9-1 Management of Quality

CHAPTER 9

Management of Quality

9-2 Management of Quality

Quality Management

•  Quality •  Theabilityofaproductorservicetoconsistentlymeetorexceedcustomerexpecta7ons(orspecifica7ons)•  Priortothe1970sand1980s,qualitywasnotafocalpointofU.S.companies(duetolackofglobalcompe77on)

9-3 Management of Quality

Reactive vs. Proactive Quality

•  QualityAssurance•  Reac7ve•  Emphasisisonfindingandcorrec*ngdefectsbeforetheyreachthemarket

•  StrategicApproach•  Proac7ve•  Focusesonpreven*ngmistakesfromoccurring•  Greateremphasisoncustomersa7sfac7on•  Involvesallmanagerandworkersinacon*nuingefforttoimprovequality

9-4 Management of Quality

Dimensions of Product Quality

•  Performance–maincharacteris*csoftheproduct•  Aesthe7cs–appearance,feel,smell,taste•  Specialfeatures–extracharacteris*cs•  Conformance–howwelltheproductconformstodesignspecifica*ons

•  Reliability–consistencyofperformance(seeReliability/Dependability)•  Durability–theusefullifeoftheproduct

•  Perceivedquality–indirectevalua*onofquality(seeGM)

•  Servicebility–handlingofcomplaintsorrepairs

9-5 Management of Quality

Dimensions of Service Quality

•  Convenience–theavailabilityandaccessibilityoftheservice•  Reliability–abilitytoperformaservicedependably,consistently,andaccurately

•  Responsiveness–willingnesstohelpcustomersinunusualsitua*onsandtodealwithproblems

•  Time–thespeedwithwhichtheserviceisdelivered•  Assurance–knowledgeexhibitedbypersonnelandtheirabilitytoconveytrustandconfidence

9-6 Management of Quality

Dimensions of Service Quality (contd.)

•  Courtesy–thewaycustomersaretreatedbyemployees•  Tangibles–thephysicalappearanceoffacili*es,equipment,personnel,andcommunica*onmaterials

•  Consistency–theabilitytoprovidethesamelevelofgoodqualityrepeatedly

9-7 Management of Quality

Assessing Service Quality

•  Auditservicetoiden7fystrengthsandweaknesses•  Inpar7cular,lookfordiscrepanciesbetween:

1.  Customerexpecta7onsandmanagementpercep7onofthoseexpecta7ons

2.  Managementpercep7onsofcustomerexpecta7onsandservice-qualityspecifica7ons

3.  Servicequalityandserviceactuallydelivered4.  Serviceactuallydeliveredandwhat’s

communicatedtocustomers5.  Customers’expecta7onsoftheserviceproviderand

theirpercep7onsofproviderdelivery

9-8 Management of Quality

Determinants of Quality

•  Qualityofdesign•  Inten7onofdesignerstoincludeorexcludefeaturesinaproductorservice;

•  Qualityofconformance•  Thedegreetowhichgoodsorservicesconformtotheintentofthedesigners;

•  Ease-of-Useanduserinstruc7ons•  Increasethelikelihoodthataproductwillbeusedforitsintendedpurposeandinsuchawaythatitwillcon7nuetofunc7onproperlyandsafely

•  ABer-the-saleservice•  TakingcareofissuesandproblemsthatariseaZerthesale

9-9 Management of Quality

The Consequences of Poor Quality

•  Lossofbusiness•  Liability• Produc7vity• Costs

9-10 Management of Quality

Benefits of Good Quality

•  Enhancedreputa7onforquality• Abilitytocommandhigherprices•  Increasedmarketshare• Greatercustomerloyalty•  Lowerliabilitycosts•  Fewerproduc7onorserviceproblems• Higherprofits

9-11 Management of Quality

Responsibility for Quality

•  Topmanagement•  Design•  Procurement•  Produc7on/opera7ons•  Qualityassurance•  Packagingandshipping• Marke7ngandsales•  Customerservice

9-12 Management of Quality

Costs of Quality

•  FailureCosts-costsincurredbydefec7veparts/productsorfaultyservices.

•  InternalFailureCosts

•  Costsincurredtofixproblemsthataredetectedbeforetheproduct/serviceisdeliveredtothecustomer.

•  ExternalFailureCosts• AllcostsincurredtofixproblemsthataredetectedaBertheproduct/serviceisdeliveredtothecustomer.

9-13 Management of Quality

Costs of Quality (continued)

• AppraisalCosts• Costsofac7vi7esdesignedtoensurequalityoruncoverdefects

• Preven7onCosts• AllTQtraining,TQplanning,customerassessment,processcontrol,andqualityimprovementcoststopreventdefectsfromoccurring

Q:Rela7onshipsbetweenqualityandcosts?

9-14 Management of Quality

•  Substandardwork• Defec7veproducts•  Substandardservice•  Poordesigns•  Shoddyworkmanship•  Substandardpartsandmaterials

Ethics and Quality

Havingknowledgeofthisandfailingtocorrectandreportitina7melymannerisunethical.

