1. Chapter 9/11 Introduction to Quality Total Quality Management
Operations Management MBA105
Williams J. Srevenson 7th Edition

2. Learning Objectives Define quality. Importance of quality.
Determinants of quality.
Costs & quality.
Quality awards.
quality gurus
TQM
Quality tools

3. Quality Management What does the term quality mean?
Quality is the ability of a product or service to consistently meet or exceed customer expectations.
degree of excellence of a thing.
Totality of features and characteristics that satisfy needs

4. Quality Cost and Productivity Vs. Quality
USA Organizations Focus in Cost and productivity (2nd war – mid 1980s)
WHY AMERICAN ORGANIZATIONS BEHAVIOR CHANGE TWARD QUALITY??

5. Evolution of Quality Management
Fredrick Taylor (Scientific Management)
Statistical process control charts
Tables for acceptance sampling
1940’s - Statistical sampling techniques
1950’s - Quality assurance/TQC (DEMING)
1960’s - Zero defects
1970’s - Quality assurance in services

6. Quality Assurance vs. Strategic Approach
Emphasis on finding and correcting defects before reaching market
Strategic Approach
Proactive, focusing on preventing mistakes from occurring
Greater emphasis on customer satisfaction

7. Dimension of Quality Which type of fuel you prefer to your car
MOMTAZ or GAID
Which Car you prefer
CAMRY OR LUMINA
FULL OPTIONS OR NORMAL OPTION
Did you prefer health centre or private clinic

8. Dimensions of Quality Performance Features Reliability
basic operating characteristics of a product; how well a car is handled.
Features
“extra” items added to basic features, such as a stereo CD or a leather interior in a car
Reliability
probability that a product will operate properly within an expected time frame; that is, a TV will work without repair for about seven years

9. Dimensions of Quality (Cont’d)
Conformance
degree to which a product meets pre–established standards
Durability
how long product lasts before replacement
Serviceability
ease of getting repairs, speed of repairs, courtesy and competence of repair person

10. Dimensions of Quality (Cont’d)
Aesthetics
how a product looks, feels, sounds, smells, or tastes
Safety
assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles
Perceptions
subjective perceptions based on brand name, advertising, and the like

11. Examples of Quality Dimensions

12. Examples of Quality Dimensions (Cont’d)

13. Dimensions of Quality: Service
Time and Timeliness
How long must a customer wait for service, and is it completed on time?
Is an overnight package delivered overnight?
Completeness:
Is everything customer asked for provided?
Is a mail order from a catalogue company complete when delivered?

14. Dimensions of Quality: Service
Courtesy:
How are customers treated by employees?
Are catalogue phone operators nice and are their voices pleasant?
Consistency
Is the same level of service provided to each customer each time?
Is your newspaper delivered on time every morning?

15. Dimensions of Quality: Service
Accessibility and convenience
How easy is it to obtain service?
Does a service representative answer you calls quickly?
Accuracy
Is the service performed right every time?
Is your bank or credit card statement correct every month?

16. Dimensions of Quality: Service
Responsiveness
How well does the company react to unusual situations?
How well is a telephone operator able to respond to a customer’s questions?

17. 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-staffing must be designed into the system

18. Quality Gurus Walter Shewart W. Edwards Deming Joseph M. Juran
In 1920s, developed control charts
Introduced the term “quality assurance”
W. Edwards Deming
Developed courses during World War II to teach statistical quality-control techniques to engineers and executives of companies that were military suppliers
After the war, began teaching statistical quality control to Japanese companies
Joseph M. Juran
Followed Deming to Japan in 1954
Focused on strategic quality planning

19. Quality Gurus (cont.) Armand V. Feigenbaum Philip Crosby
In 1951, introduced concepts of total quality control and continuous quality improvement
Philip Crosby
In 1979, emphasized that costs of poor quality far outweigh the cost of preventing poor quality
In 1984, defined absolutes of quality management—conformance to requirements, prevention, and “zero defects”
Kaoru Ishikawa
Promoted use of quality circles
Developed “fishbone” diagram
Emphasized importance of internal customer

20. Deming’s 14 Points Create constancy of purpose
Adopt philosophy of prevention
Cease mass inspection
Select a few suppliers based on quality
Constantly improve system and workers
Institute worker training
Instill leadership among supervisors
Eliminate fear among employees
Eliminate barriers between departments
Eliminate slogans
Remove numerical quotas
Enhance worker pride
Institute vigorous training and education programs
Develop a commitment from top management to implement above 13 points

21. Determinants of Quality (cont’d)
Quality of design
Intension of designers to include or exclude features in a product or service:
Different car models with different features
size
Appearance
Roominess
Fuel economy
Comfort
Material used

