Chapter 9/11
Introduction to Quality
Total Quality Management
Operations Management MBA105
Williams J. Srevenson 7th Edition
9-1
Learning Objectives
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Define quality.
Importance of quality.
Determinants of quality.
Costs & quality.
Quality awards.
quality gurus
TQM
Quality tools
9-2
Quality Management
 What does the term quality mean?
 Quality is the ability of a product or service
to consistently meet or exceed customer
expectations.
 degree of excellence of a thing.
 Totality of features and characteristics that
satisfy needs
9-3
Quality
Cost and Productivity Vs. Quality
USA Organizations Focus in Cost and
productivity (2nd war – mid 1980s)
WHY AMERICAN ORGANIZATIONS
BEHAVIOR CHANGE TWARD QUALITY??
9-4
Evolution of Quality Management
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Fredrick Taylor (Scientific Management)
1924 - Statistical process control charts
1930 - Tables for acceptance sampling
1940’s - Statistical sampling techniques
1950’s - Quality assurance/TQC (DEMING)
1960’s - Zero defects
1970’s - Quality assurance in services
9-5
Quality Assurance vs. Strategic
Approach
 Quality Assurance
 Emphasis on finding and correcting defects
before reaching market
 Strategic Approach
 Proactive, focusing on preventing mistakes
from occurring
 Greater emphasis on customer satisfaction
9-6
Dimension of Quality
 Which type of fuel you prefer to your car
 MOMTAZ or GAID
 Which Car you prefer
 CAMRY OR LUMINA
 FULL OPTIONS OR NORMAL OPTION
 Did you prefer health centre or private clinic
9-7
Dimensions of Quality
 Performance
 basic operating characteristics of a product; how
well a car is handled.
 Features
 “extra” items added to basic features, such as a
stereo CD or a leather interior in a car
 Reliability
 probability that a product will operate properly
within an expected time frame; that is, a TV will
work without repair for about seven years
9-8
Dimensions of Quality (Cont’d)
 Conformance
 degree to which a product meets pre–
established standards
 Durability
 how long product lasts before replacement
 Serviceability
 ease of getting repairs, speed of repairs,
courtesy and competence of repair person
9-9
Dimensions of Quality (Cont’d)
 Aesthetics
 how a product looks, feels, sounds, smells, or
tastes
 Safety
 assurance that customer will not suffer injury or
harm from a product; an especially important
consideration for automobiles
 Perceptions
 subjective perceptions based on brand name,
advertising, and the like
9-10
Examples of Quality Dimensions
Dimension
(Product)
Automobile
1. Performance
Everything works, fit &
finish Ride, handling,
grade of materials used
2. Aesthetics
(Service)
Auto Repair
All work done, at agreed
priceFriendliness,
courtesy, Competency,
quickness
Interior design, soft touch Clean work/waiting area
3. Special features Gauge/control placement Location, call when ready
Cellular phone, CD
Computer diagnostics
player
9-11
Examples of Quality Dimensions
(Cont’d)
D im ension (P roduct)
A utom obile
(S ervice)
A uto R epair
5. R eliability
Infreq uency of breakdow ns
W ork done correctly,
ready w hen prom ised
6. D urability
U seful life in m iles, resistance
to rust & corrosion
W ork holds up over
tim e
7. P erceived
q uality
T op-rated car
A w ard-w inning service
departm ent
8. S erviceability H andling of com plaints and/or H andling of com plaints
req uests for inform ation
9-12
Dimensions of Quality: Service
 Time and Timeliness
 How long must a customer wait for service, and
is it completed on time?
 Is an overnight package delivered overnight?
 Completeness:
 Is everything customer asked for provided?
 Is a mail order from a catalogue company
complete when delivered?
9-13
Dimensions of Quality: Service
 Courtesy:
 How are customers treated by employees?
 Are catalogue phone operators nice and are their
voices pleasant?
 Consistency
 Is the same level of service provided to each
customer each time?
 Is your newspaper delivered on time every
morning?
9-14
Dimensions of Quality: Service
 Accessibility and convenience
 How easy is it to obtain service?
 Does a service representative answer you calls
quickly?
 Accuracy
 Is the service performed right every time?
 Is your bank or credit card statement correct
every month?
