1. Chapter 07 Process Improvement
Check Do
Act Plan
Quality level
Time
McGraw-Hill/Irwin
Service Management: Operations, Strategy, and Information Technology, 6e
Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.

2. Learning Objectives
Use quality tools for process analysis and problem solving.
Describe and contrast corporate quality improvement programs.
Lead a team in a process improvement initiative.
Conduct a data envelopment analysis (DEA).
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3. Quality and Productivity Improvement Process
Foundations of Continuous Improvement
- Customer Satisfaction - Management by Facts - Respect for People
Plan-Do-Check-Act (PDCA) Cycle
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4. Quality Tools for Analysis and Problem Solving
Check Sheet
Run Chart
Histogram
Pareto Chart
Flowchart
Cause-and-Effect Diagram
Scatter Diagram
Control Chart
Benchmarking
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5. Check Sheet of Problems
Month Lost Departure Mechanical Overbooked Other
Luggage Delay
January
February
March
April
May
June
July
August
September
October
November
December
Total
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6. Run Chart of Departure Delays
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7. Histogram of Lost Luggage
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8. Pareto Chart of Problems
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9. Cause-and-Effect Chart for Flight Departure Delay (Fishbone Chart)
Equipment
Personnel
Gate agents cannot process passengers quickly enough
Too few agents
Aircraft late to gate
Agents undertrained
Late arrival
Agents undermotivated
Gate occupied
Agents arrive at gate late
Other
Mechanical failures
Late cabin cleaners
Late pushback tug
Weather
Late or unavailable cabin crews
Air traffic
Late or unavailable cockpit crews
Delayed
Flight
Departure
Poor announcement of departures
Weight and balance sheet late
Delayed checkin procedure
Late baggage to aircraft
Confused seat selection
Late fuel
Passengers bypass checkin counter
Late food service
Checking oversize baggage
Issuance of boarding pass
Acceptance of late passengers
Cutoff too close to departure time
Desire to protect late passengers
Material
Desire to help company’s income
Poor gate locations
Procedure
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10. Pareto Analysis of Flight Departure Delay Causes
Percentage of Incidents
Cumulative Percentage
Late passengers
53.3
Waiting for pushback
15.0
68.3
Waiting for fuel
11.3
79.6
Late weight and balance sheet
8.7
88.3
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11. Flowchart at Departure Gate
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12. Scatter Diagram of Departure Delay vs Late Passengers
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13. Control Chart of Departure Delays
expected
Lower Control Limit
1998
1999
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14. Quality Improvement Programs
Personnel Programs for Quality Assurance
Deming’s 14 Point Program
Baldrige National Quality Award
ISO 9000
Six-Sigma
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15. Six Sigma DMAIC Process Steps
Definition
Define
Define project objectives, internal and external customers
Measure
Measure current level of performance
Analyze
Determine causes of current problems
Improve
Identify how the process can be improved to eliminate the problems
Control
Develop mechanisms for controlling the improved process
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16. Topics for Discussion
Discuss why Deming’s 14-point program was rejected by U.S. firms but embraced by the Japanese following World War II.
Explain how the application of the DPCA cycle can support a competitive strategy of low cost leadership.
What are the limitations of “benchmarking”?
Articulate a process in which DEA can be used to improve the performance of an elementary school district.
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17. Interactive Exercise
Perform a walk-through audit of the class experience by recording responses on a five point Likert scale using a show of hands without the professor present. Average the student responses for each statement and use a graph to compare the results with the professor’s own assessment.
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18. Mega Bytes Restaurant
How is the Seven-Step Method (SSM) different from Deming’s PDCA cycle?
Prepare a cause-and-effect or fishbone diagram for a problem such as “Why customers have long waits for coffee.” Use Figure 7.7 as a guide.
How would you resolve the difficulties that study teams have experienced when applying the SSM?
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19. The Seven-Step Method (SSM)
Step 1: Define the project
Step 2: Study the current situation
Step 3: Analyze the potential causes
Step 4: Implement a solution
Step 5: Check the results
Step 6: Standardize the improvement
Step 7: Establish future plans
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