Operations Management Operations Management: Chapter 6 - Managing Quality Chapter 6 - Managing Quality

9/20/2012
Operations
Management
Chapter 6
Managing Quality
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 6e
Operations Management, 8e
2006
Prentice
Hall, Inc.Hall, Inc.
2006
Prentice
61
Outline
Global Company Profile: Arnold
Palmer Hospital
Quality And Strategy
Defining Quality
Implications of Quality
Malcolm Baldrige National Quality
Award
Cost of Quality (COQ)
2006 Prentice Hall, Inc.
62
9/20/2012
Outline Continued
Ethics and Quality Management
International Quality Standards
ISO 9000
ISO14000
63
Outline Continued
Total Quality Management
Continuous Improvement
Six Sigma
Employee Empowerment
Benchmarking
Just
Just--in
in--Time (JIT)
Taguchi Concepts
Knowledge of TQM Tools
64
9/20/2012
Outline Continued
Tools Of TQM
Check Sheets
Scatter Diagrams
Cause
Cause--and
and--Effect Diagram
Pareto Charts
Flow Charts
Histograms
Statistical Process Control (SPC)
65
Outline Continued
The Role Of Inspection
When and Where to Inspect
Source Inspection
Service Industry Inspection
Inspection of Attributes versus
Variables
TQM In Services
66
9/20/2012
Learning Objectives
When you complete this chapter, you
should be able to:
Identify or Define:
Quality
Malcolm Baldrige National Quality
Award
ISO International Quality Standards
Taguchi Concepts
67
Learning Objectives
When you complete this chapter, you
should be able to:
Explain:
Why quality is important
Total Quality Management (TQM)
Seven tools of TQM
Quality robust products
Deming, Juran, Feigenbaum, and
Crosbys ideas
68
9/20/2012
Managing Quality Provides a

Competitive Advantage
Arnold Palmer Hospital
Deliver over 10,000 babies annually
Virtually every type of quality tool is
employed
Continuous improvement
Employee empowerment
Benchmarking
Just
Just--in
in--time
Quality tools
69
Quality and Strategy

Managing quality supports
differentiation, low cost, and
response strategies
Quality helps firms increase sales
and reduce costs
Building a quality organization is a
demanding task
6 10
9/20/2012
Ways Quality Improves

Productivity
Sales Gains
Improved response
Higher Prices
Improved
Quality
Improved reputation
Reduced Costs
Increased productivity
Increased
Profits
Lower rework and scrap costs

Lower warranty costs
Figure 6.1
6 11
The Flow of Activities

Organizational Practices
Leadership, Mission statement, Effective operating
procedures, Staff support, Training
Yields: What is important and what is to be accomplished
Quality Principles
Customer focus, Continuous improvement, Benchmarking,
Just-in-time, Tools of TQM
Yields: How to do what is important and to be
accomplished
Employee Fulfillment
Empowerment, Organizational commitment
Yields: Employee attitudes that can accomplish
what is important
Figure 6.2
Customer Satisfaction
Winning orders, Repeat customers
Yields: An effective organization with
a competitive advantage
6 12
9/20/2012
Defining Quality
The totality of features and
characteristics of a product or
service that bears on its ability to
satisfy stated or implied needs
American Society for Quality
6 13
Different Views
User
User--based better performance,
more features
Manufacturing
Manufacturing--based
conformance to standards,
making it right the first time
Product
Product--based specific and
measurable attributes of the
product
6 14
9/20/2012
Implications of Quality
1. Company reputation
Perception of new products
Employment practices
Supplier relations
2. Product liability
Reduce risk
3. Global implications
Improved ability to compete
6 15
Key Dimensions of Quality

Performance
Durability
Features
Serviceability
Reliability
Aesthetics
Conformance
Perceived quality
Value
6 16
9/20/2012
Malcom Baldrige National

