group/council, steering committee,champions, process owners)champions, process owners)

Create qualified process improvement experts:Create qualified process improvement experts:o master black belts as implementation leaders and six-master black belts as implementation leaders and six-

sigma coachessigma coaches

o black belts as team leaders or project leadersblack belts as team leaders or project leaderso green belts as team membersgreen belts as team members

Ensure identification of appropriate metrics toEnsure identification of appropriate metrics toassess progressassess progress


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Statistical Quality ControlStatistical Quality Control

Statistical Process ControlStatistical Process ControlTool: Control ChartsTool: Control Charts

Control processControl process

Acceptance SamplingAcceptance Sampling Control incoming raw-material andControl incoming raw-material and

output (products)output (products)


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Basic Forms of VariationBasic Forms of Variation

Assignable variationAssignable variation is caused byis caused by

factors that can be clearly identifiedfactors that can be clearly identified

and possibly managed. (Assignableand possibly managed. (Assignable

cause)cause)

Common variationCommon variation is inherent inis inherent in

the production process. ( Randomthe production process. ( Randomcause)cause)

Do we need to adjust the process bothsituations?


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Control ChartsControl Charts

Upper Control Limit (UCL)

Lower Control Limit (LCL)

Upper Warning Limit (UWL)

Lower Warning Limit (LWL)

Variablemean

Grandmean Sample

Number


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Acceptance Sampling MethodAcceptance Sampling Method

ACCEPTANCE SAMPLING

ACCEPT LOT

RETURN LOT TO SUPPLIER 100% INSPECTION

DECISION

REJECT LOT SAMPLE AGAIN

DECISION

INSPECT SAMPLE

TAKE SAMPLE

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