Module 4
BIS 963 Operations Management
Quality Management
Prof. Aziz Ezzat ElSayed, Ph.D.
Professor of Industrial and Management Engineering
College of Engineering and Technology
Arab Academy for Science and Technology
Abu-Kir Campus, Alexandria, Egypt
Main Reference: Operations Management: Sustainability and Supply Chain Management, Jay Heizer,
Barry Render, Chuck Munson, Global Edition, 12/E, ©2017 • Pearson
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Today’s Agenda …
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•
•
•
•
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Quality … Defined
Quality Models (Review)
Quality & Profitability
Consequences of Poor Quality
Measuring Quality (Dimensions)
TQM Concepts …
•
•
•
•
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Continuous Improvement
Six Sigma
Benchmarking
Tagushi Concept
Quality Circles
TQM Tools
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Quality ...
“The ability of a product or service to
consistently meet or exceed customer
expectations “
William Stevenson- Operations Management- Theory and Practice, 2012
“ The totality of features & characteristics
of a product or service that bears on its
ability to satisfy stated or implied needs“
American Society for Quality (ASQ) – www.asq.org
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Quality and Profitability
Q: is there a relationship between Quality & Profitability ?
A: High quality products and services are the most profitable.
Sales Gains via
Improved Response Time
Flexible Pricing policies
Improved Reputation
Improved
Quality
Increased
Profits
Reduced
Costs via
Lower Wastes & Defects
Lower Rework & Scrap
Lower Warranty costs
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Reactive/Passive
Adapted from: http://www.region1mep.org/quality-control/
Traditional Quality …
ACCEPT
INPUTS
PROCESS
PRODUCT
INSPECT
REJECT
REWORK
100 % Inspection: comparing each item to an
acceptable specification example. inspections are made
after a process has transformed inputs into a product.
Based on inspection, the product is accepted, rejected, or
sent back to reworked.
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Adapted from: http://www.region1mep.org/quality-control/
Still Reactive/Passive
Statistical Quality Control…
ACCEPT
PRODUCT
INPUTS
PROCESS
DATA
SAMPLE
INSPECT
CONTROL
REJECT
REWORK
Sampling inspection: SQC inspections begin with a sample
drawn from products downstream of a process.
Data is collected and described statistically and used to
provide feedback control for the process to decide whether
the product or lot is accepted, rejected, or sent to rework.
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Proactive/Preventive
Adapted from: http://www.region1mep.org/quality-control/
Quality at Source Inspection …
INPUTS
ACCEPT
PROCESS
PRODUCT
INSPECT
SHUTDOWN
REJECT
CONTROL
WARNING
Mistake Proof: focus on detecting defect-causing conditions
upstream of the process and correcting mistakes before
they result in nonconformities.
Source inspections verify that all of the inputs to a process
are acceptable before the process is executed.
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Consequences of Poor Quality
1. Company reputation
Liability = ‫مسئولية‬
2. Liability
3. Global implications
4. Loss of business
5. Costs
6. Productivity
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Measuring Quality ?
• Before being able to construct a quality
management program, the company must
first organize a system of quality that will
determine how they will judge their products.
• This quality system will contain the
characteristics (Dimensions) to be judged
in order to define the quality of the particular
product or service to be produced for the
market.
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© Copyright Prof. Dr. Aziz Ezzat ElSayed – BIS 963 Operations Management - Lecture Handouts
Durability = ‫المتانة – التحمل‬
Reliability = ‫إعتمادية‬
Aesthetics = ‫جماليات‬
Dimensions of Quality (Goods)
Product (Goods) quality is judged based on
1
2
3
4
5
6
7
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Dimension
Performance
Aesthetics
Special features
Safety
Reliability
Durability
Perceived quality
Serviceability
8 dimensions :
Drivers
Main characteristics of the product.
Appearance, feel, smell, taste, etc.
Extra characteristics.
How well a product is safe during usage.
Consistency of performance.
Useful life.
Reputation.
Handling of complaints or repairs.
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Courtesy = ‫ الذوق‬- ‫مجاملة‬
Competence = ‫ مهارة‬- ‫كفاءة‬
Dimensions of Quality (Services)
Service (employee) quality is judged based on
1
2
3
4
5
6
7
8
Dimension
Responsiveness
Competence
Access
Reliability
Courtesy
Communication
Credibility
know the customer
8 dimensions:
Drivers
Readiness to provide service
Have the required skills.
Approachability and ease of contact
Consistency of performance
Politeness, respect, and friendliness
Listening and informing customers
Trustworthiness, believability, and honesty
Effort to understand the customer's needs
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TQM (Total Quality Management)
•
•
A philosophy that involves everyone in the
organization in a continual improvement
effort to improve quality and achieve
customer satisfaction.
It encompasses the entire firm from
supplier to customers to excel in all aspects
that are important to the customer.
It’s a journey of Continuous Improvement
with perfection unattainable
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1- Continuous Improvement
• TQM requires a never-ending process of
continuous improvement that covers: peopleequipment-materials-procedures- etc.
1- Identify the
problem and
make a plan.
4- Take action
based on results
learned in the
study.
Deming’s
PDCA
Cycle
2- Test the
Plan, do a
small-scale
study.
3- is the plan
working?
Review the test,
analyze the results.
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2- Six Sigma
• A statistical approach used to improve the
process capability to reach (99.9997%)
accuracy and reduce the defects to reach
3.4 DPMO (defects per million opportunities).
• Any process can be defined as a normal
distribution with a (mean = ) and a
(standard deviation = )
The concept of
wiping out defects
-∞
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+∞

