3. Productivity and Quality Management
Introductory Lecture

4. Introductory Lecture Instructor’s Profile Course Outline
Productivity and Quality Explained
Productivity Defined
Quality Defined

5. Instructor’s Profile

6. Dr. Muhammad Tahir Nawaz
Currently Serving as HOD Engineering Management Dept, EME College, NUST
Member – Conduct of GRE Subject Type Test in Engineering Management at NUST
Served as a Visiting Faculty Member in different reputed universities from 2004 onwards.
Working as Thesis Supervisor for 5 PhD level thesis.
Supervised for more than 10 MS level thesis.

7. Dr. Muhammad Tahir Nawaz
PhD, Engineering Management , UET, Taxila
MSc, Engineering Management , UET, Taxila
BSc, Electrical Engineering , UET, Lahore

8. Dr. Muhammad Tahir Nawaz
Author of over 30 journal and conference papers
PUBLISHED BOOKS
“Moving Towards Happy Lane” in 2014
“Khushiyon Bhari Zindagi Ka Aaghaaz” in 2014

9. Dr. Muhammad Tahir Nawaz
COURSES TAUGHT AT MSC/PHD LEVEL
Business Process Re-engineering
Productivity and Quality Management
Technology & Entrepreneurship
Engineering Project Management
Supply Chain Management
Production and Operations Management
Quality Management for Project Managers
Seminar in Competitiveness and Technology
Seminar in Technology, Governance and Globalization
Strategic Decision and Risk Management
Research Methodology for Engineering Managers
Business and Industrial Engineering Economics
Leadership and Motivation
Managing of Organizational Change in Technical Organizations
Total Quality Management
Business Research Methods
Project Management
Strategic Human Resource Management

10. Course Outline

11. Course Outline The Course is divided into two parts
Productivity Management
Quality Management

12. Sr. No.
Lec No.
Lecture Topic
Topics 1
Introduction to Productivity and Quality
Introductory Lecture 2
Productivity: Concept and Definition
Different types of Productivity measures, misconceptions about productivity, Low Productivity Trap 3
History and Background of Productivity Improvement Factors
History of Background of Productivity, Productivity Models Productivity Measurement Models, Productivity Improvement 4
Productivity and Operations Management
Role of Productivity in Operations Management, Efficiency Versus Effectiveness, Production and Productivity, Productivity Calculations, Examples of Productivity 5
Productivity Improvement Factors
Improving Productivity, Historical Background, Productivity Growth, Productivity Improvement Factors (1st Theory) Internal Factors, External Factors, Productivity Improvement Factors, Technical Factors 6
Productivity Improvement Factors - 2nd Theory, Organizational Factors, Management Factors, Production Factors, Government Factors, Finance Factors, Government Factors 7
Productivity and Global Economic Growth and Development
Background, Economic Growth, Causes of Economic Growth, Economic Development, Issues and Applications 8
Productivity Analysis and Appraisal
Productivity Appraisal Methods, Productivity measurement in Services, Government and Organizations

13. Sr. No.
Lec No.
Lecture Topic
Topics 9
Performance and Productivity in Non-profit organizations
Performance and Productivity, Public and Private Organizations, Some reasons for Performance, Major Performance Challenges, Stakeholders, Organizations Projects, People 10
Quick Productivity Appraisal, Steps in Company Performance Appraisal (CPA), Problems of Productivity Analysis, Misunderstanding of Productivity measurement Sound Productivity measurement system 11
Total Productive Maintenance
Philosophy of Total Productive Maintenance (TPM) History of TPM, Types of Maintenance, TPM Policies and Objectives, Similarities and Differences between TPM and TQM 12
Total Productive Maintenance Models
TPM Models and Theories, 5S Theory Pillars of TPM, TPM Implementation, Benefits of Applying Total Productive Maintenance 13
Productivity in Oil and Gas Sector
Factors that improve productivity in Oil and Gas 14
Motion and Time Study (MTS)
History of Motion and Time Study, Defining Work Systems and Productivity, Methods Design, Motion Study Work Methods Design 15
Time Study in Quality and Productivity
Time Study, Work Measurement, Normal Performance 16
Introduction to Quality
What is Quality? Century of Quality, History of Quality Methodology, Deming’s Principles, Taguchi’s Contributions And Philosophy

