quality management ppt 947

8/6/2019 Quality Management Ppt 947

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IE 3265IE 3265

Quality Management in POMQuality Management in POM



TopicsTopics

Managing a Quality SystemManaging a Quality System�� Total Quality Management (TQM)Total Quality Management (TQM)

Achieving Quality in a SystemAchieving Quality in a System�� Look early and oftenLook early and often

�� Make it a part of the processMake it a part of the process The Customers Voice in TotalThe Customers Voice in Total

Quality ManagementQuality Management Quality EngineeringQuality Engineering ±± Taguchi¶sTaguchi¶s

MethodsMethods

�� Loss FunctionLoss Function�� Quality StudiesQuality Studies�� Experimental ApproachesExperimental Approaches�� ³Quality is Free´ when we meet the ³Quality is Free´ when we meet the

System NeedsSystem Needs



1. Maynard's Industrial Engineering1. Maynard's Industrial EngineeringHandbook, 5th ed., McGrawHandbook, 5th ed., McGraw--Hill, 2001.Hill, 2001.

Total Quality Management Total Quality Management ± ± consider this:consider this:

TQM as a philosophy states that Quality is a TOPTQM as a philosophy states that Quality is a TOPManagement responsibility with Customer SatisfactionManagement responsibility with Customer Satisfactionas the primary target, continuous improvement as theas the primary target, continuous improvement as thecredo, the way of action being based on FACTS andcredo, the way of action being based on FACTS andnot opinions, while every employee must benot opinions, while every employee must be

involved.involved.1 1

The strategy is to concentrate on simplification andThe strategy is to concentrate on simplification andimprovement of processes and organizing actionimprovement of processes and organizing actionaround supplieraround supplier--customer relations (internal as well ascustomer relations (internal as well asexternal). Use of interexternal). Use of inter--disciplinary teams fordisciplinary teams forimprovement and problem solving, to monitor andimprovement and problem solving, to monitor and

ACT on internal and external quality information isACT on internal and external quality information iscritical. Each organization should continuouslycritical. Each organization should continuouslybenchmark themselves against their competition andbenchmark themselves against their competition andtrain all employees in the philosophy of TQM!train all employees in the philosophy of TQM!



Total Quality ManagementTotal Quality ManagementAccording to FeigenbaumAccording to Feigenbaum

³ ³Total quality control is an effective system forTotal quality control is an effective system for

integrating the quality development, qualityintegrating the quality development, quality--maintenance, and quality improvementmaintenance, and quality improvementefforts of the various groups in anefforts of the various groups in anorganization so as to enable marketing,organization so as to enable marketing,

engineering, production, and service at theengineering, production, and service at themost economical levels which allow for fullmost economical levels which allow for fullcustomer satisfaction.´ customer satisfaction.´



Deming's 14 points f or Quality Deming's 14 points f or Quality

Achievement Achievement1.1. Create consistence of purposeCreate consistence of purpose

toward improvement of toward improvement of product or service, with theproduct or service, with theaim to become cometitive, stayaim to become cometitive, stay

in business and provide jobs.in business and provide jobs.2.2. Adopt the new philosophy. WeAdopt the new philosophy. We

are in a new economic age. are in a new economic age. Live no longer with defectiveLive no longer with defectivemethods and poormethods and poor

workmanship.workmanship.3.3. Cease dependence onCease dependence on

inspection. Require statisticalinspection. Require statisticalevidence of process controlevidence of process controlfrom suppliers.from suppliers.




Achievement Achievement4.4. End the practice of rewardingEnd the practice of rewarding

business on the basis of price. business on the basis of price. Reduce the number of suppliers.Reduce the number of suppliers.

