Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Total Quality Management
Chapter 16
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
What is Quality?
Quality means user satisfaction: that goods or services satisfy the needs and
expectations of the user.
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Quality and Product Policy
• Established by management
• Product planning
– wants and needs of the marketplace
– level of product performance
– price to be charged
– expected sales volume
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Quality and Product Design
• General specifications set by the marketplace– expected perfomance, appearance, price,
volume
• Product designers– materials to be used, dimensions,
tolerances, product capability, service requirements
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Product Development Cycle
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Quality and Manufacturing
• Strive for excellence in products
• All products must be within specification
• The less the variation (from the nominal) the better
• Tolerance– the amount of variation allowed from the
desired value
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Quality and Use
• Performance– reliability, durability, maintainability
• Features• Conformance to specification• Warranty• Service• Aesthetics• Perceived quality• Price
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Total Quality Management (TQM)
“TQM is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which the work.”
• APICS 11th Edition Dictionary
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
TQM - Basic Concepts
1. A committed and involved management
2. Focus on the customer
3. Involvement of the total workforce
4. Continuous process improvement
5. Supplier partnering
6. Performance measures
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Management Commitment
• Vision Statement– what the organization will be in 5 years
• Mission statement– who we are, who are our customers, what
we do, how we do it• Quality policy
– how goods and services are provided• Strategic plan
– includes TQM objectives
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Customer Focus
X-plicit– I want a car that will comfortably carry 5
passengers and some gear
X-pected– we arrived safely at our campsite
X-citing– there’s a 110 volt outlet in the back!
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Customer Focus
• Meeting and exceeding customer expectations
• External customers– people we sell our goods to
• Internal customers– people or departments who receive output
from another person or department– treat them like a customer
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Customer Requirements
1. High quality
2. Flexibility to change in volume, etc.
3. High service level
4. Short lead times
5. Consistency in meeting targets
6. Low cost
Customers expect improvements
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Employee Involvement
• TQM is everyone’s responsibility
• Employees are expected to do their jobs and to work at improving their jobs (and) other’s jobs
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Commitment to TQM
1. Training– their own job skills– cross trained on other jobs– tools of continuous improvement
2. Organization– to keep close contact with customers
3. Local ownership of processes– empowerment
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Empowerment
A condition whereby employees have the authority to make decisions and take actions in their work areas without approval. For example, a customer service representative can send out a replacement product if a customer calls with a problem.
• APICs 11th Edition Dictionary
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
TQM - Teams
• Move beyond the contribution of individuals
• Sum of the total effort is increased
• Requires skill and training
• Fundamental part of TQM
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Supplier Partnerships
• Used in JIT and TQM
• Treat the supplier as a partner and not as an adversary– quality improvements– mutual sharing of savings– team approach
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Performance Measures
“That what gets measured is that what gets done” - Anonymous
• Decide which processes need improvement
• Evaluate alternatives• Compare actual to target• Evaluate employees• Show trends
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Measurements
• Need to give useful feedback– Quantity of good parts per unit time– Cost– On time delivery– Quality
• function• aesthetics• accuracy (defects/tolerance)
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Measurements
• Simple, understandable, relevant and visible to the user, preferably developed by the user, designed to promote improvement, few in number
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Measurements
• Customer– number of complaints– on-time delivery
• Production– inventory turns, scrap,
cost per unit, time to delivery
• Suppliers– on-time delivery– rating– quality performance– billing accuracy
• Sales– expense to revenue– new customers– sales per square foot
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Quality Cost Concepts
• Cost of failure to control quality– failure
• Cost of controlling quality– prevention– appraisal
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Costs of Failure
• Internal failure costs– scrap– rework– spoilage
– these costs diminish with improved quality
• External failure costs
• After the customer receives the goods
• Most costly– warranty costs– field service– other costs to satisfy
the customer– decrese with
improved quality
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Costs of Controlling Quality
• Prevention costs– training– statistical process
control– maintenance– quality planning
• Appraisal costs– inspection– quality audits– testing– calibration
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Impact of Quality Improvements
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Variation• All things vary, the question is how much
variablity is acceptable
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Chance Variation
1. People - poorly trained vs skilled
2. Machine - well maintained?
3. Material - should be consistent
4. Method - often by different operators
5. Environment - temperature, humidity
6. Measurement - poor adjustments
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Chance Variation
There is no way to alter chance variation except to change the process. If the process produces too many defects,
then it must be changed.
