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Principles of Principles of Operations ManagementOperations Management

Principles of Principles of Operations ManagementOperations Management

Total Quality ManagementTotal Quality ManagementChapter 3Chapter 3

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Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

Define qualityDefine quality State why quality is importantState why quality is important Explain total quality management (TQM)Explain total quality management (TQM) Explain tools for total quality Explain tools for total quality

managementmanagement Describe inspectionDescribe inspection

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Definitions of QualityDefinitions of QualityDefinitions of QualityDefinitions of Quality

ASQCASQC: Product characteristics & : Product characteristics & features that affect customer features that affect customer satisfactionsatisfaction

User-BasedUser-Based: What consumer says it is: What consumer says it is Mfg.-BasedMfg.-Based: Degree to which a product : Degree to which a product

conforms to conforms to designdesign specification specification Product-BasedProduct-Based: Level of measurable : Level of measurable

product characteristicproduct characteristic

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Dimensions of Quality Dimensions of Quality for Goodsfor Goods

Dimensions of Quality Dimensions of Quality for Goodsfor Goods

OperationOperation Reliability & durabilityReliability & durability ConformanceConformance ServiceabilityServiceability AppearanceAppearance Perceived qualityPerceived quality

Quality

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Importance of QualityImportance of QualityImportance of QualityImportance of Quality

Company’s Company’s reputationreputation

Product Product liabilityliability

International International implicationsimplications

Market GainsReputationVolumePrice

Lower CostsProductivityRework/ScrapWarranty

ImprovedQuality

IncreasedProfits

Market GainsReputationVolumePrice

Lower CostsProductivityRework/ScrapWarranty

ImprovedQuality

IncreasedProfits

Costs & market Costs & market shareshare

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International International Quality StandardsQuality Standards

International International Quality StandardsQuality Standards

Industrial Standard Z8101-1981 (Japan)Industrial Standard Z8101-1981 (Japan) Specification for TQMSpecification for TQM

ISO 9000 series (Europe/EC)ISO 9000 series (Europe/EC) Common quality standards for products Common quality standards for products

sold in Europe (even if made in U.S.)sold in Europe (even if made in U.S.)

ISO 14000 series (Europe/EC)ISO 14000 series (Europe/EC) Standards for recycling, labeling etc.Standards for recycling, labeling etc.

ASQC Q90 series; MILSTD (U.S.)ASQC Q90 series; MILSTD (U.S.)

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Malcolm Baldrige Malcolm Baldrige National Quality AwardNational Quality Award

Malcolm Baldrige Malcolm Baldrige National Quality AwardNational Quality Award

Established in 1988 by the U.S. gov’tEstablished in 1988 by the U.S. gov’t Designed to promote TQM practicesDesigned to promote TQM practices Some criteriaSome criteria

Senior executive leadership; strategic Senior executive leadership; strategic planning; mgt. of process qualityplanning; mgt. of process quality

Quality results; customer satisfactionQuality results; customer satisfaction

Recent winnersRecent winners Corning Inc.; GTE; AT&T; Eastman Chem.Corning Inc.; GTE; AT&T; Eastman Chem.

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Traditional Traditional Quality Process (Mfg.)Quality Process (Mfg.)

Traditional Traditional Quality Process (Mfg.)Quality Process (Mfg.)

InterpretsNeed

SpecifiesNeed

DesignsProduct

DefinesQuality

ProducesProduct

PlansQuality

MonitorsQuality

Customer Marketing Engineering Operations

Quality is customer driven!Quality is customer driven!

