OPERATION MANAGEMENT

Submitted to
Col. Saleem Iqbal
GROUP MEMBERS

AMNA MUNIR Roll no:1435

MARIA KHALID Roll no:1423
 Tables of contents
1. What is TQM
2. Principals of TQM
3. What is Six Sigma
4. Six Sigma programs
5. Major cost of poor process of Quality and Performance
5.1.Cost of Poor Quality
5.2.Cost of Good Quality
5.3.Cost of Process Performance
5.4.Cost of Poor Quality supplier
5.5.Potential impact of Poor Quality
5.6.Quality Certification
TOTAL QUALITY MANAGEMENT
TQM is an enhancement to the traditional way of
doing business. It is a proven technique to
guarantee survival in world class competition.
Analysing the tree words:
Total = Made up of the whole.
Quality = Degree of excellence a product or service
provides.
Management = Act, Art, or manner of handling,
Controlling, Directing etc.
 PRINCIPALS OF TQM
Six principal's of TQM are:
1. Quality oriented management
2. Involvement of entire work force
3. Continuous improvement
4. Suppliers partnership
5. Measuring performance
 Six sigma
It was developed by MOTORALA in 1986.
Sir Bill Smith the father of Six Sigma introduced
this quality improvement methodology to
MOTOROLA.
Six Sigma is now enormous brand in the world of
corporate development.
Since the 1920s the word sigma has been used by
mathematicians and engineers as a symbol for a
unit of measurement in product quality variation.
 Six sigma
Business process for improving quality in
products.
Reducing costs.
Increasing customer satisfaction.
SIX SIGMA APPROACHES AND
METHODOLGY
Focuses on reducing variation in process and
preventing deficiencies in product.
Two approaches and methods of Six Sigma:
1. DMAIC (define, measure, analyse, improve,
control)
2. DMADV (define, measure, design, verify)
 SIX SIGMA OBJECTIVES

Overall business Improvement

Remedy Defects
Reduce cost
Improve cycle time
Increase customer satisfaction
 SIX SIGMA TEAM

Top Management
Champions
Green Belts
Black Belts
Master Black Belts
 SIX SIGMA MANAGEMENT

Provide strong Leadership

Define performance metrics
Selecting and training appropriate team
 SIX SIGMA PROGRAMS
Improve quality
Save time
Cut cost
Employees in Six Sigma:
Design
Production
Service
Inventory management
Delivery
 COST OF QUALITY
Quality Is Free, the cost of quality has two main
components:
 COST OF POOR QUALITY EFFECTS

Internal failure cost

External failure cost
 INTERNAL FAILURE COST
Internal failure costs are costs that are caused by
products or services not conforming to requirements
or customer needs and are found before delivery of
products and services to external customers.
Examples include the costs for:
Rework
Delays
Re-designing
Failure analysis
Re-testing
Lack of flexibility and adaptability
 EXTERNAL FAILURE COST

External failure costs are costs that are caused by

deficiencies found after delivery of products and services
to external customers, which lead to customer
dissatisfaction.
Examples include the costs for:
Complaints
Repairing goods and redoing services
Warranties
Customers bad will
Losses due to sales reductions
 COST OF GOOD QUALITY EFFECTS

Prevention cost
Appraisal cost
 PREVENTION COST
Prevention costs are costs of all activities that are
designed to prevent poor quality from arising in
products or services.
Examples include the costs for:
Quality planning
Error proofing
Capability evaluations
Quality improvement team meetings
Quality improvement projects
Quality education and training
 Appraisal cost

Appraisal costs are costs that occur because of the

need to control products and services to ensure a
high quality level in all stages, conformance to
quality standards and performance requirements.
Examples include the costs for:
Checking and testing purchased goods and services
In-process and final inspection/test
Field testing
Product, process or service audits
 COST OF PROCESS PERFORMANCE
Defects
Prevention costs
Appraisal costs
Internal failure costs
External failure costs
 COST OF POOR QUALITY SUPPLIERS

Producing defective material

Damaging material during delivery
Our COPQ will generally cover the followings:
Cost of labour
Loss of sale
Potential loss of market share
 POTENTIAL IMPACT OF POOR QUALITY

Customer
Legal
Staff
Financial