quality ba 339 mellie pullman. managing quality quality defined quality assurance continuous...
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Quality
BA 339
Mellie Pullman
Managing Quality
Quality defined
Quality assurance
Continuous improvement tools
Statistical quality control
Total cost of quality
Judging Fitness for Use
What are desired benefits received by the customer from the product?
Quality Specifications Design quality: Inherent value of the product in
the marketplace
Dimensions include: Performance, Features, Reliability, Durability, Serviceability, Response, Aesthetics, and Reputation.
Conformance quality: Degree to which the product or service design specifications are met
Quality as fitness for use Quality as excellence
Common Improvement Tools
Process mapping
Cause and effect diagrams (aka “Fishbone” or Ishikawa diagrams)
Check sheets
Pareto analysis
Run charts and scatter plots
Bar graphs
Histograms
Cause and Effect Diagram
ASKS: What are the possible causes?
Root cause analysis — open and narrow phases
Generic C&E Diagram
Effect
MethodsPersonnel
MeasurementsMachinesMaterials
Problem: Late Room Service No one is sure why, but plenty of opinions
“Management by Fact”
CI Tools we will use: Fishbone diagram Check sheets Pareto analysis
Check Sheets
Event: Day 1 Day 2 Day 3
Food not ready II II I
Elevator delayed lll lllll llll
Too few runners I I
No carts II I II
Pareto Analysis(sorted histogram)
Late Elevator
Late food
Lacking cart
Few runners
Other (160)
100
85
7065
Percent of each out of 480 total incidents ...
Late elevator 21%
Late food 18%
Late cart 15%
Runners 14%
Other 33%
The PDCA Cycle
Plan
Do
Check
Act
Inspect every item Expensive to do Testing can be destructive, should be
simply unnecessary Statistical techniques
Statistical process control (SPC)
Acceptance Sampling
Discovering “problems”
Costs of Quality: Four SourcesAppraisal
Costs
Internal Failure Costs
External Failure Costs
Prevention Costs
External Failure Costs
Appraisal Costs
Prevention Costs
Internal FailureCosts
Costs ofQuality
Costs of Poor Quality
Rule-of-Thumb: $1 spent in prevention leads to $10 of saved internal, external, and appraisal costs.
Cost of Quality
End user’shand
Warranty cost
Loss of market share
Reputation
Ownprocess
Nextprocess
End of theline
Finalinspection
Defects found at
Cost tothe
company
Impact tothe
company
Very minor
Minor delay
Some rework
Rework (mat’l, labor, capacity, etc)
Reschedule of work
Significant rework
Delivery delay
Inspection costs
Hidden Costs of Poor Quality
Lost sales
Paperwork errors
Lost discounts
Delays
Obsolete inventory
Damaged goods Extra process capacity
Premium freight costs Overtime to correct errors
Process downtime
Extra inventory
Loss of good will
Reprocessing
Customer returns
Sorting inspection
Warranty expensesRejects
Customer allowances Incorrect orders shipped
Total Quality Costs: “Quality is Free”
The Cost/Productivity Advantage
Before AfterImprovement Improvement
Scrap rate 15% 5%
Order size 100 100
Number produced 115 105
Production costs
@ $10 per unit $1,150 $1,050
Sales revenue
@ $15 per unit $1,500 $1,500
Profit $ 350 $ 450
Category 1 - Leadership
110 points
Category 2 - Strategic Planning
80 points
Category 3 - Customer and Market Focus
80 points
Category 4 - Information and Analysis
80 points
Category 5 - Human Resource Focus
100 points
Category 6 - Process Management
100 points
Category 7 - Business Results
450 points
Criteria for Criteria for Performance Performance ExcellenceExcellence
ISO 9000 & 14000 Series of standards agreed upon by
the International Organization for Standardization (ISO)
More than 100 countries involved
A prerequisite for global competition?
Quality Awards & Programs Malcom Baldridge: Most extensive
Focus: customer satisfaction & quality ISO 9000: Quality standards requiring companies to
“say what they do and do what they say” Focus: conformance to specs, customer requirements,
continuous improvement, leadership ISO 14000: Environmental standards requiring
companies to keep track of their raw materials use, their generation, treatment, and disposal of hazardous materials. Focus: performance improvement, labeling and life cycle
assessment
Hot!
Question?
What is the relationship between quality & environmental performance?