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Quality Management

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


QM – Philosophy & Concepts

• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


What is Quality?

January 2012

Quality Management 5January 2012


Quality

• Quality has been defined in a number of ways. When viewed from a consumer’s perspective, it means meeting or exceeding customer expectations.

January 2012


Dimensions of Quality

Dimension Product exampleMobile phone

Performance Signal, Battery chargeFeatures Internet, camera,......Conformance WorkmanshipReliability Mean-time-to-failureDurability Useful lifeServiceability Ease of repairResponse Courtesy of dealerAesthetics Surface finishReputation Customer report ranking

January 2012


Two Views of Quality

• How well the features of a product or service meet the customer need and therefore provide them with satisfaction => higher quality costs (usually) more

• Freedom from failures => higher quality costs (usually) less

January 2012


Total Quality

• Total quality is an approach to doing business that attempts to maximize an organization’s competitiveness through the continual improvement of the quality of its products, services, people, processes, and environments.

January 2012


Managing for Quality (Juran)

• A set of universal methods that any organization, whether a business, an agency, a university or a hospital can use to attain superior results by designing, continuously improving and ensuring that all products, services and processes meet customer and stakeholder needs.

January 2012


Juran´s trilogy

• Designing and planning for Quality• Compliance, controlling and assuring

quality• Improving quality

January 2012


Juran´s trilogy

• Creating processes to design goods and services to meet needs of the stakeholders (internal and external). Understand needs of customers

• Creating processes to control quality. Ensure compliance to design criteria

• Creating a systematic approach to improve continuously. Failures must be discovered and remedied.=> Create functions and skills to do the things above

January 2012


Financial trilogy

• Financial planning– Annual financial and operational budgets (revenues, costs and profits)– Financial goals for the organization and its divisions

• Financial control– Evaluation of actual financial performance and taking action on the

differences– Cost control, expense control, risk management, inventory control,

etc.• Financial improvement

– Improvement of financial results– Cost reduction projects, new facilities, new product development, M

&A, joint ventures, etc

January 2012


Quality planning

• Establish the project and design goals• Identify the customers• Discover the customer needs• Develop the product or service features• Develop the process features• Develop the controls and transfer to operations=> Customer – customer needs- product features

– process features- process control features

January 2012


Quality planning tools

• Benchmarking• Brainstorming• Competitive analysis• Control charts• FMEA• Flow diagram• Process capability• Scatter diagram• Etc.January 2012


Quality Control

• Assure Repeatable and Compliant Processes

January 2012


Quality Control Tools

• SPC (Statistical Process Control)• Problem Solving methods• Poka Yoke

January 2012


Quality Improvement

• Create breakthroughs in Performance

January 2012


Quality Improvement Tools

• Six Sigma– RDMAIC process• Recognize• Define• Measure• Analyze• Improve• Control

January 2012


Juran´s trilogy

January 2012


• Key characteristics of the total quality approach are as follows: – strategically based, – customer focus, – long-term commitment, – teamwork, – employee involvement and empowerment, – continual process improvement, – education and training,

The Total Quality Approach toQuality Management

January 2012


• The rationale for total quality can be found in the need to compete in the global marketplace.

• Countries that are competing successfully in the

global marketplace are seeing their quality of living improve. Those that cannot are seeing theirs decline.

The Total Quality Approach toQuality Management

January 2012


• W. Edward Deming is best known for his Fourteen Points, the Deming Cycle

• Joseph M. Juran is best known for the Pareto Principle, and the Juran Trilogy.

• Armand V. Feigenbaum is best known for his Total Quality Control.

• Philip B. Crosby is best known for his Quality is Free and the Zero Defects program

The Total Quality Pioneers

January 2012


QM – Philosophy & Concepts• The Total Quality Approach

• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


• Several factors can inhibit competitiveness, including those related to business and government, family, and education.

• In a global marketplace quality is the key to competitiveness.

• Total Quality approach minimizes the Cost of Quality, making products or services more competitive

Quality and Global Competitiveness

January 2012


Costs of Quality

• Prevention• Appraisal and inspection• Internal failure • External failure

• COPQ = Costs of Poor Quality

January 2012

COPQ


Prevention Costs

• Quality Planning activities– FMEA analysis– Control Plans

• Quality training• Product design Verification

January 2012


Appraisal and Inspection Costs

• Testing product • Reviewing documents• Inspecting equipment and supplies• End of line inspection• Product audits• Etc.

