Post on 22-Dec-2015
Operations Management - 5th EditionOperations Management - 5th Edition
Chapter 3Chapter 3
Roberta Russell & Bernard W. Taylor, III
Quality ManagementQuality Management
3-2
Meaning of QualityMeaning of Quality
Webster’s DictionaryWebster’s Dictionary Degree of excellence of a thingDegree of excellence of a thing
American Society for QualityAmerican Society for Quality Totality of features and Totality of features and
characteristics that satisfy needscharacteristics that satisfy needs
Google’s Definition?Google’s Definition? Are there different perspectives?Are there different perspectives?
3-3
Meaning of Quality:Meaning of Quality:Consumer’s PerspectiveConsumer’s Perspective
Fitness for useFitness for use How well product or How well product or
service does what it is service does what it is supposed tosupposed to
Quality of designQuality of design Designing quality Designing quality
characteristics into a characteristics into a product or serviceproduct or service
A Mercedes sports car and a A Mercedes sports car and a Ford truck are equally “fit for Ford truck are equally “fit for use,” but with different design use,” but with different design dimensionsdimensions
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Dimensions of QualityDimensions of Quality
What are some of the dimensions of What are some of the dimensions of quality for a manufactured product?quality for a manufactured product?
What about for a service?What about for a service? Do they differ?Do they differ?
If yes, should they?If yes, should they? If no, why not?If no, why not?
3-5
Dimensions of Quality:Dimensions of Quality:Manufactured ProductsManufactured Products
Performance Performance Basic operating characteristics of a product; how Basic operating characteristics of a product; how
well a car handles or its gas mileagewell a car handles or its gas mileage Features Features
““Extra” items added to basic features, such as a Extra” items added to basic features, such as a leather interior in a carleather interior in a car
ReliabilityReliability Probability that a product will operate properly Probability that a product will operate properly
within an expected time frame; that is, a TV will within an expected time frame; that is, a TV will work without repair for about seven yearswork without repair for about seven years
3-6
ConformanceConformance Degree to which a product meets pre–established Degree to which a product meets pre–established
standardsstandards DurabilityDurability
How long product lasts before replacementHow long product lasts before replacement What’s the life expectancy of the tires on your car?What’s the life expectancy of the tires on your car?
ServiceabilityServiceability Ease of getting repairs, speed of repairs, courtesy Ease of getting repairs, speed of repairs, courtesy
and competence of repair personand competence of repair person iPhone, anyone?iPhone, anyone?
Dimensions of Quality:Dimensions of Quality:Manufactured Products (cont.)Manufactured Products (cont.)
3-7
AestheticsAesthetics How a product looks, feels, sounds, How a product looks, feels, sounds,
smells, or tastessmells, or tastes Safety Safety
Assurance that customer will not suffer Assurance that customer will not suffer injury or harm from a product; an injury or harm from a product; an especially important consideration for especially important consideration for automobilesautomobiles
PerceptionsPerceptions Subjective perceptions based on brand Subjective perceptions based on brand
name, advertising, etc.name, advertising, etc.
Dimensions of Quality:Dimensions of Quality:Manufactured Products (cont.)Manufactured Products (cont.)
3-8
Dimensions of Quality:Dimensions of Quality:ServiceService
Time and TimelinessTime and Timeliness How long must a customer wait for service, How long must a customer wait for service,
and is it completed on time?and is it completed on time? Is an overnight package delivered overnight?Is an overnight package delivered overnight?
CompletenessCompleteness Is everything customer asked for provided?Is everything customer asked for provided? Is a mail order from a catalogue company Is a mail order from a catalogue company
complete when delivered?complete when delivered?
3-9
Dimensions of Quality:Dimensions of Quality:Service (cont.)Service (cont.)
CourtesyCourtesy How are customers treated by employees?How are customers treated by employees? Are catalogue phone operators nice and are Are catalogue phone operators nice and are
their voices pleasant?their voices pleasant? ConsistencyConsistency
Is the same level of service provided to each Is the same level of service provided to each customer each time?customer each time?
