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© Wiley 2007 1
Chapter 5 - Total Quality Management
Operations Managementby
R. Dan Reid & Nada R. Sanders3rd Edition © Wiley 2007
PowerPoint Presentation by R.B. Clough – UNHM. E. Henrie - UAA
© Wiley 2007 2
Learning Objectives Explain the meaning of TQM Identify the costs of Quality Describe the evolution of TQM Identify Quality leaders and their
contributions
© Wiley 2007 3
Learning Objectives Identify key features of the TQM
philosophy Describe tools identifying and
solving quality problems Describe quality awards and
quality certifications
© Wiley 2007 4
Defining Quality Definition of quality is dependent on the
people defining it There is a lack of a single, universal
definition of quality 5 common definitions include
Conformance to specifications Fitness for use Value for price paid Support services Psychological criteria
© Wiley 2007 5
Defining Quality – 5 Ways Conformance to specifications
Does product/service meet targets and tolerances defined by designers?
Fitness for use Evaluates performance for intended use
Value for price paid Evaluation of usefulness vs. price paid
Support services Quality of support after sale
Psychological e.g. Ambiance, prestige, friendly staff
© Wiley 2007 6
Manufacturing Quality vs. Service Quality Manufacturing quality focuses on
tangible product features Conformance, performance, reliability, features
Service organizations produce intangible products that must be experienced Quality often defined by perceptional factors
like courtesy, friendliness, promptness, waiting time, consistency
© Wiley 2007 7
Cost of Quality Quality affects all aspects of the
organization Quality has dramatic cost implications of;
Quality control costs Prevention costs Appraisal costs
Quality failure costs Internal failure costs External failure costs
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Cost of Quality – 4 Categories
Early detection/prevention is less costly May be less by a factor of 10
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Evolution of TQM – New Focus
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Quality Gurus
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TQM Philosophy TQM Focuses on identifying quality problem root
causes Encompasses the entire organization Involves the technical as well as people Relies on seven basic concepts of
Customer focus Continuous improvement Employee empowerment Use of quality tools Product design Process management Managing supplier quality
© Wiley 2007 12
TQM Philosophy - concepts Focus on Customer
Identify and meet customer needs Stay tuned to changing needs, e.g. fashion
styles Continuous Improvement
Continuous learning and problem solving, e.g. Kaizen, 6 sigma
Benchmarking Employee Empowerment
Empower all employees; external and internal customers
© Wiley 2007 13
TQM Philosophy– Concepts (continued) Team Approach
Teams formed around processes – 8 to 10 people
Meet weekly to analyze and solve problems Understanding Quality Tools
Ongoing training on analysis, assessment, and correction, & implementation tools
Studying practices at “best in class” companies
Plan-Do-Study-Act
© Wiley 2007 14
Ways of Improving Quality Plan-Do-Study-Act Cycle (PDSA)
Also called the Deming Wheel after originator Circular, never ending problem solving process
Seven Tools of Quality Control Tools typically taught to problem solving teams
Quality Function Deployment Used to translate customer preferences to
design
© Wiley 2007 15
PDSA Details Plan
Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance
objectives Do
Implement the plan – trial basis Study
Collect data and evaluate against objectives Act
Communicate the results from trial If successful, implement new process
© Wiley 2007 16
PDSA (continued)
Cycle is repeated After act phase, start planning and repeat process
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Seven Tools of Quality Control Cause-and-Effect Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms
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Cause-and-Effect Diagrams Called Fishbone Diagram Focused on solving identified quality problem
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Flowcharts Used to document the detailed steps in a
process Often the first step in Process Re-Engineering
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Checklist Simple data check-off sheet designed to
identify type of quality problems at each work station; per shift, per machine, per operator
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Control Charts Important tool used in Statistical Process
Control – Chapter 6 The UCL and LCL are calculated limits used
to show when process is in or out of control
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Scatter Diagrams 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
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Pareto Analysis Technique that displays the degree of importance for each
element Named after the 19th century Italian economist Often called the 80-20 Rule Principle is that quality problems are the result of only a few
problems e.g. 80% of the problems caused by 20% of causes
