Chapter 8 Quality management

Design Planning and control Operations strategy Improvement The operation supplies… the consistent delivery of products and services at specification or above The market requires… consistent quality of products and services Capacity planning and control

Quality planning and control: What is quality and why is it so important? How can quality problems be diagnosed? What steps lead towards conformance to specification? What is Total Quality Management (TQM)? Key operations questions

Quality up1 Profits up Processing time down Inventory down Capital costs down Complaint and warranty costs down Rework and scrap costs down Inspection and test costs down Productivity up Image up Scale economies up Price competition down Sales volume up Revenue up High quality puts costs down and revenue up Operation costs down Service costs down

Customers’ expectations for the product or service Customers’ perceptions of the product or service Gap Expectations > perceptions Expectations = perceptions Expectations < perceptions Perceived quality is governed by the gap between customers’ expectations and their perceptions of the product or service Gap Perceived quality is poor Perceived quality is good Perceived quality is acceptable Customers’ expectations for the product or service Customers’ perceptions of the product or service Customers’ expectations for the product or service Customers’ perceptions of the product or service

The operation’s domain Management’s concept of the product or service The customer’s domain Previous Experience Word of mouth communications Image of product or service Customers’ own specification of quality Organization’s specification of quality The actual product or service Gap 1 Gap 2 Gap 3 Gap 4 A ‘Gap’ model of Quality Customers’ expectations concerning a product or service Customers’ perceptions concerning the product or service Gap ?

The perception – expectation gap Gap Action required to ensure high perceived quality Main organizational responsibility Gap 3Operations Ensure actual product or service conforms to internally specified quality level Gap 4 Marketing Ensure that promises made to customers concerning the product or service can really be delivered Gap 1 Ensure consistency between internal quality specification and the expectations of customers Marketing, operations, product/service development Gap 2 Ensure internal specification meets its intended concept of design Marketing, operations, product/service development

Quality characteristics of goods and services Functionality – how well the product or service does the job for which it was intended. Appearance – aesthetic appeal, look, feel, sound and smell of the product or service. Reliability – consistency of product or services performance over time. Durability – the total useful life of the product or service. Recovery – the ease with which problems with the product or service can be rectified or resolved. Contact – the nature of the person-to-person contacts that take place.

Attribute and variable measures of quality AttributesVariables Defective or not defective? Measured on a continuous scale Light bulb works or does not work? Light emission of bulb Number of defects in a turbine blade. Length of blade

Variables things you can measure Variables things you can measure Attributes things you can assess accept/reject Attributes things you can assess accept/reject Quality fitness for purpose Quality fitness for purpose Reliability ability to continue working at accepted quality level Reliability ability to continue working at accepted quality level Quality Quality of Design degree to which design achieves purpose Quality of Design degree to which design achieves purpose Quality of Conformance faithfulness with which the operation agrees with design Quality of Conformance faithfulness with which the operation agrees with design Aspects of quality

What does Total Quality Management include? Total Quality Management Includes all parts of the organization Includes all staff of the organization Includes consideration of all costs Includes every opportunity to get things right Includes all the systems that affect quality And it never stops!

Total quality management can be viewed as a natural extension of earlier approaches to quality management Quality is strategic Teamwork Staff empowerment Involves customers and suppliers Quality systems Quality costing Problem solving Quality planning Statistics Process analysis Quality standards Error detection Rectification Prevents ‘out of specification’ products and services reaching market Solves the root cause of quality problems Broadens the organizational responsibility for quality Makes quality central and strategic in the organization Inspection Quality control Quality assurance Total Quality Management