2. Chapter 14 Quality Management Sell good merchandise at a reasonable profit, treat your customers like human beings, and they will always come back for more. - Leon Leonwood Bean

3. 2000 by Prentice-Hall, Inc Ch 3 - 2 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e What Is Quality?  “The degree of excellence of a thing” (Webster’s Dictionary)  “The totality of features and characteristics that satisfy needs” ( ASQC)  Fitness for use

4. 2000 by Prentice-Hall, Inc Ch 3 - 3 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Dimensions Of Product Quality (Garvin) Performance Features Reliability Conformance Durability Serviceability Aesthetics Safety Other perceptions

5. 2000 by Prentice-Hall, Inc Ch 3 - 6 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Service Quality Time & Timeliness Completeness Courtesy Consistency Accessibility & Convenience Accuracy Responsiveness

6. 2000 by Prentice-Hall, Inc Ch 3 - 9 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e The Meaning of Quality Quality of ConformanceQuality of Design Producer’s PerspectiveConsumer’s Perspective Fitness for Consumer Use ProductionMarketing Conformance to specifications Cost Quality characteristics Price

7. 2000 by Prentice-Hall, Inc Ch 3 - 8 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Quality Of Conformance – the way the producer or service provider sees it  Ensuring product or service produced according to design  Depends on design of production process performance of machinery materials training

8. 2000 by Prentice-Hall, Inc Ch 3 - 10 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Quality Philosophers  Walter Shewhart  W. Edwards Deming  Joseph Juran  Philip Crosby  Armand Feigenbaum

9. 2000 by Prentice-Hall, Inc Ch 3 - 13 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e The Deming Wheel (or P-D-C-A Cycle) Identify problem Develop plan for improvement Implement plan on test basis Is the plan working Institutionalize improvement Continue cycle 1. Plan 2. Do 3. Study / Check 4. Act

10. 2000 by Prentice-Hall, Inc Ch 3 - 14 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Total Quality Management 1. Customer defined quality 2. Top management leadership 3. Quality as a strategic issue 4. All employees responsible for quality 5. Continuous improvement 6. Shared problem solving 7. Statistical quality control 8. Training & education for all employees

11. 2000 by Prentice-Hall, Inc Ch 3 - 15 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e TQM Throughout The Organization  Marketing, sales, R&D  Engineering  Purchasing  Personnel  Management  Packing, storing, shipping  Customer service How do you measure quality for each of these functions?

12. 2000 by Prentice-Hall, Inc Ch 3 - 17 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e TQM In Service Companies  Inputs similar to manufacturing  Processes & outputs are different  Services tend to be labor intensive  Quality measurement is harder  Timeliness is important measure

13. 2000 by Prentice-Hall, Inc Ch 3 - 18 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Cost Of Quality  Cost of achieving good quality Prevention Appraisal  Cost of poor quality Internal failure costs External failure costs

14. 2000 by Prentice-Hall, Inc Ch 3 - 22 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Quality Is...  An important determinant of business profitability  Positively & significantly related to higher return on investment - The bottom line is profitability

15. 2000 by Prentice-Hall, Inc Ch 3 - 23 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Quality And Productivity  Productivity = output / input  Fewer defects increase output  Quality improvement reduces inputs

16. 2000 by Prentice-Hall, Inc Ch 3 - 35 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Employees & Quality Improvement Quality circles Employee suggestions Process improvement teams Self-managed work teams

17. 2000 by Prentice-Hall, Inc Ch 3 - 36 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e The Quality Circle Process

18. 2000 by Prentice-Hall, Inc Ch 3 - 37 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Seven Quality Control Tools 1. Pareto analysis 2. Flowcharts 3. Check sheets 4. Histograms 5. Scatter diagrams 6. Control charts 7. Fishbone diagram

19. 2000 by Prentice-Hall, Inc Ch 3 - 38 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e A Pareto Chart Percent from each cause Causes of poor quality Machine calibrations Defective parts Wrong dimensions Poor Design Operator errors Defective materials Surface abrasions 0 10 20 30 40 50 60 70 (64) (13) (10) (6) (3) (2)

20. 2000 by Prentice-Hall, Inc Ch 3 - 39 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e A Flowchart

21. 2000 by Prentice-Hall, Inc Ch 3 - 40 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Check Sheet COMPONENTS REPLACED BY LAB TIME PERIOD: 22 Feb to 27 Feb 1998 REPAIR TECHNICIAN: Bob TV SET MODEL 1013 Integrated Circuits |||| Capacitors |||| |||| |||| |||| |||| || Resistors || Transformers |||| Commands CRT |

22. 2000 by Prentice-Hall, Inc Ch 3 - 41 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Histogram 0 5 10 15 20 25 30 35 40 1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1

23. 2000 by Prentice-Hall, Inc Ch 3 - 42 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Scatter Diagram.

24. 2000 by Prentice-Hall, Inc Ch 3 - 43 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Control Chart 18 12 6 3 9 15 21 24 27 246810121416 Sample number Number of defects UCL = 23.35 LCL = 1.99 c = 12.67

25. 2000 by Prentice-Hall, Inc Ch 3 - 44 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Fishbone Diagram Quality Problem MachinesMeasurementHuman ProcessEnvironmentMaterials Faulty testing equipment Incorrect specifications Improper methods Poor supervision Lack of concentration Inadequate training Out of adjustment Tooling problems Old/worn Defective from vendor Not to specifications Material- handling problems Deficiencies in product design Ineffective quality management Poor process design Inaccurate temperature control Dust and Dirt

26. 2000 by Prentice-Hall, Inc Ch 3 - 45 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Quality Awards And Certifications  The Malcolm Baldrige Award  The Deming Prize  Industry, regional, and company awards Institute of Industrial Engineers NASA European Quality Award

27. 2000 by Prentice-Hall, Inc Ch 3 - 46 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e ISO 9000 Categories  ISO 9001 ~ Suppliers and Designers  ISO 9002 ~ Production  ISO 9003 ~ Inspection and Test  ISO 9004 ~ Quality Management

28. 2000 by Prentice-Hall, Inc Ch 3 - 47 © 2000by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e Implications Of ISO 9000  Truly international in scope  Certification required by many foreign firms  U.S. firms export > $100 billion/yr to Europe  Adopted by U.S. Navy, DuPont, 3M, AT&T, & others

29. 2000 by Prentice-Hall, Inc Ch 3 - 48 © 2000 by Prentice-Hall Inc Russell/Taylor Oper Mgt 3/e ISO Accreditation  European registration 3rd party registrar assesses quality program European Conformity (CE) mark authorized  United States 3rd party registrars American National Standards Institute (ANSI) American Society for Quality Control (ASQC) Registrar Accreditation Board (RAB)