5.5. Improve Constantly and forever. Improve Constantly and forever. Use statistical methods to detectUse statistical methods to detectthe sources of problemsthe sources of problems

6.6. Institute modern aids for trainingInstitute modern aids for training

on the job.on the job.7.7. Institute leadership. ImproveInstitute leadership. Improve

supervisionsupervision




Achievement Achievement8.8. Drive out the fear to express ideasDrive out the fear to express ideas

and report problemsand report problems

9.9. Break down barriers betweenBreak down barriers between

departmentsdepartments10.10. Eliminate production quotas,Eliminate production quotas,

slogans and exhortationsslogans and exhortations

11.11. Create work standards thatCreate work standards that

account for qualityaccount for quality




Achievement Achievement12.12. Institute a trainingInstitute a trainingprogram in statisticalprogram in statisticalmethodsmethods

13.13. Institute a program forInstitute a program for

retraining people in newretraining people in newskillsskills

14.14. Put everybody in thePut everybody in thecompany to work tocompany to work toaccomplish theaccomplish the

transformation. Thetransformation. Thetransformation istransformation iseverybody's job. everybody's job. Emphasize the 13 Emphasize the 13 proceeding points everyproceeding points every

day.day.



Make Quality An Integral Part Of Make Quality An Integral Part Of Manuf acturing And ServiceManuf acturing And Service

Develop and document good habits andDevelop and document good habits andprocessesprocesses

Design Quality assurance (inspecting forDesign Quality assurance (inspecting foracceptability) into the system so as toacceptability) into the system so as toput it close to the possible source of anyput it close to the possible source of anyproblemsproblems

Check Quality Early and OftenCheck Quality Early and Often

Maintain Quality Performance recordsMaintain Quality Performance records�� Identify & Correct problem processesIdentify & Correct problem processes

�� Develop (and nurture) highly reliableDevelop (and nurture) highly reliable

product sources and suppliersproduct sources and suppliers�� As quality improves reduce qualityAs quality improves reduce quality

inspections!!!inspections!!!



Summarizing:Summarizing:

Defects found earlyDefects found earlyare much lessare much lesscostly that thosecostly that those

found later in thefound later in theproduct life cycleproduct life cycle

³Make it right the ³Make it right theFirst Time´ First Time´



7 Tools of Quality Improvement7 Tools of Quality Improvement

Check sheets used to gather information onCheck sheets used to gather information onproblem under investigationproblem under investigation ±± where and howwhere and howmuchmuch

Pareto DiagramPareto Diagram ±± the so called 80the so called 80--20 chart20 chartused to identify the ³vital few´ that cause theused to identify the ³vital few´ that cause themost problemsmost problems ±± helps to focus thehelps to focus theimprovement studiesimprovement studies

HistogramHistogram ±± shows stratification in productionshows stratification in production

Scatter DiagramScatter Diagram ±± used to identify relationshipsused to identify relationshipsbetween variablesbetween variables



7 Tools of Quality Improvement7 Tools of Quality Improvement

Flow ChartsFlow Charts ±± describes, visually, thedescribes, visually, theprocess under study. Allows teams toprocess under study. Allows teams tofocus on problem areas and structuralfocus on problem areas and structural

issuesissues CauseCause--andand--effect diagramseffect diagrams ±± also calledalso called

fishbone diagrams relates relationshipsfishbone diagrams relates relationshipsbetween various factors influencing thebetween various factors influencing the

problem under study.

problem under study.

Control ChartControl Chart ±± charts of SPC to thatcharts of SPC to thatassess status of the problem under study.assess status of the problem under study.



An Aside An Aside ± ± Quality and Process Quality and Process

Control in FoundryControl in Foundry Lets look again at last week EconomicsLets look again at last week Economics

ProblemProblem

Your Homework saw only part of theYour Homework saw only part of thewhole problemwhole problem

Those ³separated´ parts that didn¶tThose ³separated´ parts that didn¶t justify saving the machine justify saving the machine

Total Quality Management suggest thatTotal Quality Management suggest thatwe strive for continuous improvementwe strive for continuous improvementand delight our customers by exceedingand delight our customers by exceedingtheir expectationstheir expectations

Lets see what fixing quality and gettingLets see what fixing quality and gettingsmaller lots through in less time can dosmaller lots through in less time can dofor us.for us.



