1. © 2005 Wiley1 Total Quality Management Chapter 5

2. © 2005 Wiley2 Total Quality Management (TQM) Customer-defined quality: Meeting quality expectations as defined by the customer Integrated organizational effort designed to improve quality on all quality characteristics that are important to customers (core product and anything else that affects customers) Requires a coordinated effort All levels of the organization All functions (departments) in the organization Work with suppliers and listen to customers

3. © 2005 Wiley3 Quality Definitions Fitness for use: product performs its intended function Intended function depends on customer requirements in the target market Value: product is superior to others in the same price range (getting more for your money) Psychological (perceived quality): the quality that the customer thinks he/she got Conformance quality: product performs at targeted levels, as defined in the product specification

4. © 2005 Wiley4 Quality Measurement in Services Qualitative measures are based on customer perceptions Customer satisfaction surveys Teacher evaluations Quantitative measures are based on numerical data Waiting time Number of errors

5. © 2005 Wiley5 Quality Leaders: Walter Shewhart Recognized 2 types of process variation Assignable cause variation: variation for which we can find a cause Random variation: variation that is naturally present in a process Developed statistical process control (SPC) to distinguish between these 2 types of variation SPC is used to control quality

6. © 2005 Wiley6 Quality Leaders: W. Edwards Deming Applied SPC in industry 85% of quality problems are caused by systems and processes – management responsibility 15% of quality problems are caused by worker error. Continuous (incremental improvement) 14 points for quality improvement Train workers to do a good job & improve quality. Drive fear out of the workplace. Eliminate production quotas & incentive pay. Organizational change is required and must be led by upper management.

7. © 2005 Wiley7 Quality Leaders: Joseph Juran Fitness for use Cost of quality Quality trilogy Quality planning – consistent with business strategy Quality control (SPC) Quality improvement – continuous and breakthrough improvements Training for workers

8. © 2005 Wiley8 Cost of Quality – Juran Early detection/prevention is less costly May be less by a factor of 10

9. © 2005 Wiley9 Quality Leaders: Feigenbaum & Crosby Armand Feigenbaum Company-wide quality control – similar to TQM Philip Crosby Popularized cost of quality Quality is free, but you have to work for it It is cheaper to do it right the first time

10. © 2005 Wiley10 Quality Leaders: Kaoru Ishikawa Internal customers Quality tools Cause and effect diagrams Employee involvement in quality improvement Quality circles

11. © 2005 Wiley11 Quality Leaders: Genichi Taguchi 80% of quality defects are caused by poor product design Quality of product design – design products that you can make in a quality manner Robust design – products that perform well under varied conditions Quality loss function

12. © 2005 Wiley12 TQM Philosophy Focus on Customer Identify and meet customer needs Stay tuned to changing needs, e.g. fashion styles Continuous Improvement Continuous learning and problem solving Quality at the Source Inspection vs. prevention & problem solving Employee Empowerment Empower all employees; serve external and internal customers

13. © 2005 Wiley13 TQM Philosophy ( continued ) Understanding Quality Tools Ongoing training on analysis, assessment, and correction, & implementation tools Team Approach Teams formed around processes – 8 to 10 people Meet regularly to analyze and solve problems Benchmarking Studying practices at “best in class” companies Managing Supplier Quality Certify suppliers and eliminate receiving inspection

14. © 2005 Wiley14 Plan-Do-Study-Act (PDSA) Plan Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance objectives Do Implement the plan – trial basis Study Collect data and evaluate against objectives Act Communicate the results from trial If successful, implement new process After Act phase, go back and Plan the next quality project

15. © 2005 Wiley15 Seven Quality Tools ( pages 150-153) Cause-and-Effect Diagrams (Ishikawa or fishbone diagram) The effect is the problem you want to solve Use brainstorming to identify possible causes of the problem Classify the causes into categories – each major categories is a "bone" on the diagram If the cause is not evident, collect additional data about the most likely causes Use PDSA to eliminate the causes, and solve the problem.

16. © 2005 Wiley16 Seven Quality Tools (2) Flowcharts Used to document the detailed steps in a process Often the first step in Process Re-Engineering Checklist (checksheet): A simple tool that workers use to collect data efficiently Used to tabulate defects, causes of defects, etc. Control charts (Chapter 6)

17. © 2005 Wiley17 Seven Quality Tools (3) Scatter Diagram: a graph that shows the relationship between 2 variables Preliminary indicator of cause (x-axis) and effect (y-axis) Answers questions like: Do students who study more make better grades? Histogram: Shows the frequency distribution of observed values of a variable

18. © 2005 Wiley18 Seven Quality Tools (4) Pareto analysis: Arranges categorical data in descending order (largest first) Defects result from a small number of causes Examples Number of defects by type of defect Cost of defects by type of defect Used to set priorities: solve the most frequent or costly problem first

19. © 2005 Wiley19 Quality in Product Design Quality function deployment Used by product design teams Used to translate customer preferences into specific technical requirements The technical requirements are used to develop the product specification Operations is responsible for making the product to specifications Products that meet specifications have conformance quality Objective is to satisfy customers Principal tool is House of Quality (pages 154-156)

20. © 2005 Wiley20 Why TQM Efforts Fail Lack of top management support and commitment Lack of a genuine quality culture Continuous improvement Teamwork Training Employee empowerment Recognition and rewards (team or individual) Under-reliance or over-reliance on statistical process control (SPC) SPC is an essential tool for identifying problems and monitoring quality It is important to solve the problems (PDSA, 7 quality tools)