operation management chapter 7
DESCRIPTION
Operation ManagementTRANSCRIPT
Managing qualityAlex Hill and Terry Hill
Lecture outline
• INTRODUCTION
• Defining QUALITY and its role
• Quality PHILOSOPHIES
• STEPS to effectively managing quality- TOOLS and TECHNIQUES
• APPROACHES to managing quality
• Critical REFLECTIONS
• SUMMARY
Defining quality and its role
OPERATION MANAGERS SHOULD Ensures that the actual service or product CONFORMS to its INTERNALLY SPECIFIED quality level
Quality conformance means: CONSISTENTLY delivering services and products in line with their DESIGN SPECIFICATIONS, which, in turn need to reflect customer needsQuality conformance means: CONSISTENTLY delivering services and products in line with their DESIGN SPECIFICATIONS, which, in turn need to reflect customer needs
Quality conformance meansCONSISTENTLY delivering services and products in line with their DESIGN SPECIFICATIONS, which, in turn need to reflect customer needs
Quality philosophies
W Edwards DEMING
Joseph M JURANPhilip B CROSBY
ways for improving the quality consistency of organization
Deming
1. Clear quality VISION2. Focus on correcting SYSTEMS and PROCEDURES3. Drive to eliminate ERRORS4. Build LONG-TERM supplier relationships5. Continuously reduce WASTE6. Centre TRAINING on producing acceptable work7. LEAD rather than supervise8. Encourage QUESTIONS9. Use cross-functional TEAMS10.Give employees the right TOOLS to do the job11.Focus quotas and targets on QUALITY not output12.Encourage PRIDE in one’s work13.Continuously TRAIN people on new tools and
techniques14.Work CONTINUOUSLY on the other 13 points
IMPROVING QUALITY
Juran
• INTERNAL cost of failure- Defects, rework, losses, re-inspection, removal
• EXTERNAL cost of failure- Complaints, returns, field service support,
repairs
• APPRAISAL costs- Inspection, test, checks, assurance and control
• PREVENTION costs- Planning, reviews, controls, analysis, reporting
COSTS OF QUALITY
Crosby
• Apparent management COMMITMENT• Improvement supported by MULTI-FUNCTIONAL team• Quality MEASURES in place• Quality AWARENESS promoted throughout organisation• Improvement ideas ACTIONED• Goal is to achieve ZERO DEFECTS• Improvement based on EDUCATION and TRAINING• Make EVERYONE responsible for identifying and fixing
errors• Form quality COUNCIL to help share knowledge• CONTINUOUSLY improve quality by returning to step 1
IMPROVING QUALITY
Steps to effectively manage quality
CONTROL
IMPROVEMENT
Steps to effectively manage quality
Control
1.Define quality CHARACTERISTICS (E.g. reliability, durability, appearance)
•Decide how to MEASURE characteristics•Set quality STANDARDS•CONTROL quality against standards
Steps to effectively manage quality
DECIDE HOW TO MEASURE CHARACTERISTICS•VARIABLES- Measured on a continuous
SCALE- E.g. length, weight or time•ATTRIBUTES- Have TWO states- Assessed by JUDGEMENT- DESCRIPTIVE- E.g. right/wrong, looks OK/NOT
OK
Control
SETTING QUALITY STANDARDS
E.g. customers should be served within 90 seconds of
arriving
That LEVEL of quality whichdefines the boundary
between ACCEPTABLE and unacceptable
CONTROL
•Find and correct CAUSES of poor quality•CONTINUE to make improvements
Improvement
Quality conformance must be CONTROLLED before it be IMPROVED
> KEY IDEA
Organizations mustPROACTIVELY improve quality byCONTINUALLY identifying what could go wrong before it does and thenPREVENTING these problems from occurring
CASE 10.3
REGAINING CONSUMER CONFIDENCE AT COCA-COLA AND PERRIER
1.How did they REACT to the quality conformance problems?
2.Was quality conformance an ORDER-WINNER or QUALIFIER in their markets?
3.How did this affect their MARKETS?