© Wiley 2007 24
Histograms 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
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Product Design - Quality Function Deployment Critical to ensure product design meets
customer expectations Useful tool for translating customer
specifications into technical requirements is Quality Function Deployment (QFD)
QFD encompasses Customer requirements Competitive evaluation Product characteristics Relationship matrix Trade-off matrix Setting Targets
© Wiley 2007 26
Quality Function Deployment(QFD) Details Process used to ensure that the product meets
customer specifications
Voice of theengineer
Voice of the
customer
Customer-basedbenchmarks
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QFD - House of Quality Adding trade-offs, targets & developing
product specificationsTrade-offs
TargetsTechnical
Benchmarks
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Reliability – critical to quality Reliability is the probability that the
product, service or part will function as expected
No product is 100% certain to function properly
Reliability is a probability function dependent on sub-parts or components
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Reliability – critical to quality Reliability of a system is the product
of component reliabilitiesRS = (R1) (R2) (R3) . . . (Rn)RS = reliability of the product or systemR1 = reliability of the components
Increase reliability by placing components in parallel
© Wiley 2007 30
Reliability – critical to quality Increase reliability by placing
components in parallel Parallel components allow system
to operate if one or the other fails
RS = R1 + (R2* Probability of needing 2nd component)
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Process Management Quality products come from quality
sources Quality must be built into the process Quality at the source is belief that it
is better to uncover source of quality problems and correct it
TQM extends to quality of product from company’s suppliers
© Wiley 2007 32
Quality Awards and Standards Malcolm Baldrige National
Quality Award (MBNQA) The Deming Prize ISO 9000 Certification ISO 14000 Standards
© Wiley 2007 33
MBNQA- What Is It? Award named after the former Secretary of
Commerce – Regan Administration Intended to reward and stimulate quality
initiatives Given to no more that two companies in
each of three categories; manufacturing, service, and small business
Past winners; Motorola Corp., Xerox, FedEx, 3M, IBM, Ritz-Carlton
© Wiley 2007 34
The Deming Prize Given by the Union of Japanese Scientists
and Engineers since 1951 Named after W. Edwards Deming who
worked to improve Japanese quality after WWII
Not open to foreign companies until 1984 Florida P & L was first US company winner
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ISO Standards ISO 9000 Standards:
Certification developed by International Organization for Standardization
Set of internationally recognized quality standards
Companies are periodically audited & certified ISO 9000:2000 QMS – Fundamentals and Standards ISO 9001:2000 QMS – Requirements ISO 9004:2000 QMS - Guidelines for Performance More than 40,000 companies have been certified
ISO 14000: Focuses on a company’s environmental
responsibility
© Wiley 2007 36
Why TQM Efforts Fail Lack of a genuine quality culture
Lack of top management support and commitment
Over- and under-reliance on SPC methods
© Wiley 2007 37
TQM Within OM TQM is broad sweeping organizational change TQM impacts
Marketing – providing key inputs of customer information
Finance – evaluating and monitoring financial impact Accounting – provides exact costing Engineering – translate customer requirements into
specific engineering terms Purchasing – acquiring materials to support product
development Human Resources – hire employees with skills necessary Information systems – increased need for accessible
information
© Wiley 2007 38
Chapter 5 Highlights TQM is different from the old concept of quality
as it focus is on serving customers, identifying the causes of quality problems, and building quality into the production process
Four categories of quality cost of prevention, appraisal, internal and external costs
Seven TQM notable individuals include Walter A. Shewhart, W. Edwards Demings, Joseph M. Juran, Armand V. Feigenbaum, Philip B. Crosby, Kaoru Ishikawa, and Genichi Taguchi
© Wiley 2007 39
Chapter 5 Highlights - Continued
Seven features of TQM combine to create TQM philosophy; customer focus, continuous improvement, employee empowerment, use of quality tools, product design, process management, and managing supplier quality
QFD is a tool used to translate customer needs into specific engineering requirements
Reliability is the probability that the product will functions as expected
The Malcom Baldridge Award is given to companies to recognize excellence in quality management.
© Wiley 2007 40
The End Copyright © 2007 John Wiley & Sons, Inc. All rights
reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United State Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.
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