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Assignable Variation
• Where variation can be related to a given action– tool wear, movement– operator error– changes in the process
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Statistical Process Control (SPC)
• Attempts to find the assignable causes (so they can be eliminated)
• Helps select processes that are capable of producing quality products
• Monitors process to be sure it remains capable of producing quality products
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Patterns of Variability
• A histogram of a number of readings gives a predictable pattern
• Normal curve exists in all natural processes
• If a process is studied and detects an odd shape, something is causing the change (assignable cause)
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Patterns of Variability
• Shape– ‘bell curve’– symetrical (even on both sides)
• Center– computed as the average– represented by the Greek letter μ ‘mu’
• Spread– measured and represented by the Greek
letter σ ‘sigma’
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Normal Distribution
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Areas Under the Normal Curve
μ-1σ-2σ-3σ +1σ +2σ +3σ68.3%
95.4%
99.7%
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Variation - Example
σ = 0.0016
μ = 1.000
1.000 1.0016
68.3%
95.4%
99.7%
1.0032 1.00480.99840.99680.9952
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Tolerance
“Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle.”
• APICS 11th Edition Dictionary
• Nominal value– desired value
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability
“Refers to the ability of the process to produce parts that conform to (engineering) specifications. Process capability relates to the inherent variability of a process …”)
• APICS 11th Edition Dictionary
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability
• Compares the 6 sigma spread of a process with the specification limits– LSL - lower specification limit– USL - upper specification limit– specification doorway = USL - LSL
• The 6 sigma spread of the process should be smaller than the specification doorway
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process CapabilityLSL USL
x
6 σ Total Process Spread
SpecificationDoorway
-3σ +3σ
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Capable?
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability
• The process spread is not related to the product specification tolerance
• A process must be selected that can meet the specifications– or defects will be produced
• Processes can produce defects in one of two ways, by having too big a spread (σ) or by a shift in the average (μ)
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability - Example Problem
In the previous example the process had a standard deviation of 0.0016” and a mean of 1”. If the specification called for a diameter of 1” +/- .005”:
a. Approximately what percent of the shafts will be within tolerance?
b. If the tolerance were changed to 1” +/- .002”, approximately what percent of the shafts will be within tolerance?
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
1.000 1.0016
68.3%
95.4%
99.7%
1.0032 1.00480.99840.99680.9952
σ = 0.0016
μ = 1.000
LSL0.995
USL1.005
Process Capability - Example Problem
a. Approximately 99.7% of the shafts will be in tolerance
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability - Example Problem
b. Approximately 68.3% of the shafts will be in tolerance
1.000 1.0016
68.3%
95.4%
99.7%
1.0032 1.00480.99840.99680.9952
σ = 0.0016
μ = 1.000
LSL0.998
USL1.002
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability Index Cp
Cp = USL - LSL
6 σ
• If the Cp is greater than one, then the process is
capable of producing 99.7% of parts within tolerance
• Many companies use a Cp of 1.33 or 2 since
processes may shift
• Note: Cp assumes the process is centered
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability Index Cp
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cp - Example Problem
The specifications for the weight of a chemical in a compound is 10 +/- 0.05 grams. If the standard deviation of the weighing scales is 0.02 grams, is the process considered capable?
Cp = 10.05 - 9.95
6 x 0.02
= 0.83
Since 0.83 is less than one, the process is not capable.
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Capability Cpk Index
Cpk = the lesser of:
(Mean - LSL) (USL - Mean)3σ or 3σ
Cpk Value Evaluation
Less than +1 Unacceptable process
+1 to +1.33 Marginal process
Greater than +1.33 Acceptable process
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cpk Index
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cpk - Example Problem
A company produces shafts with a nominal diameter of 1” and a tolerance of +/- .005 on a lathe. The process has a standard deviation of .001”. For each of the following cases calculate the Cpk and evaluate the process capability.
a. A sample has an average of .997.
b. A sample has an average of .998.
c. A sample has an average of 1.001
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cpk - Example Problem
a. Cpk = 1.005 - .997 = 2.67 or = .997 - .995 = .067
3 x .001 3 x .001
Cpk is less than 1. Process is not capable
b. Cpk = 1.005 - .998 = 2.33 or = .998 - .995 = 1.00
3 x .001 3 x .001
Cpk is 1. Process is marginal
c. Cpk = 1.005 - 1.001 = 1.33 or = 1.001 - .995 = 2.00
3 x .001 3 x .001
Cpk is 1.33. Process is capable
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Control
• Attempts to prevent defects by showing when there is assignable cause
• The process should exhibit only normal variation when there is no assignable cause
• This variation is monitored on a control chart
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Control Charts
Run chart: A graphical technique that illustrates how a process is performing over time.