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A Process Normal Distribution
• Example: A pharmaceutical process where bottles
•
are filled with a saline solution.
The salt concentration of a sample of 50 bottles is
measured.
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What will happen if we increase the sample size ?
A Process Normal Distribution
• Example: A pharmaceutical process where bottles are
filled with a saline solution. The salt concentration of a
sample of 50 bottles is measured.
which gives the following results:
Histogram
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Specifications Limits
Defects = Area under the curve
outside the specification limits
y
LSL = Lower Specifications Limit
USL = Upper Specification Limit
LSL
USL
Defects
Defects
x
-∞
µ-3σ µ-2σ µ-σ
µ
µ+σ µ+2σ µ+3σ
+∞
ProcessThe
capability
as %ofof(σ),
defects
variability
(σ)curve
decreases
Smallerincreases
the value
theand
narrower
the
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Reducing process variability by reducing ()
Process Capability
Case 1: N ( , )
High variability, More dispersion,
Higher value of (), High % of defects.
Low process capability
1

USL
Case 2: N ( , reduced )
Reducing process variability by reducing
(), better dispersion, less % of defects.
Process is partly capable.
Case 3: N ( , more reduced )
More reduction of process variability by
reducing (), less dispersion, less % of
defects.
Process is capable.
© Copyright Prof. Dr. Aziz Ezzat ElSayed – BIS 963 Operations Management - Lecture Handouts
LSL
USL
LSL
2

LSL
USL
3

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Process variability and Quality
• Quality is inversely proportional to
variability (Variability & Quality are enemies).
• The more variation in product
characteristics, in delivery times, in work
practices, etc. the more waste, higher
costs and poor quality, is delivered to our
customers.
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High and Low variability
Q: How we measure variability in a process ?
Case (2)
Case (1)
USL
USL
Defect
Defect
Case (1): Products delivered after 30 minutes represent 15.87%
Case (2): Products delivered after 30 minutes represent 2.27%
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DPMO = Defects Per Million Opportunities
6 Sigma Process Capability
USL
LSL
6
When the
process is
centered
0.002 DPMO
3
2700 DPMO
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11
12
13
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In a 3 sigma process the values are widely spread along the
center line, showing higher process variation.
In a 6 Sigma process, the values are closer to the center line
showing less process variation
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DPMO = Defects Per Million Opportunities
3 Sigma Process Capability
LSL
USL
When the
process is
centered
Process Capability= 99.73%
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DPMO = Defects Per Million Opportunities
6 Sigma Process Capability
When the
process is
centered
USL
LSL
Process Capability= 99.9997%
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6 Sigma Quality
Area = 0.1587
DPMO = 158,700
Between 2 & 3 Sigma
Sigma
LSL
DPMO
6
3.4
5
233
4
6,210
3
66,800
2
308,540
USL
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3- Employee Empowerment
‫تمكين‬
• Giving employees decision-making and
problem-solving authority within their jobs
and more involved in product and process
improvements
• Reason : 85% of quality problems are due to
process and material and not the employees.
Techniques:
1. Build communication networks for employee.
2. Develop supportive supervisors.
3. Move responsibility to lowest level possible.
4. Encourage High morale organization.
5. Create Formal team structure.
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4- Benchmarking
• Selecting best practices to use as a standard
for performance.