14. Sr. No.
Lec No.
Lecture Topic
Topics 17
Quality Management: Definition and Concepts
Total Quality Management, Quality Improvement Tools Costs related to quality, Benefits/Drawbacks 18
Quality Management Paradigms
The Quality Management Paradigms Inspection Era, Statistical Quality Control Era Quality Assurance Era, Strategic Management Era Total Quality Management 19
The Philosophies of Quality
The Quality Management Philosophies Deming’s System of Profound Knowledge, Appreciation for a system, Understanding variation Theory of knowledge, Psychology, Perspectives on Profound Knowledge 20
The Quality Gurus
Deming's Philosophy, Juran Quality Triology 21
Philip B. Crosby, Shingo , Ishikawa, Genichi Taguchi, Peter Drucker, Tom Peters 22
The Business Quality Planning
To emphasize the importance of planning in the quality management system, To compare and contrast formal and informal planning, To provide a systematic approach to planning 23
The Project Quality Planning
The process of Quality Planning in Projects 24
Controlling for Quality
Define the control process, and discuss the elements of reporting. Develop an appreciation for business, process, and product performance reporting. Introduce and describe the various reporting structures.

15. Sr. No.
Lec No.
Lecture Topic
Topics 25
Controlling for Quality
The Journalizing Process, Posting and Analysis 26
Staffing for Quality
Define the employee-forecasting process, and discuss the elements of resource planning. Develop a scheme for the development of job descriptions and requirements. Describe the various education and training methodologies. 27
Leadership
Leadership Styles, Performance Appraisals, Theory of Needs 28
Total Quality Management
Definition and Explanation of TQM, History of TQM, Five Approaches of Quality, Characteristics of TQM, Quality chains, Company policy and accountability Control , Monitoring the process , Teamwork , Consumer views, Zero defects 29
Introduction to Six Sigma
Introduction to Six Sigma Methodology 30
Six Sigma Methodologies
BPMS-Business Process Management System DMAIC-Six Sigma Improvement Methodology, DMADV- Creating new process which will perform at Six Sigma 31
ISO Quality management system
The Quality Management System explained 32
Revision Lecture
Revision of all the lectures in the course.

16. Background

17. Ultimate Goal of a Company
Improve Profit
Increase Sales Volume (Increase Market share)
Increase Sale Price
Reduce Purchase cost of Input
Reduce cost of production
Improve quality (Reduce cost of Quality)
Improve productivity

18. Productivity and Quality Management
Differentiate
Production and Productivity
Inspection and Quality Control
System, Procedures and Processes
Quality Control and Total Quality Mgmt (TQM)
TQM and Six Sigma

19. Productivity
Productivity is a tool of measurement that determines the efficiency of the organization in terms of the ratio of output produced with respect to inputs used.
Various factors like technology, plant layouts, equipment, and machinery affect productivity.
Operations managers need to carry out a regular review of all these factors to maintain as well as improve productivity.

20. Productivity
Productivity can be either measured as total productivity or as partial productivity where single variable or multiple variables are considered.
Measuring productivity in production organizations is relatively easy.
But measuring productivity for knowledge workers and in the service organizations is difficult.
Maintaining time sheets to determine the time spent on each task and the quantity of work done is one of the ways of measuring productivity in the services industry.

21. Quality
Quality is one of the key issues, which defines an organization's competitive position in the market.
Till the mid-seventies quality was only defined by periodic maintenance
But companies today are using quality as a competitive advantage against the competitors.
To gain competitive advantage in the market through quality, organizations have adopted the Total Quality Management (TQM) approach

22. Quality Quality is conformance to requirements.
A well designed and properly produced product without any error may not be perceived as a quality product by the customers if it does not satisfy their requirements.

23. Quality
There are eight different quality dimensions that a company can leverage to gain competitive advantage.
performance,
features,
reliability,
conformance,
durability,
serviceability,
aesthetics
perceived quality
Random samples, statistical control charts, and acceptance plans are some of the tools that are used for quality control.

24. Quality
Control charts (X-Charts, R-Charts, P-Charts and C-Charts) are used to find out if the quality of the product is within acceptable limits.
The P-chart is used to control the percentage of defectives in the sample.
X-chart and R-chart are used to control sample means and sample ranges.
Average outgoing quality (AOQ) curves and operating characteristics (OC) curves explain the workings of acceptance plans. For a service organization, the quality can be judged only through the feedback from the customers.