Quality Award
Established in 1988 by the U.S.
government
Designed to promote TQM practices
Recent winners
The Bama Companies, Kenneth W.
Monfort College of Business,
Caterpillar Financial Services, Baptist
Hospital, Clarke American Checks,
Los Alamos National Bank
6 17
Baldrige Criteria
Applicants are evaluated on:
Categories
Leadership
Strategic Planning
Customer & Market Focus
Information & Analysis
Human Resource Focus
Process Management
Organizational Results
Points
120
85
85
90
85
85
450
6 18
9/20/2012
Takumi
A Japanese character
that symbolizes a
broader dimension
than quality, a deeper
process than
education, and a more
perfect method than
persistence
6 19
Costs of Quality
Prevention costs - reducing the
potential for defects
Appraisal costs - evaluating
products, parts, and services
Internal failure - producing defective
parts or service before delivery
External costs - defects discovered
after delivery
6 20
10
9/20/2012
Costs of Quality
Total
Cost
Total Cost
External Failure
Internal Failure
Prevention
Appraisal
Quality Improvement
6 21
International Quality
Standards
Industrial Standard Z8101Z8101-1981 (Japan)
Specification for TQM
ISO 9000 series (Europe/EC)

Common quality standards for products
sold in Europe (even if made in U.S.)
2000 update places greater emphasis on
leadership and customer satisfaction
ISO 14000 series (Europe/EC)

6 22
11
9/20/2012
ISO 14000
Environmental Standard
Core Elements:
Environmental management
Auditing
Performance evaluation
Labeling
Life
Life--cycle assessment
6 23
Leaders in Quality
W. Edwards Deming
14 Points for
Management
Joseph M. Juran
Top management
commitment,
fitness for use
Armand Feigenbaum
Total Quality
Control
Philip B. Crosby
Quality is Free
6 24
12
9/20/2012
Ethics and Quality

Management
Operations managers must
deliver healthy, safe, quality
products and services
Poor quality risks injuries,
lawsuits, recalls, and regulation
Organizations are judged by
how they respond to problems
6 25
TQM
Encompasses entire organization,
from supplier to customer
Stresses a commitment by
management to have a continuing,
companywide drive toward
excellence in all aspects of products
and services that are important to the
customer
6 26
13
9/20/2012
Demings Fourteen Points

1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop
depending on inspection
4. Build long term relationships based on
performance, not price
5. Continuously improve product, quality,
and service
6. Start training
7. Emphasize leadership
Table 6.1
6 27
Demings Fourteen Points

8.
9.
10.
11.
12.
13.
14.
Drive out fear

Break down barriers between
departments
Stop haranguing workers
Support, help, improve
Remove barriers to pride in work
Institute a vigorous program of
education and selfself-improvement
Put everybody in the company to work
on the transformation
Table 6.1
6 28
14
9/20/2012
Seven Concepts of TQM

Continuous improvement
Six Sigma
Employee empowerment
Benchmarking
Just
Just--in
in--time (JIT)
Taguchi concepts
Knowledge of TQM tools
6 29
Continuous Improvement
Represents continual
improvement of all processes
Involves all operations and work
centers including suppliers and
customers
People, Equipment, Materials,
Procedures
6 30
15
9/20/2012
Shewharts PDCA Model

1.Plan
4. Act
Identify the
Implement improvement
and make
the plan
a plan
3. Check
Is the plan
working?
2. Do
Test the
plan
Figure 6.3
6 31
Six Sigma
Originally developed by Motorola,
Six Sigma refers to an extremely
high measure of process capability
A Six Sigma capable process will
return no more than 3.4 defects per
million operations (DPMO)
Highly structured approach to
process improvement
6 32
16
9/20/2012
Six Sigma
1. Define critical outputs
and identify gaps for
improvement
DMAIC Approach
2. Measure the work and

collect process data
3. Analyze the data
4. Improve the process
5. Control the new process to
make sure new performance
is maintained
6 33
Six Sigma Implementation

