conformance quality

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conformance quality
Total Quality Management
Chapter 5
© 2005 Wiley
1
MGMT 326
Foundations
of Operations
Introduction
Strategy
Products &
Processes
Quality
Assurance
Product
Design
Managing
Quality
Process
Design
Statistical
Process
Control
Capacity,
Facilities,
& Work
Design
Planning
& Control
Total Quality Management (TQM)
Chapter 5
What is
quality?
CustomerDefined
Quality
Costs of
quality
Total Quality
Management (TQM)
TQM
Philosophy
Quality
Tools
Quality in
Product Design
(Quality Function
Deployment)
Why Quality is Important

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Increases value of products to customers
Reduces expensive mistakes
Increases profits  Shareholder value
© 2005 Wiley
4
How Customers Define Quality

Customer-defined quality: Meeting quality
expectations as defined by the customer
 High performance design vs. product or service
consistency
 Psychological (perceived quality): the quality
that the customer thinks he/she got
 Value: the good or service is superior to others
with similar prices (getting more for your
money)
© 2005 Wiley
5
How Customers Define Quality (2)

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How customers define quality (2)
 Fitness for use: how well the product performs
its intended function – differs by target market
 Support services – technical support, repairs,
etc.
 See differences between manufacturing and
service organizations, pp. 139-140, Table 5.1
Quality includes all characteristics that are
important to customers – not just the core
product
© 2005 Wiley
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How Companies Meet
Customer Requirements

Companies use product or service specifications to meet
customer requirements
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Characteristics of the product or service which will be measured
to determine quality
Target values (ideal values) for each characteristic
Should be based on customer expectations
Should meet any legal requirements
Conformance quality: If a product or service
consistently meets specifications, it has conformance
quality.
© 2005 Wiley
7
Cost of Quality – 4 Categories

Early detection/prevention is less costly
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Costs may be less by a factor of 10
See pages 140-141 for cost of quality details
© 2005 Wiley
8
Total Quality Management (TQM)

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Customer-defined quality: Meeting quality
expectations as defined by the customer
Integrated organizational effort designed to improve
quality on all quality characteristics that are
important to customers (core product and anything
else that affects customers)
Requires a coordinated effort
 All levels of the organization
 All functions (departments) in the organization
 Work with suppliers and listen to customers
© 2005 Wiley
9
External and internal customers

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External customers buy goods and/or services from
the organization
 External customers may be people, businesses,
government agencies, universities, or non-profit
organizations
If you work in an organization, internal customers are
people in the same organization who use your work
product (goods, services, reports, information
systems)
© 2005 Wiley
10
TQM Philosophy
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Focus on Customer
 Identify and meet customer needs
 Stay tuned to changing needs, e.g. fashion styles
Continuous Improvement: Continuous learning and
problem solving
Quality at the Source: Find the problem when it
occurs and fix it.
Employee Empowerment and problem solving (pages
149-150): Empower all employees. Serve external and
internal customers
© 2005 Wiley
11
TQM Philosophy (2)
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Quality improvement teams (QIT's or quality circles)
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Teams formed around processes – 8 to 10 people
Meet regularly to analyze and solve problems
Self-managed work teams: a work group is
responsible for managing its responsibilities.
Managers are coaches, not bosses. (less common
than QIT's)
Benchmarking: Studying practices at “best in class”
companies
Managing Supplier Quality: Certify suppliers and
eliminate receiving inspection
© 2005 Wiley
12
Plan-Do-Study-Act Cycle (PDSA)
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PDSA is a problem-solving process used in
continuous improvement
Plan:
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Document the current process. What is being done?
 Collect procedures and flowchart the process
 Collect performance data and identify problems.
Evaluate the current process. What should be changed?
Set performance objectives.
Develop an improvement plan.
© 2005 Wiley
13
Plan-Do-Study-Act Cycle (2)
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Do: Implement the improvement plan on trial basis
Study:
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Collect data on the new process.
Compare actual performance with objectives
Act
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Communicate the results from the trial
If successful, implement new process throughout the
organization.
If the trial was not successful or did not fully achieve
objectives, go back to Plan step.
© 2005 Wiley
14
PDSA
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(continued)
Cycle is repeated
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After act phase, start planning and repeat process
© 2005 Wiley
15
Seven Problem Solving Tools
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Cause-and-Effect Diagrams
Flowcharts
Checksheet
Control Charts
Scatter Diagrams
Pareto Analysis
Histograms
© 2005 Wiley
16
Cause-and-Effect Diagrams
Used to identify the cause of a quality problem
Followup: Collect data to verify the cause and
develop a plan to eliminate the cause.
fig_05_08
Flowchart

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Used to document the detailed steps in a
process
Often the first step in Process Reengineering
Checksheet
Tool Used to Collect Data for Analysis
Control Chart
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Set confidence intervals for the mean and range of a
process (usual behavior)
LCL = lower control limit, UCL = upper control limit
Is process in control (predictable)?
Does process have conformance quality?
Scatter Diagrams
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A graph that shows how two variables are related to
one another
Data can be used in a regression analysis to establish
equation for the relationship
Pareto Analysis
Used to Prioritize Problems
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Most important problems should be solved first
Prioritize by number of defects or $ cost of defects
Often called the 80-20 Rule: Most quality problems are the
result of only a few causes.
Example: 80% of the problems caused by 20% of causes
Histogram
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A chart that shows the frequency distribution of
observed values of a variable like service time
at a bank drive-up window
Displays whether the distribution is symmetrical
(normal) or skewed
Quality in Product Design

Quality function deployment (QFD)
 Used by product design teams
 Used to translate customer preferences into specific
technical requirements
 The technical requirements are used to develop the
product specification
 Operations is responsible for making the product to
specifications
 Products that meet specifications have conformance
quality
 Objective is to satisfy customers
 Principal tool is House of Quality (pages 154-156)
© 2005 Wiley
25
QFD Details

Process used to ensure that the product meets customer
specifications
Voice of the
engineer
Voice
of the
customer
Customer-based
benchmarks
QFD - House of Quality

Adding trade-offs, targets & developing product
specifications
Targets
Technical
Benchmarks

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