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Chapter5.pdf
Total Quality Management
(Chapter 5)
Production & Operations Management
INFO 335-71
Week 1
2
Learning Objectives
⚫ Define Quality
⚫ TQM Concepts
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Defining Quality – 5 Ways
1. Conformance to specifications ▪ How well a product/service meet targets and tolerances
defined by its designers.
2. Fitness for use ▪ Evaluates performance for intended use
3. Value for price paid ▪ Evaluation of usefulness vs. price paid
4. Support services ▪ Quality of support after sale
5. Psychological ▪ Ambiance, prestige, friendly staff
Manufacturing Quality vs. Service
Quality
⚫ Manufacturing focuses
on tangible product
features (can be seen,
touched, directly managed)
• Conformance • Performance • Reliability • Features • Durability • Serviceability
⚫ Service produce
intangible products that
must be experienced
(cannot be seen or touched)
• Intangible factors • Consistency • Responsiveness • Courtesy, friendliness • Promptness, timeliness • Atmosphere
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5
Cost of Quality
⚫ Loss of Business!!
⚫ Quality has dramatic cost implications of:
• Quality control costs (to achieve high quality) • Prevention costs (planning, training) • Appraisal costs (inspection, testing, audits)
• Quality failure costs (consequences of poor quality) • Internal failure costs (rework, scrap) • External failure costs (recalls, litigation, lost sales)
Early detection/prevention is less costly (Maybe by a factor of 10)
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TQM Philosophy
◼ TQM focuses on identifying quality problem root causes ◼ Encompasses the entire organization and is customer
driven ◼ Involves the technical aspects as well as people
(customers, suppliers, employees) ◼ Relies on seven basic concepts of
1. Customer focus 2. Continuous improvement 3. Employee empowerment 4. Use of quality tools 5. Product design 6. Process management 7. Managing supplier quality
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TQM Philosophy Concepts
⚫ Focus on Customer • Identify and meet customer needs • Stay tuned to changing needs, e.g. fashion styles
⚫ Continuous Improvement • Continuous learning and problem solving, e.g.
Kaizen, 6 sigma
• Plan-Do-Study-Act (PDSA) • Benchmarking • SixSigma DMAIC (Define-Measure-Analyze-
Improve-Control)
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TQM Philosophy Concepts - cont'd
⚫ Employee Empowerment • Empower all employees; external and internal
customers
• Team Approach • Teams formed around processes; 8-10 people • Meet weekly to analyze and solve problems
⚫ Use of Quality Tools
• Ongoing training on analysis, assessment, and correction, & implementation tools
• Studying practices at “best in class” companies
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Seven Tools of Quality Control
1. Cause-and-Effect Diagrams
2. Flowcharts
3. Checklists
4. Control Charts
5. Scatter Diagrams
6. Pareto Analysis
7. Histograms
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1. Cause-and-Effect Diagrams
⚫ Called Fishbone Diagram
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2. Flowcharts
⚫ Schematic diagram
⚫ Used to document the detailed steps in a process
12
3. Checklist
⚫ Simple data check-off sheet
⚫ Designed to identify type of quality problems at each
work station; per shift, per machine, per operator
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4. Control Charts
⚫ The UCL and LCL are calculated limits used to show
when a process is in or out of control i.e.; weight, width,
or volume
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5. Scatter Diagrams
⚫ A graph showing how two variables are related to one another
⚫ The greater the degree of correlation, the more linear are the observations
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6. Pareto Analysis
⚫ Named after the 19th century Italian economist; often called
the 80-20 Rule
• Principle is that quality problems are the result of only a few problems i.e.; 80% of problems are caused by 20% of causes
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7. Histograms
⚫ A chart that shows the frequency distribution of observed values of a variable (i.e.; service time
at a bank drive-up window)
⚫ Displays whether the distribution is symmetrical (normal) or skewed
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Product Design - Quality Function
Deployment (QFD)
⚫ Critical to ensure product design meets customer expectations (and enhance communications internally)
⚫ QFD is a useful tool for translating customer specifications into technical requirements
⚫ QFD encompasses • Customer requirements • Competitive evaluation • Product characteristics • Relationship matrix • Trade-off matrix • Setting Targets
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QFD - House of Quality
Trade-offs
Targets
Technical Benchmarks
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Quality Awards and Standards
⚫ Malcolm Baldrige National Quality Award (MBNQA)
⚫ The Deming Prize
⚫ ISO 9000 Certification
⚫ ISO 14000 Standards
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Reliability – Critical to Quality
⚫ Reliability is the probability that the product, service or
part will function as expected
⚫ No product is 100% certain to function properly
⚫ Reliability is a probability function dependent on sub-
parts or components
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Reliability – Critical to Quality
⚫ Example. Suppose a room has two lamps, but to have
adequate light both lamps must work (success) when
turned on. One lamp has a probability of working of .90,
and the other has a probability of working of .80.
⚫ What is the probability that the room will have adequate
lighting?
Note: Here the product is the lighting system that has two
component lamps.
.9 * .8 = .72
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Reliability – Critical to Quality
⚫ Example. There are two lamps in a room. When turned
on, one has probability of working of .90 and the other
has probability of working of .80. Only a single lamp is
needed to light the room for success.
⚫ What is the probability that the room will have adequate
lighting?
Note: Here the product is the lighting system that has two
component lamps.
Parallel
Backup
Redudant
R = r1 + r2*(1 – r1)
= .8 + .9*(1 - .8) = .8 + .9*.2 = .8 + .18 = .98
Probability of not working = component 1 not working and component 2 not working
C1 not working = 1 - .9 = 0.1; c2 not working = 1 – 0.8 =.2
Probability of system not working = .1 * .2 = .02
Probability of system working = 1 - .02 = .98
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Reliability – Critical to Quality
⚫ Example. Three lamps have probabilities of .90, .80, and
.70 of lighting when turned on. Only one lighted lamp is
needed for success.
⚫ What is the probability that the room will have adequate
lighting?
Note: Here the product is the lighting system that has three
component lamps.
.994
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Reliability – Critical to Quality
⚫ Determine the reliability of the system shown below.
.98 .99 .996
.966
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Reliability – Critical to Quality
⚫ Example. A product designer must decide if a redundant
component is cost-justified in a product. The product in
question has a critical component with a probability of
.98 of operating. Product failure would involve a cost of
$20,000. For a cost of $100, a switch and backup
component could be added that would automatically
transfer the control to the backup component in the
event of a failure. Should the backup component be
added if its operating probability is also .98?
Current System = .98
Probability of Failure = 1 - .98 = .02
Cost of Failure = $20,000
Expected Cost of Failure = $20,000 * .02
= $400
New System Not Working = .02 * .02
Probability of Failure = .0004
Cost of Failure = $20,000
Expected Cost of Failure = $20,000 * .0004
= 8
Cost of backup component = $100
Total Expected Cost of Failure = $100 + $8
= $108
