Total Quality Management

Your Instructor Kimball Bullington, Ph.D. Ph.D. in Industrial Engineering Dissertation Title: A Living Systems Methodology for Investigating the Validity of Organizational Change Prescriptions Master’s Thesis: Taguchi Methods 20 years of operations experience

Your Instructor Kimball Bullington, Ph.D. Quality Engineer Quality Engineering Manager Senior Member – American Society for Quality ASQ Certified Six Sigma Black Belt Author and Speaker on various quality topics

Who Cares? (And Why Should I?) Manufacturers Service companies Employers Estimated cost of poor quality – 25%

What is Quality? Many different definitions Different perspectives Different dimensions

Quality From the Consumer’s Perspective How do you judge the quality of a product? I know it when I see it. How do you judge the quality of a service?

Quality throughout History Inspectors and samples Guilds – (apprentices, journeymen, masters) Certification and insurance Mass production and interchangeable parts Scientific management Military dependence upon quality Dark ages of quality Modern quality movement

Quality From the Producer’s/Provider’s Perspective What is the challenge to operations managers regarding quality? Where does quality in a product/service begin? How is quality achieved? How is quality maintained? How do we learn the customer’s perspective / perception?

Engineering Perspective on Quality Product Design Engineering Involves all of those activities associated with developing a product from concept development to final design and implementation. Product design life cycle Key to quality - quality is assured at the design stage. Concurrent engineering The simultaneous performance of product and process design activities. Has resulted in improved quality and shorter time to market for new products.

Engineering Perspective on Quality Life Testing Is a facet of reliability engineering that concerns itself with determining whether a product will fail under controlled conditions during a specified life. Redundancy Is applied so that a back up system can take over for the failed primary system. © 2004 Prentice-Hall

Operations Perspective on Quality The Systems View of Operation Management Figure 1.3 Planning Organizing Inputs Conversion Process Outputs Customers Feedback © 2004 Prentice-Hall Controlling

Operations Perspective on Quality Operations/Marketing Interface In recent years, a major advance in operations management has been the improved understanding of the operations/marketing interface. The interface has resulted in an increased focus on the customer. This externalized view is important as operations managers in firms still tend to be focused heavily on meeting production schedules, sometimes at the expense of good quality. © 2004 Prentice-Hall

Strategic Management Perspective on Quality Nature of the Strategic Management Perspective Strategy refers to the planning processes used by an organization to achieve a set of long term goals. The planned course of action must be cohesive and coherent in terms of goals, policies, plans, and sequencing to achieve quality improvement. © 2004 Prentice-Hall

Strategic Management Perspective on Quality Nature of the Strategic Management Perspective Initially, quality-related strategic planning was treated as if it were a separate exercise from firm-level strategic planning. However, quality management, to become pervasive in a firm, needed to be included in all of the firm’s business practices, including strategic planning. © 2004 Prentice-Hall

Marketing Perspective on Quality Nature of Marketing Perspective Marketing efforts are often focused on managing perceptions of quality. Relationship Management Directing attention toward satisfying and delivering value to the customer. Tools for Influencing Customer Perceptions of Quality Price and advertising are the primary tools for influencing customer perceptions of quality, but are imperfect mechanisms. © 2004 Prentice-Hall

Marketing Perspective on Quality Focus on Service Another important contribution of the marketing perspective has been the focus on service. Customer service surveys are important tools for assessing the multiple dimensions of quality. © 2004 Prentice-Hall

Financial Perspective on Quality Nature of the Financial Perspective One of the most commonly asked questions about quality management is “will it pay us financial benefits?” The financial perspective relies more on quantified, measurable, results-oriented thinking. W. Edwards Deming made the first conceptual attempt to link quality improvements to financial results through the “Deming Value Chain.” Harry and Schroeder have made the most complete link to date in Six Sigma © 2004 Prentice-Hall

Financial Perspective on Quality The Deming Value Chain Figure 1.8 Improve Quality Cost decrease because of less rework, fewer mistakes, fewer delays, snags; better use of machine-time and materials Productivity Improves Capture the Market Stay in Business Provide Jobs and More Jobs © 2004 Prentice-Hall

Financial Perspective on Quality Law of Diminishing Marginal Returns According to this law, there is a point at which investments in quality improvement will become uneconomical. According to the quadratic economic quality level model, higher levels of quality will result in higher expenditures. This view is at odds with the ethic of continual improvement. © 2004 Prentice-Hall

Financial Perspective on Quality Basic Economic Quality Level Model Figure 1.9 Cost Total Quality Costs = Sum of Losses and Gains Costs of Improving Quality Minimum Cost Losses due to poor quality Optimum Quality Level Quality © 2004 Prentice-Hall

Costs of Quality Appraisal – inspection & test Prevention – mistake-proofing Internal failures – scrap & rework External failures – warranty failures, other field failures, liability, loss of goodwill

Human Resources Perspective on Quality Nature of Human Resources Perspective Understanding the human resources perspective on quality is essential as it is impossible to implement quality without the commitment and action of employees. Related Concepts Employee Empowerment Organizational Design Job Analysis 360-degree evaluation Total Quality Human Resources Management © 2004 Prentice-Hall

Human Resource Perspective on Quality Employee Empowerment Empowering employees involves moving decision making to the lowest level in the organization. Organizational Design Human resources managers are involved in many aspects of organizational design, such as the design of reward systems, pay systems, organizational structure, compensation, training mechanisms, and employee grievance arbitration. Job Analysis Involves collecting detailed information about a particular job. © 2004 Prentice-Hall

Other Perspectives on Quality Cultural Perspectives on Quality International marketers have long noted that there are differences in tastes and preferences between cultures and nations. It is not so obvious that approaches to quality improvement may differ according to culture. © 2004 Prentice-Hall

Nature of Quality Dimensions of Quality Determinants of Quality Costs of Quality

Garvin’s Dimensions of Quality Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived Quality

Determinants of Quality Design of the product/service Capabilities of the transformation processes Conformance to design specifications Quality of customer service The role of quality in the organizational culture

Service Quality Dimensions Parasuraman, Zeithamel, and Berry’s Service Quality Dimensions Tangibles Responsiveness Service Reliability Assurance © 2004 Prentice-Hall Empathy

Service Quality Dimensions Tangibles Include the physical appearance of the service facility, the equipment, the personnel, and the communication material. Service Reliability Differs from product reliability in that it relates to the ability of the service provider to perform the promised service dependably and accurately. Responsiveness The willingness of the service provider to be helpful and prompt in providing service. © 2004 Prentice-Hall

Service Quality Dimensions Assurance The knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy Caring, individual attention paid to customers by the service firm. © 2004 Prentice-Hall

Quality Theory

Quality Theory Theory – a model or framework describing the behavior of a certain natural or social phenomenon.

Quality Theory There is no unified or standard quality theory just as there is no single definition of total quality management. Why is this a problem?

Inductive vs. Deductive Reasoning Induction Data Generalization Deduction Generalization Supported by Data Most Quality Leaders

Contingency Theory Applied to Quality Contingency theory presupposes that there is no theory or method for operating a business that can be applied in all situations. As a result, a coherent quality strategy will need to address key environmental variables. © 2004 Prentice-Hall

Contingency Approach to Quality Definitions and dimensions of quality applied within an organization will, and should vary. Dimensions of quality will depend on the environment in which a company operates. Provides flexibility to managers in pursuing quality. © 2004 Prentice-Hall

Quality From the Consumer’s Perspective How do you judge the quality of a product? (Example: What make of car do you drive? Why?) How do you judge the quality of a service? (What is a great flight?)

Quality Is there a problem?