1. Chapter 9 Management of Quality
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2. Chapter 15 Quality Management
Quality management refers to systematic policies, methods, and procedures used to ensure that goods and services are produced with appropriate levels of quality to meet and exceed the needs of customers.
Organizations today integrate quality principles into their management systems, using tools such as Total Quality Management (TQM), Six Sigma, and Lean Operating Systems.
Understanding Quality
Quality can be a confusing concept, partly because people view quality in relation to differing criteria based on their individual roles in the value chain such as:
perfection,
doing it right the first time, and/or
consistency.
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3. Chapter 15 Quality Management
A Brief History of Quality Management
Historical uses of quality management include the precision involved in building of Egyptian pyramids, interchangeable parts during Industrial Revolution, and statistical tools used for quality control during World War II.
Dr. Joseph Juran and Dr. W. Edwards Deming were pioneers in the field (more later on these two quality gurus).
Japan integrated quality ideas and methods throughout their organizations and developed a culture of continuous improvement.
Statistical process control charts
Tables for acceptance sampling
1940’s - Statistical sampling techniques
1950’s - Quality assurance/TQC
1960’s - Zero defects
1970’s - Quality assurance in services
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4. Chapter 15 Quality Management
Principles of Total Quality Management
A focus on customers and stakeholders.
A process focus supported by continuous improvement and learning.
Participation and teamwork by everyone in the organization.
Investment in Quality Yields Business Results
Increased employee participation
Improved product and service quality
Improved customer satisfaction
Improved productivity
Improved employee skills
Improved financial performance
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5. Dimensions of Quality
Performance - main characteristics of the product/service
Aesthetics - appearance, feel, smell, taste
Special Features - extra characteristics
Conformance - how well a product/service meets expectations
Reliability - consistency of performance
Durability - useful life of the product/service
Perceived Quality - indirect evaluation of quality (e.g. reputation)
Serviceability - service after sale
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6. Reducing variability in processes
W. Edwards Deming
Reducing variability in processes
^ quality -> ^ productivity and V costs
“Chain Reaction” theory
“14 Points” management philosophy
Deming Cycle: Plan, Do, Study, and Act.
PDSA Cycle
Joseph Juran
Quality Control Handbook (1951)
Defined quality as “fitness for use”
Advocated use of quality cost measurement
Quality Trilogy: quality planning - quality control - quality improvement
Philip B. Crosby
Quality is Free (1979)
Quality means conformance to requirements, not excellence.
Doing the job right the first time is always cheaper.
Measurement: the cost of quality = expense of nonconformance.
The only performance standard is Zero Defects (ZD).
Feignbaum: Quality is a total field
Ishigawa: Cause and Effect diagram; Quality Circles
Taguchi: Taguchi Loss Function
Ohno and Shingo: Continuous improvement (Toyota)
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7. The Process Improvement Cycle
Implement the
Improved process
Select a
process
Study/document
Seek ways to
Improve it
Design an
Evaluate
Document
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8. Chapter 15 Influential Leaders in Quality Management
Deming’s
Chain Reaction
W. Edwards Deming 14 Points
Point 1: Create Vision; Demonstrate Commitment
Point 2: Learn the Philosophy
Point 3: Understand Inspection
Point 4: Stop Purely Cost Based Decision
Point 5: Improve Constantly and Forever
Point 6: Institute Training
Point 7: Institute Leadership
Point 8: Drive Out Fear
Point 9: Optimize the Efforts of Teams
Point 10: Eliminate Exhortation
Point 11: Eliminate Numerical Quotas
Point 12: Remove Barriers to Pride in Work
Point 13: Reward Education / Self-Improvement
Point 14: Take Action
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9. Elements of TQM
A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.
Continual improvement
Competitive benchmarking
Employee empowerment
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Champion
Quality at the source
Relationship with customers and suppliers
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10. Chapter 15 Quality Management
Six Sigma
Six Sigma is a business improvement approach that seeks to find and eliminate causes of defects and errors.
Used by companies including Motorola, Allied Signal, Texas Instruments, and General Electric.
The Six Sigma concept characterizes quality performance by defects (or errors) per million opportunities – dpmo or epmo.
Statistically speaking:
3 Sigma results in around 3 defects per thousand (old standard)
6 Sigma results in around 3-4 defects per million
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11. Chapter 15 Quality Management
Six Sigma’s DMAIC Process
Define: identify customer and priorities, identify and define a suitable project, identify CTQs (critical to quality characteristics).
Measure: determine how to measure the process, identify key internal processes that influence CTQs.