Typical measures: % of defects – cost per unit –
processing time – service response time – ROI –
customer satisfaction rates – customer retention
rates
• Find a similar firm that is leader – world classin business (need not to be in same field )1
• Compare your firm (benchmark yourself)
against those firms.
(1) Example:
Xerox and Mercedes Benz went to L.L. Bean For order filling and warehousing
benchmarks
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QLF= identifies all costs of poor quality
5- Taguchi Concepts
Quality Loss Function (QLF):
High loss
•To Firm
•To Customer
•To Society
Unacceptable
Poor
Fair
Good
Low loss
LSL
Target
L = Quality loss
D = Distance from target
C = Cost of deviation
Conformance Quality:
Accepts products that fall
within the limits , Which
cause losses to be high
The farthest from target
the higher is the loss
Best
Frequency
Genichi Taguchi
L = D 2C
USL
Target-oriented Quality
Strive to produce units
near the target
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6- Quality Circles
• A group of employees meeting regularly with
a facilitator to solve work-related problems in
their work area
• Members receive training in group planning –
problem solving – statistical quality control
(SQC).
Meetings are usually scheduled weekly
after work but sometimes on company
time. A specially trained team member
(Facilitator) helps training members and
keeps meeting run smoothly
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TQM Tools
1.
2.
3.
4.
5.
6.
7.
Check Sheets
Scatter Diagrams
Fishbone Diagrams
Pareto Charts
Flow Charts
Histograms
Control Charts
American Society for Quality (ASQ) – www.asq.org
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7- TQM Tools
1. Check Sheet (Tally Sheet):

An organized method of recording data
October 2021
Adapted from: https://techqualitypedia.com/check-sheet-tally-sheet/
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7- TQM Tools
2. Scatter Diagram:

A graph of the value of one variable vs.
Another variable
R  0.75 to 1.0
Strong – Positive - Linear
R  - 0.4 to - 0.6
Moderate – Negative - Linear
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7- TQM Tools
Kaoru Ishikawa
(1915-1989)
3. Cause-and-Effect Diagram:


A tool that identifies process elements that
may affect an outcome
Also known as Fish Bone diagram and
Ishikawa diagrams
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7- TQM Tools
3. Cause-and-Effect Diagram:
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7- TQM Tools
3. Cause-and-Effect Diagram:
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7- TQM Tools
4. Pareto Chart :


A graph that identifies problems or defects
in descending order of frequency
Separates the "vital few" from the "trivial
many" (Pareto Principle)
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7- TQM Tools
4. Pareto Chart : (Customer Complaints)
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7- TQM Tools
4. Pareto Chart : (Customer Complaints)
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7- TQM Tools
4. Pareto Chart : (Customer Complaints)
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7- TQM Tools
5. Flow Chart :

A chart that describes the steps in a process
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7- TQM Tools
6. Histogram :

A distribution that shows the frequency of
occurrences of a variable
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7- TQM Tools
7. Control charts :

A chart with time on the horizontal axis for
plotting values of a statistical variable
Upper Control Limit (UCL)
Variable
Average (
)
Lower Control Limit (LCL)
Time
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A Stable Process
Upper Control Limit
+3 σ
Average
X
-3 σ
Time
Lower Control Limit
• Control limits predict the variation that will
occur to the process or system.
• The process shown is stable since it has
only common causes affecting the system.
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An Unstable Process
Upper Control Limit
+3 σ
Average
X
-3 σ
Time
Lower Control Limit
• Control limits predict the variation that will
occur to the process or system.
• The process shown is unstable since it has
both common & Special causes of variations
affecting the system.
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