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Operations Management
Outline <ul><li>Tools of TQM </li></ul><ul><ul><li>Check sheets </li></ul></ul><ul><ul><li>Scatter Diagrams  </li></ul></u...
Service Industry Inspection <ul><ul><li>Inspection of Attributes vs Variables </li></ul></ul><ul><li>TQM in Services </li>...
Learning Objectives <ul><li>When you complete this chapter, you should be able to : </li></ul><ul><li>Identify or Define :...
Learning Objectives - continued <ul><li>When you complete this chapter, you should be able to : </li></ul><ul><li>Explain ...
To Make the Quality Focus Work <ul><li>Motorola: </li></ul><ul><ul><li>Aggressively began a worldwide education program to...
Ways in Which Quality Can Improve Productivity <ul><li>Sales Gains </li></ul><ul><ul><li>Improved response </li></ul></ul>...
Flow of Activities Necessary to Achieve Total Quality Management <ul><li>Organizational Practices </li></ul>Quality Princi...
Organizational Practices <ul><li>Leadership </li></ul><ul><li>Mission statement </li></ul><ul><li>Effective operating proc...
Quality Principles <ul><li>Customer focus </li></ul><ul><li>Continuous improvement </li></ul><ul><li>Employee empowerment ...
Employment Fulfillment <ul><li>Empowerment </li></ul><ul><li>Organizational commitment </li></ul><ul><li>Yields: Employees...
Customer Satisfaction <ul><li>Winning orders </li></ul><ul><li>Repeat customers </li></ul><ul><li>Yields: An effective org...
Definitions of Quality <ul><li>ASC : Product characteristics & features that affect customer satisfaction </li></ul><ul><l...
Dimensions of Quality for Goods Operation Reliability & durability Conformance Serviceability Appearance Perceived quality...
Importance of Quality Costs & market share Company’s reputation Product  liability International implications Increased Pr...
<ul><li>Established in 1988 by the U.S. government </li></ul><ul><li>Designed to promote TQM practices </li></ul><ul><li>S...
Baldrige Award Criteria Framework    
Costs of Quality <ul><li>Prevention costs  - reducing the potential for defects </li></ul><ul><li>Appraisal costs  - evalu...
EC Environmental Standard ISO 14000 <ul><li>Core Elements: </li></ul><ul><ul><li>Environmental management </li></ul></ul><...
International Quality Standards <ul><li>Industrial Standard Z8101-1981 (Japan) </li></ul><ul><ul><li>Specification for TQM...
Traditional  Quality Process (Manufacturing) Specifies Need Customer Interprets Need Marketing Designs Product Defines Qua...
TQM <ul><li>Encompasses entire organization, from supplier to customer </li></ul><ul><li>Stresses a commitment by manageme...
Achieving  Total Quality Management Organizational Practices Quality Principles Employee Fulfillment Attitudes  (e.g., Com...
Deming’s Fourteen Points <ul><li>Create consistency of purpose </li></ul><ul><li>Lead to promote change </li></ul><ul><li>...
Deming’s Points - continued <ul><li>Drive out fear </li></ul><ul><li>Break down barriers between departments </li></ul><ul...
Concepts of TQM <ul><li>Continuous improvement </li></ul><ul><li>Employee empowerment </li></ul><ul><li>Benchmarking </li>...
Continuous Improvement Represents continual improvement of process & customer satisfaction Involves all operations  & work...
Shewhart’s PDCA Model 4.Act 1.Plan 3.Check 2.Do Identify the improvement and make a plan Test the plan Is the plan working...
Employee Empowerment Getting employees involved in product & process improvements 85% of quality problems are due to proce...
Benchmarking <ul><li>Selecting best practices to use  as a standard for performance </li></ul><ul><li>Determine what to be...
Just-in-Time (JIT) <ul><li>Relationship to quality: </li></ul><ul><ul><li>JIT cuts cost of quality </li></ul></ul><ul><ul>...
Just-in-Time (JIT) <ul><li>‘ Pull’ system of production/purchasing </li></ul><ul><ul><li>Customer starts production with a...
Just-In-Time (JIT) Example Scrap Work in process inventory level (hides problems) Unreliable Vendors Capacity Imbalances
Just-In-Time (JIT) Example Scrap Reducing inventory reveals problems so they can be solved. Unreliable Vendors Capacity Im...