Analyze: determine likely causes of defects and understand why defects are generated by identifying key variables that cause process variation.
Improve: identify means to remove defects, confirm key variables, modify the process to stay within acceptable range.
Control: determine how to maintain improvements, put tools in place to ensure that key variables remain within acceptance ranges under the modified process.
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12. Implementing Six Sigma
Chapter 15 Quality Management
Implementing Six Sigma
Six Sigma teams are comprised of:
Champions - senior-level managers who promote and lead the deployment of Six Sigma.
Master Black Belts - full-time Six Sigma experts who are responsible for Six Sigma strategy, training, mentoring, deployment, and results.
Black Belts - fully-trained Six Sigma experts with up to 160 hours of training who perform much of the technical analyses required of Six Sigma projects, usually on a full-time basis.
Green Belts – functional employees who are trained in introductory Six Sigma tools and methodology and work on projects on a part-time basis, assisting Black Belts while developing their own knowledge and expertise.
Team Members are individuals from various functional areas who support specific projects.
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13. Chapter 15 Quality Management
Cost of Quality Measurements
Cost of quality: costs associated with avoiding poor quality or those incurred as a result of poor quality.
Prevention costs: expended to keep nonconforming goods and services from being made and reaching the customer – Training cost.
Appraisal costs: expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems.
Internal-failure costs: costs incurred as a result of unsatisfactory quality that is found before delivery of good or service to the customer.
External-failure costs: incurred after poor-quality goods or services reach the customer.
Quality is
Free
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14. Chapter 15 Quality Management
ISO 9000:2000
Quality standards 1987, 1994, 2000 to improve the quality of operation’s processes, and provide confidence to organizations and customers.
Internationally recognized - required in certain countries.
Standardizes key terms in quality; provides a set of basic principles for initiating quality management systems.
Customer focus
Leadership
People involvement
Process approach
A systems approach to management
Continual improvement
Factual approach to decision making
Mutually beneficial supplier relationships
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15. Malcolm Baldrige National Quality Award
The Deming Prize
Honoring W. Edwards Deming
Japan’s highly coveted award
Main focus on statistical quality control
Malcolm Baldrige National Quality Award
Leadership (125 points)
Strategic Planning (85 points)
Customer and Market Focus (85 points)
Information and Analysis (85 points)
Human Resource Focus (85 points)
Process Management (85 points)
Business Results (450 points)
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16. Chapter 15 Quality Management
Continuous Improvement (Kaizen): focuses on small, gradual, and frequent improvements over the long term with participation by everyone in the organization.
Poka-Yoke (Mistake-Proofing): an approach using automatic devices or methods to avoid simple human error.
French fries are prepackaged for a particular size of a fryer.
A flash memory with the beveled corner.
Windows: Are you sure?
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17. Responsibility for Quality
Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service
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18. TQM Tools – 7 Tools
Flowcharts Visual representation of the process - logical sequential flow
Check sheets A tabular or graphical method making data easier to understand
Run charts A graphical approach for tracking performance over time
Pareto analysis Vilfredo Pareto (Italian): few factors account for a large percentage
Cause-and-effect Ishikawa - Fishbone diagrams: grouping causes in categories
Histograms Showing the frequency of events
Control charts A statistical tool for identifying non-randomness in a process
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19. Saba Bahouth – UCO

20. Customer’s Satisfaction Flowchart for a Restaurant
Identify the problem
Warm Welcome
Rectify
Dissatisfied
Identify # of guests and match with table availability
Need for order assistance
Fulfill Order/Need
Satisfied or not
Routine
Need help
Satisfied
Suggestions
Check and farewell
Enter into guest history profile and initiate a letter if necessary
Complete the “Guest’s Suggestion Form”
Daily Report
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21. Check Sheet
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22. An Example of a Run Chart
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23. Pareto Chart
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24. Cause and Effect (Fishbone) Diagram
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25. Histogram
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26. Control Chart
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27. Service Quality Challenges with Service Quality:
Dimension
Examples
1. Convenience
Was the service center conveniently located?
2. Reliability
Was the problem fixed?
3. Responsiveness
Were customer service personnel able to answer questions?
4. Time
How long did the customer wait?
5. Assurance
Did the customer service personnel seem knowledgeable?
6. Courtesy
Were customer service personnel and the cashier friendly?
7. Tangibles
Were the facilities clean; personnel neat?
Challenges with Service Quality:
Customer expectations often change
Different customers have different expectations
Each customer contact is a “moment of truth”
Customer participation can affect perception of quality
“Fail-safe” must be designed into the system
Many Moments of Truth