January 2012


Internal Failure Costs

• Rework on product• Scrap of non conforming product• Correcting database errors• Stocking extra parts to replace defective

components• Etc,

January 2012


External Failure Costs

• Warranty claims• Investigating complaints

January 2012


Direct Cost of Poor Quality (4 – 8% of Sales)

Indirect Cost of Poor Quality (15 – 25% of Sales)

ScrapReworkWarrantyCustomer Return

Loss of Customer LoyaltyEngineering changeExcessive inventoryLate deliveryExcessive overtimeExcessive employee turnoverExpediting costs


Cost of Quality

January 2012

Freedom from failures

Failure

Appraisal & Prevention

Total

Cost

s

100%

Juran´s Cost of Quality


Cost of Quality

January 2012

Excess Quality

Customer Value of Quality

Cost

of Q

ualit

y

Junk Zone Profit

Zone

Quality Costs

Freedom from Failures 100%


Quality Cost as % of Sales

January 2012


Cost distribution as a % of total cost of Quality

Prevention Appraisal Internal FailureExternal Failure

3,5 %

26 %

2,5 %

68 %

January 2012


COPQ - car recalls Here are the larger recent recalls, and these are just for October 2010-

• Nissan: 2.2 million vehicles worldwide (747,000 in the U.S.): ignition relay problem

• BMW: 130,000 vehicles: faulty fuel pump in the twin-turbo inline 6• Honda: 470,000 cars in the U.S.: faulty seal in master brake cylinder• Mercedes-Benz: 85,000 E-Class cars: possible power steering

connection fitting problem• Toyota: 1.53 million cars worldwide (740,000 in the U.S.): faulty seal

in master cylinder• GM: 392,000 Chevrolet Impalas: faulty front seat-belt anchors.

January 2012

http://blogs.consumerreports.org/cars/2010/10/nissan-announces-third-largest-recall-in-company-history-214-million-pathfinder-armada-xterra.html

http://www.automotiveaddicts.com/14939/bmw-issues-recall-for-turbocharged-n54-engine-equipped-vehicles

http://www.autojab.com/honda-recalls-vehicles-due-to-brake-issue/

http://wheels.blogs.nytimes.com/2010/10/09/mercedes-recalls-85000-recent-cars-for-steering-problem/

http://www.msnbc.msn.com/id/39773169/ns/business-autos/

http://www.autoblog.com/2010/10/15/gm-recalls-2009-2010-chevrolet-impala-over-faulty-seat-belts/


COPQ – car recalls USA

January 2012

Automakers recalled about 15.5 million vehicles last year compared with 20 million in 2010, according to figures released on Friday by the National Highway Traffic Safety Administration. The figure was the fourth lowest in the last decade.

http://topics.nytimes.com/top/reference/timestopics/organizations/n/national_highway_traffic_safety_administration/index.html?inline=nyt-org


Investment in Quality Cost

January 2012


Quality and Global Competitiveness

• The most important key in maximizing competitiveness is the human resource.

• The Competitive Edge is in the Quality of the People

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness

• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Strategic Management

• Strategic management is management that bases all actions, activities, and decisions on what is most likely to ensure successful performance in the marketplace.

• The two major components of strategic management are strategic planning and strategic execution.

• Part of strategic planning is thinking creatively to eliminate “sacred cows” that work against competitiveness.

January 2012


Strategic planning

• Who are we?• Where are we going?• How will we get there?• What do we hope to accomplish?• What are our core competencies?• What are our strengths and weaknesses?• What are our opportunities and threats?

January 2012


Core competencies

• Core competencies are things an organization does so well they can be viewed as providing a competitive advantage.

January 2012


SWOT analysis

• SWOT analysis is defined as a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats

• SWOT analysis identifies the core competencies of the organization

January 2012


SWOT analysis

• Opportunities • Threats– => apply to External Factors

• Strengths• Weaknesses– => apply to Internal Factors

January 2012


SWOT analysis

January 2012


SWOT example

January 2012


Strategic Management • Strategies that organizations can adopt for gaining a

sustainable competitive advantage are – cost leadership, – differentiation, and – market-niche strategies.

