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Management
Chapter 6
Managing Quality
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 7e
Operations Management, 9e
2008 Prentice Hall, Inc.
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Outline
Global Company Profile: Arnold
Palmer Hospital
Quality and Strategy
Defining Quality
Implications of Quality
Malcolm Baldrige National Quality
Award
Cost of Quality (COQ)
Ethics and Quality Management
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Outline Continued
International Quality Standards
ISO 9000
ISO14000
63
Outline Continued
Total Quality Management
Continuous Improvement
Six Sigma
Employee Empowerment
Benchmarking
Just-in-Time (JIT)
Taguchi Concepts
Knowledge of TQM Tools
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Outline Continued
Tools of TQM
Check Sheets
Scatter Diagrams
Cause-and-Effect Diagrams
Pareto Charts
Flowcharts
Histograms
Statistical Process Control (SPC)
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Outline Continued
The Role of Inspection
When and Where to Inspect
Source Inspection
Service Industry Inspection
Inspection of Attributes versus
Variables
TQM in Services
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Learning Objectives
When you complete this chapter you
should be able to:
Define quality and TQM
Describe the ISO international
quality standards
Explain Six Sigma
Explain how benchmarking is used
Explain quality robust products and
Taguchi concepts
Use the seven tools of TQM
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Improved reputation
Reduced Costs via
Increased
Profits
Increased productivity
Lower rework and scrap costs
Lower warranty costs
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Figure 6.1
6 10
Figure 6.2
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Customer Satisfaction
Winning orders, Repeat customers
Yields: An effective organization with
a competitive advantage
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Defining Quality
The totality of features and
characteristics of a product or
service that bears on its ability to
satisfy stated or implied needs
American Society for Quality
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Different Views
User-based better performance,
more features
Manufacturing-based
conformance to standards,
making it right the first time
Product-based specific and
measurable attributes of the
product
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Implications of Quality
1. Company reputation
Perception of new products
Employment practices
Supplier relations
2. Product liability
Reduce risk
3. Global implications
Improved ability to compete
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Durability
Features
Serviceability
Reliability
Aesthetics
Conformance
Perceived quality
Value
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Baldrige Criteria
Applicants are evaluated on:
Categories
Leadership
Strategic Planning
Customer & Market Focus
Measurement, Analysis, and
Knowledge Management
Workforce Focus
Process Management
Results
2008 Prentice Hall, Inc.
Points
120
85
85
90
85
85
450
6 17
Takumi
A Japanese character
that symbolizes a
broader dimension
than quality, a deeper
process than
education, and a more
perfect method than
persistence
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Costs of Quality
Prevention costs - reducing the
potential for defects
Appraisal costs - evaluating
products, parts, and services
Internal failure - producing defective
parts or service before delivery
External costs - defects discovered
after delivery
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Costs of Quality
Total
Cost
Total Cost
External Failure
Internal Failure
Prevention
Appraisal
Quality Improvement
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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
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International Quality
Standards
ISO 9000 series (Europe/EC)
Common quality standards for products
sold in Europe (even if made in U.S.)
2000 update places greater emphasis on
leadership and customer satisfaction
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ISO 14000
Environmental Standard
Core Elements:
Environmental management
Auditing
Performance evaluation
Labeling
Life cycle assessment
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TQM
Encompasses entire organization,
from supplier to customer
Stresses a commitment by
management to have a continuing,
companywide drive toward
excellence in all aspects of products
and services that are important to
the customer
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Table 6.1
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Table 6.1
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Continuous Improvement
Represents continual
improvement of all processes
Involves all operations and work
centers including suppliers and
customers
People, Equipment, Materials,
Procedures
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2. Do
Test the
plan
Figure 6.3
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Six Sigma
Two meanings
Statistical definition of a process that
is 99.9997% capable, 3.4 defects per
million opportunities (DPMO)
A program designed to reduce
defects, lower costs, and improve
customer satisfaction
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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)
A program designed to reduce
defects, lower costs, and improve
customer satisfactionMean
3
6
Figure 6.4
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6
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Six Sigma
1. Define critical outputs
and identify gaps for
improvement
DMAIC Approach
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Employee Empowerment
Getting employees involved in product
and process improvements
85% of quality problems are due
to process and material
Techniques
Build communication networks
that include employees
Develop open, supportive supervisors
Move responsibility to employees
Build a high-morale organization
Create formal team structures
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Quality Circles
Group of employees who meet
regularly to solve problems
Trained in planning, problem
solving, and statistical methods