Emphasize DPMO as a standard metric
Provide extensive training
Focus on corporate sponsor support
(Champions)
Create qualified process improvement
experts (Black Belts, Green Belts, etc.)
Set stretch objectives
This cannot be accomplished without a major
commitment from top level management
6 34
17
9/20/2012
Employee Empowerment
Getting employees involved in product
and process improvements
85% of quality problems are due to process
and material
Techniques
Build communication networks that include
employees
Develop open, supportive supervisors
Move responsibility to employees
Build a highhigh-morale organization
Create formal team structures
6 35
Quality Circles
Group of employees who meet
regularly to solve problems
Trained in planning, problem
solving, and statistical methods
Often led by a facilitator
Very effective when done
properly
6 36
18
9/20/2012
Benchmarking
Selecting best practices to use as a
standard for performance
Determine what to
benchmark
Form a benchmark team
Identify benchmarking partners
Collect and analyze benchmarking
information
Take action to match or exceed the
benchmark
6 37
Best Practices for Resolving

Customer Complaints
Make it easy for clients to complain
Respond quickly to complaints
Resolve complaints on first contact
Use computers to manage
complaints
Recruit the best for customer
service jobs
6 38
19
9/20/2012
Just--in
Just
in--Time (JIT)
Relationship to quality:
JIT cuts the cost of quality
JIT improves quality
Better quality means less
inventory and better, easiereasier-to
to-employ JIT system
6 39
Just--in
Just
in--Time (JIT)
Pull system of production scheduling
including supply management
Production only when signaled
Allows reduced inventory levels

Inventory costs money and hides process
and material problems
Encourages improved process and

product quality
6 40
20
9/20/2012
Just--In
Just
In--Time (JIT) Example
Work in process
inventory level
(hides problems)
Unreliable
Vendors
Scrap
Capacity
Imbalances
6 41
Just--In
Just
In--Time (JIT) Example
Reducing inventory reveals
problems so they can be solved
Unreliable
Vendors
Scrap
Capacity
Imbalances
6 42
21
9/20/2012
Taguchi Concepts
Experimental design methods to
improve product and process design
Identify key component and process
variables affecting product variation
Taguchi Concepts
Quality robustness
Quality loss function
Target
Target--oriented quality
6 43
Quality Robustness
Ability to produce products
uniformly in adverse manufacturing
and environmental conditions
Remove the effects of adverse
conditions
Small variations in materials and
process do not destroy product
quality
6 44
22
9/20/2012
Quality Loss Function

Shows that costs increase as the
product moves away from what
the customer wants
Costs include customer
dissatisfaction, warranty and
service, internal scrap and repair,
and costs to society
Traditional conformance
specifications are too simplistic
6 45
Quality Loss Function

L = D2C
High loss
Unacceptable
Loss (to
producing
organization,
customer,
and society)
Poor
Good
Best
Low loss
where
L = loss to society
D = distance from
target value
C = cost of deviation
Target-oriented quality
Targetyields more product in
the best category
Target-oriented quality
Targetbrings product toward
the target value
Frequency
Conformance-oriented
Conformancequality keeps products
within 3 standard
deviations
Lower
Target
Upper
Specification
Figure 6.4
6 46
23
9/20/2012
Tools of TQM
Tools for Generating Ideas
Check sheets
Scatter diagrams
Cause and effect diagrams
Tools to Organize the Data

Pareto charts
Flow charts
Tools for Identifying Problems

Histogram
Statistical process control chart
6 47
Seven Tools for TQM

(a) Check Sheet: An organized method of
recording data
Defect
A
B
C
1
///
//
/
2
/
/
//
3
/
Hour
4
5
/
/
/
6
/
7
///
//
//
8
/
///
////
Figure 6.5
6 48
24
9/20/2012
Seven Tools for TQM
Productivity
(b) Scatter Diagram: A graph of the value

of one variable vs. another variable
Absenteeism
Figure 6.5
6 49
Seven Tools for TQM