Tools for TQM <ul><li>Quality Function Deployment </li></ul><ul><ul><li>House of Quality </li></ul></ul><ul><li>Quality lo...
Cause and Effect Diagram Example Too many  defects Problem
Cause and Effect Diagram Example Method Manpower Material Machinery Too many  defects Main Cause Main Cause
Cause and Effect Diagram Example Method Manpower Material Machinery Drill Over Time Steel Wood Lathe Too many  defects Sub...
Cause and Effect Diagram Example Method Manpower Material Machinery Drill Over Time Steel Wood Lathe Too many  defects Tir...
Fishbone Chart - Problems with Airline Customer Service
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Operations management ppt @ bec doms bagalkot

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Operations management ppt @ bec doms bagalkot

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  • One of the most useful points to made from this slide is that the Motorola example illustrates that quality must be a concern of the enterprise - not an individual or department.
  • This slide looks at the impact of quality on productivity - it also enables you to begin a discussion as to the meaning of quality (or perhaps the differing meanings among different people). To many people, the notion of “high quality” carries with it the assumption of “high price.” This slide provides an initial point to challenge that assumption. On Quiz: An improvement in quality will decease production costs.
  • This slide simply introduces the four activities. Subsequent slides expand on each .
  • Read Slide…………………. Point out the difference between “leadership” and “management.”………….a leader will rally the employees to share the same vision and mutually work together to achieve the same goals. To manage is to ensure that all the resources are working towards the same goal. The point should also be made, again, about the need for involvement and commitment throughout the organization.
  • Read Slide……………………… Discuss the importance of employee involvement. All of the above principles can be esier achieved when there is a high level of employee involvement.
  • This slide can be used to form the basis for a discussion of empowerment. Read Slide……………………… Discuss empowerment - begin by asking students to define the term. It may be helpful to ask students to identify the benefits and pitfalls to both management and worker. (For example, empowerment requires workers to assume greater responsibility.)
  • The main point that one might make with this slide is that the customer is, ultimately, the most important person in your business.
  • Once you have introduced these definitions of quality, ask students to provide example of products that use them.
  • It may be most helpful to provide, or ask you students to provide, examples of products for which the notion of quality is based upon one or more of the dimensions listed .
  • This slide simply illustrates the relationships between quality and other elements of the firm.
  • You might make the point that companies actually do consider this a prestigious award. For further information, visit the web site: http://www.quality.nist.gov
  • On quiz………prevention costs.
  • One of the most important points to be made from this slide is that quality standards are now international. Students might be asked to explain the benefits of international as opposed to national standards. They might also be asked to consider the limitations we would face if there were no such standards. The problems to be encountered in developing international standards also make for good discussion.
  • What problems they would foresee in implementing this process?
  • A point to be made here is that TQM is not a program but a philosophy. All functions within an organization must be involved in quality or TQM Includes manufacturing, logistics, maintenance, accounting, and all levels of employees.
  • Again, a point to be made here is the universality required to achieve TQM.
  • One point to make here is that this list represents a recent expression of Demings 14 points - the list is still evolving. You notice that many of these fourteen points seem to be simply common sense. Consider jobs you have held. Were these points emphasized or implemented by their employers? If not, why not? Proper approaches to quality are not “programs,” with limited involvement and finite duration, but rather philosophies which must become ingrained throughout the organization.
  • This slide simply introduces concepts of TQM . Explain later
  • With respect to the notion of continuous improvement. - Why do we need continuous improvement? Why can’t we do it right the first time? - Doesn’t implementation of continuous improvement introduce a certain instability? - Are we never “done”? - Etc. On Quiz: Kaizen is similar to TQM in that both focus on continuous improvement.
  • At this point discuss : - why employee empowerment works - the role of information technology in enabling employee empowerment - the role of information technology in making employee empowerment a requirement
  • Ask student to identify firms which they believe could serve as benchmarks. If students are unable to identify any firms - ask them to identify a college or university whose registration system or housing selection system could serve as a benchmark. Most students have enough knowledge of, or friends at,other colleges and universities so as to be able to respond to this question.