X-bar (averages) chart: A control chart in which the subgroup average, X-bar, is used to evaluate the stability of the process level.
R chart: A control chart in which the subgroup range, R, is used to evaluate the stability or variability within a process.
• APICS 11th Edition Dictionary
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Run Charts
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
X (X-bar) and R Charts
• Small samples (3 - 9 pieces) are taken on a regular basis to find the the average (X) and range (R) of the sample
• These values are then plotted on a chart– X-bar chart– R chart
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Control Limits
• Lines on a control chart showing the normal (99.7%) of expected variation of a process
• Readings (X-bar or R) outside of these limits indicates assignable cause of variation
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
X-bar and R Control Charts
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Interpretting Control Charts
• A shift in the average (X-bar)– something has moved– change in method or material– worn tools
• A change in the range (R)– loose tools– change in method or material
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Action on Out of Control Points
• Out-of-control points indicate that something unusual has occurred
• Current conditions should be recorded
• The operator is probably the most aware of what has ‘changed’
• The sooner an investigation is conducted the better
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Attributes
• Items that do not conform to specification (difficult to measure)– scratches, dents– light bulbs– go-no-go inspection– sterility– dissatsified customers– missing items
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Attribute Charts
• “p-chart”
• Frequency of defects are charted
• Investigation is made of unusual changes in number of defects
• After-the-fact and do not prevent defects
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Other Quality Tools
1. Pareto charts
2. Checksheets
3. Process flow charts
4. Scatterplots
5. Cause and effect (fishbone) diagrams
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Pareto Charts
• Histograms arranged in decending order– typically: problems or defects (scrap,
customer complaints)
• Identifies most significant area to start investigation
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Checksheets
• Lists source of quality problems– customer complaints– missing parts, defects
• Occurances are simpy checked on the sheet
• Totals should show where the most problems occur
Reasons for return______________
Customer not satisfied with productWrong colorPaint chippedWrong sizeMissing partsBroken partsDelivered late
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Process Flow Charts
• Show in detail the steps required to produce the product or service
• Can show where problems occur– delays– wasted activity– excess travelling
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Scatterplots
• Shows the relationship between two variables
• temperature and strength• length of stay and
satisfaction• price and number sold• study hours and grade
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cause and Effect (Fishbone) Diagrams
• Plots potential causes of a quality problem
• Encourages input from group members
• Sorts by category– People– Machine– Method– Material– Measurement – Environment
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cause and Effect (Fishbone) Diagrams
QualityProblem
Man Machine Material
Method EnvironmentMeasurement
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sampling Inspection
• 100% inspection– inspect every part – when the consequence of failure is critical– when its easy to do– medical, aeronautics– tends to be expensive
• Acceptance sampling– take a sample of parts– accept or reject the entire batch
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
When to Use Acceptance Sampling
• Testing is destructive– ultimate pull strength of chain, sterility, firecrackers
• Not enough time to sample– election polls
• It is too expensive to test the whole batch– machine output, market surveys
• Human error will be in the sampling– as high as 3%– judgement is involved
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Conditions Necessary for Sampling
• All items are processed under the same conditions– same machine, same load of corn
• Samples must be random– inspectors are not allowed to choose
• The lot should be homogeneous– start, middle and end of the batch
• Batches are large– need enough samples to be significant
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sampling Plans
• Establish a level of acceptance– “if more than 2% defects are found, reject”
• AQL - Acceptable Quality Level
• Requires a pre-determined number of samples
• Procedures are set down to keep sampling methods consistant
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sampling Plans
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sampling Plans
• Consumer’s risk– the probability of accepting a batch which
is actually worse than the value found in the sample
• Producer’s risk– the probability of a rejecting a batch that is
actually better than the sample indicates
• Larger samples help to reduce these risks
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sampling PlansT
rue
% D
efec
tive
Sample % Defective - - -
Producer’s Risk
Consumer’sRisk
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sampling Plans - Cost
• Inspection costs money– employees time– destroyed product
• Need to balance the cost of sampling between the consumer’s risk and the producer’s risk
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
ISO Certification
• International Organization for Standardization - Geneva Switzerland
• “Iso” Greek for equality