(c) Cause and Effect Diagram: A tool that
identifies process elements (causes) that
might effect an outcome
Cause
Materials
Methods
Effect
Manpower
Machinery
Figure 6.5
6 50
25
9/20/2012
Seven Tools for TQM
Percent
Frequency
(d) Pareto Charts: A graph to identify and plot

problems or defects in descending order of
frequency
E
Figure 6.5
6 51
Seven Tools for TQM

(e) Flow Charts (Process Diagrams): A chart
that describes the steps in a process
Figure 6.5
6 52
26
9/20/2012
Seven Tools for TQM

(f) Histogram: A distribution showing the
frequency of occurrence of a variable
Frequency
Distribution
Repair time (minutes)

Figure 6.5
6 53
Seven Tools for TQM

(g) Statistical Process Control Chart: A chart with
time on the horizontal axis to plot values of a
statistic
Upper control limit

Target value
Lower control limit
Time
Figure 6.5
6 54
27
9/20/2012
Inadequate
supply of
magazines
Machinery
Deicing
equipment
not available
Material
& blankets
on--board
on
Insufficient
clean pillows
Cause--and
Cause
and--Effect Diagrams
Mechanical delay
on plane
Inadequate special
Broken luggage
meals onon-board
carousel
Dissatisfied
Airline
Customer
Understaffed
Overbooking policies
crew
Poorly trained
attendants
policies
bags
Mistagged
Methods
Poor checkcheck-in
Understaffed
Bumping policies
ticket counters
Manpower
Figure 6.6
6 55
Pareto Charts
Data for October
Frequency (number)
60
54
72
50
40
Number of
occurrences
30
20
12
10
Minibar
4%
Misc.
3%
0
Room svc
72%
Check-in Pool hours

Check16%
5%
Cumulative percent
100
93
88
70
Causes and percent

6 56
28
9/20/2012
Flow Charts
Packing and shipping process
Packing
station
Sealing
Weighing
Labeling
Quick freeze
storage
(60 Mins)
Storage
(4 to 6 hrs)
Shipping
dock
6 57
Statistical Process Control

(SPC)
Uses statistics and control charts to
tell when to take corrective action
Drives process improvement
Four key steps
Measure the process
When a change is indicated, find the
assignable cause
Eliminate or incorporate the cause
Restart the revised process
6 58
29
9/20/2012
An SPC Chart
Plots the percent of free throws missed
20%
Upper control limit
10%
Coachs target value
0%
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
Lower control limit
Game number
Figure 6.7
6 59
Inspection
Involves examining items to see if
an item is good or defective
Detect a defective product
Does not correct deficiencies in
process or product
It is expensive
Issues
When to inspect
Where in process to inspect
6 60
30
9/20/2012
When and Where to Inspect

1. At the suppliers plant while the supplier
is producing
2. At your facility upon receipt of goods from
the supplier
3. Before costly or irreversible processes
4. During the stepstep-by
by--step production
processes
5. When production or service is complete
6. Before delivery from your facility
7. At the point of customer contact
6 61
Inspection
Many problems
Worker fatigue
Measurement error
Process variability
Cannot inspect quality into a

product
Robust design, empowered
employees, and sound processes
are better solutions
6 62
31
9/20/2012
Source Inspection
Also known as source control
The next step in the process is
your customer
Ensure perfect product to your
customer
Poka-yoke is the concept of foolproof devices
or techniques designed to pass only
acceptable product
6 63

Organization
What is
Inspected
Jones Law Office Receptionist

performance
Standard
Is phone answered by the
second ring
Billing
Accurate, timely, and

correct format
Attorney
Promptness in returning
calls
Table 6.4
6 64
32
9/20/2012