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Total Quality Total Quality ManagementManagementTotal Quality Total Quality ManagementManagement

Quality system involving Quality system involving entireentire organization from supplier to customerorganization from supplier to customer

ObjectiveObjective: Meet or exceed customer : Meet or exceed customer needs through company-wide needs through company-wide continuous improvementcontinuous improvement

Early proponentsEarly proponents W. Edwards DemingW. Edwards Deming J. M. JuranJ. M. Juran Philip B. CrosbyPhilip B. Crosby

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Total Quality Management Total Quality Management PrinciplesPrinciples

Total Quality Management Total Quality Management PrinciplesPrinciples

Continuous improvementContinuous improvement Employee empowermentEmployee empowerment BenchmarkingBenchmarking Just-in-time (JIT)Just-in-time (JIT) Knowledge of TQM toolsKnowledge of TQM tools

© 1995 Corel Corp.

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Continuous ImprovementContinuous ImprovementContinuous ImprovementContinuous Improvement

Represents continual improvement Represents continual improvement of process & customer satisfactionof process & customer satisfaction

Involves all operations Involves all operations & work units& work units

Other namesOther names Kaizen (Japanese)Kaizen (Japanese) Zero-defectsZero-defects Six sigmaSix sigma © 1984-1994 T/Maker Co.

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Employee Employee EmpowermentEmpowerment

Employee Employee EmpowermentEmpowerment

Getting employees involved in product Getting employees involved in product & process improvements& process improvements 85% of quality problems are due to 85% of quality problems are due to

process & material process & material

TechniquesTechniques Talk to workersTalk to workers Support workersSupport workers Let workers make decisionsLet workers make decisions Build teams & quality circlesBuild teams & quality circles

© 1995 Corel Corp.

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Quality CirclesQuality CirclesQuality CirclesQuality Circles

Group of 6-12 employees from same Group of 6-12 employees from same work areawork area

Meet regularly to solve work-related Meet regularly to solve work-related problemsproblems 4 hours/month4 hours/month

Facilitator trains Facilitator trains & helps with & helps with meetingsmeetings

© 1995 Corel Corp.

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BenchmarkingBenchmarkingBenchmarkingBenchmarking

Selecting best practices to use Selecting best practices to use as a standard for performanceas a standard for performance

StepsSteps Determine what to Determine what to

benchmarkbenchmark Form benchmarking teamForm benchmarking team Identify benchmarking partnersIdentify benchmarking partners Collect benchmarking informationCollect benchmarking information Take action to meet or exceed benchmarkTake action to meet or exceed benchmark

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Benchmarking Benchmarking Thinking ChallengeThinking Challenge

Benchmarking Benchmarking Thinking ChallengeThinking Challenge

AccountingAccounting

Data processingData processing

Hotel front deskHotel front desk

MarketingMarketing

What What specificspecific & & measurablemeasurable variables variables would you benchmark in these areas? would you benchmark in these areas?

AloneAlone GroupGroup Class Class

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Just-In-Time (JIT)Just-In-Time (JIT)Just-In-Time (JIT)Just-In-Time (JIT)

‘‘Pull’ system of production/purchasingPull’ system of production/purchasing Customer starts production with an orderCustomer starts production with an order

Involves ‘vendor partnership programs’ Involves ‘vendor partnership programs’ to improve quality of purchased itemsto improve quality of purchased items

Reduces all inventory levelsReduces all inventory levels Inventory hides process & material Inventory hides process & material

problemsproblems

Improves process & product qualityImproves process & product quality

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Quality function deployment (QFD)Quality function deployment (QFD) Pareto chartsPareto charts Process chartsProcess charts Cause & effect diagrams Cause & effect diagrams Statistical process control (SPC)Statistical process control (SPC)

TQM ToolsTQM ToolsTQM ToolsTQM Tools

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Quality Function Quality Function Deployment (QFD)Deployment (QFD)Quality Function Quality Function

Deployment (QFD)Deployment (QFD)

Product design process using Product design process using cross-functional teamscross-functional teams Marketing, engineering, manufacturingMarketing, engineering, manufacturing

Translates customer preferences into Translates customer preferences into specific product characteristicsspecific product characteristics

Involves creating 4 tabular ‘Matrices’ or Involves creating 4 tabular ‘Matrices’ or ‘Houses’‘Houses’ Breakdown product design into increasing Breakdown product design into increasing

levels of detaillevels of detail

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Quality Function Quality Function Deployment SequenceDeployment Sequence

Quality Function Quality Function Deployment SequenceDeployment Sequence

Product Product Char.Char.

