Quality Management © Holmes Miller 1999 Based on slides for Chase Acquilano and Jacobs, Operations Management, McGraw-Hill

Definitions of Quality ASQC: Product characteristics & features that affect customer satisfaction User-Based: What consumer says it is Manufacturing-Based: Degree to which a product conforms to design specification Product-Based: Level of measurable product characteristic Exercise: List attributes of a quality car

Importance of Quality Costs & market share Market Gains Reputation Volume Price Lower Costs Productivity Rework/Scrap Warranty Improved Quality Increased Profits

Total Quality Management Managing the entire organization so that it excels on all dimensions of products and services that are important to the customer. äInvolves entire organization from supplier to customer äObjective: Meet or exceed customer needs through company-wide continuous improvement äEarly proponents äW. Edwards Deming äJ. M. Juran äPhilip B. Crosby

Some Total Quality Management Principles Continuous improvement Employee empowerment Benchmarking Knowledge of TQM tools

1. Plan a change aimed at improvement. 1. Plan 2. Execute the change. 2. Do 3. Study the results; did it work? 3. Check 4. Implement the change; abandon it or do it again. 4. Act CI Methodology: PDCA Cycle (Deming Wheel)

Employee Empowerment Getting employees involved in product & process improvements ä85% of quality problems are due to process & material Techniques äTalk to workers äSupport workers äLet workers make decisions äBuild teams & quality circles

Benchmarking Learn “best practices” Form Benchmarking teams How might Muhlenberg go about benchmarking? What topic might be “benchmarked”?

Quality Tools Quality function deployment (QFD) Taguchi techniques Pareto charts Process charts Cause & effect diagrams Statistical process control (SPC)

Pareto Chart Vertical bar chart showing relative importance of problems or defects äMakes identifying & solving them easier Based on Pareto Principle äMost effects have relatively few causes äe.g., 80% of quality problems come from 20% of machines, materials, or operators äFocus on ‘vital few’ 20% causes äCalled rule

Process Chart Example  = Operation;  = Transport;  = Inspect; D = Delay;  = Storage

Cause & Effect Diagram ExampleMethodManpower Material Machinery DrillDrill OverOver TimeTime SteelSteel WoodWood LatheLathe TiredTired Too many defects OldOld SlowSlow

Exercise In your group, select a problem: äAt Muhlenberg äYour company äAnother organization Develop a cause and effect diagram to address the problem Deliverable: Develop the diagram and share solution with class

Statistical Process Control (SPC) Uses statistics & control charts to tell when to adjust process Developed by Shewhart in 1920’s Involves äCreating standards (upper & lower limits) äMeasuring sample output (e.g. mean weight) äTaking corrective action (if necessary) Done while product is being produced

LCL UCL Can be used to monitor ongoing production process quality and quality conformance to stated standards of quality. Example: Control Charts

Aspects of Statistical Process Control Process Variation äKey Point: ANY process has associated variation Process Capability äSome processes are not capable of satisfying customer requirements Process Control Procedures äVariable data ä72” in height, 131 lbs. äAttribute data äOn/Off, 7 scratches on surface

SPC at Honda

Basic Forms of Variation Assignable variation is caused by factors that can be clearly identified and possibly managed ätemporary employee äimproperly set machine Common variation is inherent in the production process äphone system cannot handle incoming traffic -- slow response times

SPC at Honda (Part 2)

Six Sigma Quality A philosophy and set of methods companies use to eliminate defects in their products and processes Seeks to reduce variation in the processes that lead to product defects The name, “six sigma” refers to the variation that exists within plus or minus six standard deviations of the process outputs

Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO)

Six Sigma Quality: DMAIC Cycle Define, Measure, Analyze, Improve, and Control (DMAIC) Developed by General Electric as a means of focusing effort on quality using a methodological approach Overall focus of the methodology is to understand and achieve what the customer wants

Inspection Involves examining items to see if an item is good or defective Objective: Detect a defective product äDoes not correct deficiencies in process or product Issues äWhen to inspect äWhere in process to inspect äConsider Transformation Process ---

Transformation Process -- Revised View

External Failure Costs Appraisal Costs Prevention Costs Internal Failure Costs Costs of Quality Costs of Quality

Funnel Experiment (Deming) Treating a special cause as a common cause Improvement of a stable system nearly always means reduction of variation it may also require moving the center line to a higher or lower level. Tampering with a stable system only increases the production of faulty items and mistakes. One necessary qualification of anyone in management is stop asking people to explain ups and downs that come from random variation.