9-15
Dimensions of Quality: Service
 Responsiveness
 How well does the company react to unusual
situations?
 How well is a telephone operator able to respond
to a customer’s questions?
9-16
Challenges with Service Quality
 Customer expectations often change
 Different customers have different
expectations
 Each customer contact is a “moment of truth”
 Customer participation can affect perception
of quality
 Fail-staffing must be designed into the
system
9-17
Quality Gurus
 Walter Shewart
 In 1920s, developed control charts
 Introduced the term “quality assurance”
 W. Edwards Deming
 Developed courses during World War II to teach
statistical quality-control techniques to engineers and
executives of companies that were military suppliers
 After the war, began teaching statistical quality control to
Japanese companies
 Joseph M. Juran
 Followed Deming to Japan in 1954
 Focused on strategic quality planning
9-18
Quality Gurus (cont.)
 Armand V. Feigenbaum
 In 1951, introduced concepts of total quality control and
continuous quality improvement
 Philip Crosby
 In 1979, emphasized that costs of poor quality far
outweigh the cost of preventing poor quality
 In 1984, defined absolutes of quality management—
conformance to requirements, prevention, and “zero
defects”
 Kaoru Ishikawa
 Promoted use of quality circles
 Developed “fishbone” diagram
 Emphasized importance of internal customer
9-19
Deming’s 14 Points
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Create constancy of purpose
Adopt philosophy of prevention
Cease mass inspection
Select a few suppliers based on quality
Constantly improve system and workers
Institute worker training
Instill leadership among supervisors
Eliminate fear among employees
Eliminate barriers between departments
Eliminate slogans
Remove numerical quotas
Enhance worker pride
Institute vigorous training and education programs
Develop a commitment from top management to implement
above 13 points
9-20
Determinants of Quality (cont’d)
 Quality of design
 Intension of designers to include or exclude
features in a product or service:
Different car models with different features
 size
 Appearance
 Roominess
 Fuel economy
 Comfort
 Material used
9-21
Determinants of Quality (cont’d)
 Quality of Conformance
 Making sure a product or service is produced
according to design:
 if new tires do not conform to specifications, they
wobble
 if a hotel room is not clean when a guest checks in,
the hotel is not functioning according to specifications
of its design
9-22
Determinants of Quality (cont’d)
 Ease of Use
 Instruction manuals
 Guide the customer for proper used
 good labeling
 Service after Delivery
9-23
The Consequences of Poor Quality
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Loss of business
Liability
Productivity
Costs
9-24
Benefits of Good Quality
 Organizations will benefit in different way:
 Enhance reputation
 Increase market share
 Greater customer loyalty
 Lower liability Cost
 Fewer complains
 Lower production cost
 Higher profits
9-25
Responsibility for Quality
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Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Customer service
9-26
Costs of Quality
 Failure Costs - costs incurred by defective
parts/products or faulty services.
 Internal Failure Costs
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Costs incurred to fix problems that are
detected during the production.
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Defective materials
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Incorrect machine setting
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Faulty equipment
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Carelessness
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Wrong procedure
9-27
Costs of Quality
 External Failure Costs
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All costs incurred to fix problems that are
detected after the product/service is delivered
to the customer.
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Warranty work
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Handling of complains
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Replacement
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Liability
9-28
Costs of Quality (continued)
 Appraisal Costs
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Costs of activities designed to ensure
quality or uncover defects
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Cost of inspector
Testing
Test equipment
Labs
Field testing
9-29
Costs of Quality (continued)
 Prevention Costs
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Cost of preventing defects form occurring
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Planning and adminstration
Working with vendors
Training
Quality control procedures
9-30
Total Quality Management
A philosophy that involves everyone in
an organization in a continual effort to
improve quality and achieve customer
satisfaction.
Continuous Improvement
 Involvement of Everyone
 Customer Satisfaction
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9-31
Elements of TQM
1. Continual improvement (never ending)
2. Competitive benchmarking
3. Employee empowerment
4. Team approach
5. Decisions based on facts
6. Knowledge of tools
7. Supplier quality
8. Champion
9. Quality at the source
10. Suppliers
9-32
Continuous Improvement
 Philosophy that seeks to make neverending improvements to the process of
converting inputs into outputs.
 Kaizen: Japanese
word for continuous
improvement.
