LECTURE 3

Quality Philosophies and Management Strategies Deming was asked to deliver a lecture on statistical quality control to management Japanese adopted many aspects of Deming’s management philosophy Deming stressed “continual never-ending improvement” Deming lectured widely in North America during the 1980s; he died 24 December 1993

Deming’s 14 Points 1. Create constancy of purpose toward improvement. No short term thinking. 2. Adopt a new philosophy, recognize that we are in a time of change, a new economic age 3. Cease reliance on mass inspection to improve quality. Before its too late. Process improvement not inspection 4. End the practice of awarding business to suppliers on the basis of price alone 5. Improve constantly and forever the system of production and service 6. Institute training for all employees. 7. Improve leadership, recognize that the aim of supervision is help people and equipment to do a better job 8. Drive out fear to ask questions, report problems etc 9. Break down barriers between departments

14 Points cont’d 10. Eliminate slogans and targets for the workforce such as zero defects 11. Eliminate work standards 12. Remove barriers that rob workers of the right to pride in the quality of their work 13. Institute a vigorous program of education and self-improvement 14. Put everyone to work to accomplish the transformation Note that the 14 points are about change

The Juran Trilogy 1.Planning 2.Control 3.Improvement These three processes are interrelated Project-by-project improvement

Total Quality Management (TQM) TQM is “just another program” Value engineering Zero defects “Quality is free”

Focus of Six Sigma is on Process Improvement with an Emphasis on Achieving Significant Business Impact A process is an organized sequence of activities that produces an output that adds value to the organization All work is performed in (interconnected) processes – Easy to see in some situations (manufacturing) – Harder in others Any process can be improved An organized approach to improvement is necessary The process focus is essential to Six Sigma

Why “ Quality Improvement ” is Important: A Simple Example A family of four members visit to a fast-food store once in a month: Hamburger (bun, meat, special sauce, cheese, pickle, onion, lettuce, tomato), fries, and drink. This product has 10 components - is 99% good okay? At 99.9%

Link between Quality and Productivity Rapid changes in technology has made it difficult to overcome the problems in designing and manufacturing products of superior quality. Effective quality improvement is instrumental in increasing productivity and cost.

Example of manufacturing a mechanical component Rate of production of part = 100 parts per day approx. First pass yield rate (parts conformed) = 75%= 75% * 100 = 75 parts Non-conformed parts = 25%= 25 parts Fallout which can be reworked = 60% = 60% * 25 = 15 parts

Direct manufacturing cost of a part = $20 Reworked parts additional cost = $4 Total yield after reworking = parts Total manufacturing cost per good part produced = $20(100) + $4 (15)/90 = $22.89

After implementation of a new statistical-process control procedure Fallout rate = 5% Reworked = 60% Reworked parts = 3 Total yield per day = 98 parts Cost/good part = $20(100) + $4 (3)/98 = $20.53

Quality Costs Quality costs are those categories of costs that are associated with producing, identifying, avoiding, or repairing products that do not meet requirements. These cost categories are – Prevention cost- costs associated with efforts in design and manufacturing that are directed towards the prevention of nonconformance….”make it right the first time”

– Appraisal costs- costs associated with measuring, evaluating, or auditing products, components, and purchased items to ensure conformance to standards. – Internal failure costs- incurred when products, components, materials, and services fail to meet quality requirements, and this failure is discovered prior to delivery of the product to the customer. – External failure costs- when the product does not perform satisfactorily after it is delivered to the customer. This cost disappear if every product s conformed.

Quality Costs