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Quality Management

COLLIER/EVANS

Explain the concepts and definitions of quality

Describe the quality philosophies and principles of Deming, Juran, and Crosby

Explain the GAP model and its importance

Describe the concepts and philosophy of ISO 9000:2000

LEARNING OUTCOMES

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Describe the philosophy and methods of Six Sigma

Explain the categories of cost-of-quality measurement

Describe how to apply the seven QC Tools

Explain the concepts of kaizen and poka-yoke

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LEARNING OUTCOMES (continued)

Quality Management

Systematic policies, methods, and procedures used to ensure that goods and services are produced

With appropriate levels of quality to meet the needs of customers

Deals with key issues relating to how goods and services are designed, created, and delivered to meet customer expectations

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Understanding Quality

Industrial Revolution led to quality control and the dependence on inspection

Reduced the workers’ responsibility for quality

Dr. Joseph Juran and Dr. W. Edwards Deming introduced quality to the Japanese after World War II

Using their ideas, Japanese quality exceeded that of Western manufacturers and created a renewed interest in quality in the U.S

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Understanding Quality

In recent years, quality has emerged under the concept of Six Sigma

Customer-focused and results-oriented approach to business environment

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Quality

Meeting or exceeding customer’s expectations

Quality of conformance: Extent to which a process is able to deliver output that conforms to the design specifications

Specifications: Targets and tolerances determined by designers of goods and services

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Service Quality

Consistently meeting or exceeding customer expectations and service delivery system performance criteria during all service encounters

Achieved by consistent delivery of a clearly defined customer benefit package and associated process and service encounters

Defined by Internal and external standards of performance

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Dimensions of Service Quality

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Tangibles

Reliability

Responsiveness

Assurance

Empathy

Principles of Total Quality

Focus on customers and stakeholders

Process focus supported by continuous improvement and learning

Participation and teamwork by everyone in the organization

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Influential Leaders in Modern Quality Management

W. Edwards Deming

Focused on bringing about improvements in product and service quality

By reducing uncertainty and variability in goods and services design

Higher quality leads to higher productivity and lower costs

Which leads to improved market share and long-term competitive strength

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Influential Leaders in Modern Quality Management

W. Edwards Deming

14 Points - Management philosophy for organizations

Deming cycle - Advocated a process to guide and motivate improvement activities through:

Planning

Doing

Studying

Acting

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Influential Leaders in Modern Quality Management

Joseph Juran

Defined quality as fitness for use

Advocated use of quality cost measurement

Quality trilogy

Planning

Control

Improvement

Focused on defect elimination using statistical tools

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Influential Leaders in Modern Quality Management

Philip B. Crosby

Authored the book, Quality is Free, in 1979

Brought quality to the attention of top corporate managers in the U.S

Absolutes of quality management

Quality means conformance to requirements, not elegance

There is no such thing as a quality problem

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Influential Leaders in Modern Quality Management

Philip B. Crosby

Absolutes of quality management

There is no such thing as the economics of quality

Doing the job right the first time is always cheaper

Performance measurement is the cost of quality, which is the expense of nonconformance

Performance standard is zero defects

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The GAP Model

People view quality by comparing features and characteristics of goods and services to a set of expectations

Recognizes that there are ways to mismanage the creation and delivery of high levels of quality

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15.1 The Gap Model of Quality

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Exhibit

The GAP Model

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Gap 1

Discrepancy between customer expectations and management perceptions of those expectations

Gap 2

Discrepancy between management perceptions of what features constitute:

Target level of quality

Task of translating these perceptions into executable specifications

The GAP Model

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Gap 3

Discrepancy between actual manufacturing and service delivery system performance and external communications to the customers

Gap 5

Difference between the customer's expectations and perceptions

Discrepancy between quality specifications documented in operating and training manuals and plans and their implementation

Gap 4

ISO 9000:2000

Quality standards created in 1987 and revised in 1994 and 2000 to improve:

Product quality

Quality of operation’s processes

Confidence to organizations and customers that quality system requirements are fulfilled

Internationally recognized

Prescribe documentation for all processes affecting quality

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Eight Principles of ISO 9000:2000

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Customer-focused organization

Leadership

Involvement of people

Process approach

System approach to management

Continual improvement

Factual approach to decision making

Mutually beneficial supplier relationships

Six Sigma

Business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes

By focusing on outputs that are critical to customers and results in a clear financial return for the organization

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Six Sigma

Used by:

Motorola

Allied Signal

Texas Instruments

General Electric

Defect: Mistake or error that is passed on to the customer

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Six Sigma

Unit of work: Output of a process or an individual process step

Defects per unit (DPU) = Number of defects discovered/number of units produced

Quantifies quality performance by defects per million opportunities (dpmo)

dpmo = (Number of defects discovered/ opportunities for error) X 1,000,000

In service applications, the term is errors per million opportunities (epmo)

