chapter 5 - total quality management - wright state university

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Wiley 2007*Chapter 5 - Total Quality ManagementOperations ManagementbyR. Dan Reid & Nada R. Sanders3rd Edition Wiley 2007PowerPoint Presentation by R.B. Clough UNHM. E. Henrie - UAA

Wiley 2007

Wiley 2007*Defining QualityDefinition of quality is dependent on the people defining itThere is a lack of a single, universal definition of quality5 common definitions includeConformance to specificationsFitness for useValue for price paidSupport servicesPsychological criteria

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Wiley 2007*Order QualifiersDelivering Two Kinds of Quality by Keith McFarland, Business Week, Feb. 15, 2006As I write this, the petroleum executive sitting next to me on the plane has carefully unpacked his Bose QuietComfort 2 headphones and iPod nano, which has me thinking about the meaning of quality. The Japanese actually have two words for quality -- and an understanding of each is necessary to compete today.More than 20 years after the quality craze kicked off in the U.S. (primarily because America was getting its clock cleaned by the Japanese), quality remains an elusive target for many American companies. Not that we haven't made progress. In 1980 the average car produced by Ford (F) had twice as many product flaws (as measured by J.D. Power's survey of initial quality) as the average Japanese car.

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Wiley 2007*Order QualifiersBy 1986 the Japanese auto industry lead over Ford had shrunk from 100% to about 20%, as Ford made quality "Job One." But since that impressive initial spurt of progress, many U.S. companies have struggled to keep up on quality, even as the Japanese began building more of their products in the U.S. with American workers.INNOVATION CURVE. The truth is, the Japanese have an unfair advantage. Japanese culture intrinsically values quality and appreciates the small details. In fact, the Japanese expression for quality is atarimae hinshitsu, which can be roughly translated as "taken-for-granted quality."What do the Japanese take for granted when it comes to quality? They take for granted that things should work as they are supposed to, and they even see an elegance to things working properly -- whether it's cars, subway schedules, traditional flower arranging, or the famous tea ceremony.

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Wiley 2007*Order QualifiersJapanese manufacturers were so obsessed with taken-for-granted quality that they created a constant stream of innovations that built on renowned quality-management consultant Ed Deming's original concepts: lean manufacturing, just-in-time industry, and design for quality. In today's competitive markets, manufacturers need to be very far along this quality innovation curve -- or moving along it very quickly. If they are not, you can take for granted that they will go out of business.This is true even for small, entrepreneurial companies. The ability to create products and services that work is no longer a source of long-term competitive advantage. It has become just the price of admission to most markets. If the stuff your competitors make works better, your customers aren't going to be customers for long.

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Wiley 2007*and Order Winners!MODERN MARVELS. That brings us to the second of the two Japanese expressions for quality: miryoku teki hinshitsu, which means "bewitching" or "enchanting quality." This kind of quality appeals not to customer expectations and reliability (that things should do what they're supposed to), but rather to a person's aesthetic sense of beauty and elegance.That's what I think Apple Computer (AAPL) got right with the iPod and its many offspring. The nano belonging to the man sitting next to me is a marvel, not just of miniaturization, but of rounded edges in a world of sharp corners.And as I put on my own Bose headphones, I realize how much I appreciate being able to retreat to my Zen space amid the rumble of the aircraft engines, rattling serving carts, and chattering cabin mates. If these products didn't work properly when you turned them on, nobody would buy them. They would lack atarimae hinshitsu. But with the hungry competitors in most markets today, taken-for-granted quality by itself may not get the job done.http://www.businessweek.com/smallbiz/content/feb2006/sb20060214_876719.htm?chan=search

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Wiley 2007*Defining Quality 5 WaysConformance to specificationsDoes product/service meet targets and tolerances defined by designers?Fitness for use Evaluates performance for intended useValue for price paidEvaluation of usefulness vs. price paidSupport servicesQuality of support after salePsychologicale.g. Ambiance, prestige, friendly staff

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Wiley 2007*TQM is a Philosophy for BusinessPhilosophy is the discipline concerned with questions of how one should live (ethics); what sorts of things exist and what are their essential natures (metaphysics); what counts as genuine knowledge (epistemology); and what are the correct principles of reasoning (logic). The word is of Greek origin: (philosopha), meaning love of wisdom.http://en.wikipedia.org/wiki/Philosophy

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Wiley 2007*Quality Gurus

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Wiley 2007*Demings 14 PointsCreate constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

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Wiley 2007*Demings 14 PointsEnd the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. Institute training on the job. Institute leadership (see Point 12 and Ch. 8). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.

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Wiley 2007*Demings 14 PointsDrive out fear, so that everyone may work effectively for the company.Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

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Wiley 2007*Demings 14 PointsEliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

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Wiley 2007*Demings 14 PointsRemove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

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Wiley 2007*Demings 14 PointsInstitute a vigorous program of education and self-improvement. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job. From http://www.deming.org/theman/teachings02.html

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Wiley 2007*Evolution of TQM New Focus

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Wiley 2007*Cost of QualityQuality affects all aspects of the organizationQuality has dramatic cost implications of;Quality control costsPrevention costsAppraisal costsQuality failure costsInternal failure costsExternal failure costs

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Wiley 2007*Cost of Quality 4 CategoriesEarly detection/prevention is less costly May be less by a factor of 10

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Wiley 2007*TQM Methodology

TQM Focuses on identifying quality problem root causes Encompasses the entire organizationInvolves the technical as well as peopleRelies on seven basic concepts ofCustomer focusContinuous improvementEmployee empowermentUse of quality toolsProduct designProcess managementManaging supplier quality

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Wiley 2007*TQM Methodology - conceptsFocus on CustomerIdentify and meet customer needsStay tuned to changing needs, e.g. fashion stylesContinuous ImprovementContinuous learning and problem solving, e.g. Kaizen, 6 sigma, benchmarking

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Wiley 2007*TQM Methodology Concepts (continued)Employee EmpowermentEmpower all employees; external and internal customersTeams formed around processes 8 to 10 peopleMeet weekly to analyze and solve problemsQuality ToolsOngoing training on analysis, assessment, and correction, & implementation toolsStudying practices at best in class companiesPlan-Do-Study-Act

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Wiley 2007*Ways of Improving QualityPlan-Do-Study-Act Cycle (PDSA)Also called the Deming Wheel after originatorCircular, never ending problem solving processSeven Tools of Quality ControlTools typically taught to problem solving teamsQuality Function DeploymentUsed to translate customer preferences to design

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Wiley 2007*PDSA DetailsPlanEvaluate current processCollect procedures, data, identify problemsDevelop an improvement plan, performance objectivesDoImplement the plan trial basisStudyCollect data and evaluate against objectivesActCommunicate the results from trialIf succes