Lesson 7
QUALITY MANAGEMENT
Management issues
Difficult to define quality
Different perspectives
customer, manufacturer
Design, conformance, specifications, fitness to use etc
Still important
identify dimensions of quality important to customers
Quality and costs related
Bad quality or poor service
dissatisfied customers, returns, loss of goodwill
Good quality or service
Customer loyalty, increased profits
Global market
Highly competitive
Not sufficient to satisfy customer
excite, delight etc the customer
Hence provision of high quality goods and or services mandatory for
long-term success.
Rework and
scrap costs
down
Image up
Service costs
down
Inspection and
test costs down
Sales volume
up
Price
competition
down
Processing time
down
Inventory down
Complaint and
warranty costs down
Scale economies
up
Productivity up
Operation costs
down
Revenue up
Profits up
Capital costs
down
QUALITY MANAGEMENT
Product or
service
Quality of
design
Stage II
Note:
All quality aspects important
Failure in any one can create quality problems
Customer
needs
Quality of
conformance
Stage III
Customers
expectations
for the
product or
service
Gap
Gap
Customers
perceptions
of the
product or
service
Expectations >
perceptions
Customers
expectations
for the
product or
service
Customers
perceptions
of the
product or
service
Expectations =
perceptions
Perceived quality is
acceptable
Customers
expectations
for the
product or
service
Customers
perceptions
of the
product or
service
Expectations <
perceptions
Perceived quality is
good
Word-of-mouth
communications
The customers
domain
Customers
expectations
concerning a
product or service
Image of product
or service
Gap ?
Gap 4
Customers own
specification of
quality
Gap 1
Managements
concept of the
product or service
Gap 2
Customers
perceptions
concerning the
product or service
Organizations
specification of
quality
Gap 3
The operations domain
Main organizational
responsibility
Gap 1
Marketing, operations,
product/service
development
Gap 2
Marketing, operations,
product/service
development
Gap 3
Operations
Gap 4
Marketing
Quality
Quality
fitness for purpose
Quality of design
degree to which
design achieves purpose
Reliability
ability to continue
working at accepted
quality level
Quality of conformance
faithfulness with which the
operation agrees with design
Variables
things you can measure
Attributes
things you can assess and
accept or reject
Attributes
Variables
Measured on a continuous
scale
Diameter of bulb
Length of bar
Quality Dimensions
Goods
Performance
Measure of operating
characteristic
Features
Reliability
Durability
Conformance
Design specifications
Serviceability
Aesthetics
Perceived quality
Reputation of manaufacturer
Services
Reliability
Ability to perform
Tangibles
dependably
accurately
Appearance of facilities,
equipment, personnel
Responsiveness
Assurance
Knowledge, courtesy of
employees
Ability to convey trust and
confidence
Empathy
Caring,
individualised attention
accesibility
Leaders in Quality
W. Edwards Deming
14 Points for
Management
Joseph M. Juran
Top management
commitment,
fitness for use
Armand Feigenbaum
Total Quality
Control
Philip B. Crosby
Quality is Free,
zero defects
Deming
Juran
Definition of Quality
Conformance to specifications
A predictable degree of
uniformity and
dependability at low cost
and suited to market
Degree of senior
management
responsibility
Performance standard
or motivation
Zero defects
Avoid campaigns to do
perfect work
General approach
Reduce variability by
continuous improvement;
cease mass inspection
structure
14 steps to quality
improvements
10 steps to quality
improvement
Statistical process
control, SPC
Statistical methods of
quality control must be
used
Technical quality
Relates to the core element of the commodity or service
Cannot be readily assessed by customer
Customers may use some other measure, (closely related to
aesthetics)
Functional quality
Relates to customers perceptions of how the service was delivered
Can be assessed by customers
More important to customers
Expectations
Set of these developed by customer using a variety of input
Previous experiences
Information (reputation, gossip, research)
Perceptions
Experience of service
Good or bad
Satisfaction
Does service meet or exceed expectations
Performance usually clouded by customers perceptions of quality
Satisfaction = (perception of performance) (Expectation)
Cost of Quality
Cost of prevention
Incurred when attempting to prevent production of
defective goods and services
Includes
Investment in machinery, technology, training
Admin of quality program. Statistical analysis, vendor
certification
Cost of Quality
Cost of failure
Internal failure costs
Due to defects produced within the system
Include