9-15 Management of Quality

Quality Contributors

•  WalterShewhart•  “fatherofsta7s7calqualitycontrol”•  Controlcharts•  Variancereduc7on

•  W.EdwardsDeming•  Specialvs.commoncausevaria7on•  The14points;managementisresponsible,DemingPrizeinJapan(1951)

•  JosephJuran•  QualityControlHandbook,1951,80%controllable•  Viewedqualityasfitness-for-use•  Qualitytrilogy–qualityplanning,qualitycontrol,qualityimprovement(1974)

9-16 Management of Quality

Quality Contributors (contd.)

•  ArmandFeigenbaum•  “Costofnonconformance”•  Qualityisa“totalfield”notjustasetoftools/technique•  Thecustomerdefinesquality

•  PhilipB.Crosby•  Zerodefects•  Topmanagementcommitment•  QualityisFree,1979•  QualityisS*llFree,1995

9-17 Management of Quality

Quality Contributors (contd.)

•  KaoruIshikawa•  Cause-and-effectdiagram(fishboneanalysis)•  Qualitycircles;Recognizedtheinternalcustomer•  TotalCompanyInvolvement(1972)

•  GenichiTaguchi•  Costofpoorquality•  Taguchilossfunc7on

•  TaiichiOhnoandShigeoShingo•  Developedphilosophyandmethodsofkaizen(con7nuousimprovement)

9-18 Management of Quality

Quality Awards

DemingPrize

EFQMExcellenceAward

BaldrigeAward

9-19 Management of Quality

The Deming Prize

• HonoringW.EdwardsDeming

•  Japan’shighlycovetedaward

• Mainfocusonsta7s7calqualitycontrol

9-20 Management of Quality

European Quality Award

• Prizesintendedtoiden7fyrolemodels•  Leadership• Customerfocus• Corporatesocialresponsibility•  Peopledevelopmentandinvolvement• Resultsorienta7on

9-21 Management of Quality

Baldrige Quality Award Criteria

• 1.0Leadership(120points)

• 2.0StrategicPlanning(85points)

• 3.0CustomerandMarketFocus(85points)

• 4.0MeasurementandAnalysis(90points)

• 5.0WorkforceFocus(90points)

• 6.0ProcessManagement(85points)

• 7.0BusinessResults(450points)

9-22 Management of Quality

Quality Certification ISO

•  ISO9000 •  Setofinterna7onalstandardsonqualitymanagementandqualityassurance,cri7caltointerna7onalbusiness

•  ISO14000•  Asetofinterna7onalstandardsforassessingacompany’senvironmentalperformance

•  ISO24700•  Pertainstothequalityandperformanceofofficeequipmentthatcontainsreusedcomponents

ISO (International Organization for Standardization)

9-23 Management of Quality

Quality Certification

•  ISO9000:2000• QualityPrinciples:

•  Principle1Customerfocus•  Principle2Leadership•  Principle3Involvementofpeople•  Principle4Processapproach•  Principle5Systemapproachtomanagement•  Principle6Con7nualimprovement•  Principle7Factualapproachtodecisionmaking

•  Principle8Mutuallybeneficialsupplierrela7onships

9-24 Management of Quality

•  ISO14000-Asetofinterna7onalstandardsforassessingacompany’senvironmentalperformance

•  Standardsinthreemajorareas• Managementsystems• Opera7ons•  Environmentalsystems

ISO 14000

9-25 Management of Quality

• Managementsystems •  Systemsdevelopmentandintegra7onofenvironmentalresponsibili7esintobusinessplanning,includingproductsandprocesses

• Opera7ons•  Consump7onofnaturalresourcesandenergy

•  Environmentalsystems• Measuring,assessingandmanagingemissions,effluents,andotherwaste

ISO 14000 9-26 Management of Quality

Total Quality Management

Aphilosophythatinvolveseveryoneinanorganiza7oninacon7nualefforttoimprovequalityandachievecustomersa7sfac7on.

T Q M

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Q=

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9-27 Management of Quality

1.  Findoutwhatthecustomerwants2.  Designaproductorservicethatmeetsorexceedscustomerwants

3.  Designprocessesthatfacilitatesdoingthejobrightthefirst7me pokayoke=fail-safing=foolproofing

4.  Keeptrackofresults5.  Extendtheseconceptsthroughoutthesupplychain

The TQM Approach 9-28 Management of Quality

Elements of TQM

• Con7nualimprovement• Compe77vebenchmarking•  Employeeempowerment•  Teamapproach• Decisionsbasedonfacts• Knowledgeoftools•  Supplierquality• Champion• QualityatthesourceSuppliers

9-29 Management of Quality

Continuous Improvement

•  Philosophythatseekstomakenever-endingimprovementstotheprocessofconver7nginputsintooutputs.

•  Kaizen:Japanesewordforcon7nuousimprovementor,literally,“changeforthebeper”

9-30 Management of Quality

Quality at the Source

The philosophy of making each worker responsible for the quality of his or her work.