Often led by a facilitator
Very effective when done
properly
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Benchmarking
Selecting best practices to use as a
l
standard for performance
a
n
er
t
g
n
n
i
i
e
k
Us hmar ig
c re b
n
e
b
u
o
if y nough
e
Determine what to
benchmark
Form a benchmark team
Identify benchmarking partners
Collect and analyze benchmarking
information
Take action to match or exceed the
benchmark
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Above 96%
0.16
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Just-in-Time (JIT)
Relationship to quality:
JIT cuts the cost of quality
JIT improves quality
Better quality means less
inventory and better, easier-toemploy JIT system
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Just-in-Time (JIT)
Pull system of production scheduling
including supply management
Production only when signaled
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Work in process
inventory level
(hides problems)
Unreliable
Vendors
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Scrap
Capacity
Imbalances
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Unreliable
Vendors
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Scrap
Capacity
Imbalances
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Taguchi Concepts
Engineering and experimental
design methods to improve product
and process design
Identify key component and process
variables affecting product variation
Taguchi Concepts
Quality robustness
Quality loss function
Target-oriented quality
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Quality Robustness
Ability to produce products
uniformly in adverse manufacturing
and environmental conditions
Remove the effects of adverse
conditions
Small variations in materials and
process do not destroy product
quality
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High loss
Unacceptable
Loss (to
producing
organization,
customer,
and society)
Poor
Fair
Good
Best
Low loss
L=
loss to
society
D=
distance from
target value
C=
cost of
Target-oriented
quality
deviation
yields more
product in
the best category
Target-oriented quality
brings product toward
the target value
Frequency
Lower
where
Target
Upper
Specification
Conformance-oriented
quality keeps products
within 3 standard
deviations
Figure 6.5
6 48
Tools of TQM
Tools for Generating Ideas
Check sheets
Scatter diagrams
Cause-and-effect diagrams
Histogram
Statistical process control chart
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Defect
A
B
C
1
///
//
/
2
/
/
//
3
/
Hour
4
5
/
/
/
6
/
7
///
//
//
8
/
///
////
Figure 6.6
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Productivity
Absenteeism
Figure 6.6
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Methods
Effect
Manpower
Machinery
Figure 6.6
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Percent
Frequency
E
Figure 6.6
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Figure 6.6
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Distribution
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Time
Figure 6.6
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Cause-and-Effect Diagrams
Method
(shooting process)
Material
(ball)
Grain/Feel
(grip)
Size of ball
Aiming point
Bend knees
Air pressure
Hand position
Lopsidedness
Follow-through
Training
Conditioning
Motivation
Concentration
Manpower
(shooter)
2008 Prentice Hall, Inc.
Missed
free-throws
Rim size
Rim alignment
Consistency
Balance
Machine
(hoop &
backboard)
Rim height
Backboard
stability
Figure 6.7
6 57
Pareto Charts
Data for October
70
50
54
72
40
30
Number of
occurrences
20
12
10
0
Room svc
72%
Minibar
4%
Misc.
3%
Cumulative percent
Frequency (number)
60
100
93
88
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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
80%
8
11
9
10
20%
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An SPC Chart
Plots the percent of free throws missed
20%
10%
0%
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
Game number
Figure 6.8
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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
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Inspection
Many problems
Worker fatigue
Measurement error
Process variability
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Source Inspection
Also known as source control
The next step in the process is
your customer
Ensure perfect product
to your customer
Poka-yoke is the concept of foolproof devices
or techniques designed to pass only
acceptable product
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What is
Inspected
Standard
Is phone answered by the
second ring
Accurate, timely, and
correct format
Promptness in returning
calls
Table 6.5
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What is
Inspected
Reception
desk
Doorman
Room
Minibar
Standard
Use customers name
Greet guest in less than 30
seconds
All lights working, spotless
bathroom
Restocked and charges
accurately posted to bill
Table 6.5
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What is
Inspected
Billing
Pharmacy
Lab
Nurses
Admissions
Standard
Accurate, timely, and
correct format
Prescription accuracy,
inventory accuracy
Audit for lab-test accuracy
Charts immediately
updated
Data entered correctly and
completely
Table 6.5
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What is
Inspected
Busboy
Busboy
Waiter
Standard
Serves water and bread
within 1 minute
Clears all entre items and
crumbs prior to dessert
Knows and suggest
specials, desserts
Table 6.5
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What is
Inspected
Standard
Table 6.5
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Variables
Measures dimensions such as weight,
speed, height, or strength
Falls within an acceptable range
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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
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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
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Service
Specifications
at UPS
6 74
Determinants of Service
Quality
Reliability
Responsiveness
Credibility
Security
Competence
Access
Understanding/
knowing the
customer
Tangibles
Courtesy
Communication
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