Is your newspaper delivered on time every Is your newspaper delivered on time every morning?morning?
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Accessibility and convenienceAccessibility and convenience How easy is it to obtain service?How easy is it to obtain service? Does a service representative answer you calls quickly?Does a service representative answer you calls quickly?
AccuracyAccuracy Is the service performed right every time?Is the service performed right every time? Is your bank or credit card statement correct every month?Is your bank or credit card statement correct every month?
ResponsivenessResponsiveness How well does the company react to unusual situations?How well does the company react to unusual situations? How well is a telephone operator able to respond to a How well is a telephone operator able to respond to a
customer’s questions?customer’s questions? What about Internet-based service – does it differ?What about Internet-based service – does it differ?
Dimensions of Quality:Dimensions of Quality:Service (cont.)Service (cont.)
3-11
Meaning of Quality:Meaning of Quality:Producer’s PerspectiveProducer’s Perspective
Quality of ConformanceQuality of Conformance Making sure a product or service is Making sure a product or service is
produced according to designproduced according to design If new tires do not conform to specifications, they If new tires do not conform to specifications, they
wobblewobble If a hotel room is not clean when a guest checks If a hotel room is not clean when a guest checks
in, the hotel is not functioning according to in, the hotel is not functioning according to specifications of its designspecifications of its design
3-12
Meaning of Quality:Meaning of Quality:A Final PerspectiveA Final Perspective
Consumer’s and producer’s Consumer’s and producer’s perspectives depend on each otherperspectives depend on each other
Consumer’s perspective: PRICE Consumer’s perspective: PRICE Producer’s perspective: COSTProducer’s perspective: COST Consumer’s view must dominateConsumer’s view must dominate
Why?Why?
3-13
Fitness forConsumer Use
Fitness forConsumer Use
Producer’s PerspectiveProducer’s Perspective Consumer’s PerspectiveConsumer’s Perspective
Quality of ConformanceQuality of Conformance
• Conformance to specifications
• Cost
Quality of DesignQuality of Design
• Quality characteristics• Price
MarketingMarketingProductionProduction
Meaning of Quality Meaning of Quality
Meaning of QualityMeaning of Quality
3-14
Total Quality ManagementTotal Quality Management
Commitment to quality throughout the organizationCommitment to quality throughout the organization
Principles of TQMPrinciples of TQM Customer-orientedCustomer-oriented LeadershipLeadership Strategic planningStrategic planning Employee responsibilityEmployee responsibility Continuous improvementContinuous improvement CooperationCooperation Statistical methodsStatistical methods Training and educationTraining and education
3-15
Deming Wheel: PDCA Deming Wheel: PDCA CycleCycle
1. PlanIdentify problem and develop plan for improvement.
2. DoImplement plan on a test basis.
3. Study/CheckAssess plan; is it working?
4. ActInstitutionalize improvement; continue cycle.
3-16
Quality Improvement Quality Improvement and Role of Employeesand Role of Employees
Should employees Should employees be involved?be involved?