25. Productivity

26. Productivity Definition
Productivity is the relationship between the outputs generated from a system and the inputs that are used to create those outputs. Mathematically O
P = I

27. Productivity is a ratio
The amount of output per unit of input
(labor, equipment, and capital).
Number of products / No. of hours taken to produce them
Revenue generated by employee / Salary of employee

28. System, Procedure and Process
System is a set of interactive elements corresponding to the given inputs to produce the desired output
Procedure is a set of activities which have to follow in a systematic format without taking any shortcuts
Process is a set of activities/operations which follow the procedures and systems with right RM and intermittent checking to avoid any lapses

29. Systems Concept inputs outputs Customers transformations Land Goods
people
capital
facilities
equipment
tools
energy
materials
information
Goods
and
services
SYSTEM O I
productivity

30. Process Process is a summation of activities such as operations,
inspection,
delays,
storage,
Transportation
everything else that happens between the beginning and the end of the process

31. Mathematically, How Can We Increase Productivity?

32. Productivity Improvement
Productivity Improvement (PI) is the result of managing and intervening in transformation or work processes.
PI will occur if:

33. Measuring Productivity
Static: P=O/I in a given period of time (t). Useful for benchmarking purposes.
Dynamic: p(1)=O(1)/I(1); p(2)=O(2)/I(2); then p(2)/p(1) yields a dimensionless index that reflects change in productivity between periods. ((p(2)-p(1))/p(1))*100 yields the percentage change between periods.

34. Measuring Productivity (Continued)
Partial-Factor: Uses a single “I” factor; e.g., output/labor-hour, sales/employee
Multi-Factor: Uses more than one “I” factor; e.g. output/direct costs (labor, materials, and overhead).
Total-Factor: Uses all “I” factors.
(Note: Total-Factor captures “trade-offs” between input factors.)

35. Measurement Problems Multiple products/services (aggregation-O)
Varied categories, types, and levels of input resources (aggregation-I)
Price/cost changes of outputs & inputs
Redesigned products, services, processes
“Hard-to-measure” factors (e.g., quality)

36. Application of Productivity Measures
Individual level
Group level
Department level
Corporate level
National level
Global level

37. Global-Level Productivity
Why are global-level productivity measures important?
How do we compare productivity among nations?
How can a nation increase productivity in a global economy?

38. Importance of Global-Level Productivity Measures
Measure and compare competitiveness among nations.
Contribute to the development of a nation’s economic, social, and political policies.
Develop global cooperation among nations.
Help business organizations make investment decisions.

39. Global-Level Productivity Measures
Organisation for Economic Co-operation and Development (OECD) –
GDP per capita (labor productivity * fraction of people who work) is widely regarded as the best measure.
A common currency is used to measure the GDP.

40. Factors Affecting Productivity Improvement at Global Level
Education
Technology
Macroeconomic policies
Social and culture environments
Foreign aids
Foreign investments
Industry policies & competition

41. Competing on Productivity
At the national level, growing productivity
leads to a higher standard of living
holds inflation in check
enhances international competitiveness.
The annual GDP growth is partially due to
growth in productivity
growth in inflation

42. National Productivity Measures (http://www.bls.gov/)
Comparisons within a segment of economy over time
Comparisons of specific productivity measures
International comparisons

43. Labor Productivity - Percent Change from Previous Year
2001
2002
2003
Business Sector
2.2
4.9
4.5
2.6
Non-Farm Sector
2.1
5.0
4.4
Manufacturing
7.2
5.1
4.2

44. Other Measures Affecting Productivity
Efficiency
Effectiveness
Quality
Quality of Work Life
Innovation

45. Efficiency
Measures the resources expected to be consumed to the resources actually consumed.
Hence, it focuses on the input side of the system. (To what degree did the system utilize the “right” things.)

46. Effectiveness
Measures what the system sets out to accomplish (objective) with what was actually accomplished; plan vs. actual
Hence, effectiveness is an output measure. (Is the output “right” - right quality, right quantity, on time, etc.)

47. Quality

48. Quality
Degree to which the outputs (products and services) from the system conform to requirements or meet customer expectations.
The focus is on quality attributes (e.g., conformance, performance, convenience, responsiveness, perceived quality.)

