530 quality

Upload: shahzad-afzal

Post on 30-May-2018




0 download


  • 8/14/2019 530 Quality


    Quality DefinedASQC totality of features and characteristics of a product or service that bears on its ability to satisfy given needs

    fitness for its use how well does the product do what thecustomer thinks it should do and wants it to do

  • 8/14/2019 530 Quality


    Dimensions of Qualityquality of design - degree to which quality characteristics aredesigned into a product

    products or services designed with different levels of quality for different types of customers

    customer determines quality

  • 8/14/2019 530 Quality


    Dimensions of Quality (cont)customer dimensions of product quality

    performance, features, reliability

    conformance, durability, serviceability

    aesthetics, safety, other perceptions

  • 8/14/2019 530 Quality


    Dimensions of Quality (cont)customer dimensions of service quality

    time and timeliness, completeness, courtesy, consistency

    accessibility and convenience, accuracy, responsiveness

    quality characteristics weighed by customer relative to cost of product or service

  • 8/14/2019 530 Quality


    Dimensions of Quality (cont)quality from producer perspective

    quality of conformance product is produced according todesign specifications

    achieving quality of conformance

    design of production process

    equipment, technology, materialsemployees, use of statistical quality control (SQC)

  • 8/14/2019 530 Quality


    TQMTQM total commitment to quality throughout the entireorganization

    Deming approach to quality management

    continuous improvement of production process to achieveconformance to specifications and reduce variation

    two primary sources of process improvement

    common causes of quality problems poor productdesign or insufficient employee training

    special causes of quality problems improperlyoperating equipment or a poor operator

  • 8/14/2019 530 Quality


    TQM (cont)emphasizes extensive use of SQC to reduce variability inproduction process

    dismisses extensive use of inspections as coming too late toreduce product defects

    primary responsibility for quality is with employee andmanager, not quality manager or inspection technician

  • 8/14/2019 530 Quality


    TQM (cont)Deming's 14 points

    create constancy pf purpose toward productimprovement

    prevent poor-quality products rather than acceptablelevels of poor quality

    eliminate need for inspection to achieve quality and relyon SQC to improve product and process design

    select a few suppliers or vendors based on qualitycommitment rather than competitive prices

  • 8/14/2019 530 Quality


    TQM (cont)constantly improve production process by focus on twoprimary sources of quality problems, the system andworkers

    institute worker training on prevention of quality problemsand use of SQC

    instill leadership among supervisors to help workersperform better

    encourage employee involvement by eliminating fear of reprisal for asking questions and identifying qualityproblems

  • 8/14/2019 530 Quality


    TQM (cont)eliminate barriers between departments and promotecooperation and a team approach

    eliminate slogans and numerical targets that encourageworkers to achieve higher performance levels withoutfirst showing them how to do it

    eliminate numerical quotas which employees attempt tomeet at any cost without regard for quality

    enhance worker pride, artistry, and self-esteem byimproving supervision and the production process so thatworkers can perform to their capabilities

  • 8/14/2019 530 Quality


    TQM (cont)institute training programs in methods of qualityimprovement throughout the entire organization

    develop a commitment from top management toimplement previous points

    Deming Wheel (PDCA Cycle) plan, do, study/check, act

  • 8/14/2019 530 Quality


    TQM (cont)Joseph Juran - included quality in strategic planning process

    strategic quality planning - determine desired quality leveland design production process to achieve desired qualitycharacteristicsemphasizes quality improvement by focus on chronic qualityproblems and securing a break-thru solution

    hundreds, or even thousands, of quality improvement

    projects going on at any one time

  • 8/14/2019 530 Quality


    TQM (cont)Phillip Crosby author of 1979 book Quality is Free

    emphasized the cost of poor quality

    cost of poor quality far outweighs cost of preventing poor quality

  • 8/14/2019 530 Quality


    TQM (cont)Armand Feigenbaum introduced total quality control in 1980s

    total quality control total commitment of management andemployees throughout the organization to improve qualityJapanese adopt this approach referred to as company-wide quality control

    Japanese believe all employees at all levels are responsiblefor continuous quality improvement