Question Answer
Reaction
Order-winner or qualifier
Market impact
• Lost consumer CONFIDENCE• Lost SALES- Perrier has never really regained market
share
CASE 10.3
• SLOW to react• Initially DENIED that there was a
problem
• QUALIFIER
Question Answer
Point
Importance
• One of the key FIRST STEPS in any improvement program must be to:
- EDUCATE staff in the use of quality improvement TOOLS and TECHNIQUES
HAVING THE RIGHT TOOLS TO DO THE JOB
• Managers need to equip employees with the right TOOLS to do the job
• It is NOT ENOUGH to simply motivate and support them
•CHECKLISTS•PARETO analysis•CAUSE and EFFECT diagram•GAP analysis•CONTROL charts•Statistical process control (SPC)•SIX-SIGMA quality
> KEY IDEA
Quality conformance can be IMPROVED by changing how services or products are eitherDESIGNED or DELIVERED
Tools and techniques
Checklists record how OFTEN a problem occurs
Pareto analysis: Pareto analyses identify the MOST FREQUENT causes of a problem and thereby help FOCUS improvement activities and resource
Cause and effect diagrams1. Identify the PROBLEM to be addressed2. Identify the major CATEGORIES of causes3. List all the DETAILED causes4. Identify the PRINCIPAL causes
The diner
Five Easy Pieces(1970)
•What is the OUTCOME? What are the CAUSES of this?
Breakfast at Tiffany’s
(1961)
Film clip The Diner
FilmTitleDirector (year)
Five Easy PiecesRafelson (1970)
ClipStartFinish
00:45:4200:46:13
What clip shows A group of people being served in a diner
Key learning objective
Identifying why the customers’ expectations were not met
Cause and effect diagrams
Film clip Tiffany’s
FilmTitleDirector (year)
Breakfast at Tiffany’sEdwards (1961)
ClipStartFinish
01:05:4101:09:49
What clip shows A couple being served in Tiffany’s
Key learning objective
Identifying how the business identified and met the customers’ expectations
Cause and effect diagrams
The Diner
PeopleSystems
Materials Customer
OutcomeInflexible
Unprofessional
Not empowered
High expectation
Customers do not eat and leave upset
Low variety
Inflexible
Tools and techniquesTiffany’s
PeopleSystems
Materials Customer
OutcomeFlexible
Skilled / professional
Empowered
Low expectation
Satisfied customers will come again
High variety
Flexible
Gap analysis
1.KNOWLEDGE gap2.DESIGN gap3.PERFORMANCE gap4.COMMUNICATION gap5.OVERALL gap
Gap analysis helps identify why customers’ PERCEPTIONS of the quality of a service or product are LESS THAN their EXPECTATIONS
Control charts
•WHAT- aspects of PERFORMANCE need to be measured•WHERE- which POINT in the delivery system•HOW- which TYPE of control chart - attribute or variable- FREQUENCY of measurement•By WHOM- who will MEASURE performance- who will take corrective ACTION when it moves
outside of its limits
Control charts can be used to control a process and ensure that it PERFORMS within specified SPECIFIC LIMITS
Six-sigma quality
1.Critical to Quality: Attributes most important to the customer
2.Defect: Failing to deliver what the customer wants
3.Process Capability: What your process can deliver
4.Variation: What the customer sees and feels
5.Stable Operations:Ensuring consistent, predictable processes to improve what the customer sees and feels
6.Design for Six Sigma:
Designing to meet customer needs and process capability
Key Concepts of Six SigmaAt its core, Six Sigma revolves around a few key concepts.
Approaches to managing qualityTotal quality managementMANAGEMENT PHILOSOPHY
•Meet CUSTOMER needs and expectations
•Cover all FUNCTIONS•Involve all LEVELS•Examine the current COST of quality•Deliver services and products RIGHT
first time•Develop a quality management
APPROACH•CONTINUOUSLY look for ways to
improve
IMPLEMENTATION
•Develop a quality STRATEGY•Get top-management SUPPORT•Use a TQM group•Use improvement TEAMS•RECOGNISE success•Use quality TOOLS and TECHNIQUES•TRAIN staff in the aims and tools of
TQM
To implement TQM, companies must broaden their SKILLS and be more INNOVATIVE. This requires CHANGES in attitude, behavior and working practices
A number of FRAMEWORKS are available to help organizations consistently DESIGN and DELIVER services and products
for example :Systems and procedures• ISO 9000
ISO 9000HELPS CONTROL BUSINESS PROCESSES
•DESIGNING and DEVELOPING new services and products
•Control MATERIALS•DELIVER services and products•INSPECT, MEASURE and TEST services and
products •HANDLE, STORE and PACK products•SERVICE products after installation•Maintain and audit quality RECORDS for the
above
Summary
• QUALITY conformance: Either order-winner or qualifier in most markets
• MANAGING quality: Characteristics, measures, levels and monitors
• Quality LEVELS must be: Controlled before they can be improved
• TOOLS and TECHNIQUES for improving quality: Checklists, Pareto analysis, cause and effect, gap analysis
SYSTEMS and PROCEDURES: ISO 9000, Baldrige Award, EFQM Excellence Award