Operations

Management
Quality Management

OM - Quality Management

Definitions of Quality
ASQ:

Totality of features and

characteristics of a product or service
having the ability to meet customer
needs (implied or stated)

User-Based:

What consumer says it is

Manufacturing-Based:

Degree to which a
product conforms to design specification

Product-Based:

Measurable variable
product characteristics

OM - Quality Management

Determinants of Quality
Quality of design
Intention of designers to include or exclude features in a
product or service

Quality of conformance
The degree to which goods or services conform to the intent of
the designers

Ease-of-Use and user instructions

Increase the likelihood that a product will be used for its
intended purpose and in such a way that it will continue to
function properly and safely

After-the-sale service
Taking care of issues and problems that arise after the sale

OM - Quality Management

Dimensions of Quality for

Goods
Functionality
Reliability
Durability

Quality

Conformance
Serviceability
Appearance
OM - Quality Management

Dimensions of Quality for

Services
Time and Timeliness

Completeness

Courtesy

Consistency

Accessibility and convenience

Accuracy

Responsiveness

OM - Quality Management

Costs of Quality
Prevention

costs - reducing the potential

for defects e.g. training, QI programs

Appraisal

costs - evaluating products &

processes e.g. testing, labs, inspectors

Internal

failure - producing defective parts

or service before delivery to customers e.g.

rework, scrap, downtime, etc
External

costs - occur after delivery of

defective parts e.g. rework, returned goods,

lost goodwill, etc
OM - Quality Management

Ways in Which Quality Can

Improve Profits
Sales Gains
Improved response
Higher Prices
Improved reputation
Improved
Quality

Reduced Costs

Increased
Profits

Increased productivity
Lower rework and
scrap costs
Lower warranty costs
OM - Quality Management

Total Quality Management

Encompasses

entire organization,
from supplier to customer

Stresses

a commitment by
management to have a continuing
company-wide drive toward
excellence in all aspects of products
and services that are important to
the customer.

OM - Quality Management

Seven Concepts of TQM

Continuous
Six

improvement (Kaizen)

Sigma

Employee

empowerment

Benchmarking
Just-in-time
Taguchi

concepts

Knowledge

OM - Quality Management

(JIT)
of TQM tools
9

Continuous Improvement
Represents

continual improvement
of process & customer satisfaction
Involves all operations
& work units
Other names
Kaizen (Japanese)
Zero-defects

OM - Quality Management

10

Six Sigma
Popularized
Process

by Motorola, GM, Honeywell

with an extremely high

capability (3.4 defect per Million)

Implementing

six sigma is a big

commitment

OM - Quality Management

11

Employee Empowerment
Getting

employees involved in product

& process improvements

85% of quality problems are due to process

& material

Techniques

Communication system with employees

Open, supportive supervisors
Shifting responsibility to production
employees
Building high-morale organizations
Build teams & quality circles

OM - Quality Management

12

Benchmarking
Selecting best practices to use as a
standard for performance

Determine what to benchmark

Form a benchmark team

Identify benchmarking partners

Collect and analyze benchmarking information

Take action to match or exceed the

benchmark

OM - Quality Management

13

Just-in-Time (JIT)
Relationship to quality:
JIT

cuts cost of quality

JIT

improves quality

Better

quality means less inventory

and better, easier-to-employ JIT

system

OM - Quality Management

15

Taguchi Techniques
Experimental

design methods to
improve product & process design

Identify key component & process

variables affecting product variation

Taguchi

Concepts

Quality robustness
Quality loss function
Target specifications

OM - Quality Management

16

Quality Loss Function

Shows

cost ($) of deviation from target

value
Assumptions
Most

measurable quality characteristics

(e.g., length, weight) have a target value
Deviations from target value are
undesirable
Equation:

L = D2C

= Loss to society ($); D = Deviation; C =

Cost of deviation

OM - Quality Management

17

Quality Loss Function; Distribution of

Products Produced
Quality Loss Function (a)

High loss
Unacceptable

Loss (to
producing
organization,
customer, and
society)
Low loss

Target-oriented
quality yields more
product in the
best category

Poor
Fair
Good
Best

Target-oriented quality
brings products toward
the target value
Conformance-oriented
quality keeps product
within three standard
deviations

Frequency

Lower

OM - Quality Management

Target
Specification

Upper

Distribution of
specifications for product
produced (b)

18

Seven Tools for TQM

OM - Quality Management

19

Service Quality
For

services, the assessment of

quality is made during the service
delivery process.

Customer

satisfaction can be
measured as the difference between
the customers service expectation
and the service actually received.

Gaps in Service Quality

Measuring

the gap between

expected service and perceived
service is a routine customer
feedback process practiced by many
companies

Walk-Through-Audit (WtA)
A

diagnostic tool to identify gaps in

service perception
Involves three parties management,
front-line or customer contact personnel
and customers

OM - Quality Management

22

Walk-Through-Audit (WtA)
First

flow chart must be prepared to

highlight areas of customer interaction
Statements must be declarative rather
than questions
WtA must be limited to two pages since
customers would not be interested in
filling out long questionnaires
Best way to administer is through oneon-one interview/dialogue

OM - Quality Management

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Identifying GAPS with WtA