1. DEFINITIONS Juran defined it as 'fitness for purpose'. Crosby, another quality guru, defined quality as 'conformance to requirements'. Feigenbaum, who led the quality revolution in the US, was more comprehensive in his definition: …the total composite product and service characteristics of marketing, engineering, manufacturing and maintenance through which the product and service in use will meet the expectations of the customer. From a marketing perspective, Peter Wickens has probably captured the essence of the meaning of quality most aptly when he defined it as: The quality of a product or service is the customer's perception of it, taking into account their total experience of those features they consider important. The customer's perception might be irrational, illogical and always changing but it still is the reality. It remains true that '…the customer is not always right, but he is always the customer'. Quality is essentially about satisfying customer requirements. The customer is still king!

3. Leaders in Quality Leader Philosophy/Contribution W. Edwards Deming14 Points for Management Joseph M. JuranTop management commitment, fitness for use Armand FeigenbaumTotal Quality Control Philip B. CrosbyQuality is defect free, zero defects

4. Defining Quality The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs American Society for Quality

5. Different Views  User-based  User-based: better performance, more features  Manufacturing-based  Manufacturing-based: conformance to standards, making it right the first time  Product-based  Product-based: specific and measurable attributes of the product

6. QUALITY CONTROL OR QUALITY ASSURANCE? Quality control Quality control is defined as 'those quality activities focused on fulfilling quality requirements‘. It is therefore focused on the activities during the manufacturing process, where the quality of the end product is directly influenced. Quality assurance Quality assurance is defined as 'the part of quality management focused on providing confidence that requirements will be fulfilled'. It is therefore more focused on the quality management systems that will support quality control and demonstrate with confidence adherence to quality requirements. Total quality The total quality management (TQM) movement of the eighties and nineties was aimed at improving both the quality control and assurance elements in organisations. It therefore seems to be the all encompassing term, but the 'management' element does not do justice to the key role of front line workers in ensuring good quality. Kolarik therefore feels that total quality is a more descriptive term and defines it as follows in his book entitled, Creating Quality: Overall, the total quality philosophy embraces a long-range vision, competition oriented innovation, and close relationships with customers and suppliers. Another universal feature of a total quality philosophy is the respect for employees and the role that they play in implementing and accomplishing improvements.

7. Control at the End Right 1 st Time

8. ELEMENTS OF QUALITY 1. The customer's experience of quality in terms of satisfaction or dissatisfaction as a result of the benefits and burdens created by the product or service. The Customer is willing to incur a 'burden' or cost to have certain Expected benefits such as form, fit and function. The ultimate customer satisfaction is always the result of the relative size of these two aspects. · 2. The creation of quality through planning, controlling and improvement activities during the manufacturing process. The creation of quality can, however, only be successful if we truly understand the needs and expectations of the customer.

9. Quality and Strategy An operations manager’s objective is to build a total quality management system that identifies and satisfies customer needs

10. QUALITY & STRATEGY Customer Satisfaction Customer satisfaction will be improved by consistent product quality and better delivery. Customers expect to receive what they asked for on time and at a fair price. A focus on quality improvement will give customers the following benefits: · consistent product performance · lower product cost · reliable delivery dates · improved customer service This in turn will lead to increased customer satisfaction and loyalty as well as increased sales.

11. QUALITY & STRATEGY - COST Reduced Waste Poor quality always translates into high cost. These costs include: the wasted double production time including labour cost and other direct costs the lost opportunity cost to rework products the loss of production time spent because of rejected products the loss of material because products have been reworked or rejected. On the other hand, good quality translates into lower cost. Good quality means reduced rework and errors and the resulting reduction of wastes of manpower, machine time and material.

12. QUALITY & PEOPLE Higher Morale Reduction in waste also leads to happier and more motivated people. A characteristic of all humans is that they do not enjoy being criticised. It is very demoralising to receive regular feedback that you are doing things wrong and that customers are dissatisfied with your work. On the other hand, to know that you are doing a good job and to receive compliments from customers can be highly motivating.

13. QUALITY & MARKET SHARE Increased Market Share Customers base their buying decisions on their perception of 'value for money', which is normally a combination of price, quality, response time and product flexibility. For many organisations quality has become an order qualifier, implying that poor quality becomes a disqualifier in the customer's mind, while good quality is taken for granted. If you do not consistently improve your quality you may find you are not even in the race. Deming explained the knock-on effect of good quality as follows:

14. The Flow of Activities Organizational Practices Leadership, Mission statement, Effective operating procedures, Staff support, Training Yields:What is important and what is to be accomplished Quality Principles Customer focus, Continuous improvement, Benchmarking, Just- in-time, Tools of TQM Yields:How to do what is important and to be accomplished Employee Fulfillment Empowerment, Organizational commitment Yields:Employee attitudes that can accomplish what is important Customer Satisfaction Winning orders, Repeat customers Yields:An effective organization with a competitive advantage

15. Implications of Quality 1.Company reputation  Perception of new products  Employment practices  Supplier relations 2.Product liability  Reduce risk 3.Global implications  Improved ability to compete