22. Determinants of Quality (cont’d)
Quality of Conformance
Making sure a product or service is produced according to design:
if new tires do not conform to specifications, they wobble
if a hotel room is not clean when a guest checks in, the hotel is not functioning according to specifications of its design

23. Determinants of Quality (cont’d)
Ease of Use
Instruction manuals
Guide the customer for proper used
good labeling
Service after Delivery

24. The Consequences of Poor Quality
Loss of business
Liability
Productivity
Costs

25. Benefits of Good Quality
Organizations will benefit in different way:
Enhance reputation
Increase market share
Greater customer loyalty
Lower liability Cost
Fewer complains
Lower production cost
Higher profits

26. Responsibility for Quality
Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service

27. Costs of Quality
Failure Costs - costs incurred by defective parts/products or faulty services.
Internal Failure Costs
Costs incurred to fix problems that are detected during the production.
Defective materials
Incorrect machine setting
Faulty equipment
Carelessness
Wrong procedure

28. Costs of Quality External Failure Costs
All costs incurred to fix problems that are detected after the product/service is delivered to the customer.
Warranty work
Handling of complains
Replacement
Liability

29. Costs of Quality (continued)
Appraisal Costs
Costs of activities designed to ensure quality or uncover defects
Cost of inspector
Testing
Test equipment
Labs
Field testing

30. Costs of Quality (continued)
Prevention Costs
Cost of preventing defects form occurring
Planning and adminstration
Working with vendors
Training
Quality control procedures

31. Total Quality Management
A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.
Continuous Improvement
Involvement of Everyone
Customer Satisfaction

32. Elements of TQM Continual improvement (never ending)
Competitive benchmarking
Employee empowerment
Team approach
Decisions based on facts
Knowledge of tools
Supplier quality
Champion
Quality at the source
Suppliers

33. Continuous Improvement
Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs.
Kaizen: Japanese word for continuous improvement.

34. Quality at the Source
The philosophy of making each worker responsible for the quality of his or her work.

35. Process Improvement and Tools
Process improvement - a systematic approach to improving a process
Process mapping
Analyze the process
Redesign the process
Tools
There are a number of tools that can be used for problem solving and process improvement
Tools aid in data collection and interpretation, and provide the basis for decision making

36. Basic Quality Tools Flowcharts Check sheets Histograms Pareto Charts
Scatter diagrams
Control charts
Cause-and-effect diagrams
Run charts

37. Quality Tools Flow Chart : Cause and Effect
displays the steps in a process showing order and relationships helps in understanding of that process and identifies potential weaknesses i.e. poor performance
Cause and Effect
Also know as fishbone or Ishikawa

38. Quality Tools

39. Quality Tools

40. Quality Tools

41. Flow Chart
Operation
Decision
Start/ Finish

42. Check Sheet COMPONENTS REPLACED BY LAB
TIME PERIOD: 22 Feb to 27 Feb 2002
REPAIR TECHNICIAN: Bob
TV SET MODEL 1013
Integrated Circuits ||||
Capacitors |||| |||| |||| |||| |||| ||
Resistors ||
Transformers ||||
Commands
CRT |

43. Histogram 5 10 15 20

44. Pareto Analysis NUMBER OF CAUSE DEFECTS PERCENTAGE Poor design 80 64 %
Wrong part dimensions 16 13
Defective parts 12 10
Incorrect machine calibration 7 6
Operator errors 4 3
Defective material 3 2
Surface abrasions 3 2 %

45. Percent from each cause
Causes of poor quality
Machine calibrations
Defective parts
Wrong dimensions
Poor Design
Operator errors
Defective materials
Surface abrasions 10 20 30 40 50 60 70
(64)
(13)
(10)
(6)
(3)
(2)

46. Scatter Diagram Y X

47. Control Chart
970
980
990
1000
1010
1020 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
UCL
LCL

48. Cause-and-Effect Diagram
Figure 9.12
Quality
Problem
Out of adjustment
Tooling problems
Old / worn
Machines
Faulty
testing equipment
Incorrect specifications
Improper methods
Measurement
Poor supervision
Lack of concentration
Inadequate training
Human
Deficiencies
in product design
Ineffective quality
management
Poor process design
Process
Inaccurate
temperature
control
Dust and Dirt
Environment
Defective from vendor
Not to specifications
Material-
handling problems
Materials

49. Run Chart
Time (Hours)
Diameter

50. Tracking Improvements
Figure 9-18
UCL
LCL
Process not centered
and not stable
Process centered
and stable
Additional improvements
made to the process

51. Methods for Generating Ideas
Brainstorming
Quality circles
Interviewing
Benchmarking
5W2H

52. Quality Circles Team approach List reduction Balance sheet
Paired comparisons

53. Benchmarking Process Identify a critical process that needs improving
Identify an organization that excels in this process
Contact that organization
Analyze the data
Improve the critical process