49. Meaning of Quality

50. Quality
The TQM philosophy states that maintaining and improving quality is not just the prerogative of quality control department but each and every employee of an organization is equally responsible.
A clever and well-executed advertising may attract customers initially, but if the product supplied does not match customer’s quality expectations then in all probability the customer will shift to a competitor's product

51. Quality of Work Life (QWL)
Measures the way that employees in a system respond to the sociotechnical aspects of that system.

52. Innovation Measures the applied creativity of the system.
Relates to the design and development of improved products, services, and processes.

53. How Do Those Other Measures Affect Productivity?

54. TQM
What is TQM ?
Total quality management ( TQM ) is a business management strategy aimed at embedding awareness of quality in all organizational processes.
TQM has been widely used in manufacturing, education, hospitals, call centers, government, and service industries, as well as NASA space and science programs

55. TQM
Total Quality Management (TQM) is a structured system for meeting and exceeding customer needs and expectations by creating organization-wide participation in the planning and implementation of improvement (continuous and breakthrough) processes

56. TQM Total Quality Management
Total : Involve all functions to have customer focus and give reliable delivery of product+service in line with customer’s expectations at lowest cost
Quality : Design and manufacture the product+service to achieve zero defect and 100% customer satisfaction
Management : Lead to achieve quality for customers by communicating the vision, mission and values to all employees and creating continuous improvement culture

57. TQM Techniques for TQM Total Employee Involvement
Kaizen, Small Group Activity, Quality Circles, Key Business Process /Biz Process Re-engineering,
customer satisfaction surveys, Training
Just in Time/ Waste Elimination
TPM, Zero Defect, supplier Partnership
Total Quality Control
TQC is applicable to all functions, use of 7 QC Tools, use of SPC/SQC and PDCA, ISO 9000, Six Sigma, ISO 14000, understand the processes critical to quality (CTQ)

58. Six Sigma
Six Sigma- (The statistical Representation) is a process of Quality measurement, which helps the organization in the improvement of their Quality
Six Sigma is a systematical process which helps the organization to eliminate the defects which prevent it from reaching perfection
Six Sigma ensures the QC, TQM and Zero Defect
When a process attains six sigma level it means that there is no room for the product to fail
Six sigma is professionalizing of the Quality Management functions

59. Copyright 2011 John Wiley & Sons, Inc.
Six Sigma Process
3.4 DPMO
67,000 DPMO
cost = 25% of sales
DEFINE
CONTROL
IMPROVE
ANALYZE
MEASURE
Copyright 2011 John Wiley & Sons, Inc.

60. Total Productive Maintenance
Maintenance is done on the equipments to keep them running as efficiently as possible for as long as possible
There are three types of maintenance :
Breakdown maintenance (unplanned)
Preventive maintenance (planned)
Predictive maintenance ( High tech analysis )

61. Total Productive Maintenance
TPM , developed in Japan, is a scientific company wide approach in which every employee is concerned about the maintenance , quality and efficiency of the equipment
The objective is to reduce the whole life cost of equipment through more efficient maintenance management and to integrate the maintenance and manufacturing functions
Teamwork is a key element of TPM
Analysis of each equipment focuses on reduction of manufacturing losses and costs

62. Total Productive Maintenance
TPM aims to achieve improvements in cost, quality and speed (productivity)
This is equivalent to TQM (reduces variations due to automation)
TPM addresses six big losses
reduced yield process defects
reduced speed idling and minor stoppages
setup and adjustment equipment failure

63. Product Quality
Product and Service Quality Factors affecting Product Quality
Men
Materials
Machines
Manufacturing conditions
Manufacturing process
Capability to invest money
Management commitment to Quality
Product design (Tangible and *Intangible)
After sales service (*Safety and Reliability)

64. Product and Service Quality
Ten Dimensions of Service Quality
1. Quality
2. Tangibility
3. Reliability
4. Responsiveness
5. Communication
6. Security
7. Competence
8. Courtesy
9. Understanding
10. Access

65. Summary Course Outline Productivity and Quality Defined
Concepts Introduced
Efficiency
Effectiveness
National and Global Productivity
Quality
Quality of Work Life
Innovation
Total Productive Maintenance
Six Sigma
Product and Service Quality

67. Improving Productivity