• Management standards
• May be a requirement of doing business
• Most recent standard - ISO9000:2000
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Third Party Registration System
• Registrar Accreditation Board
• American Society for Quality - ASQ
• Registers and regularly audits – quality system is in place– it is being followed– documentation is provided
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
ISO 9000:2000 8 Principles
1. Customer focus
2. Leadership
3. Involvement of
people
4. Process approach
5. System approach to management
6. Continuous improvement
7. Factual approach to decision making
8. Mutually beneficial supplier relations
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
ISO 9000:2000
• Product realization– bringing the product or service into reality
• Applies to services as well as manufacturing
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
1Policy
4Proof
3Practice
2Procedure
ISO Documentation Pyramid
1. Quality manual, organization chart, indexed to level 2
2. What the firm does to meet level 1 policies, indexed to level 3
3. Work procedures and instructions
4. Records of proof of the above
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
ISO Certification
• Management standard
• Process approach
• Audited by third party
• Consistency in doing business
• Continuous improvement
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Benchmarking
• Compares an organization to the best in class– not necessarily in the same business
• Looks outward for ideas on improvement
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Benchmarking
1. Select the process2. Identify an organization that is “best in
class”– for that process i.e. accounts receivable
3. Study the benchmarked organization4. Analyze the data
– metrics, a measure of performance• quality, response time, cost per order
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma
• Focus on improving all business functions
• Initiated by upper management
• Tasked by middle management
• Projects
• Project managers
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma
• Striving for failure rates less than 3.4 out of one million possibilities
• Applied to all business processes
• Customer focus
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma
•Scope: Systemic reduction of variability
•Quality Definition: Defects per million
•Purpose: Reduce variation - increase
profits
•Measurement: Defects per million
•Focus: Locate and eliminate sources of
process error
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma Projects
DMAIC– Design– Measure – Analyze– Improve– Control
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma Project
1. Select the appropriate metrics
2. Determine how metrics will be tracked
3. Determine current baseline
4. Determine input variables
5. Determine changes needed
6. Make the changes
7. Did changes have a positive effect?
8. Establish controls at the new level
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma
• Achieved when process capability is equal to or greater than 2
• The process variation consumes less than half the specification doorway
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Project Managers
• Green Belts– specific amount of training– project savings of $10,000
• Black Belts– more training– project savings of $100,000
• Master Black Belts– Masters Degree– savings of $1,000,000
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Six Sigma
• Extension of SPC to business processes
• Continuous improvement– reduced waste– decreased costs– improved opportunities
• Customer benefits
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Quality Function Deployment
• Decision making method
• Voice of the customer
• Helps incorporate customer wants and needs into design features
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
House of Quality - Method
1. Gather information from customers and identify
wants and needs
2. Rate how we compare to the competition
3. Identify the features that affect the wants and needs
4. Identify the interactions between the features
5. Prioritise the wants/features by importance to customer
6. Set design objectives by feature
7. Assign responsibility for meeting the design objectives
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Interactions+ Strong Positive* Weak Positive- Strong Negativeo Weak Negative
Customer Needs
CompetitiveEvaluation
A - Competitor AB - Competitor BU - Us
Low High
Target Values
1. Attributes desiredby the cusotmer
2. How we compareto the
competition
4. Interactions between features
6. DesignObjectives
7. Responsibility
5. Importance tocustomer
3. Features thataffect the desired
attributes
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Interactions+ Strong Positive* Weak Positive- Strong Negativeo Weak Negative
Coffee Mug
Customer Needs Wal
l thi
ckne
ss
He
at
Re
ten
tion
Ap
pe
ara
nce
Lid
De
sig
n
Vo
lum
e
Sta
bili
ty
CompetitiveEvaluation
A - Competitor AB - Competitor BU - Us
Low High
Tight fitting lid 2 A B U
Insulation Value 5 5 U B A
Stability 4 B A U
Handle Grip 4 A B U
Volume 5 B U A
Appearance - Shape 5 5 A U B
Spilling 5 3 U B A
Ease of Drinking 4 A U B
Drop Test 3 U A B
Target Values
Wal
l thi
ckne
ss 3
mm
Insu
latio
n
Val
ue
AB
S P
last
ic
Clo
sure
on
Lid
Dia
me
ter
80
mm
He
igh
t 10
0 m
m
Responsibility J J J W Z Z
Figure 16.16 House of Quality for a Travel Mug
+ +
-+
-
++
House of Quality
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
JIT - TQM - MRPII
• JIT seeks to eliminate waste– inward looking
• TQM emphasis on customer satisfaction– outward looking
• MRPII manages resources
• All are involved in satisfying the customer
Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.
© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
JIT - TQM - MRPII
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