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Six Sigma

Quality level corresponds to a dpmo or epmo equal to 3.4, which represents almost perfect quality

Calculating sigma level using excel

= NORMSINV(1 – Number of defects/ number of opportunities) + 1.5

= NORMSINV(1 – dpmo/1,000,000) + 1.5

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Six Sigma

3-sigma process has dpmo = 66,807

4-sigma process has dpmo = 6,210

5-sigma process has dpmo = 233

Moving from a three- to a four-sigma level requires about a 10-fold improvement

Moving from a five- to a six-sigma level is almost a 70-fold improvement

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Key Concepts of Implementing Six Sigma

Emphasizing dpmo or epmo as a standard metric that can be applied to all parts of an organization

Providing extensive training followed by project team deployment

Focusing on corporate sponsors responsible for supporting team activities

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Key Concepts of Implementing Six Sigma

Creating highly qualified process improvement experts

Ensuring that appropriate metrics are identified early in the process and that they focus on business results

Setting stretch objectives for improvement

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DMAIC Process

Define

Identify customers and their priorities

Identify and define a suitable project

Identify CTQs (critical-to-quality characteristics)

Measure

Determine how to measure the process and how it is performing

Identify key internal processes that influence CTQs

Measure current defects

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DMAIC Process

Analyze

Determine likely causes of defects

Understand why defects are generated by identifying key variables that cause process variation

Improve

Identify means to remove causes of defects

Confirm key variables and quantify their effects on CTQs

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DMAIC Process

Improve

Identify the maximum acceptable ranges of the key variables and a system for measuring deviations of the variables

Modify the process to stay within the acceptable range

Control

Determine how to maintain improvements

Put tools in place to ensure that key variables remain within acceptable ranges under the modified process

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Concepts and Methods Used in Six Sigma

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Elementary statistical tools

Advanced statistical tools

Product design and reliability

Measurement

Process control

Process improvement

Implementation and teamwork

Cost of Quality Measurement

Cost of quality: Costs associated with avoiding poor quality or those incurred as a result of poor quality

Applications

Better communication between operations managers and senior-level managers

Identify and justify major improvement opportunities

Evaluate the importance of quality and improvement in operations

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Categories of Quality Costs

Prevention costs: Expended to keep nonconforming goods and services from being made and reaching the customer

Quality planning costs

Process-control costs

Information-systems costs

Training and general management costs

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Categories of Quality Costs

Appraisal costs: Expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems

Test and inspection costs

Instrument maintenance costs

Process-measurement and process-control costs

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Categories of Quality Costs

Internal failure costs: Incurred as a result of unsatisfactory quality that is found before the delivery of a good or service to the customer

Scrap and rework costs

Costs of corrective action

Downgrading costs

Process failures

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Categories of Quality Costs

External failure costs: Incurred after poor-quality goods or services reach the customer

Costs due to customer complaints and returns

Goods and services recall costs and warranty and service guarantee claims

Product-liability costs

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The “Seven QC Tools”

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Flowcharts

Process mapping to identify the sequence of activities or flow of materials/ information in a process

Run charts and control charts

Run chart - Line graph with data plotted over time

Control charts - Include control limits

Checksheets

Simple tools for data collection and ensure completeness

Histograms

Graphically represent frequency of values within a specified group

The “Seven QC Tools”

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Pareto diagrams

Separate the vital few from the trivial many causes

Provide direction for selecting projects for improvement

Cause-and-effect diagrams

Represent chain of relationships

Scatter diagrams

Graphical component of regression analysis

15.4 The Structure of a Control Chart

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Exhibit

15.5 Defective Item Checksheet

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Exhibit

15.6 Pareto Diagram of Defective Items

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Exhibit

Root Cause Analysis

Root cause - Designate the source of a problem

5-Why technique

Forces one to redefine a problem statement as a chain of causes and effects to identify the source of the symptoms

By asking why, ideally five times

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Other Quality Improvement Strategies

Kaizen: Focuses on small, gradual, and frequent improvements over the long term with:

Minimum financial investment

Participation by everyone in the organization

Kaizen event: Intense and rapid improvement process

In which a team throws all its resources into an improvement project over a short time period

As opposed to traditional kaizen applications, which are performed on a part-time basis

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Other Quality Improvement Strategies

Poka-yoke: Approach for mistake-proofing processes using automatic devices or methods to avoid simple human error

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Quality management is systematic policies, methods, and procedures

Used to ensure that goods and services are produced with appropriate levels of quality

To meet the needs of customers

Service quality is consistently meeting or exceeding customer expectations and service delivery system performance criteria during all service encounters

SUMMARY

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Appraisal costs

Cost of quality

Defect

External-failure costs

Internal-failure costs

Kaizen

Kaizen event

Poka-yoke

Prevention costs

KEY TERMS

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Quality

Quality Management

Quality of conformance

Service Quality

Six Sigma

Specifications

Unit of work

KEY TERMS

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