Customer Req.

Component Component Spec.Spec.

Product Product Char.Char.

Production Production ProcessProcess

Component Component Spec.Spec.

Quality Quality PlanPlan

Production Production ProcessProcess

House of House of Quality 1Quality 1

House of House of Quality 2Quality 2

House of House of Quality 3Quality 3

House of House of Quality 4Quality 4

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House of Quality House of Quality ExampleExample

House of Quality House of Quality ExampleExample

You’ve been assigned You’ve been assigned temporarily to a QFD temporarily to a QFD team. The goal of the team. The goal of the team is to develop a team is to develop a new camera design. new camera design. Build a House of Build a House of Quality.Quality.

© 1984-1994 T/Maker Co.

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House of Quality House of Quality ExampleExample

House of Quality House of Quality ExampleExample

High relationshipHigh relationship Medium relationship Medium relationship

Cust.Cust.Req.Req.

Cust.Cust.ImportanceImportance

Target ValuesTarget Values

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Pareto ChartPareto ChartPareto ChartPareto Chart

Vertical bar chart showing relative Vertical bar chart showing relative importance of problems or defects importance of problems or defects Makes identifying & solving them easierMakes identifying & solving them easier

Based on Pareto PrincipleBased on Pareto Principle Most effects have relatively few causesMost effects have relatively few causes e.g., 80% of quality problems come from e.g., 80% of quality problems come from

20% of machines, materials, or operators20% of machines, materials, or operatorsFocus on ‘vital few’ 20% Focus on ‘vital few’ 20% causescausesCalled 80-20 ruleCalled 80-20 rule

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Pareto Chart Pareto Chart Thinking ChallengeThinking Challenge

Pareto Chart Pareto Chart Thinking ChallengeThinking Challenge

You’re a quality analyst for You’re a quality analyst for Corning Glass. You’ve Corning Glass. You’ve collected data on 100 collected data on 100 rejected glasses:rejected glasses:

NicksNicks 8080CutsCuts 1111ScratchesScratches 33PorosityPorosity 33Misc.Misc. 33

Prepare a Pareto Chart.Prepare a Pareto Chart.

AloneAlone GroupGroup Class Class

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Process ChartProcess ChartProcess ChartProcess Chart

Shows sequence of events in processShows sequence of events in process Depicts activity relationshipsDepicts activity relationships Has many usesHas many uses

Identify data collection pointsIdentify data collection points Find problem sourcesFind problem sources Identify places for improvementIdentify places for improvement Identify where travel distances can be Identify where travel distances can be

reducedreduced

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Process Chart ExampleProcess Chart ExampleProcess Chart ExampleProcess Chart Example

SUBJECT: Request tool purchase

Dist (ft) Time (min) Symbol Description

D Write order

On desk

75 D To buyer

D Examine

SUBJECT: Request tool purchase

Dist (ft) Time (min) Symbol Description

D Write order

On desk

75 D To buyer

D Examine

= Operation; = Operation; = Transport; = Transport; = Inspect; = Inspect; D = Delay; D = Delay; = Storage = Storage

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Cause & Effect DiagramCause & Effect DiagramCause & Effect DiagramCause & Effect Diagram

Used to find problem sources/solutionsUsed to find problem sources/solutions Other namesOther names

Fish-bone diagram, Ishikawa diagramFish-bone diagram, Ishikawa diagram

StepsSteps Identify problem to correctIdentify problem to correct Draw main causes for problem as ‘bones’Draw main causes for problem as ‘bones’ Ask ‘What could have caused problems in Ask ‘What could have caused problems in

these areas?’ Repeat for each sub-area.these areas?’ Repeat for each sub-area.

