Quality Management

Quality and Strategy

• Managing quality supports (1) differentiation (2) low
cost (3) response strategies
• Quality helps firms (1) increase sales and (2) reduce
costs
• Building a quality organization is a demanding task

Two Ways Quality Improves Profitability The Flow of Activities

What is Quality
The objective is to build a total quality management system Implications of Quality
that identifies and satisfies customer needs
• Company reputation
Different Views
✓ Perception of new products
• User based: better performance, more features ✓ Employment practices
• Manufacturing based: conformance to standards, ✓ Supplier relations
making it right the first time • Product liability
• Product based: specific and measurable attributes of the ✓ Reduce risk
product • Global implications
✓ Improved ability to compete
ISO 9000 International Quality Standards
• Encourages (1) quality management procedures, (2)
detailed documentation (3) work instructions (4) Costs of Quality
recordkeeping • Prevention costs - reducing the potential for defects
• Appraisal costs - evaluating products, parts, and services
Management Principles • Internal failure costs - producing defective parts or
• Top management leadership service before delivery
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• Customer satisfaction • External failure costs - defects discovered after delivery
• Continual improvement
• Involvement of people
• Process analysis Ethics and Quality Management
• Use of data-driven decision making • Operations managers must deliver healthy, safe, quality
• A systems approach to management products and services
• Mutually beneficial supplier relationships • Poor quality risks injuries, lawsuits, recalls, and
regulation
Takumi • Ethical conduct must dictate response to problems
• A Japanese character that (1) symbolizes a broader • All stakeholders must be considered
dimension than quality, (2) a deeper process than
education, and (3) a more perfect method than
persistence
Total Quality Management (TQM) Deming's 14 Points for Implementing Quality Improvement
• Encompasses entire organization from supplier to 1. Create consistency of purpose
customer 2. Lead to promote change
• Stresses a commitment by management to have a 3. Build quality into the product; stop depending on
continuing companywide drive toward excellence in all inspections to catch problems
aspects of products and services that are important to 4. Build long-term relationships based on performance
the customer instead of awarding business on price
5. Continuously improve product, quality, and service
6. Start training
Seven Concepts of TQM 7. Emphasize leadership
1. Continuous improvement 8. Drive out fear
2. Six Sigma 9. Break down barriers between departments
3. Employee empowerment 10. Stop criticizing workers
4. Benchmarking 11. Support, help, and improve
5. Just-in-time (JIT) 12. Remove barriers to pride in work
6. Taguchi concepts 13. Institute a strong program of education and self-
7. Knowledge of TQM tools improvement
14. Put everyone in the company to work on the
Continuous Improvement transformation
• Never-ending process of continuous improvement
• Covers people, equipment, suppliers, materials, Shewhart's PDCA Model
procedures
• Every operation can be improved
• Kaizen describes the ongoing process of unending
improvement
• TQM and zero defects also used to describe continuous
improvement
•Six Sigma
• Two meanings
o Statistical definition of a process that is 99.9997%
capable, 3.4 defects per million opportunities (DPMO)
o A program designed to (1) reduce defects (2) lower
costs (3) save time, and (4) improve customer
satisfaction
• A comprehensive system for achieving and sustaining
business success

DMAIC Approach Implementing Six Sigma

1. Defines the project’s purpose, scope, and outputs, then • Emphasize defects per million opportunities as a
identifies the required process information keeping in standard metric
mind the customer’s definition of quality • Provide extensive training
2. Measures the process and collects data • Focus on top management leadership (Champion)
3. Analyzes the data ensuring repeatability and • Create qualified process improvement experts (Black
reproducibility Belts, Green Belts, etc.)
4. Improves by modifying or redesigning existing • Set stretch objectives
processes and procedures Note: this cannot be accomplished without a major
5. Controls the new process to make sure performance commitment from top level management
levels are maintained
Employee Empowerment Quality Circles
• Getting employees involved in product and process • Group of employees who meet regularly to solve
improvements problems
o 85% of quality problems are due to materials and • Trained in planning, problem solving, and statistical
process methods
• Techniques • Often led by a facilitator
o Build communication networks that include • Very effective when done properly
employees
o Develop open, supportive supervisors
Best Practices for Resolving Customer Complaints
o Move responsibility to employees
• Make it easy for clients to complain
o Build a high-morale organization
✓ It is free market research
o Create formal team structures
• Respond quickly to complaints
✓ It adds customers and loyalty
Benchmarking • Resolve complaints on first contact
Selecting best practices to use as a standard for performance ✓ It reduces cost
1. Determine what to benchmark • Use computers to manage complaints
2. Form a benchmark team ✓ Discover trends, share, and align your services
3. Identify benchmarking partners • Recruit the best for customer service jobs
4. Collect and analyze benchmarking information ✓ It should be part of formal training and career
5. Take action to match or exceed the benchmark advancement

Taguchi Concepts
Just-in-Time (JIT)
• Engineering and experimental design methods to
• 'Pull' system of production scheduling including supply
improve product and process design
management
o Identify key component and process variables
✓ Production only when signaled
affecting product variation
• Allows reduced inventory levels
• Taguchi Concepts
✓ Inventory costs money and hides process and
o Quality robustness
material problems
o Target-oriented quality
• Encourages improved process and product quality o Quality loss function
• Relationship to quality:
✓ JIT cuts the cost of quality
✓ JIT improves quality Quality Loss Function
✓ Better quality means less inventory and better, • Shows that costs increase as the product moves away
easier-to-employ JIT system from what the customer wants
• Costs include customer dissatisfaction, warranty
Quality Robustness and service, internal
• Ability to produce products uniformly in adverse scrap and repair, and costs to society
manufacturing and environmental conditions • Traditional conformance specifications are too simplistic
o Remove the effects of adverse conditions
o Small variations in materials and process do not destroy TQM Tools
product quality • Tools for Generating Ideas
✓ Check Sheet
✓ Scatter Diagram
Check Sheet
✓ Cause-and-Effect Diagram
• An organized method of recording data
• Tools to Organize the Data
✓ Pareto Chart
✓ Flowchart (Process Diagram)
• Tools for Identifying Problems
✓ Histogram
✓ Statistical Process Control Chart
Scatter Diagram Pareto Chart
• A graph of the value of one variable vs. another variable • A graph to identify and plot problems or defects in
descending order of frequency

Cause-and-Effect Diagram Histogram

• A tool that identifies process elements (causes) that • A distribution showing the frequency of occurrences of a
may effect an outcome variable

Flowchart (Process Diagram)

• A chart that describes the steps in a process

Inspection
• Involves examining items to see if an item is good or
defective
• Detect a defective product
✓ Does not correct deficiencies in process or product
✓ It is expensive Statistical Process Control Chart:
• Issues • A chart with time on the horizontal axis to plot values of a
✓ When to inspect statistic
✓ Where in process to inspect
When and Where to Inspect
1. At the supplier’s plant while the supplier is producing
2. At your facility upon receipt of goods from your
supplier
3. Before costly or irreversible processes
4. During the step-by-step production process Statistical Process Control (SPC)
5. When production or service is complete • Uses statistics and control charts to tell when to take
6. Before delivery to your customer corrective action
7. At the point of customer contact • Drives process improvement
• Many problems: (1) Worker fatigue (2) Measurement • Four key steps
error (3) Process variability 1. Measure the process
2. When a change is indicated, find the assignable cause
Source Inspection (source control)
3. Eliminate or incorporate the cause
• Poka-yoke: is the concept of foolproof devices or 4. Restart the revised process
techniques designed to pass only acceptable products
• Checklists: ensure consistency and completeness

Dr. Talal Alyamani