Machine Replacement analysis Machine Replacement analysis ± ± Af ter Tax Af ter Tax Basis with added QuickChange ToolingBasis with added QuickChange Tooling

When purchased, average ³Lot Size´ wasWhen purchased, average ³Lot Size´ was7500 molds and patterns took 45 minutes7500 molds and patterns took 45 minutesto changeto change

Currently, production lot size has fallen toCurrently, production lot size has fallen to375 molds but with significant investment375 molds but with significant investmentpattern change is now 5 minutespattern change is now 5 minutes�� Indicates 375/310 = 1.21 hr/pattern µrun¶ orIndicates 375/310 = 1.21 hr/pattern µrun¶ or375 molds every 1.21+0.083 (1.29) hours375 molds every 1.21+0.083 (1.29) hourswith pattern changewith pattern change

�� Real Production rate is: 290 molds/hr (580Real Production rate is: 290 molds/hr (580parts/hr)! (fixing the horrors of JIT!)parts/hr)! (fixing the horrors of JIT!)



Machine Replacement analysis Machine Replacement analysis ± ±

Af ter Tax Basis Af ter Tax Basis ³Product Issues´ ³Product Issues´

�� Prod Costs (labor/mat¶l/etc.)Prod Costs (labor/mat¶l/etc.) = 7.00= 7.00�� Avg. Sale PriceAvg. Sale Price = 8.00= 8.00

�� NOTE: in most JIT systems cost must dropNOTE: in most JIT systems cost must drop55 ±± 10% annually to customer!!!!10% annually to customer!!!!

Annual Income Defender (RevAnnual Income Defender (Rev ±± Costs)Costs)�� Costs: Pr. Cost (All Castings) + Q. Costs + M. Costs: Pr. Cost (All Castings) + Q. Costs + M.

CostsCosts7*(580*18*250) + 63000 + 12000 = $18,345,0007*(580*18*250) + 63000 + 12000 = $18,345,000

�� Revenue: Price * #Good Parts =Revenue: Price * #Good Parts =8*(580*18*.971*250) = $20,274,4808*(580*18*.971*250) = $20,274,480

�� Income: 20,274,480Income: 20,274,480 -- $ 18,345,000 = $1,923,460$ 18,345,000 = $1,923,460



ATCF f or this case w/ Quick ATCF f or this case w/ Quick

Change tooling added on:Change tooling added on:YRYR BTCFBTCF DeprecDeprec Tax. IncTax. Inc TaxesTaxes ATCF ATCF NPV at 12%NPV at 12%

00 --650000650000 nana --103750103750 3942539425 --610575610575 --610,575.00610,575.00

11 19294801929480 156250156250 177

3230177

3230 --67

3827

67

3827

12556531255653 1,121,17

2.211,121,17

2.2122 19294801929480 111250111250 18182301818230 --690927690927 12385531238553 987,374.13987,374.13

33 19294801929480 111250111250 18182301818230 --690927690927 12385531238553 881,601.74881,601.74

44 19294801929480 111250111250 18182301818230 --690927690927 12385531238553 787,100.18787,100.18

55 19294801929480 5625056250 18732301873230 --711827711827 12176531217653 690,896.09690,896.09

55 220000220000 220000220000 --8360083600 136400136400 77,393.3677,393.36

PV@12%PV@12% $3,934,962.70$3,934,962.70



Present Worth Comparison Present Worth Comparison ---- NowNow

We are much closer to theWe are much closer to theChallengers NPW of $4,422,000Challengers NPW of $4,422,000but still we still ³make thebut still we still ³make thepurchase´ purchase´

Lets see the effect of fixing theLets see the effect of fixing theQuality IssuesQuality Issues

�� Now we work 20 hour/dayNow we work 20 hour/day

�� Quality Iceberg costs fall to $7000Quality Iceberg costs fall to $7000

to do spot inspections and payto do spot inspections and paywarranty claimswarranty claims

�� Production Quality increases toProduction Quality increases to99.5% good!99.5% good!



