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2. Production & Operations Management Chapter : The Role of Operations Management Business Process Reengineering Inventory Management Operations Strategy Total Quality Management Supply Chain Management ✓ Planning & Control Analyzing Operations New Product/process development Project Management Issues For International Operations Time Based Competition Cost Elements 8 8 9 9 10 11 12 13

3. Modern Importance of Quality Quality Assurance & Quality Assurance History Contemporary influences on quality Definition of Quality Quality Perspectives Customer –Driven Quality Principles of Total quality Customer & Stakeholder Focus Participation & team work Process Focus & Continuous improvement Order Quantity for a Periodic Inventory System Deming’ View of a production System Infrastructure, Practices & Tools Quality and Profitability Lecture Outlines

4. Modern Importance of Quality “The first job we have is to turn out quality merchandise that consumers will buy and keep on buying. If we produce it efficiently and economically, we will earn a profit, in which you will share.” - William Cooper Procter

5. Quality Assurance...is any action directed toward providing customers with goods and services of appropriate quality.

6. History of Quality Assurance Skilled craftsmanship during Middle Ages Industrial Revolution: rise of inspection and separate quality departments Statistical methods at Bell System Quality control during World War II Quality management in Japan

7. History of Quality Assurance (Cont.) Quality awareness in U.S. manufacturing industry during 1980s: “Total Quality Management” Malcolm Baldrige National Quality Award (1987) Quality in service industries, government, health care, and education Current and future challenge: keep progress in quality management alive

8. Contemporary Influences on Quality Learning systems Adaptability and speed of change Environmental sustainability Globalization Knowledge focus Customization and differentiation Shifting demographics

9. Definitions of Quality Transcendent definition: excellence Product-based definition: quantities of product attributes User-based definition: fitness for intended use Value-based definition: quality vs. price Manufacturing-based definition: conformance to specifications

10. Definitions of Quality Customer Distribution products and services needs transcendent & product-based user-based manufacturing- based value-based Marketing Design Manufacturing Information flow Product flow

11. Total Quality People-focused management system Focus on increasing customer satisfaction and reducing costs A systems approach that integrates organizational functions and the entire supply chain Stresses learning and adaptation to change Based on the scientific method

12. Principles of Total Quality Customer and stakeholder focus Participation and teamwork Process focus and continuous improvement...supported by an integrated organizational infrastructure, a set of management practices, and a set of tools and techniques

13. Customer and Stakeholder Focus Customer is principal judge of quality Organizations must first understand customers’ needs and expectations in order to meet and exceed them Organizations must build relationships with customers Customers include employees and society at large

14. Participation and Teamwork Employees know their jobs best and therefore, how to improve them Management must develop the systems and procedures that foster participation and teamwork Empowerment better serves customers, and creates trust and motivation Teamwork and partnerships must exist both horizontally and vertically

15. Process Focus and Continuous Improvement A process is a sequence of activities that is intended to achieve some result

16. Continuous Improvement Enhancing value through new products and services Reducing errors, defects, waste, and costs Increasing productivity and effectiveness Improving responsiveness and cycle time performance

17. Deming’s View of a Production System Suppliers of materials and equipment Receipt and test of materials Design and Redesign Consumer research ABCDABCD Production, assembly inspection Tests of processes, machines, methods Distribution Consumers INPUTS PROCESSES OUTPUTS

18. Learning The foundation for improvement … Understanding why changes are successful through feedback between practices and results, which leads to new goals and approaches Learning cycle: – Planning – Execution of plans – Assessment of progress – Revision of plans based on assessment findings

19. Infrastructure, Practices, and Tools Leadership Strategic HRM Process Data and information Planning mgt. management Performance Training appraisal Trend chart Tools Practices Infrastructure

20. TQ Infrastructure Customer relationship management Leadership and strategic planning Human resources management Process management Data and information management

21. Competitive Advantage Is driven by customer wants and needs Makes significant contribution to business success Matches organization’s unique resources with opportunities Is durable and lasting Provides basis for further improvement Provides direction and motivation

22. Competitive Advantage Is driven by customer wants and needs Makes significant contribution to business success Matches organization’s unique resources with opportunities Is durable and lasting Provides basis for further improvement Provides direction and motivation Quality supports each of these characteristics

23. Quality and Profitability Improved quality of design Higher perceived value Increased market share Higher prices Increased revenues Improved quality of conformance Lower manufacturing and service costs Higher profitability

24. Evidence that Quality Impacts Business Results General Accounting Office study of Baldrige Award applicants Baldrige stock study (see www.quality.nist.gov) Hendricks and Singhal study of quality award winners Performance results of Baldrige Award winners

25. GAO TQ Model Product and service quality Customer satisfaction Leadership for continuous improvement Quality systems and employee involvement Competitiveness Organization benefits Reliability On-time delivery Error/defects Overall satisfaction Customer retention Complaints Costs Cycle time Turnover Satisfaction Safety & health Productivity Market share Profits

26. Evidence that Quality Impacts Business Results Organizational level: meeting external customer requirements Process level: linking external and internal customer requirements Performer/job level: meeting internal customer requirements

27. Quality and Personal Values Personal initiative has a positive impact on business success Quality begins with personal attitudes Quality-focused individuals often exceed customer expectations Attitudes can be changed through awareness and effort (e.g., personal quality checklists)

28. THANK YOU! Ahmed BELAFQUIH