Participative Participative problem solvingproblem solving Employees involved in Employees involved in
quality management quality management Every employee has Every employee has
undergone extensive undergone extensive training to provide quality training to provide quality service to Disney’s guestsservice to Disney’s guests
3-17
PresentationImplementation
Monitoring
SolutionProblem results
Problem Analysis
Cause and effectData collection and analysis
Problem IdentificationList alternatives
ConsensusBrainstorming
TrainingGroup processes
Data collectionProblem analysis
Organization8-10 members
Same areaSupervisor/moderator
Quality CircleQuality Circle
3-18
Strategic Implications of Strategic Implications of TQMTQM
Strong leadershipStrong leadership GoalsGoals, , visionvision, or , or missionmission Operational plans and policiesOperational plans and policies Mechanism for feedbackMechanism for feedback
3-19
Six SigmaSix Sigma
A process for developing and delivering A process for developing and delivering near perfect products and servicesnear perfect products and services
Measure of how much a process Measure of how much a process deviates from perfectiondeviates from perfection
3.4 defects per million opportunities3.4 defects per million opportunities ChampionChampion
An executive responsible for project successAn executive responsible for project success
3-20
Black Belts and Black Belts and Green BeltsGreen Belts
Black BeltBlack Belt Project leaderProject leader
Master Black BeltMaster Black Belt A teacher and mentor A teacher and mentor
for Black Beltsfor Black Belts
Green BeltsGreen Belts Project team Project team
membersmembers
3-21
3.4 DPMO3.4 DPMO
67,000 DPMOcost = 25% of
sales
67,000 DPMOcost = 25% of
sales
DEFINEDEFINE CONTROLCONTROLIMPROVEIMPROVEANALYZEANALYZEMEASUREMEASURE
Six Sigma: DMAICSix Sigma: DMAIC
3-22
TQM in Service TQM in Service CompaniesCompanies
Principles of TQM apply equally well to Principles of TQM apply equally well to services and manufacturingservices and manufacturing
Services and manufacturing companies Services and manufacturing companies have similar inputs but different processes have similar inputs but different processes and outputsand outputs
Services tend to be labor intensiveServices tend to be labor intensive Service defects are not always easy to Service defects are not always easy to
measure because service output is not measure because service output is not usually a tangible itemusually a tangible item
3-23
Quality Attributes in Quality Attributes in ServiceService
BenchmarkBenchmark ““Best” level of quality Best” level of quality
achievement one achievement one company or company or companies seek to companies seek to achieveachieve
TimelinessTimeliness How quickly a service How quickly a service
is providedis provided ““quickest, friendliest, most quickest, friendliest, most accurate service accurate service
available.”available.”
3-24
Cost of QualityCost of Quality
Cost of Achieving Good QualityCost of Achieving Good Quality Prevention costsPrevention costs
Costs incurred during product designCosts incurred during product design Appraisal costsAppraisal costs
Costs of measuring, testing, and analyzingCosts of measuring, testing, and analyzing Cost of Poor QualityCost of Poor Quality
Internal failure costsInternal failure costs Include scrap, rework, process failure, downtime, Include scrap, rework, process failure, downtime,
and price reductionsand price reductions External failure costsExternal failure costs
Include complaints, returns, warranty claims, Include complaints, returns, warranty claims, liability, and lost salesliability, and lost sales
3-25
Quality Management Quality Management and Productivityand Productivity
ProductivityProductivity Ratio of output to inputRatio of output to input
Yield: Yield: a measure of productivitya measure of productivity