Organization
Hard Rock Hotel
What is
Inspected
Standard
Reception
desk
Use customers name
Doorman
Greet guest in less than 30

seconds
Room
All lights working, spotless

bathroom
Minibar
Restocked and charges

accurately posted to bill
Table 6.4
6 65

Organization
Arnold Palmer
Hospital
What is
Inspected
Standard
Billing
Accurate, timely, and

correct format
Pharmacy
Prescription accuracy,
inventory accuracy
Lab
Audit for lablab-test accuracy
Nurses
Charts immediately
updated
Admissions
Data entered correctly and

completely
Table 6.4
6 66
33
9/20/2012

Organization
Hard Rock Cafe
What is
Inspected
Standard
Busboy
Serves water and bread

within 1 minute
Busboy
Clears all entre items and

crumbs prior to dessert
Waiter
Knows and suggest

specials and desserts
Table 6.4
6 67

Organization
Nordstroms
Department
Store
What is
Inspected
Standard
Display areas Attractive, wellwell-organized,

stocked, good lighting
Stockrooms
Rotation of goods,
organized, clean
Salesclerks
Neat, courteous, very

knowledgeable
Table 6.4
6 68
34
9/20/2012
TQM In Services
Service quality is more difficult to
measure than the quality of goods
Service quality perceptions depend
on
Intangible differences between
products
Intangible expectations customers
have of those products
6 69
Service Quality
The Operations Manager must
recognize:
1. The tangible component of
services is important
2. The service process is important
3. The service is judged against the
customers expectations
4. Exceptions will occur
6 70
35
9/20/2012
Service
Specs
at UPS
6 71
Determinants of Service
Quality
Reliability
Credibility
Responsiveness
Security
Competence
Understanding/
knowing the
customer
Access
Courtesy
Communication
Tangibles
6 72
36

Operations Management Operations Management: Chapter 6 - Managing Quality Chapter 6 - Managing Quality

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Operations Management Operations Management: Chapter 6 - Managing Quality Chapter 6 - Managing Quality

Încărcat de

Drepturi de autor:

Formate disponibile

9/20/2012

2006 Prentice Hall, Inc.

2006 Prentice Hall, Inc.

2006 Prentice Hall, Inc.

Managing Quality Provides a

Quality and Strategy

2006 Prentice Hall, Inc.

Ways Quality Improves

Lower rework and scrap costs

The Flow of Activities

2006 Prentice Hall, Inc.

Key Dimensions of Quality

2006 Prentice Hall, Inc.

Malcom Baldrige National

ISO 9000 series (Europe/EC)

ISO 14000 series (Europe/EC)

2006 Prentice Hall, Inc.

Ethics and Quality

Demings Fourteen Points

Demings Fourteen Points

Drive out fear

2006 Prentice Hall, Inc.

Seven Concepts of TQM

Shewharts PDCA Model

2006 Prentice Hall, Inc.

2. Measure the work and

Six Sigma Implementation

2006 Prentice Hall, Inc.

Best Practices for Resolving

2006 Prentice Hall, Inc.

Allows reduced inventory levels

Encourages improved process and

2006 Prentice Hall, Inc.

2006 Prentice Hall, Inc.

2006 Prentice Hall, Inc.

Quality Loss Function

Quality Loss Function

2006 Prentice Hall, Inc.

Tools to Organize the Data

Tools for Identifying Problems

Seven Tools for TQM

Seven Tools for TQM

(b) Scatter Diagram: A graph of the value

Seven Tools for TQM

2006 Prentice Hall, Inc.

Seven Tools for TQM

(d) Pareto Charts: A graph to identify and plot

2006 Prentice Hall, Inc.

Seven Tools for TQM

Seven Tools for TQM

Repair time (minutes)

Seven Tools for TQM

Upper control limit

2006 Prentice Hall, Inc.

Check-in Pool hours

Causes and percent

2006 Prentice Hall, Inc.

Statistical Process Control

Upper control limit

Coachs target value

Lower control limit

When and Where to Inspect

Cannot inspect quality into a