  • This slide introduces a discussion about JIT. Subsequent slides elaborate. On Quiz: Waste reduction is central to the Just-In-Time philosophy. Waste of inventory or excessive inventory works against the J.I.T. concept and contributes to quality problems.
  • This might be a good time to differentiate between “push”and “pull” systems. Do Beer example Subsequent slides elaborate on the role of JIT and inventory levels in hiding problems.
  • Remember this slide!
  • Note that reducing inventory enables problems to be seen - it does not necessarily fix them.
  • This slide is to simply introduce the tools of TQM. Q. F. D. We discussed this one last week. It determines what will satisfy the customer, and translates those customer desires into the target design. Quality Loss Function is a mathematical function that identifies all costs connected with poor quality and shows how these costs increase as product moves from what the customer wants. Pareto’s rule states that 80% of a firm’s problems are a result of 20% of the causes. It’s a graphical method of identifying the few critical items as opposed to many less important ones. As Spock would say on Star Trek, “sacrifice the trivial many to save the vital few, it’s logical. Be careful to watch the wording on the quiz on this ones. Fish-Bone, or Cause &amp; Effect, Ishikawa chart is used to identify the location where quality problems are. It helps identify the source of a problem. Poke-Yoke is a Japanese term for error proofing. It usually means a device or technique that ensures a good unit every time. Such devices should lead to fewer inspection points.
  • This slide illustrates a Cause and Effect Chart for a practical problem.
  • Transcript of "Operations management ppt @ bec doms bagalkot "

    1. 1. Operations Management
    2. 2. Outline <ul><li>Tools of TQM </li></ul><ul><ul><li>Check sheets </li></ul></ul><ul><ul><li>Scatter Diagrams </li></ul></ul><ul><ul><li>Cause-and-Effect Diagram </li></ul></ul><ul><ul><li>Pareto Charts </li></ul></ul><ul><ul><li>Process Charts </li></ul></ul><ul><ul><li>Histogram </li></ul></ul><ul><li>The Role of Inspection </li></ul><ul><ul><li>When and where to Inspect </li></ul></ul><ul><ul><li>Source Inspection </li></ul></ul>
    3. 3. Service Industry Inspection <ul><ul><li>Inspection of Attributes vs Variables </li></ul></ul><ul><li>TQM in Services </li></ul><ul><ul><li>Process Charts </li></ul></ul><ul><ul><li>Histogram </li></ul></ul><ul><li>The Role of Inspection </li></ul><ul><li>Total Quality Management in Services </li></ul><ul><ul><li>Knowledge of TQM Tools </li></ul></ul>
    4. 4. Learning Objectives <ul><li>When you complete this chapter, you should be able to : </li></ul><ul><li>Identify or Define : </li></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Malcolm Baldrige National Quality Award </li></ul></ul><ul><ul><li>Demings, Juran, and Crosby </li></ul></ul><ul><ul><li>Taguchi Concepts </li></ul></ul>
    5. 5. Learning Objectives - continued <ul><li>When you complete this chapter, you should be able to : </li></ul><ul><li>Explain : </li></ul><ul><ul><li>Why quality is important </li></ul></ul><ul><ul><li>Total Quality Management (TQM) </li></ul></ul><ul><ul><li>Pareto charts </li></ul></ul><ul><ul><li>Process charts </li></ul></ul><ul><ul><li>Quality robust products </li></ul></ul><ul><ul><li>Inspection </li></ul></ul>
    6. 6. To Make the Quality Focus Work <ul><li>Motorola: </li></ul><ul><ul><li>Aggressively began a worldwide education program to be sure that employees understood quality and statistical process control </li></ul></ul><ul><ul><li>Established goals </li></ul></ul><ul><ul><li>Established extensive employee participation and employee teams </li></ul></ul>