Machine Replacement analysis Machine Replacement analysis ± ± Af ter Tax Af ter Tax Basis with Quality Issuss µFixed¶Basis with Quality Issuss µFixed¶


Currently, production lot size has fallen toCurrently, production lot size has fallen to375 molds but without significant375 molds but without significantinvestment pattern change is still 45investment pattern change is still 45minutesminutes�� Indicates 375/310 = 1.21 hr/pattern µrun¶ orIndicates 375/310 = 1.21 hr/pattern µrun¶ or375 molds every 1.21+.75 (1.96) hours with375 molds every 1.21+.75 (1.96) hours withpattern changepattern change

�� Real Production rate is: 190 molds/hr (380Real Production rate is: 190 molds/hr (380parts/hr)! (still experiencing the horrors of parts/hr)! (still experiencing the horrors of JIT!)JIT!)



Machine Replacement analysis Machine Replacement analysis ± ±

Af ter Tax Basis Af ter Tax Basis ³Product Issues´ ³Product Issues´ �� Prod Costs (labor/mat¶l/etc.)Prod Costs (labor/mat¶l/etc.) = 7.00= 7.00�� Avg. Sale PriceAvg. Sale Price = 8.00= 8.00

Annual IncomeD

efender (RevAnnual IncomeD

efender (Rev ±± Costs)Costs)�� Costs: Pr. Cost (All Castings) + Q. Costs + M. CostsCosts: Pr. Cost (All Castings) + Q. Costs + M. Costs= 7*(380*20*250) + 7000 = $13,307,000= 7*(380*20*250) + 7000 = $13,307,000


�� Income: $15,124,000 20,274,480Income: $15,124,000 20,274,480 -- $13,307,000 =$13,307,000 =$1,817,000$1,817,000



ATCF f or this case w/ Quality ATCF f or this case w/ Quality

Issues µRepaired¶:Issues µRepaired¶:YRYR BTCFBTCF DeprecDeprec Tax. IncTax. Inc TaxesTaxes ATCF ATCF NPV at 12%NPV at 12%

00 --650000650000 nana --103750103750 3942539425 --610575610575 --610,575.00610,575.00

11 18170001817000 156250156250 16607501660750 --631085631085 11859151185915 1,058,903.501,058,903.50

22 18170001817000 111250111250 17057501705750 --648185648185 11688151168815 931,779.32931,779.32

33 18170001817000 111250111250 17057501705750 --648185648185 11688151168815 831,962.52831,962.52

44 18170001817000 111250111250 17057501705750 --648185648185 11688151168815 742,781.93742,781.93

55 18170001817000 5625056250 17607501760750 --669085669085 11479151147915 651,326.97651,326.97

55 220000220000 220000220000 --8360083600 136400136400 77,393.3677,393.36

PV@12%PV@12% $3,683,572.60$3,683,572.60



Present Worth Comparison Present Worth Comparison ---- NowNow

We are close to the Challenger¶s NPW of We are close to the Challenger¶s NPW of $4,422,000 but still we ³make the$4,422,000 but still we ³make thepurchase´ purchase´

But, as a rational organization, whyBut, as a rational organization, whywouldn¶t we consider doing both? Then:wouldn¶t we consider doing both? Then:�� We can work 20 productive hour/dayWe can work 20 productive hour/day

�� Quality Iceberg costs fall to $7000 doing spotQuality Iceberg costs fall to $7000 doing spotinspections and to pay (a few) warranty claimsinspections and to pay (a few) warranty claims

�� Production Quality increases to 99.5% good!Production Quality increases to 99.5% good!

�� And our hourly production rate increases to anAnd our hourly production rate increases to anaverage of 580 castings an houraverage of 580 castings an hour



Machine Replacement analysis Machine Replacement analysis ± ± Af ter Tax Af ter Tax Basis with added Q.Change ToolingBasis with added Q.Change Tooling


Currently, production lot size has fallen toCurrently, production lot size has fallen to375 molds but with significant investment375 molds but with significant investmentpattern change is now 5 minutespattern change is now 5 minutes�� Indicates 375/310 = 1.21 hr/pattern µrun¶ orIndicates 375/310 = 1.21 hr/pattern µrun¶ or375 molds every 1.21+0.083 (1.29) hours375 molds every 1.21+0.083 (1.29) hourswith pattern changewith pattern change

�� Real Production rate is: 290 molds/hr (580Real Production rate is: 290 molds/hr (580parts/hr)! (fixing the horrors of JIT!)parts/hr)! (fixing the horrors of JIT!)



