Managing Quality
12 July 2001
Introduction
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What: quality in operations
management
Where: Quality affects all goods and
services
Why: Customers demand quality
What is Quality
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High quality products
Low quality products
What does quality mean to you?
American Society for Quality
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“The totality of features and
characteristics of a product or service
that bears on its ability to satisfy stated
or implied needs”
User-Based Definition
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“Quality lies in the eye of the beholder”
Higher quality = better performance
Higher quality = nicer features
Manufacturing-Based
Definition
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Quality = conforming to standards
“Making it right the first time”
Product-Based Definition
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Quality = a measurable variable
Our Definition
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Quality: The ability of a product or
service to meet customer needs
Implications of Quality
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Company Reputation
Product Liability
Global Implications
Global Implications
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National Quality Awards:
US: Malcolm Baldridge National Quality
Award
Japan: Deming Prize
Canada: National Quality Institute
Canada Awards for Excellence
Canada Award Winners 2000
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Aeronautical and Technical Services
British Columbia Transplant Society
Delta Hotels
Honeywell Water Controls Business Unit
Quality and Strategy
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Differentiation
Cost Leader
Response
Quality and Profitability
Sales Gains
•Improved Response
•Higher Prices
•Improved Reputation
Improved Quality
Increased Profits
Reduced Costs
•Increased Productivity
•Lower Rework, Scrap
•Lower Warranty Costs
Costs of Quality
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Prevention Costs
Appraisal Costs
Internal Failure
External Costs
International Standards
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ISO 9000
Establish quality management
procedures
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Documented processes
Work Instructions
Record Keeping
Does NOT tell you how to make a
product!
Total Quality Management
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TQM – Total Quality Management
Quality emphasis throughout an
organization
From suppliers through to customers
W. Edwards Deming
Deming’s 14 Points
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Create consistency of purpose
Lead to promote change
Build quality into the product, stop depending
on inspections to catch problems
Build long-term relationships based on
performance instead of awarding business on
the basis of price
Continuously improve product, quality and
service
Start training
Deming’s 14 Points
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Emphasize leadership
Drive out fear
Break down barriers between departments
Stop haranguing workers
Support, help and improve
Remove barriers to pride in work
Institute a vigorous program of education and
self-improvement
Put everybody in the company to work on
transformation
TQM Concepts
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Continuous Improvement
Employee Empowerment
Benchmarking
Just-In-Time
Taguchi
Knowledge of Tools
Continuous Improvement
Act
Plan
Check
Do
Continuous Improvement
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Kaizen
Zero Defects
Six Sigma
Employee Empowerment
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Involve employees in every step of
production
High involvement by those who
understand the shortcomings of the
system
Quality circle
Benchmarking
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Pick a standard or target to work
towards
Compare your performance
Best practices in the industry
Just-In-Time
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Produce or deliver goods just when they
are needed
Low inventory on hand
Keeps evidence of errors fresh
Taguchi Concepts
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Quality robustness
Quality Loss Function
Target-oriented Quality
TQM Tools
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Check Sheet
Scatter Diagram
Cause and effect diagram (fishbone)
Pareto Chart – 80-20 Rule
Flow Charts
Histogram
Statistical Process Control
Inspection
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Attribute Inspection
Variable Inspection
Inspection
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At supplier’s plant
Upon receipt of goods from supplier
Before costly processes
During production
When production complete
Before delivery
At point of customer contact
Source Inspection
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Employees self-check their work
Poka-yoke
Statistical Process Control
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Apply statistical techniques to ensure
processes meet standards
Natural variations
Assignable variations
Goal: signal when assignable causes of
a variation are present
Statistics
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Mean
Standard deviation
Natural variation
Assignable variation
Control Charts
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X Bar Chart
R Chart
In Control vs Out Of Control
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In control and producing within control
limits
In control, but not producing within
control limits
Out of control
Central Limit Theorem
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Mean
Standard Deviation
95.5%
99.73%
Control Limits
Using Control Charts
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Mean changing –
Range changing