    7. 7. Ways in Which Quality Can Improve Productivity <ul><li>Sales Gains </li></ul><ul><ul><li>Improved response </li></ul></ul><ul><ul><li>Higher Prices </li></ul></ul><ul><ul><li>Improved reputation </li></ul></ul>Reduced Costs Increased productivity Lower rework and scrap costs Lower warranty costs Increased Profits Improved Quality
    8. 8. Flow of Activities Necessary to Achieve Total Quality Management <ul><li>Organizational Practices </li></ul>Quality Principles Employee Fulfillment Customer Satisfaction
    9. 9. Organizational Practices <ul><li>Leadership </li></ul><ul><li>Mission statement </li></ul><ul><li>Effective operating procedure </li></ul><ul><li>Staff support </li></ul><ul><li>Training </li></ul><ul><li>Yields: What is important and what is to be accomplished </li></ul>
    10. 10. Quality Principles <ul><li>Customer focus </li></ul><ul><li>Continuous improvement </li></ul><ul><li>Employee empowerment </li></ul><ul><li>Benchmarking </li></ul><ul><li>Just-in-time </li></ul><ul><li>Tools of TQM </li></ul><ul><li>Yields: How to do what is important and to be accomplished </li></ul>
    11. 11. Employment Fulfillment <ul><li>Empowerment </li></ul><ul><li>Organizational commitment </li></ul><ul><li>Yields: Employees’ attitudes that they can accomplish what is important and to be accomplished </li></ul>
    12. 12. Customer Satisfaction <ul><li>Winning orders </li></ul><ul><li>Repeat customers </li></ul><ul><li>Yields: An effective organization with a competitive advantage </li></ul>
    13. 13. Definitions of Quality <ul><li>ASC : Product characteristics & features that affect customer satisfaction </li></ul><ul><li>User-Based : What consumer says it is </li></ul><ul><li>Manufacturing-Based : Degree to which a product conforms to design specification </li></ul><ul><li>Product-Based : Level of measurable product characteristic </li></ul>
    14. 14. Dimensions of Quality for Goods Operation Reliability & durability Conformance Serviceability Appearance Perceived quality Quality
    15. 15. Importance of Quality Costs & market share Company’s reputation Product liability International implications Increased Profits Lower Costs Productivity Rework/Scrap Warranty Market Gains Reputation Volume Price Improved Quality
    16. 16. <ul><li>Established in 1988 by the U.S. government </li></ul><ul><li>Designed to promote TQM practices </li></ul><ul><li>Some criteria </li></ul><ul><ul><li>Senior executive leadership; strategic planning; management. of process quality </li></ul></ul><ul><ul><li>Quality results; customer satisfaction </li></ul></ul><ul><li>Recent winners </li></ul><ul><ul><li>Corning Inc.; GTE; AT&T; Eastman Chemical. </li></ul></ul>Malcom Baldrige National Quality Award
    17. 17. Baldrige Award Criteria Framework  
    18. 18. Costs of Quality <ul><li>Prevention costs - reducing the potential for defects </li></ul><ul><li>Appraisal costs - evaluating products </li></ul><ul><li>Internal failure - of producing defective parts or service </li></ul><ul><li>External costs - occur after delivery </li></ul>
    19. 19. EC Environmental Standard ISO 14000 <ul><li>Core Elements: </li></ul><ul><ul><li>Environmental management </li></ul></ul><ul><ul><li>Auditing </li></ul></ul><ul><ul><li>Performance evaluation </li></ul></ul><ul><ul><li>Labeling </li></ul></ul><ul><ul><li>Life-cycle assessment </li></ul></ul>
    20. 20. International Quality Standards <ul><li>Industrial Standard Z8101-1981 (Japan) </li></ul><ul><ul><li>Specification for TQM </li></ul></ul><ul><li>ISO 9000 series (Europe/EC) </li></ul><ul><ul><li>Common quality standards for products sold in Europe (even if made in U.S.) </li></ul></ul><ul><li>ISO 14000 series (Europe/EC) </li></ul><ul><ul><li>Standards for recycling, labeling etc. </li></ul></ul><ul><li>ASQC Q90 series; MILSTD (U.S.) </li></ul>
    21. 21. Traditional Quality Process (Manufacturing) Specifies Need Customer Interprets Need Marketing Designs Product Defines Quality Engineering Produces Product Plans Quality Monitors Quality Operations Quality is customer driven!