Machine Replacement analysis Machine Replacement analysis ± ± Af ter Tax Basis Af ter Tax Basis

³Product Issues´ ³Product Issues´

�� Prod Costs (labor/mat¶l/etc.)Prod Costs (labor/mat¶l/etc.) = 7.00= 7.00

�� Avg. Sale PriceAvg. Sale Price = 8.00= 8.00

Annual Income Defender (RevAnnual Income Defender (Rev ±± Costs)Costs)�� Costs: Pr. Cost (All Castings) + Q. Costs + M. Costs: Pr. Cost (All Castings) + Q. Costs + M.

Costs = 7*(580*20*250) + 7000 = $20,307,000Costs = 7*(580*20*250) + 7000 = $20,307,000


�� Income: $23,084,000Income: $23,084,000 -- $20,307,000 = $2,777,000$20,307,000 = $2,777,000



ATCF f or this case w/ Fixed Quality ATCF f or this case w/ Fixed Quality & Q. Change Investment& Q. Change Investment

YRYR BTCFBTCF DeprecDeprec Tax. IncTax. Inc TaxesTaxes ATCF ATCF NPV at 12%NPV at 12%

00 --650000650000 nana --103750103750 3942539425 --610575610575 --610,575.00610,575.00

11 27700002770000 156250156250 26137502613750 --993225993225 17767751776775 1,586,482.401,586,482.40

22 27700002770000 111250111250 26587502658750 --1E+061E+06 17596751759675 1,402,812.911,402,812.91

33 27700002770000 111250111250 26587502658750 --1E+061E+06 17596751759675 1,252,536.671,252,536.67

44 27700002770000 111250111250 26587502658750 --1E+061E+06 17596751759675 1,118,273.461,118,273.46

55 27700002770000 5625056250 27137502713750 --1E+061E+06 17387751738775 986,580.94986,580.94

55 220000220000 220000220000 --8360083600 136400136400 77,393.3677,393.36

PV@12%PV@12% $5,813,504.73$5,813,504.73



Now we have f inal identif ied the Now we have f inal identif ied the capital source to achieve our goals!capital source to achieve our goals!

NPW of (totally) FixedNPW of (totally) FixedDefender is nearly $1.4MDefender is nearly $1.4Mgreater than the Challengergreater than the Challenger

Really, if I was investigatingReally, if I was investigatingexpenditures, why wouldn¶t Iexpenditures, why wouldn¶t Ifocus on doing both?focus on doing both?

A RATIONAL ORGANIZATIONA RATIONAL ORGANIZATIONwould investigate solving allwould investigate solving all

their problems beforetheir problems beforeinvesting in expensive newinvesting in expensive newtechnologiestechnologies



Lets consider the issue of Productivity Lets consider the issue of Productivity Considering QualityConsidering Quality

We can define a processes Yield:We can define a processes Yield:�� YYldld = I(%G) + I(1= I(%G) + I(1--%G)(%R)%G)(%R)

I = #units startedI = #units started %G is good product %%G is good product % %R is %of defects that can be re%R is %of defects that can be re--worked at added costworked at added cost

�� Per Station in a SystemPer Station in a System

Example:Example:�� YYldld = 500(.94) + 500(1= 500(.94) + 500(1--.94).75 = 492.5 units on average.94).75 = 492.5 units on average

�� Given that direct Mfg costs are $57 /unit and rework is ½ of Given that direct Mfg costs are $57 /unit and rework is ½ of this or $28.5this or $28.5

�� Unit cost of each product shipped isUnit cost of each product shipped is{K{KddI + KI + Krr(I(1(I(1--%G)(%R))}/Yield%G)(%R))}/Yield

�� Here: {57*500 + 28.5*22.5}/492.5 = $59.17 /shipped unitHere: {57*500 + 28.5*22.5}/492.5 = $59.17 /shipped unit



