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CHAPTER 15
QUALITY MANAGEMENT
DAVID A. COLLIER AND JAMES R. EVANS
learning outcomes
LO1 Explain the concepts and definitions of quality. LO2 Describe the quality philosophies and principles of
Deming, Juran, and Crosby.
LO3 Explain the GAP model and its importance. LO4 Describe the concepts and philosophy of ISO
9000:2000.
LO5
LO6 Explain the categories of cost of quality LO7 Describe how to apply the 7 QC Tools. LO8 Explain the concepts of kaizen and poka-yoke.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
Quality management refers to systematic policies, methods, and procedures used to ensure that goods and services are produced with appropriate levels of quality to meet the needs of customers. Organizations today integrate quality principles into their management systems using tools such as Total Quality Management (TQM), Six Sigma, and Lean Operating Systems (Chapter 17).
Understanding Quality
Quality can be a confusing concept, partly because people view quality in relation to differing criteria based on their individual roles in the value chain, such as: perfection, delighting or pleasing the customer, eliminating waste, doing it right the first time, and/or consistency.
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Understanding Quality
Fitness for use is the ability of a good or service to meet customer needs. Quality of conformance is the extent to which a process is able to deliver output that confirms to design specifications. Specifications are targets and tolerances determined by designers of goods and services.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
Understanding Quality Quality Control means ensuring consistency in processes to achieve conformance. Service Quality is consistently meeting or exceeding customer expectations (external focus) and service delivery system performance criteria (internal focus) during all service encounters.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
Understanding Quality Principles of Total Quality 1. A focus on customers and stakeholders, 2. A process focus supported by continuous improvement and learning, and 3. Participation and teamwork by everyone in the organization.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
W. Edwards Deming
Focus on bringing about improvements in product and service quality by reducing uncertainty and variability in goods and services design and associated processes (the beginning of his ideas in 1920s and 1930s). Higher quality leads to higher productivity and lower costs. 14 Points management philosophy. Deming Cycle
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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Exhibit Extra
Plan: study current situation Do: implement plan on trial basis Study: determine if trial is working correctly Act: standardize improvements
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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Joseph Juran
Wrote Quality Control Handbook in 1951, a comprehensive quality manual. Defined quality as fitness for use. Advocated use of quality cost measurement. Quality Trilogy: quality planning, quality control, and quality improvement.
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Philip B. Crosby
Wrote Quality is Free in 1979, which brought quality to the attention of top corporate managers in the U.S. Crosby s Absolutes of Quality Management include:
Quality means conformance to requirements, not elegance. There is no such thing as a quality problem. There is no such thing as the economics of quality; doing the job right the first time is always cheaper. The only performance measurement is the cost of quality, which is the expense of nonconformance. The only performance standard is Zero Defects (ZD).
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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The GAP model recognizes that there are several ways to misspecify and mismanage the creation and delivery of high levels of quality. These gaps are shown in the model in Exhibit 15.2 and explained below. Gap 1 is the discrepancy between customer expectations and management perceptions of those expectations. Gap 2 is the discrepancy between management perceptions of what features constitute a target level of quality and the task of translating these perceptions into executable specifications.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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Exhibit 15.2
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Gap 3 is the discrepancy between quality specifications documented in operating and training manuals and plans and their implementation. Gap 4 is the discrepancy between actual manufacturing and service delivery system performance and external communications to the customers. Gap 5 is the difference between the customer's expectations and perceptions. The fifth gap depends on the other four.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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Exhibit 15.2
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ISO 9000:2000
Quality standards were created in 1987 and revised in 1994 and 2000 to improve product quality, improve the quality of operation s processes, and provide confidence to organizations and customers that quality system requirements are fulfilled. Internationally recognized (and sometimes required to do business in certain countries). Standardizes key terms in quality and provides a set of basic principles for initiating quality management systems.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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Six Sigma
Six Sigma is a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and results in a clear financial return for the organization. Used by companies including Motorola, Allied Signal, Texas Instruments, and General Electric.
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Six Sigma
Defects are any mistakes or errors that are passed on to the customer (many people also use the term nonconformance).
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Six Sigma The Six Sigma concept characterizes quality performance by defects per million opportunities (dpmo), computed as DPU v 1,000,000 opportunities for error (or, as is often used in services, errors per million opportunities epmo).
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Six Sigma
A DPU measure might be lost bags per customer. However, customers may have different numbers of bags; thus the number of opportunities for error is the average number of bags per customer. If the average number of bags per customer is 1.6, and the airline recorded 3 lost bags for 8,000 passengers in one month (note: 12,800 opportunities for error in one month), then epmo = (3/8,000 DPU) v 1,000,000/1.6 = 234.375
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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Exhibit 15.3
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Exhibit 15.4
Source: K. Ishikawa, Guide to Quality Control (Tokyo: Asian Productivity Organization, 1982), p. 33.
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Exhibit 15.5
Use of Pareto Diagrams for Progressive Analysis
Source: Small Business Guidebook to Quality Management, Office of the Secretary of Defense, Quality Management Office, Washington, DC (1988).
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Exhibit 15.6
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Poka-Yoke Examples
Machines have limit switches connected to warning lights that tell the operator when parts are positioned improperly on the machine. Fast food restaurants use automated frenchfrying machines that can only be operated one way; the french fries are prepackaged and the equipment automated to reduce the chance of human error.
OM, Ch. 15 Quality Management 2009 South-Western, a part of Cengage Learning
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