Yield=(total input)(% good units) + (total input)(1-%good units)(% reworked)Yield=(total input)(% good units) + (total input)(1-%good units)(% reworked)
or
Y=(I)(%G)+(I)(1-%G)(%R)Y=(I)(%G)+(I)(1-%G)(%R)
or
Y=(I)(%G)+(I)(1-%G)(%R)Y=(I)(%G)+(I)(1-%G)(%R)
3-26
Product CostProduct Cost
Y
RKIK rd ))(())(( Product Cost
where:Kd = direct manufacturing cost per unitI = inputKr = rework cost per unitR = reworked unitsY = yield
3-27
Computing ProductComputing ProductYield for Multistage ProcessesYield for Multistage Processes
Y = (I)(%g1)(%g2) … (%gn)
where:I = input of items to the production process that will result in finished productsgi = good-quality, work-in-process products at stage i
3-28
Quality–Productivity RatioQuality–Productivity Ratio
QPRQPR Productivity index that includes productivity and Productivity index that includes productivity and
quality costsquality costs
QPR =(non-defective units)
(input) (processing cost) + (defective units) (reworked cost)
Microsoft Excel Worksheet
3-29
Seven Quality Control ToolsSeven Quality Control Tools
Pareto AnalysisPareto Analysis Flow ChartFlow Chart Check SheetCheck Sheet HistogramHistogram
Scatter DiagramScatter Diagram
SPC ChartSPC Chart Cause-and-Effect Cause-and-Effect
DiagramDiagram
3-30
NUMBER OFNUMBER OFCAUSECAUSE DEFECTSDEFECTS PERCENTAGEPERCENTAGE
Poor designPoor design 8080 6464 %%Wrong part dimensionsWrong part dimensions 1616 1313Defective partsDefective parts 1212 1010Incorrect machine calibrationIncorrect machine calibration 77 66Operator errorsOperator errors 44 33Defective materialDefective material 33 22Surface abrasionsSurface abrasions 33 22
125125 100100 %%
Pareto AnalysisPareto Analysis
3-31
Per
cen
t fr
om
eac
h c
ause
Per
cen
t fr
om
eac
h c
ause
Causes of poor qualityCauses of poor quality
Mac
hine
cal
ibra
tions
Mac
hine
cal
ibra
tions
Defec
tive
parts
Defec
tive
parts
Wro
ng d
imen
sion
s
Wro
ng d
imen
sion
s
Poor D
esig
n
Poor D
esig
n
Ope
rato
r err
ors
Ope
rato
r err
ors
Defec
tive
mat
eria
ls
Defec
tive
mat
eria
ls
Surfa
ce a
bras
ions
Surfa
ce a
bras
ions
00
1010
2020
3030
4040
5050
6060
7070(64)(64)
(13)(13)(10)(10)
(6)(6)(3)(3) (2)(2) (2)(2)
Pareto ChartPareto Chart
3-32
Flow ChartFlow Chart
Operation DecisionStart/ Finish
Start/ Finish
Operation
OperationOperation
Operation
Decision
3-33
Check SheetCheck Sheet
COMPONENTS REPLACED BY LABTIME PERIOD: 22 Feb to 27 Feb 2002REPAIR TECHNICIAN: Bob
TV SET MODEL 1013
Integrated Circuits ||||Capacitors |||| |||| |||| |||| |||| ||Resistors ||Transformers ||||CommandsCRT |
3-36
Control ChartControl Chart
1818
1212
66
33
99
1515
2121
2424
22 44 66 88 1010 1212 1414 1616
Sample numberSample number
Nu
mb
er o
f d
efec
tsN
um
ber
of
def
ects
UCL = 23.35
LCL = 1.99
c = 12.67
3-37
Cause-and-Effect Diagram Cause-and-Effect Diagram
QualityProblemQuality
Problem
Out of adjustmentOut of adjustment
Tooling problemsTooling problems
Old / wornOld / worn
MachinesMachinesFaultyFaulty testing equipmenttesting equipment
Incorrect specificationsIncorrect specifications
Improper methodsImproper methods
MeasurementMeasurement
Poor supervisionPoor supervision
Lack of concentrationLack of concentration
Inadequate trainingInadequate training
HumanHuman
DeficienciesDeficienciesin product designin product design
Ineffective qualityIneffective qualitymanagementmanagement
Poor process designPoor process design
ProcessProcess
InaccurateInaccuratetemperature temperature controlcontrol
Dust and DirtDust and Dirt
EnvironmentEnvironment
Defective from vendorDefective from vendor
Not to specificationsNot to specifications
Material-Material-handling problemshandling problems
MaterialsMaterials
3-38
American Customer American Customer Satisfaction Index (ACSI)Satisfaction Index (ACSI)
Measures customer satisfactionMeasures customer satisfaction Established in 1994Established in 1994 Web site: Web site: www.theacsi.orgwww.theacsi.org
Who do you think is top in ‘Breweries’?Who do you think is top in ‘Breweries’? Automobiles?Automobiles?