16. Key Dimensions of Quality  Performance  Features  Reliability  Conformance  Durability  Serviceability  Aesthetics  Perceived quality  Value

17. EVOLUTION OF QUALITY SYSTEMS

18. EVOLUTION CONTINUED

19. Continuous Improvement

20. Costs of Quality  Prevention costs  Prevention costs - reducing the potential for defects  Appraisal costs  Appraisal costs - evaluating products, parts, and services  Internal failure  Internal failure - producing defective parts or service before delivery  External costs  External costs - defects discovered after delivery

21. External Failure Internal Failure Prevention Costs of Quality Appraisal Total Cost Quality Improvement Total Cost

22. International Quality Standards  ISO 9000 series (Europe/EC)  Common quality standards for products sold in Europe (even if made in U.S.)  2008 update places greater emphasis on leadership and customer requirements and satisfaction  British Retail Consortium  ISO 14000 series (Europe/EC)

23. TQM Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer

24. Deming’s Fourteen Points Table 6.2 1.Create consistency of purpose 2.Lead to promote change 3.Build quality into the product; stop depending on inspections 4.Build long-term relationships based on performance instead of awarding business on price 5.Continuously improve product, quality, and service

25. Deming’s Fourteen Points Table 6.2 6.Start training 7.Emphasize leadership 8.Drive out fear 9.Break down barriers between departments 10.Stop haranguing workers 11.Support, help, and improve

26. Deming’s Fourteen Points Table 6.2 12.Remove barriers to pride in work 13.Institute education and self- improvement 14.Put everyone to work on the transformation

27. Seven Concepts of TQM 1. Continuous improvement 2. Six Sigma 3. Employee empowerment 4. Benchmarking 5. Just-in-time (JIT) 6. Taguchi concepts 7. Knowledge of TQM tools

28. Continuous Improvement  Represents continual improvement of all processes  Involves all operations and work centers including suppliers and customers  People, Equipment, Materials, Procedures

29. 4. Act Implement the plan document 2. Do Test the plan 3. Check Is the plan working? 1.Plan Identify the pattern and make a plan Shewhart’s / Demings PDCA Model Figure 6.3

30. Six Sigma  Two meanings  Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)  A program designed to reduce defects, lower costs, and improve customer satisfaction

31.  Two meanings  Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)  A program designed to reduce defects, lower costs, and improve customer satisfaction Six Sigma Mean Lower limitsUpper limits 3.4 defects/million ±6  2,700 defects/million ±3  Figure 6.4

32. Six Sigma Program  Originally developed by Motorola, adopted and enhanced by Honeywell and GE  Highly structured approach to process improvement  A strategy  A discipline - DMAIC 66 66

33. Six Sigma 1.Define critical outputs and identify gaps for improvement 2.Measure the work and collect process data 3.Analyze the data 4.Improve the process 5.Control the new process to make sure new performance is maintained DMAIC Approach

34. Six Sigma Implementation  Emphasize defects per million opportunities as a standard metric  Provide extensive training  Focus on corporate sponsor support (Champions)  Create qualified process improvement experts (Black Belts, Green Belts, etc.)  Set stretch objectives This cannot be accomplished without a major commitment from top level management

35. Employee Empowerment  Getting employees involved in product and process improvements  85% of quality problems are due to process and material  Techniques  Build communication networks that include employees  Develop open, supportive supervisors  Move responsibility to employees  Build a high-morale organization  Create formal team structures

36. Quality Circles  Group of employees who meet regularly to solve problems  Trained in planning, problem solving, and statistical methods  Often led by a facilitator  Very effective when done properly

37. © 2011 Pearson Education, Inc. publishing as Prentice Hall Use internal benchmarking if you’re big enough Benchmarking Selecting best practices to use as a standard for performance 1.Determine what to benchmark 2.Form a benchmark team 3.Identify benchmarking partners 4.Collect and analyze benchmarking information 5.Take action to match or exceed the benchmark

38. © 2011 Pearson Education, Inc. publishing as Prentice Hall Best Practices for Resolving Customer Complaints Best PracticeJustification Make it easy for clients to complain It is free market research Respond quickly to complaints It adds customers and loyalty Resolve complaints on first contact It reduces cost Use computers to manage complaints Discover trends, share them, and align your services Recruit the best for customer service jobs It should be part of formal training and career advancement Table 6.3

39. Just-in-Time (JIT) Relationship to quality:  JIT cuts the cost of quality  JIT improves quality  Better quality means less inventory and better, easier-to- employ JIT system

40. Just-in-Time (JIT)  ‘Pull’ system of production scheduling including supply management  Production only when signaled  Allows reduced inventory levels  Inventory costs money and hides process and material problems  Encourages improved process and product quality

41. Just-In-Time (JIT) Example Scrap Unreliable Vendors Capacity Imbalances Work in process inventory level (hides problems)

42. Just-In-Time (JIT) Example Reducing inventory reveals problems so they can be solved Scrap Unreliable Vendors Capacity Imbalances