    22. 22. TQM <ul><li>Encompasses entire organization, from supplier to customer </li></ul><ul><li>Stresses a commitment by management to have a continuing company-wide drive toward excellence in all aspects of products and services that are important to the customer. </li></ul>
    23. 23. Achieving Total Quality Management Organizational Practices Quality Principles Employee Fulfillment Attitudes (e.g., Commitment) How to Do What to Do Effective Business Customer Satisfaction
    24. 24. Deming’s Fourteen Points <ul><li>Create consistency of purpose </li></ul><ul><li>Lead to promote change </li></ul><ul><li>Build quality into the products </li></ul><ul><li>Build long term relationships </li></ul><ul><li>Continuously improve product, quality, and service </li></ul><ul><li>Start training </li></ul><ul><li>Emphasize leadership </li></ul>
    25. 25. Deming’s Points - continued <ul><li>Drive out fear </li></ul><ul><li>Break down barriers between departments </li></ul><ul><li>Stop haranguing workers </li></ul><ul><li>Support, help, improve </li></ul><ul><li>Remove barriers to pride in work </li></ul><ul><li>Institute a vigorous program of education and self-improvement </li></ul><ul><li>Put everybody in the company to work on the transformation </li></ul>
    26. 26. Concepts of TQM <ul><li>Continuous improvement </li></ul><ul><li>Employee empowerment </li></ul><ul><li>Benchmarking </li></ul><ul><li>Just-in-time (JIT) </li></ul><ul><li>Taguchi concepts </li></ul><ul><li>Knowledge of tools </li></ul>
    27. 27. Continuous Improvement Represents continual improvement of process & customer satisfaction Involves all operations & work units Other names Kaizen (Japanese) Zero-defects Six sigma © 1984-1994 T/Maker Co.
    28. 28. Shewhart’s PDCA Model 4.Act 1.Plan 3.Check 2.Do Identify the improvement and make a plan Test the plan Is the plan working Implement the plan
    29. 29. Employee Empowerment Getting employees involved in product & process improvements 85% of quality problems are due to process & material Techniques Support workers Let workers make decisions Build teams & quality circles © 1995 Corel Corp.
    30. 30. Benchmarking <ul><li>Selecting best practices to use as a standard for performance </li></ul><ul><li>Determine what to benchmark </li></ul><ul><li>Form a benchmark team </li></ul><ul><li>Identify benchmarking partners </li></ul><ul><li>Collect and analyze benchmarking information </li></ul><ul><li>Take action to match or exceed the benchmark </li></ul>
    31. 31. Just-in-Time (JIT) <ul><li>Relationship to quality: </li></ul><ul><ul><li>JIT cuts cost of quality </li></ul></ul><ul><ul><li>JIT improves quality </li></ul></ul><ul><ul><li>Better quality means less inventory and better, easier-to-employ JIT system </li></ul></ul>
    32. 32. Just-in-Time (JIT) <ul><li>‘ Pull’ system of production/purchasing </li></ul><ul><ul><li>Customer starts production with an order </li></ul></ul><ul><li>Involves ‘vendor partnership programs’ to improve quality of purchased items </li></ul><ul><li>Reduces all inventory levels </li></ul><ul><ul><li>Inventory hides process & material problems </li></ul></ul><ul><li>Improves process & product quality </li></ul>
    33. 33. Just-In-Time (JIT) Example Scrap Work in process inventory level (hides problems) Unreliable Vendors Capacity Imbalances
    34. 34. Just-In-Time (JIT) Example Scrap Reducing inventory reveals problems so they can be solved. Unreliable Vendors Capacity Imbalances
    35. 35. Tools for TQM <ul><li>Quality Function Deployment </li></ul><ul><ul><li>House of Quality </li></ul></ul><ul><li>Quality loss function </li></ul><ul><li>Pareto charts </li></ul><ul><li>Process charts </li></ul><ul><li>Cause-and-effect diagrams </li></ul><ul><li>Statistical process control </li></ul><ul><li>Poke-Yoke, (error proofing) </li></ul>
    36. 36. Cause and Effect Diagram Example Too many defects Problem
    37. 37. Cause and Effect Diagram Example Method Manpower Material Machinery Too many defects Main Cause Main Cause
    38. 38. Cause and Effect Diagram Example Method Manpower Material Machinery Drill Over Time Steel Wood Lathe Too many defects Sub-Cause
    39. 39. Cause and Effect Diagram Example Method Manpower Material Machinery Drill Over Time Steel Wood Lathe Too many defects Tired Old Slow
    40. 40. Fishbone Chart - Problems with Airline Customer Service
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