Product Yield in a ³MultiProduct Yield in a ³Multi--Stage´ System Stage´ System (we will neglect Rework f or now)(we will neglect Rework f or now)

YYldld = I(%g= I(%g11)(%g)(%g22)(%g)(%g33) « (%g) « (%gnn)) Looking at a 4 station line with the followingLooking at a 4 station line with the following

quality achievements:quality achievements: St1: 94%St1: 94%

St2:78

%St2:78

% St3: 92%St3: 92% St4: 87%St4: 87%

Starting with 500 pieces we only see:Starting with 500 pieces we only see: 500*.94*.78*.92*.87 = 293 pieces of good500*.94*.78*.92*.87 = 293 pieces of good

through the system!through the system! But if I need 500 to ship?But if I need 500 to ship? Start with YStart with Yldld /{(%g /{(%g11)(%g)(%g22)(%g)(%g33) « (%g) « (%gnn)} = I)} = I Here I = 852 unitsHere I = 852 units




Given that a raw materials cost $100Given that a raw materials cost $100here. A Quality Team may ask how muchhere. A Quality Team may ask how muchthey could invest in quality improvementthey could invest in quality improvementalong this line?along this line? ±± say to improve qualitysay to improve quality

performance by ¾performance by ¾ After Improvement:After Improvement:

�� St1: %gSt1: %g11¶ = 100¶ = 100--.06*.25 = .985 (98.5%).06*.25 = .985 (98.5%)�� St2: %gSt2: %g22¶ = 100¶ = 100--.22*.25 = .945 (94.5%).22*.25 = .945 (94.5%)

�� St3: %gSt3: %g33¶ =

100¶ =100--

.08*.

25 =.98

(98%)

.08*.

25 =.98

(98%)�� St4: %gSt4: %g44¶ = 100¶ = 100--.13*.25 = .9675 (96.75%).13*.25 = .9675 (96.75%)

Compute a new I¶ valueCompute a new I¶ value




New I¶ =New I¶ =500/(.985*.945*.98*.9675) =500/(.985*.945*.98*.9675) =566.53566.53

Still many defects (so we shouldStill many defects (so we shouldkeep trying to improve) but this iskeep trying to improve) but this is

a raw mat¶l savings of 285 unita raw mat¶l savings of 285 unitstarted/day compared to thestarted/day compared to thestarting pointstarting point

Or a savings of about $28550 eachOr a savings of about $28550 eachday thusday thus

$28550

*250 = $

7.1M a year$2

8550

*250 = $

7.1M a yearsaved heresaved here

This is a big bunch of $¶s savedThis is a big bunch of $¶s savedthat can be invested in fixing thethat can be invested in fixing thequality problems!quality problems!



Achieving Higher Quality Levels Achieving Higher Quality Levels---- f ocusing on the Production Systemf ocusing on the Production System

Many times companies are tempted toMany times companies are tempted tospend more for higher qualityspend more for higher quality

However, Rarely can quality beHowever, Rarely can quality bebought or inspected inbought or inspected in ±± it must flowit must flowfrom a good process where quality isfrom a good process where quality is

made a part of everyone¶s Jobmade a part of everyone¶s Job We must understand that tighterWe must understand that tighter

tolerances are a last resort that leadtolerances are a last resort that leadto nonto non--linear extra costs and qualitylinear extra costs and qualitycan be achieved through other meanscan be achieved through other means

We must analyze our products andWe must analyze our products andprocesses to determine what factorsprocesses to determine what factorsactually lead to producing quality inactually lead to producing quality inthe processes and get control of themthe processes and get control of them



Achieving Quality Achieving Quality

Inspect EARLY and oftenInspect EARLY and often ±±make it part of eachmake it part of eachoperators Dutiesoperators Duties

An operator is both aAn operator is both a

Customer of incomingCustomer of incomingquality as well as aquality as well as asupplier of downsupplier of down--streamstreamqualityquality ±± they have athey have avested interest in a bettervested interest in a betterquality levelquality level

Never rest until its perfect!Never rest until its perfect!±± which it can never bewhich it can never besince the targets keepsince the targets keepmoving.moving.