• Total Quality can be the most effective cost leadership or differentiation strategy– improve efficiency, cut costs – continuous improvement of the product features

January 2012


Strategic Execution

• Even the best strategic plan will serve no purpose unless it is effectively executed.

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management

• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Ethics

• Ethics is about doing the right thing within a moral framework.

• The most common impediment to ethical conduct is human nature because people tend to behave according to perceived personal interest.

January 2012


Ethics

• The Total Quality approach cannot be successfully implemented in an organization that fails to subscribe to high standards of ethical behavior

January 2012


Ethics

• Many of the fundamental elements of total quality depend on trust and ethical behavior, including – communication, – interpersonal relations, – conflict management, – problem solving, teamwork, – employee involvement and empowerment, and – customer focus.

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics

• Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Partnering

• Partnering means working together for mutual benefit. It involves pooling resources, sharing costs, and cooperating in ways that mutually benefit all parties involved in the partnership.

• Partnerships may be formed – internally (among departments) and – externally with suppliers, customers

January 2012


Partnering with suppliers

• 85% of the added value comes from suppliers (automotive industry)

• Traditional model (based on price only)• Total Quality model – partnership from design

to delivery

January 2012


Partnering with Customers

• The rationale for forming customer partnerships is customer satisfaction.

• The best way to ensure customer satisfaction is to involve customers as partners in the product development process.

• Doing so is, in turn, the best way to ensure competitiveness.

• Customer-defined quality is a fundamental aspect of total quality.

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics & Corporate Social Responsibility• Partnering and Strategic Alliances

• Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Quality Culture• One of the greatest obstacles in implementing Total Quality is the

cultural behavior• Why?• Successful Total Quality implementation requires cultural change• People do not like to change!• Resisting change is natural human behavior

– Fear– Uncertainty– Loss of control– More work– ……

• Emotional transition

January 2012


Total Quality culture

• Short vs long term objectives• Managers as coaches vs bosses• Finger pointing vs problem solving• Supplier cooperation• Continuous improvement

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture

• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Customer Satisfaction

(

Every organization has both internal and external customers. –An external customer is the one referred to

in the traditional definition. –An internal customer is any employee

whose work depends on that of employees whose work precedes his or hers.

January 2012


• In a total quality setting, customers define quality. Therefore, customer satisfaction must be the highest priority.

• Customer satisfaction is achieved by producing high-quality products that meet or exceed expectations.

=>It must be renewed with each purchase.


January 2012


• The key to establishing a customer focus is to put employees in touch with customers so that customer needs are known and understood.

• Once the customer needs and expectations are defined they need to be translated into product specification.

• One of the tools to do so is Quality Function Deployment (QFD)


January 2012


Quality Function Deployment (QFD)

• Quality Function Deployment (QFD) is a structured approach to defining customer needs or requirements and translating them into specific plans to produce products to meet those requirements.

• The "voice of the customer" is the term to describe these stated and unstated customer needs or requirements.

• The voice of the customer is captured in a variety of ways: direct discussion, surveys, customer specifications, observation, warranty data, field reports, etc.

January 2012


Quality Function Deployment (QFD)

• This understanding of the customer requirements is then summarized in a product planning matrix or "house of quality".

• These matrices are used to translate higher level "what's" or requirements into lower level "how's" or means to satisfy the requirements

January 2012


House of Quality (computer mouse)

January 2012


QFD example – car door

January 2012


QFD

• Six matrices to compare:– Customer requirements with related technical

features– Technical features with applied technologies– Applied technologies with manufacturing processes– Manufacturing processes with quality control

processes (to optimize processes)– Quality control processes with statistical process

control processes– Statistical control parameters with specifications

January 2012


QFD Matrices

January 2012


Kano model

• The Kano model is a theory of product development and customer satisfaction developed in the 80s by Professor Noriaki Kano which classifies customer preferences into following categories:

– Must-Be– One-Dimensional– Attractive

January 2012


Kano model• Must-be Quality

These attributes are taken for granted when fulfilled but result in dissatisfaction when not fulfilled.

