1. Module 2: Total Quality Management Operations Management as a Competitive Weapon

2. 2 OM Course Framework 1. Cost - Design & Selection 2. Quality - TQM - SQC 3. Dependability - Project Management - JIT 4. Flexibility - Inventory - Supply Chain - Location - Forecasting - Aggregate Planning

3. 3 Module 02: Total Quality Management Learning Objectives At the end of this module, each student will be able to: 1.Characterize various definitions of quality 2.Explain total quality management (TQM) 3.Understand TQM tools

4. 4 Module 02: Total Quality Management 1. Some Definitions of Quality  ASQC – customer satisfaction  User – consumer says it is  Design – marketplace  Conformance – meet specifications

5. 5 Module 02: Total Quality Management Traditional Quality Process (Mfg.) Customer Specifies Need Marketing Interprets Need EngineeringOperations Produces Product Plans Quality Monitors Quality Designs Product Defines Quality

6. 6 Module 02: Total Quality Management Interprets Need Specifies Need Designs Product Defines Quality Produces Product Plans Quality Monitors Quality CustomerMarketingEngineeringOperations Traditional Quality Process How do the definitions of quality relate to the traditional quality process?

7. 7 Module 02: Total Quality Management Traditional Quality Process Interprets Need Specifies Need Designs Product Defines Quality Produces Product Plans Quality Monitors Quality CustomerMarketingEngineeringOperations UserDesign Conformance

8. 8 Module 02: Total Quality Management 2. Total Quality Management  Quality system involving entire organization from supplier to customer  Objective: Meet or exceed customer needs through company-wide continuous improvement  Early proponents W. Edwards Deming - natural variability Philip B. Crosby - Quality is Free Joseph Juran – Cost of Quality

9. 9 Module 02: Total Quality Management Deming: Natural variability  All process are subject to variability Natural causes Assignable causes  Objective: Identify assignable causes

10. 10 Module 02: Total Quality Management Crosby: Quality is Free Improved Quality Increased Profits Lower Costs Productivity Rework/Scrap Warranty Market Gains Reputation Volume Price

11. 11 Module 02: Total Quality Management Joseph Juran: Costs of Quality

12. 12 COQ Relationship Total Cost Failure Cost 50100 Conformance Quality Level (%) 0 Cost per Good Unit of Product Appraisal Cost Min. Total Quality Cost Optimum Conf. Quality Level

13. 13 Module 02: Total Quality Management  Quality function deployment (QFD)  Pareto charts  Process charts  Cause & effect diagrams  Statistical process control (SPC) 3. TQM Tools

14. 14 Module 02: Total Quality Management Quality Function Deployment  Mitsubishi shipyard Toyota Motor Corporation  Product design process using cross-functional teams Marketing, engineering, manufacturing  Translates customer preferences into specific product characteristics

15. 15 Module 02: Total Quality Management Comparing “Voices” Voice of the Customer Voice of the Engineer Customer-based Benchmarks

16. 16 Module 02: Total Quality Management Setting Specifications Trade-offs Targets Technical Benchmarks

17. 17 Module 02: Total Quality Management  Quality function deployment (QFD)  Pareto charts  Process charts  Cause & effect diagrams  Statistical process control (SPC) TQM Tools

18. 18 Module 02: Total Quality Management Pareto Analysis  Helps identify the degree of importance of different quality problems

19. 19 Module 02: Total Quality Management  Quality function deployment (QFD)  Pareto charts  Process charts  Cause & effect diagrams  Statistical process control (SPC) TQM Tools

20. 20 Module 02: Total Quality Management Process Charts  Diagrams of the steps involved in an operation or process

21. 21 Module 02: Total Quality Management  Quality function deployment (QFD)  Pareto charts  Process charts  Cause & effect diagrams  Statistical process control (SPC) TQM Tools

22. 22 Module 02: Total Quality Management Cause-and-Effect Diagrams  Also called Fishbone Diagrams  Help identify potential causes of specific ‘effects’ (quality problems)

23. 23 Module 02: Total Quality Management  Quality function deployment (QFD)  Pareto charts  Process charts  Cause & effect diagrams  Statistical process control (SPC) TQM Tools

24. 24 Module 02: Total Quality Management Control Charts  Track whether a process is operating as expected