43. Taguchi Concepts  Engineering and experimental design methods to improve product and process design  Identify key component and process variables affecting product variation  Taguchi Concepts  Quality robustness  Quality loss function  Target-oriented quality

44. Quality Robustness  Ability to produce products uniformly in adverse manufacturing and environmental conditions  Remove the effects of adverse conditions  Small variations in materials and process do not destroy product quality

45. Quality Loss Function  Shows that costs increase as the product moves away from what the customer wants  Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society  Traditional conformance specifications are too simplistic Target- oriented quality

46. Unacceptable Poor Good Best Fair Quality Loss Function High loss Loss (to producing organization, customer, and society) Low loss Frequency LowerTargetUpper Specification Target-oriented quality yields more product in the “best” category Target-oriented quality brings product toward the target value Conformance-oriented quality keeps products within 3 standard deviations Figure 6.5 L = D 2 C where L =loss to society D =distance from target value C =cost of deviation

47. Tools of TQM  Tools for Generating Ideas  Check sheets  Scatter diagrams  Cause-and-effect diagrams  Tools to Organize the Data  Pareto charts  Flowcharts

48. Tools of TQM  Tools for Identifying Problems  Histogram  Statistical process control chart

49. //// ////// ///// ////// /// // / Hour Defect12345678 A B C / // / Seven Tools of TQM (a)Check Sheet: An organized method of recording data Figure 6.6

50. Seven Tools of TQM (b)Scatter Diagram: A graph of the value of one variable vs. another variable Absenteeism Productivity Figure 6.6

51. Seven Tools of TQM (c)Cause-and-Effect Diagram: A tool that identifies process elements (causes) that might effect an outcome Figure 6.6 Cause MaterialsMethods ManpowerMachinery Effect

52. Seven Tools of TQM (d)Pareto Chart: A graph to identify and plot problems or defects in descending order of frequency Figure 6.6 Frequency Percent ABCDEABCDE

53. Seven Tools of TQM (e)Flowchart (Process Diagram): A chart that describes the steps in a process Figure 6.6

54. Seven Tools of TQM (f)Histogram: A distribution showing the frequency of occurrences of a variable Figure 6.6 Distribution Repair time (minutes) Frequency

55. Seven Tools of TQM (g)Statistical Process Control Chart: A chart with time on the horizontal axis to plot values of a statistic Figure 6.6 Upper control limit Target value Lower control limit Time

56. Cause-and-Effect Diagrams Material (ball) Method (shooting process) Machine (hoop & backboard) Manpower (shooter) Missed free-throws Figure 6.7 Rim alignment Rim size Backboard stability Rim height Follow-through Hand position Aiming point Bend knees Balance Size of ball Lopsidedness Grain/Feel (grip) Air pressure Training Conditioning Motivation Concentration Consistency

57. Pareto Charts Number of occurrences Room svcCheck-inPool hoursMinibarMisc. 72%16%5%4%3% 12 4 3 2 54 – 100 – 93 – 88 – 72 70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – Frequency (number) Causes and percent of the total Cumulative percent Data for October

58. Flow Charts MRI Flowchart 1.Physician schedules MRI 2.Patient taken to MRI 3.Patient signs in 4.Patient is prepped 5.Technician carries out MRI 6.Technician inspects film 7.If unsatisfactory, repeat 8.Patient taken back to room 9.MRI read by radiologist 10.MRI report transferred to physician 11.Patient and physician discuss 11 10 20% 9 8 80% 1234567

59. Statistical Process Control (SPC)  Uses statistics and control charts to tell when to take corrective action  Drives process improvement  Four key steps  Measure the process  When a change is indicated, find the assignable cause  Eliminate or incorporate the cause  Restart the revised process

60. An SPC Chart Upper control limit Coach’s target value Lower control limit Game number |||||||||123456789|||||||||123456789 20% 10% 0% Plots the percent of free throws missed Figure 6.8

61. TQM In Services  Service quality is more difficult to measure than the quality of goods  Service quality perceptions depend on  Intangible differences between products  Intangible expectations customers have of those products

62. Service Quality The Operations Manager must recognize: 1.That the tangible component of services is important 2.The service process is important 3.The service is judged against the customer’s expectations 4.Exceptions will occur

63. Service Specifications at UPS

64. Determinants of Service Quality ReliabilityConsistency of performance and dependability ResponsivenessWillingness or readiness of employees CompetenceRequired skills and knowledge AccessApproachability and ease of contact CourtesyPoliteness, respect, consideration, friendliness CommunicationKeeping customers informed CredibilityTrustworthiness, believability, honesty SecurityFreedom from danger, risk, or doubt Understanding/ knowing the customer Understand the customer’s needs TangiblesPhysical evidence of the service Table 6.5

65. Service Recovery Strategy  Managers should have a plan for when services fail  Marriott’s LEARN routine  Listen  Empathize  Apologize  React  Notify

66. CUSTOMER IS KING.......