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Statistical Statistical Process Control (SPC)Process Control (SPC)

Statistical Statistical Process Control (SPC)Process Control (SPC)

Uses statistics & control charts to tell Uses statistics & control charts to tell when to adjust processwhen to adjust process

Developed by Shewhart in 1920’sDeveloped by Shewhart in 1920’s InvolvesInvolves

Creating standards (upper & lower limits)Creating standards (upper & lower limits) Measuring sample output (e.g. mean wgt.)Measuring sample output (e.g. mean wgt.) Taking corrective action (if necessary)Taking corrective action (if necessary)

Done while product is being producedDone while product is being produced

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Produce GoodProvide Service

Stop Process

Yes

No

Assign.Causes?Take Sample

Inspect Sample

Find Out WhyCreate

Control Chart

StartProduce Good

Provide Service

Stop Process

Yes

No

Assign.Causes?Take Sample

Inspect Sample

Find Out WhyCreate

Control Chart

Start

Statistical Process Statistical Process Control StepsControl Steps

Statistical Process Statistical Process Control StepsControl Steps

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020406080

X

Time

Control Chart ExampleControl Chart ExampleControl Chart ExampleControl Chart Example

UCLUCL

LCLLCL

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Thinking Challenge:Thinking Challenge:Compare & ContrastCompare & ContrastThinking Challenge:Thinking Challenge:Compare & ContrastCompare & Contrast

TQM ToolsBases

TQM ToolsBases

AloneAlone GroupGroup Class Class

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InspectionInspectionInspectionInspection

Involves examining items to see if an Involves examining items to see if an item is good or defectiveitem is good or defective

ObjectiveObjective: Detect a defective product: Detect a defective product Does not correct deficiencies in process Does not correct deficiencies in process

or productor product

IssuesIssues When to inspectWhen to inspect Where in process to inspectWhere in process to inspect

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When & Where When & Where to Inspect in Mfg.to Inspect in Mfg.When & Where When & Where

to Inspect in Mfg.to Inspect in Mfg.

At supplier’s plant while At supplier’s plant while producingproducing

Upon receipt of goods Upon receipt of goods from supplierfrom supplier

Before costly or Before costly or irreversible processesirreversible processes

During production processDuring production process When production is completeWhen production is complete Before shipmentBefore shipment

© 1995 Corel Corp.

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When & Where When & Where to Inspect in Servicesto Inspect in Services

When & Where When & Where to Inspect in Servicesto Inspect in Services

BankBank Teller stationTeller station Speed, courtesySpeed, courtesy

CheckingChecking AccuracyAccuracy

StoreStore StockroomsStockrooms Stock rotationStock rotation

Display areasDisplay areas AttractivenessAttractiveness

CountersCounters Courtesy, Courtesy, knowledgeknowledge

BusinessBusiness WhereWhere VariableVariable

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TQM in ServicesTQM in ServicesTQM in ServicesTQM in Services

Service quality is more difficult to Service quality is more difficult to measure than for goodsmeasure than for goods

Service quality perceptions depend on Service quality perceptions depend on Expectations vs. realityExpectations vs. reality Process & outcomeProcess & outcome

Types of service qualityTypes of service quality Normal: Routine service deliveryNormal: Routine service delivery Exceptional: How problems are handledExceptional: How problems are handled

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Under-Under-standingstanding

TangiblesTangibles

Service Quality Service Quality Attributes Attributes

Service Quality Service Quality Attributes Attributes

ReliabilityReliability

CommunicationCommunicationCredibilityCredibility

SecuritySecurity

ResponsivenessResponsiveness

CompetenceCompetence

CourtesyCourtesy

AccessAccess

© 1995 Corel Corp.

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ConclusionConclusionConclusionConclusion

Defined qualityDefined quality Stated why quality is importantStated why quality is important Explained total quality managementExplained total quality management Explained tools for total quality Explained tools for total quality

management (TQM)management (TQM) Described inspectionDescribed inspection