Business Finance - Operations Management OPMT 620: Operations Management - Case Study McDonalds Assignment

Stevenson7ce_PPT_Ch09-CG.pdf

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Chapter

Sam Lampropoulos George Brown College

Management of Quality

What is Quality?

Quality is the ability of a product or service to consistently meet or exceed customer expectations.

Quality control is monitoring, testing, and correcting quality problems after they occur.

Quality assurance ensuring a products quality will be good by preventing defects before they occur.

Today Six Sigma, statistical tools

1980s TQM, continuous improvement

1970s quality management systems

1950s quality assurance

Industrial Revolution Division of labour: quality control shifts to full time inspectors

Pre-Industrial Revolution Craftsmanship: each craftsman responsible for quality.

Evolution of Quality Management

Determinants of Quality

Intention of designers to include or exclude features that customers require

Product design

Translating product characteristics into process specifications and tolerances

Production Process design

The degree to which goods or services conform to design specification

Production

Ease of use and user instructions and support.

Use

Benefits of Good Quality

Costs of Quality

A methodology to determine the resources used to prevent poor quality, appraise the quality of the products, and deal with internal and external failures.

Failure Costs - costs incurred by defective parts/products. • Internal Failure Costs - fixing problems during

production • External Failure Costs - fixing problems after delivery

to customer

Costs of Quality (continued)

Appraisal Costs • Inspection and testing

Prevention Costs • Quality training, planning, customer

assessment, creating SOPs

Hidden Costs of Quality

Failure Costs Increase Over Time

Total Quality Management (TQM) Continuous

Improvement: make never-ending

improvements to critical processes

Data driven

Employee empowerment: Giving workers

responsibility and training

Team Approach

Suppliers: encourage

partnership and long term

relationships

Fail-safing: designing in

elements that prevent errors

A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

Basic Quality Tools

Figure 9-2

Six Sigma

Six Sigma is a more sophisticated statistical approach to problem solving and quality improvement. It is a business process for improving quality, reducing costs, and increasing customer satisfaction. Six Sigma has five steps: define, measure, analyze, improve, and control (DMAIC). § Statistically

• Having no more than 3.4 defects per million § Conceptually

• Program designed to reduce defects • Requires the use of certain tools and

techniques

Six Sigma Process

6s DMAIC

Define Determine the customers and critical-to- quality procedures.

Measure Identify and measure the quality problem, determine the baseline sigma, and identify possible influencing factors.

Analyze Test the influencing factors and identify the vital few.

Improve Select the solution method, prove its effectiveness, and implement it.

Control Develop process control plan.

Six Sigma Improvement Methodology DMAIC

Six Sigma Quality Continuous Improvement Objective Product and process

perfection Product and process improvement

Tools Statistical, e.g., design of experiments and analysis of variance

Simple data analysis, e.g., Pareto chart, cause-and-effect diagram

Methodology Define, measure, analyze, improve, control (DMAIC)

Plan, do, study, act (PDSA)

Team leader Black belt Champion

Training Long/formal Short/informal

Culture change Usually enforced Sometimes enforced

Project time frame Months/years Days/weeks

Comparing Six Sigma to Continuous Improvement

Exercise 2

Group Exercise