Examining this Production Flow ChartExamining this Production Flow Chart

A total of 81 steps are documentedA total of 81 steps are documented

Of this number, 50 includeOf this number, 50 includeinspection (about 62%!)inspection (about 62%!)

22 of the 50 inspections are22 of the 50 inspections areperformed during a processingperformed during a processingoperation (45%) so they add no (oroperation (45%) so they add no (orlittle) cost to the processlittle) cost to the process

The µtopmost¶ step is incomingThe µtopmost¶ step is incominginspectioninspection

The last steps are inspection duringThe last steps are inspection duringpacking and analyzing Returnedpacking and analyzing ReturnedItemsItems



Listening to the Customer Listening to the Customer An important part of TQM is determining whatAn important part of TQM is determining what

the customer wants. This is done viathe customer wants. This is done via

Focus groupsFocus groups

Customer interviewsCustomer interviews Customer surveysCustomer surveys

Downsides: customers are not in a position toDownsides: customers are not in a position to

think of new possibilities, or customersthink of new possibilities, or customersdesires are technically impossible to achieve. desires are technically impossible to achieve. Also, surveys can lead to bias depending onAlso, surveys can lead to bias depending onthe manner in which questions are worded.the manner in which questions are worded.



The House of Quality isThe House of Quality isused to match upused to match upcustomers desires withcustomers desires withcapabilities duringcapabilities duringproduct and processproduct and processdesigndesign

The Matrix allows aThe Matrix allows acompany to examinecompany to examine�� Whats vs HowsWhats vs Hows

(relationship matrix)(relationship matrix)�� Whats vs WhysWhats vs Whys

(Customer competitive(Customer competitiveassessment)assessment)

�� Hows vs HowsHows vs Hows

(Correlation Matrix)(Correlation Matrix)�� How Much vs HowsHow Much vs Hows

(Engineering(EngineeringCompetitiveCompetitiveAssessment)Assessment)

QFD and the Customer¶s voice: Using the QFD and the Customer¶s voice: Using the House of QualityHouse of Quality



What about a Paper Maker?What about a Paper Maker?

List Customer DesiresList Customer Desires

Shows how well theyShows how well theyare met by us andare met by us andcompetitorscompetitors

Compares CustomersCompares Customersdesires to technicaldesires to technicalRequirements (asRequirements (asdefined)defined)

Weighs importanceWeighs importanceand technicallyand technicallyevaluates how well weevaluates how well weare doingare doing



Organizing f or QualityOrganizing f or Quality

The quality functionThe quality functionshould not be relegatedshould not be relegatedto a single department,to a single department,but should permeate thebut should permeate theentire organizationentire organization

The quality functionThe quality functionmust have an ongoingmust have an ongoingcontact with customers.contact with customers.

Must transcendMust transcendfunctional organizationalfunctional organizationalboundariesboundaries

Must be overseen from aMust be overseen from ahigh level of the firm. high level of the firm.



Recognizing QualityRecognizing Quality

Deming Prize. Established in Japan inDeming Prize. Established in Japan in1951 by quality guru W. Edwards1951 by quality guru W. EdwardsDeming. The prestigious prize has beenDeming. The prestigious prize has beenawarded to Japanese companies almostawarded to Japanese companies almostevery year since inception in severalevery year since inception in severalcategories.categories.

Malcolm Baldrige National QualityMalcolm Baldrige National QualityAward established by the U.S. Dept of Award established by the U.S. Dept of Commerce in 1987 recognizesCommerce in 1987 recognizesexcellence in a) manufacturingexcellence in a) manufacturingcompanies b) service companies andcompanies b) service companies andsubsidiaries, and c) small businesses. subsidiaries, and c) small businesses.

ISO 9000. A certification programISO 9000. A certification programestablished by the Internationalestablished by the InternationalOrganization for Standards based inOrganization for Standards based inSwitzerland. Certification can costSwitzerland. Certification can costupwards of $1 million for largeupwards of $1 million for largecompanies.companies.



