Management
Goal 2
1
What is Quality?
A degree or level of excellence.
●Difficult to define
●Various attributes
Traditional Companies
TQM Companies
● Company / Product
● Customer driven
driven.
“What is our business?
“The customer can have any
Is not determined by the
Color car as long as it’s black.”
Producer but by the
Henry Ford
Consumer”.
Peter Drucker
& waste
● Quality at the source ● Inspection after the fact
● High employee ● Top-down approach
Participation
● Cross functional teams ● Fortressed departments
● Elimination of waste ● High scrap & rework
TQM Tools
2. Quality Circles
3. Benchmarking
●Internal Benchmarking
●Competitive Benchmarking
●Industry Benchmarking
●World-Class Benchmarking
Benchmarking Advantages
Pareto diagrams
Control charts
Cause-and-effect
diagrams
Pareto Diagram
Pareto Diagram
Control Charts
Production Line A
µ +
Defect Rate
2σ
µ +
σ
µ
µ -
σ 0 1 2 3 4 5 6 7 8 9 10
µ - Days
Cause-and-effect Diagrams
Cause-and-effect Diagrams
Methods and
Human Factors
Design Factors
Inadequate Flawed part design
supervision Incorrect
Poor training manufacturing
New operator sequence
Inadequate tools Multiple suppliers
Incorrect speed Incorrect specification
Poor Variation in purchased
maintenance components
Machine-related Materials and
Factors Components Factors
Costs of Quality
Cost of achieving good quality
• Scrap costs
• Rework costs
• Re-inspection of reworked products
• Downtime costs
External failure costs
Internal
Cost of
Internal and
external failure
&
Total
Total
External
failure Total
Cost
Prevention
Cost of
Prevention and
&
appraisal
Appraisal
Percentage of output
Quality of conformance
(Percent of output without
without defects
defects)
Quality Cost Report
Assumed sales 50,000,000 Year 2 Year 1
Prevention costs: Amount Percent Amount Percent
Systemdevelopment 400,000 0.80% 270,000 0.54%
Quality Training 210,000 0.42% 130,000 0.26%
Supervision of prevention activities 70,000 0.14% 40,000 0.08%
Quality Improvement projects 320,000 0.64% 210,000 0.42%
Total 1,000,000 2.00% 650,000 1.30%
Appraisal costs:
Inspection 600,000 1.20% 560,000 1.12%
Reliability testing 580,000 1.16% 420,000 0.84%
Supervision of testing and inspection 120,000 0.24% 80,000 0.16%
Depreciation of test equipment 200,000 0.40% 140,000 0.28%
Total 1,500,000 3.00% 1,200,000 2.40%