  • 8/14/2019 530 Quality


    TQM (cont)TQM and continuous process improvement

    focus of continuous process improvement is businessprocesses rather than business functions

    continuous process improvement

    identify critical processes

    analyze processes to find out how all tasks and functionsare interrelatedobjective is to determine how to improve process whileimproving quality of work performed

  • 8/14/2019 530 Quality


    TQM (cont)principles of TQM

    TQM is set of principles that focus on quality improvementas driving force in all functional areas and in all levels in anorganizationprinciples of TQM

    customer defines quality and customer needs are toppriority

    top management must provide leadership for qualityquality is a strategic issue

    quality is the responsibility of all employees at all levels

  • 8/14/2019 530 Quality


    TQM (cont)all functions within an organization must focus oncontinuous quality improvement

    quality problems are solved through cooperation amongemployees and management

    problem solving and continuous quality improvement areSQC methodstraining and education of all employees is the basis for

    continuous quality improvement

  • 8/14/2019 530 Quality


    TQM (cont)TQM throughout the organization

    marketing and R&D, engineering

    purchasing, human resources

    management, shipping

    customer service

  • 8/14/2019 530 Quality


    TQM (cont)strategic implications of TQM

    quality as core competency

    quality as order qualifier or order winner quality as means to position firm to compete

  • 8/14/2019 530 Quality


    Cost of Qualitycosts of quality fall into two categories

    cost of quality assurance cost of achieving quality

    prevention costs

    reflect philosophy of doing it right first time

    examples of prevention costs - quality planningcosts, product design costs, process costs, trainingcosts, and information costs

  • 8/14/2019 530 Quality


    Cost of Quality (cont)appraisal costs

    catch mistakes after the fact

    examples of appraisal costs inspection and testing,test equipment, and operator costs

    cost of not conforming to specifications costs associatedwith poor quality

    cost of failures is difference between what it actuallycosts to produce a product and what it would cost if therewere no failures

    cost of poor quality is usually largest quality cost sourcein organization

  • 8/14/2019 530 Quality


    Cost of Quality (cont)two types of cost of nonconforming

    internal failure costs

    discovered before product is delivered tocustomer

    lower for service than manufacture

    examples of internal failure costs scrap,

    rework, process failure, process downtime, price-downgrading

  • 8/14/2019 530 Quality


  • 8/14/2019 530 Quality


    Cost of Quality (cont)index numbers are one means of measuring and reportingquality costs

    index numbers are ratios which measure quality costsagainst a base value

    general form is quality index = (total quality cost / base) x100

    useful as standard to make comparisons over time

  • 8/14/2019 530 Quality


    Cost of Quality (cont)labor index

    (total quality cost / direct labor hours) x 100

    may not be appropriate for comparisons wheretechnology change reduces labor usage

    cost index

    (total quality cost / manufacturing cost) x 100

    not affected by technology change

  • 8/14/2019 530 Quality


    Cost of Quality (cont)sales index

    (total quality cost / sales) x 100

    may be distorted by changes in selling price or costs

    production index

    (total quality cost / # units final product) x 100

    may not be as effective where have number of differentproducts

  • 8/14/2019 530 Quality


    Cost of Quality (cont)quality-cost relationship

    as prevention and appraisal costs increase, internal andexternal failure costs typically decrease

    as company focuses on achieving quality, cost of achievinggood quality goes down leads companies to frequentlyseek 100% quality or zero defects

  • 8/14/2019 530 Quality


    Cost of Quality (cont)Japanese focus on improving quality at minimum cost

    improve capabilities and training of employees rather than on engineering solutions

    concentrate on quality characteristics in design stagerather than trying to build quality in production process

    long-term view of firm success suggests firms who takelong-term focus on quality do increase profitability

  • 8/14/2019 530 Quality


    Cost of Quality (cont)impact of quality management on productivity

    productivity = output / input

    quality impact on productivity fewer defects increasesoutput while quality improvement reduces inputs