Costs attributed to defects found before despatch to
customers
Eg: scrap, rework, repair, retesting, downtime, disposition
of defectives
Quality principles
Customer focus, continuous improvement
Benchmarking, JIT, tools for TQM
Yield: How to do and accomplish what is important
Employee fulfillment
Empowerment, organizational commitment
Yield: attitudes that can accomplish what is important
Customer satisfaction
Winning orders, repeat business
Yield: competitive advantage
Continuous improvement
Quest for zero defects (perfection)
Improve people, equipment, suppliers, materials, procedures etc
Six sigma
Strategy
Focus on customer satisfaction
Discipline
Six sigma improvement model (DMAIC)
Define, Measure, Analyse, Improve, control
Employee empowerment
Benchmarking
JIT
Taguchi concepts
Robustness - remove effect instead of cause of adverse conditions
loss function identify all costs connected with poor quality
TQM TOOLS
Check sheets
Tools for generating ideas
Scatter diagram
Cause and effect (fish bone) diagram
Pareto charts
Tools for organizing data
Flow diagram
Histogram
Tools for identifying problems
Control charts
Six Sigma
Two meanings
Lower limits
Upper limits
2,700 defects/million
Statistical
definition of a process that is
99.9997% capable, 3.4 defects per
3.4 defects/million
million opportunities (DPMO)
Cause-and-Effect Diagrams
Method
(shooting process)
Material
(ball)
Grain/Feel
(grip)
Aiming point
Size of ball
Bend knees
Air pressure
Hand position
Lopsidedness
Follow-through
Training
Conditioning
Consistency
Balance
Missed
free-throws
Rim size
Motivation
Rim alignment
Rim height
Backboard
stability
Concentration
Manpower
(shooter)
Machine
(hoop &
backboard)
Figure 6.7
Pareto Charts
Data for October
Frequency (number)
60
54
72
50
40
Number of
occurrences
30
20
12
10
Pool hours
5%
Minibar
4%
Misc.
3%
0
Room svc
72%
Check-in
16%
Cumulative percent
100
93
88
70
Flow Charts
MRI Flowchart
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
If unsatisfactory, repeat
Patient taken back to room
MRI read by radiologist
MRI report transferred to
physician
11. Patient and physician discuss
8
1
80%
11
9
20%
10
Distribution
Frequency
(f)
Time
Figure 6.6
Improve
quality
Traditional view
Increase
Appraisal
costs
Results:
Demings view
Increase
Process
quality
Quality goes up
Quality goes up
costs go up
costs go down
Do
Control
Act
Check
Improve
Measure
Analyze
The DMAIC
cycle
Control establish
performance
standards and deal
with any problems
Measure gather
data, refine problem
and measure inputs
and outputs
Analyze develop
Improve develop
improvement ideas, problem hypotheses,
identify root causes
test, establish
and validate
solution, and
hypotheses
measure results
Important
Understand variation
Process output
32
Examples
Variation in material
Performance of a task by workforce
Environmental variations
8-34
8-35
x- and R-charts
The x-chart monitors the centering of a
process over time as measured by the mean
of each sample
The R-chart monitors the variability in data as
measured by the range of each sample
8-36
8-37
In-Control Indicators
No points outside control limits
Number of points above and below center
line about the same
Points fall randomly above and below
center line
No steady upward or downward trends
Most points, but not all are near the center
line; only a few are close to control limits
Copyright 2013 Pearson Education,
Inc. publishing as Prentice Hall
8-38
8-39
p-Chart
p-Chart monitors the fraction nonconforming
(fraction defective) for attribute data
Control limits
UCLp = p + 3s
s
8-40
LCLp = p - 3s
p(1 p)
n
8-41
Capable Process
8-42
Incapable Process
8-43
8-44
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
Issues
When to inspect
Where in process to inspect
Inspection
Many problems
Worker fatigue
Measurement error
Process variability
Source Inspection
Also known as source control
The next step in the process is
your customer
What is
Inspected
Standard
Receptionist
performance
Billing
Attorney
Promptness in returning
calls
Table 6.5
What is
Inspected
Standard
Reception
desk
Doorman
Room
Minibar
Table 6.5
Variables
Measures dimensions such as weight, speed,
height, or strength
Falls within an acceptable range
TQM In Services
Service quality is more difficult to
measure than the quality of goods
Service quality perceptions depend on
Intangible differences between products
Intangible expectations customers have
of those products
Service Quality
The Operations Manager must
recognize:
1. The tangible component of
services is important
2. The service process is important
3. The service is judged against the
customers expectations
4. Exceptions will occur
Credibility
Responsiveness
Security
Competence
Understanding/
knowing the
customer
Access
Courtesy
Communication
Tangibles