9-33
Quality at the Source
The philosophy of making
each worker responsible for
the quality of his or her work.
9-34
Process Improvement and Tools
 Process improvement - a systematic
approach to improving a process
 Process mapping
 Analyze the process
 Redesign the process
 Tools
 There are a number of tools that can be
used for problem solving and process
improvement
 Tools aid in data collection and
interpretation, and provide the basis for
decision making
9-35
Basic Quality Tools
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Flowcharts
Check sheets
Histograms
Pareto Charts
Scatter diagrams
Control charts
Cause-and-effect diagrams
Run charts
9-36
Quality Tools
Flow Chart :
displays the steps in a process showing order and
relationships helps in understanding of that process
and identifies potential weaknesses i.e. poor
performance
Cause and Effect
Also know as fishbone or Ishikawa
9-37
Quality Tools
P oke-Y ok e
seeking to avoid inadvertent errors
F ailure M od e E ffect A n alysis(F M E A )
Q uantifies the possibilities of
failure, the effect of failure and
w eighs up the likelihood
Q u ality C ircles
feedback groups that voice problem s
and suggest solutions
T ally or C h eck sh eet
R ecords frequency
9-38
Quality Tools
P areto C h art
a form of bar-chart w hich displays
the relative im portance of problem s
or conditions by ordering frequency
and show ing the cum ulative effect
H isto gram
d isplayin g variatio n in a p rocess
tryin g to exp lain th e cause of it
N o te: B o x W hisker Plots w o uld be a
u seful ad d itio n to this
Scatter Graph
looks for relationships between
factors and displays their strength
9-39
Quality Tools
Clustering
Reduces complexity or size of data set
by grouping ideas under headingsUseful
for qualitative data from questionnaires
Filtering ideas
Reduces ideas by asking questions
e.g. Is the idea feasible? Affordable? Is
it within our control? Would it improve
the situation?
9-40
Flow Chart
Start/
Finish
Operation
Operation
Decision
Operation
Operation
Operation
Decision
Start/
Finish
9-41
Check Sheet
COMPONENTS REPLACED BY LAB
TIME PERIOD: 22 Feb to 27 Feb 2002
REPAIR TECHNICIAN: Bob
TV SET MODEL 1013
Integrated Circuits
Capacitors
Resistors
Transformers
Commands
CRT
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9-42
Histogram
20
15
1
0
5
0
1 2
6 13 10 16 19 17 12 16 2017 13 5 6 2 1
9-43
Pareto Analysis
CAUSE
NUMBER OF
DEFECTS
Poor design
Wrong part dimensions
Defective parts
Incorrect machine calibration
Operator errors
Defective material
Surface abrasions
PERCENTAGE
80
16
12
7
4
3
3
64 %
13
10
6
3
2
2
125
100 %
9-44
70
(64)
Percent from each cause
60
50
40
30
20
(13)
10
(10)
(6)
(3)
(2)
(2)
0
Causes of poor quality
9-45
Scatter Diagram
Y
X
9-46
Control Chart
1020
UCL
1010
1000
990
LCL
980
970
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15
9-47
Cause-and-Effect Diagram
Figure 9.12
Measurement
Faulty
testing equipment
Environment
Old / worn
Inadequate training
Quality
Problem
Defective from vendor
Not to specifications
Dust and Dirt
Tooling problems
Lack of concentration
Improper methods
Machines
Out of adjustment
Poor supervision
Incorrect specifications
Inaccurate
temperature
control
Human
Materialhandling problems
Materials
Poor process design
Ineffective quality
management
Deficiencies
in product design
Process
9-48
Diameter
Run Chart
Time (Hours)
9-49
Tracking Improvements
Figure 9-18
UCL
UCL
UCL
LCL
LCL
LCL
Process centered
Process not centered and stable
and not stable
Additional improvements
made to the process
9-50
Methods for Generating Ideas
 Brainstorming
 Quality circles
 Interviewing
 Benchmarking
 5W2H
9-51
Quality Circles
 Team approach
 List reduction
 Balance sheet
 Paired comparisons
9-52
Benchmarking Process
 Identify a critical process that needs
improving
 Identify an organization that excels in
this process
 Contact that organization
 Analyze the data
 Improve the critical process
9-53