• One-dimensional Quality These attributes result in satisfaction when fulfilled and dissatisfaction when not fulfilled. These are attributes that are spoken of and ones which companies compete for.

• Attractive Quality These attributes provide satisfaction when achieved fully, but do not cause dissatisfaction when not fulfilled. These are attributes that are not normally expected,.

.

January 2012


Kano model

January 2012


Customer expectations vs. customer satisfaction

Customer expectations

Actual performance

Customer satisfaction

Product B

Product A

January 2012


Customer Satisfaction, Retention and Loyalty

• Measuring customer satisfaction alone is not enough. => Many customers who found a defect can be satisfied.

• Organizations should, in addition, measure customer retention.

• It costs much more to find a new customer than to retain one.

• Customer loyaltyJanuary 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction

• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Employee Empowerment

• Empowerment means engaging employees in the thinking processes of an organization in ways that matter

• Empowerment means giving employees ownership of their jobs ( they are the best experts)– but it does not mean that managers abdicate their

responsibility or authority

• Empowerment requires a change in organizational culture (resistance to change)

January 2012


Empowerement

• Why empowerment?– it is the best way to increase creative thinking

resulting in enhancing an organization’s competitiveness.

– it can be an outstanding motivator.• Vehicles:– Quality circles– Kaizen groups– Etc.

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment

• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Leadership and Change

• Leadership is the ability to inspire people to make a total, willing, and voluntary commitment to accomplishing or exceeding organizational goals.

• Good leaders overcome resistance to change • Good leaders are committed to both the job

to be done and the people who must do it. • They are good communicators and they are

persuasive.January 2012


Leadership and Change

• To facilitate change in a positive way, leaders:– must have a clear vision and

corresponding goals,– exhibit a strong sense of responsibility, –be effective communicators, –have a high energy level, and –have the will to change.

January 2012


Commitment of Top Management

Our feedbacks have made clear that the most influential factor in successful quality leadership has been the active participation of upper management. In fact to our knowledge, every successful quality revolution has included the active participation of upper management. We know of no exceptions.

J.M.Juran

January 2012


Commitment of Top Management

It is not enough that top management commit themselves for life to product quality and productivity. They must know what it is they are committed to – i.e. what they must do. These obligations cannot be delegated. More resolutions or approval are not enough.

W.Edwards Deming

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change

• Teambuilding and Teamwork• Effective Communication• Training

January 2012


Team Building and Teamwork

• A team is a group of people with a common, collective goal.

• The rationale for the team approach to work is that “two heads are better than one”

January 2012


Teamwork

• Quality Circles• Kaizen• Team oriented problem solving – 8D methodology (Ford)

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork

• Effective Communication• Training

January 2012


Effective communication

• Communication is the transfer of a message that is both received and understood.

• Effective communication is a higher order of communication. It means the message is received, understood, and being acted on in the desired manner.

• Communication is the oil that keeps the total quality engine running. Without it, total quality breaks down.

January 2012


Effective communication

• In Total Quality, the success of the following elements is depending on effective communication:– Customer focus– Leadership– Decision Making– Teamwork– Problem solving– Employee empowerment

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication

• TrainingJanuary 2012


Training

• Training is an organized, systematic series of activities designed to enhance an individual’s work-related knowledge, skills, understanding, and motivation.

.

.

January 2012


Training

• Benefits of training– Fewer production errors– Increased productivity– Improved quality– Decreased turnover rate– Improved safety and health– Increased flexibility of employees– Better response to change– Improved communication– Better teamwork

January 2012


QM – Philosophy & Concepts• The Total Quality Approach• Quality and Global Competitiveness• Strategic Management• Ethics • Partnering • Quality Culture• Customer Satisfaction• Employee Empowerment• Leadership and Change• Teambuilding and Teamwork• Effective Communication• Education and Training

January 2012


Total Quality

• Total quality is an approach to doing business that attempts to maximize an organization’s competitiveness through the continual improvement of the quality of its products, services, people, processes, and environments.

January 2012

Download - Quality Management January 2012Quality Management1

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