Designing f or QualityDesigning f or Quality

While much of quality controlWhile much of quality control

deals with monitoring adeals with monitoring a

process or inspecting itemsprocess or inspecting items

after production, there is aafter production, there is a

substantial literature onsubstantial literature on

means of designing qualitymeans of designing quality

into the product directly. into the product directly.

Taguchi methods focus on:Taguchi methods focus on:

System DesignSystem Design

Parameter DesignParameter Design

Tolerance DesignTolerance Design..



Taguchi¶s Loss FunctionTaguchi¶s Loss Function

Taguchi defines Quality LevelTaguchi defines Quality Levelof a product as the Total Lossof a product as the Total Lossincurred by society due toincurred by society due tofailure of a product to performfailure of a product to performas desired when it deviatesas desired when it deviatesfrom the delivered targetfrom the delivered targetperformance levels.performance levels.

This includes costs associatedThis includes costs associatedwith poor performance,with poor performance,operating costs (whichoperating costs (which

changes as a product ages)changes as a product ages)and any added expenses dueand any added expenses dueto harmful side effects of theto harmful side effects of theproduct in useproduct in use



Exploring the Taguchi MethodExploring the Taguchi Method

Considering the LossConsidering the LossFunction it isFunction it isquantifiablequantifiable

�� Larger is Better:Larger is Better:

�� Smaller is Better:Smaller is Better:

�� Nominal is Best:Nominal is Best:

21( ) L y k y« »! ¬ ¼½

2( ) L y k y!

2

( ):

m is the target of the

process specification

L y k y mwhere

!



Considering the Cost of LossConsidering the Cost of Loss

k in the L(y) equation isk in the L(y) equation isfound from:found from: 0

2

0

0

0

is cost o repair or replacea product and must include

loss due to unavailability

during repair

is the unctional limit on

y o a product where it would

ail to per orm its unction

hal the

Ak

A

!(

(

time



Loss Function Example: Loss Function Example: (nominal is (nominal is

best)best)

We can define a processesWe can define a processesaverage loss as:average loss as:

S is process (product) StandardS is process (product) Standard

DeviationDeviation

YYbarbar is process (product) meanis process (product) mean

2

2 L k s y m« »! ¬ ¼½



Example cont. Example cont.

AA00 is $2 (a very cheap out) found byis $2 (a very cheap out) found byestimating that the loss is 10% of estimating that the loss is 10% of the $20 product cost when a part isthe $20 product cost when a part isexactly 8.55 or 8.45 unitsexactly 8.55 or 8.45 units

Process specification is: 8.5Process specification is: 8.5++.05.05unitsunits

Historically: yHistorically: ybarbar = 8.492 and S == 8.492 and S =0.0160.016



Example Cont.Example Cont.

Average Loss:Average Loss:

If we makeIf we make250,000 units a250,000 units ayearyear

Annual Loss isAnnual Loss is$64,000$64,000

2 22 0.016 8.492 8.500

.05

800 .00032 $0.256

L

L

« »! ½

! !



Fixing itFixing it

Shift the MeanShift the Meanto nominalto nominal

ReduceReducevariation (s =variation (s =0.01)0.01)

Fix Both!Fix Both!

22800 .016 0 $0.2048

Annual Loss is $51200 about 20% reduction

L « »! !½

22800 .010 .008 $0.1312

nnual oss is $32800 about 50 reduction

L « »! !½

22800 .010 0 $0.08

Annual Loss is $20000 about 66% reduction

L « »! !½



Taguchi MethodsTaguchi Methods

Help companies to perform theHelp companies to perform theFixing!Fixing!

Conduct extensive Problem AnalysesConduct extensive Problem Analyses Based on InterBased on Inter--disciplinary Teamsdisciplinary Teams

Perform Designed ExperimentalPerform Designed ExperimentalAnalysesAnalyses

Evaluate Experiments using ANOVAEvaluate Experiments using ANOVAand Signaland Signal--to noise techniquesto noise techniques

quality management ppt 947

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