6540-Chapter 26540-Chapter 26540-Chapter 26540-Chapter 2

Total Quality in Total Quality in OrganizationsOrganizations

Growth of Modern Growth of Modern Quality ManagementQuality Management

Manufacturing quality

Improvedproduct designs

Servicequality

Performanceexcellence

Systems ThinkingSystems Thinking

• A system is the functions or activities within an organization that work together for the aim of the organization.

• Subsystems of an organization are linked together as internal customers and suppliers.

• A systems perspective acknowledges the importance of the interactions of subsystems, not the actions of them individually.

Manufacturing Systems Manufacturing Systems (1 of 2)(1 of 2)

• Marketing and sales

• Product design and engineering

• Purchasing and receiving

• Production planning and scheduling

• Manufacturing and assembly

• Tool engineering

Manufacturing Systems Manufacturing Systems (2 of 2)(2 of 2)

• Industrial engineering and process design

• Finished goods inspection and test

• Packaging, shipping, and warehousing

• Installation and service

Quality in Business Support Quality in Business Support Functions for ManufacturingFunctions for Manufacturing

• General management

• Finance and accounting

• Human resource management

• Quality assurance

• Legal services

Quality in ServicesQuality in Services• Service is defined as “any primary or

complementary activity that does not directly produce a physical product – that is, the non-goods part of the transaction between buyer (customer) and seller (provider).”

Critical Differences between Critical Differences between Service and Manufacturing Service and Manufacturing (1 of 2)(1 of 2)

• Customer needs and performance standards are more difficult to identify and measure

• Services requires a higher degree of customization

• Output is intangible

Critical Differences between Service Critical Differences between Service and Manufacturing and Manufacturing (2 of 2)(2 of 2)

• Services are produced and consumed simultaneously

• Customers are often involved in actual process

• Services are more labor-intensive than manufacturing

• Services handle large numbers of transactions

Components of Service Components of Service System QualitySystem Quality

• Employees

• Information technology

The Ritz-Carlton Hotel Co.The Ritz-Carlton Hotel Co.

Key Shifts in Customer Satisfaction Key Shifts in Customer Satisfaction ManagementManagement

From• Provider Orientation• Tolerance• Directing• Employee as Expendable

Resource• Reactive• Tradition and “Busy-ness”• Turf Protection• “We-They” Thinking• Cynicism

To• Customer Orientation• Higher Standards• Empowering• Employee as Customer• Proactive• Experimentation and Risk• Results• Teamwork Across Lines• Organizational Perspective• Optimism

Quality in Health Care Quality in Health Care

• Joint Commission on Accreditation of Healthcare Organizations (JCAHO)

• National Committee for Quality Assurance (NCQA)

• Institute for Healthcare Improvement (IHI)

• 1999 expansion of the Baldrige Award to nonprofit health care organizations

Quality Issues in Health CareQuality Issues in Health Care

• Avoidable errors

• Underutilization of services

• Overuse of services

• Variation in services

Quality in EducationQuality in Education• Koalaty Kid program• 1999 expansion of the Baldrige

Award to nonprofit education organizations

• Success stories– Mt. Edgecumbe High School– Brazosport ISD– Hunderton Central Regional HS – Pinellas County Schools

Higher Education Higher Education as a Production Systemas a Production System

Design and Redesign Consumer

research Suppliers: families, highschools, colleges, business

Customers:business, families,society, students

Inputs:studentsfaculty

Processes

Teaching, counseling, scientific research

Outputs:able studentsnew knowledge

Quality in the Public SectorQuality in the Public Sector

• Quality in the Federal Government

• State and Local Quality Efforts