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
T=
Q=
M=
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