Implications?

9-31 Management of Quality

Six Sigma

•  SixSigma• Abusinessprocessforimprovingquality,reducingcosts,andincreasingcustomersa7sfac7on

•  Sta7s7cally•  Havingnomorethan3.4defectspermillion

• Conceptually•  Programdesignedtoreducedefects•  Requirestheuseofcertaintoolsandtechniques

9-32 Management of Quality

Six Sigma Programs

•  SixSigmaprograms•  Improvequality•  Save7me• Cutcosts•  Etc.

•  Employedin• Design•  Produc7on•  Service•  Inventorymanagement• Delivery

9-33 Management of Quality

Lean Six Sigma

•  LeanSixSigma• Abalancedapproachtoprocessimprovementthatintegratesprinciplesfromleanopera7onandsta7s7caltoolsforvaria7onreduc7onfromsixsigmatoachievespeedandquality

• Anapproachthatisequallyapplicabletoproductsandservices•  Earlyapplica7oninservicesupportfunc7onsofGeneralElectricandCaterpillarFinance

9-34 Management of Quality

Obstacles to Implementing TQM

•  Obstaclesinclude:•  Lackofcompany-widedefini7onofquality•  Lackofstrategicplanforchange•  Lackofcustomerfocus•  Poorinter-organiza7onalcommunica7on•  Lackofemployeeempowerment•  Viewofqualityasa“quickfix”•  Emphasisonshort-termfinancialresults•  Inordinatepresenceofinternalpoli7csand“turf”issues

•  Lackofstrongmo7va7on–•  Lackof7metodevotetoqualityini7a7ves•  Lackofleadership

9-35 Management of Quality

Basic Steps in Problem Solving

1.  Definetheproblemandestablishanimprovementgoal

2.  Collectdata3.  Analyzetheproblem4.  Generatepoten7alsolu7ons5.  Chooseasolu7on6.  Implementthesolu7on7.  Monitorthesolu7ontoseeifitaccomplishesthegoal

9-36 Management of Quality

The PDSA Cycle

• Plan-Do-Study-Act(PDSA)Cycle• Plan

•  Beginbystudyinganddocumen7ngthecurrentprocess.

•  Collectdataontheprocessorproblem•  Analyzethedataanddevelopaplanforimprovement

•  Specifymeasuresforevalua7ngtheplan• Do

•  Implementtheplan,documentanychangesmade,collectdataforanalysis

9-37 Management of Quality

The PDSA Cycle

• Plan-Do-Study-Act(PDSA)Cycle•  Study/check

•  Evaluatethedatacollec7onduringthedophase•  Checkresultsagainstgoalsformulatedduringtheplanphase

• Act•  Iftheresultsaresuccessful,standardizethenewmethodandcommunicateittotherelevantpersonnel

•  Implementtrainingforthenewmethod•  Ifunsuccessful,revisetheplanandrepeattheprocess

9-38 Management of Quality

The PDSA Cycle

Plan Do

Study/Check Act

9-39 Management of Quality

PDSA for Problem Solving 9-40 Management of Quality

PDSA for Process Improvement

Implement the Improved process

Select a process

Study/document

Seek ways to Improve it

Design an Improved process

Evaluate

Document

9-41 Management of Quality

7 Basic Quality Tools

⊗  FlowChart(processmaps)⊗  CheckSheets⊗  Histogram⊗  ParetoChart⊗  ScaXerDiagram⊗  Cause&Effect(fishbone)Diagram⊗  Sta7s7calProcessControlandRuncharts

9-42 Management of Quality

9-43 Management of Quality

Check Sheets/Lists 9-44 Management of Quality

Histograms (Bar Charts)

9-45 Management of Quality Pareto Analysis/chart

80%oftheproblemsmaybeaXributedto20%ofthecauses.

9-46 Management of Quality

Scatter Diagram

9-47 Management of Quality

Cause-and-Effect (fishbone) Diagram 9-48 Management of Quality

Quality Circles

•  QualityCircle•  Groupsofworkerswhomeetperiodicallytodiscusswaysofimprovingproductsorprocesses•  Lessstructuredandmoreinformalthanteamsinvolvedincon7nuousimprovement

•  Qualitycircleteamshavehistoricallyhadrela7velylipleauthoritytomakeanybutthemostminorchanges

9-49 Management of Quality

Benchmarking Process

•  Iden7fyacri7calprocessthatneedsimproving

•  Iden7fyanorganiza7onthatexcelsinthisprocess

• Contactthatorganiza7on• Analyzethedata•  Improvethecri7calprocess

9-50 Management of Quality

Operations Strategy •  Qualityisastrategicimpera7vefororganiza7ons

•  Customersareveryconcernedwiththequalityofgoodsandservicestheyreceive

•  Qualityisanever-endingjourney•  Itisimportantthatmostorganiza7onalmembersunderstandandbuyintothisidea

•  Customersa7sfac7on≠customerloyalty•  Qualityneedstobeincorporatedthroughouttheen7resupplychain,notjusttheorganiza7onitself