  • 8/14/2019 530 Quality


    Cost of Quality (cont)product yield (Y) for single stage production process

    Y = (I) (%G) + (I) (1 - %G) (%R) where

    I = planned number of units started in the productionprocess

    %G = % good units produced%R = % reworked units

    any increase in % of good products produced willincrease product yield

  • 8/14/2019 530 Quality


    Cost of Quality (cont)product yield for multiple stage production process with norework

    Y = (I) (%g 1) (%g 2) . . . (%g i) where

    I = input of items in the production process that will resultin finished products

    %g i = good quality, work-in-progress products at stage I

  • 8/14/2019 530 Quality


    Cost of Quality (cont) product manufacturing cost

    cost = ((K d) (I) + (K r ) (R)) / (Y) where

    Kd = direct manufacturing cost per unit

    I = inputKr = rework cost per unit

    R = reworked unitsY = yield

  • 8/14/2019 530 Quality


    Cost of Quality (cont)quality-productivity ratio (QPR)

    QPR = (good quality units)(100) / ((input) (processingcost) + (defective units) (rework cost))

    QPR increases if either processing cost or rework cost or bothdecrease

    more good quality units are produced relative to totalproduct input (number of units that begin productionprocess)

  • 8/14/2019 530 Quality


    Cost of Quality (cont)indirect productivity gains

    quality improvement may have indirect as well as directimpact of productivity

    in general, any quality improvements or improveddesigns which enhance the workplace, reducecongestion, or smooth out and speed up productionprocess increase productivity

  • 8/14/2019 530 Quality


    Cost of Quality (cont)quality improvement and role of employees

    participative problem solving involves employeesdirectly in quality management process

    quality circles group of workers from same area whoaddress production problems

    process improvement teams includes members frominter-related functions that make up a process

  • 8/14/2019 530 Quality


    QC Improvement ToolsPareto analysis

    flow charts (process flow chart)

    check sheetshistograms

    scatter diagramsstatistical process control (SPC) chartscause-and effect diagrams

  • 8/14/2019 530 Quality


    Quality AwardsMalcolm Baldridge National Quality Award (since 1987)

    given annually to one or two companies in each of threecategories: manufacturing, services, and small businesses(less than 500 full-time employees)

    award criteria leadership, information and analysis,strategic quality planning, human resource utilization, qualityassurance of products and service, quality results, and

    customer satisfactionmarked increase in productivity in firms who have beenfinalists or winners

  • 8/14/2019 530 Quality


  • 8/14/2019 530 Quality


    ISO 9000standards are set forth by the International Organization for Standardization (ISO) located in Geneva, Switzerland

    members are national standards organizations for more than 90countriesISO member for US is the American National StandardsInstitute (ANSI)

    purpose of ISO is to facilitate global consensus agreements on

    international quality standardsresult is a system for certifying suppliers to make sure they meetinternationally accepted standards for quality management

  • 8/14/2019 530 Quality


    ISO 9000 (cont)ISO 9000 (published 1978) provides standards and guidance for using four standards - for example ISO 9001

    Quality Systems - Model for Quality Assurance in

    Design/Development, Production, Installation, and Servicingapplies to suppliers who have responsibility for the designand development, production, installation, and servicing of aproduct

    includes set of requirements for suppliers qualitymanagement program, beginning with top management andproviding objective criteria to verify that key elements of totalquality management approach are present

  • 8/14/2019 530 Quality


    ISO 9000 (cont)three other ISO standards (ISO 9002, 9003, and 9004) existdepending on degree to which a supplier is responsible for product from design to installation and servicing

    implication of ISO 9000 for US companies must be ISO 9000certified to compete

    many foreign countries will not do business with supplierswho are not ISO 9000 accredited

    many US companies are being pressured by US customersto ISO 9000 certified

  • 8/14/2019 530 Quality


  • 8/14/2019 530 Quality


    ISO 14000new environmental management standard in development byISO; probably adopted soon

    contains five core elements environmental management,auditing, performance evaluation, labeling, and life-cycleassessment

    advantages positive public image, reduced exposure toliability, good systematic approach to pollution prevention

    through minimized ecological impact of products and processes,and compliance with regulatory environment