Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer
Two fundamental operational goals:
Careful design of product or service
Ensure consistent production of product or service
Philosophical Leaders of the Quality Movement
W. Edwards Deming
Joseph M. Juran
Each has slightly different definitions of what quality is and how to achieve it (see Exhibit 8.1), but they all had the same general message:
To achieve outstanding quality requires:
quality leadership from senior management,
a customer focus,
total involvement of the workforce, and
continuous improvement based upon rigorous analysis of processes.
Design quality - Inherent value of the product in the marketplace
Conformance quality - Degree to which the product or service design specifications are met
Products can have high design quality but low conformance quality, and vice versa
Quality at the source
Related to conformance quality
Means the person who does the work takes responsibility for making sure output meets specifications
Both design quality and conformance quality should provide products that meet customer objectives
This is often termed fitness for use
Entails identifying the dimensions of product (or service) that the customer wants i.e., the voice of the customer
Developing a quality control program
Dimensions of Quality
Primary product or service characteristic
Added touches, bells and whistles, secondary characteristics
Consistency of performance over time, probability of failing
Ease of repair
Characteristics of the human-to-human interface (speed, courtesy, competence)
Sensory characteristics (sound, feel, look, and so on)
Perceived quality (reputation)
Past performance and other intangibles (perceived quality)
Dimensions of Quality Examples
Costs of Quality (COQ) Costs of inspection, testing, and other tasks to ensure that the product or process is acceptable sum of all costs to prevent defects Costs for defects incurred within the system: scrap, rework, repair Costs for defects that pass through the system External Failure Costs Appraisal Costs Prevention Costs Internal Failure Costs Costs of Quality
Costs of Quality
No matter what the quality is, it will cost $ ...
So, the assumptions of cost of quality
Failures are caused
Prevention is cheaper
Performance can be measured
Discuss the "internal" and "external failure costs" for a high end coffee house (e.g., Starbucks)
“ Six-sigma” is a philosophy which reflects the goal of eliminating defects in the products.
Seeks to reduce variation in the processes that lead to product defects
The name, “six sigma” refers to the variation that exists within plus or minus six standard deviations of the process outputs
Statistically speaking a process in “six-sigma” control limits will only produce 2 defects per billion units.
Six Sigma Quality: DMAIC Cycle
Define, Measure, Analyze, Improve, and Control DMAIC
Developed by General Electric as a means of focusing effort on quality using a methodological approach
Firms striving to achieve six-sigma generally adopt DMAIC cycle.
DMAIC are the typical steps employed in “continuous improvement” (a.k.a. Kaizen) concept which seeks to continually improve all aspects of production (parts, machines, labor, processes, etc)
Overall focus of the methodology is to understand and achieve what the customer wants
A 6-sigma program seeks to reduce the variation in the processes that lead to these defects
Six Sigma Quality: DMAIC Cycle Cases/examples from classmates 1. Define (D) 2. Measure (M) 3. Analyze (A) 4. Improve (I) 5. Control (C) Customers and their priorities Process and its performance Causes of defects Remove causes of defects Maintain quality
Example to illustrate the process…
We are the maker of this cereal. Consumer Reports has just published an article that shows that we frequently have less than 15 ounces of cereal in a box.
What should we do?
Step 1: Define
What is the critical-to-quality characteristic?
The CTQ (critical-to-quality) characteristic in this case is the weight of the cereal in the box.
Step 2 - Measure
How would we measure to evaluate the extent of the problem?
What are acceptable limits on this measure?
Let’s assume that the government says that we must be within ± 5 percent of the weight advertised on the box.
We go out and randomly buy 1,000 boxes of cereal and find that they weight an average of 15.875 ounces with a standard deviation of 0.529 ounces.
What percentage of boxes are outside the tolerance limits?
Upper Tolerance = 16.8 Lower Tolerance = 15.2 Process Mean = 15.875 Std. Dev. = .529 What percentage of boxes are defective (i.e. less than 15.2 oz)? Z = (x – Mean)/Std. Dev. = (15.2 – 15.875)/.529 = -1.276 NORMSDIST(Z) = NORMSDIST(-1.276) = 0.100978 Approximately, 10 percent of the boxes have less than 15.2 Ounces of cereal in them!
Step 3 - Analyze - How can we improve the capability of our cereal box filling process?
Line vibration impacts scale
Random delays in nozzle open/close
Center the Process
Step 4 – Improve – How good is good enough? Motorola’s “Six Sigma”
Calibrate the equipment more frequently, upgrade process
6-sigma minimum from process center to nearest spec
Step 5 – Control
Statistical Process Control (SPC)
Use data from the actual process
Look at capability - is good quality possible
Statistically monitor the process over time
Analytical Tools for Six Sigma and Continuous Improvement: Flowchart
Analytical Tools for Six Sigma and Continuous Improvement: Runchart Can be used to identify when equipment or processes are not behaving according to specifications MEASURE 0.44 0.46 0.48 0.5 0.52 0.54 0.56 0.58 1 2 3 4 5 6 7 8 9 10 11 12 Time (Hours) Diameter
Analytical Tools for Six Sigma and Continuous Improvement: Checksheet Can be used to keep track of defects or used to make sure people collect data in a correct manner ( MEASURE )
Analytical Tools for Six Sigma and Continuous Improvement: Pareto Analysis Can be used to find when 80% of the problems may be attributed to 20% of the causes ( MEASURE ) Assy. Instruct . Frequency Design Purch. Training Other 80%
Analytical Tools for Six Sigma and Continuous Improvement: Histogram Can be used to identify the frequency of quality defect occurrence and display quality performance ( MEASURE) Number of Lots Data Ranges Defects in lot 0 1 2 3 4
Analytical Tools for Six Sigma and Continuous Improvement: Cause & Effect Diagram
Analytical Tools for Six Sigma and Continuous Improvement: Opportunity Flow Diagram IMPROVE Value added activities (Vertical steps) vs. Non-value added activities (horizontal steps)
Analytical Tools for Six Sigma and Continuous Improvement: Control Charts Can be used to monitor ongoing production process quality and quality conformance to stated standards of quality
Other Six Sigma Tools
Failure Mode and Effect Analysis (FMEA) is a structured approach to identify, estimate, prioritize, and evaluate risk of possible failures at each stage in the process
Design of Experiments (DOE) a statistical test to determine cause-and-effect relationships between process variables and output
a.k.a. multivariate analysis (testing)
i.e., testing multiple independent variables (X’s) with respect to a dependent variable (Y)
The Shingo System: Fail-Safe Design
SQC methods do not prevent defects
Defects arise when people make errors
Defects can be prevented by providing workers with feedback on errors
Special tooling that
prevents workers from making errors
Gives rapid feedback of abnormalities to worker in time to correct them
The Shingo System: Example Exhibit 8.10 Poka-Yoke Example (Placing labels on parts coming down a conveyor)
Series of standards agreed upon by the International Organization for Standardization (ISO)
Adopted in 1987
More than 100 countries
A prerequisite for global competition?
ISO 9000 directs you to "document what you do and then do as you documented."
First party: A firm audits itself against ISO 9000 standards
Second party: A customer audits its supplier
Third party: A "qualified" national or international standards or certifying agency serves as auditor
Is it important for small or medium sized businesses to have ISO 9000 certification?
External Benchmarking Steps
Identify those processes needing improvement
Identify a firm that is the world leader in performing the process
Obviously not a direct competitor
Possibly from another industry
Contact the managers of that company and make a personal visit to interview managers and workers
Compare the processes
Compare the results (performance of the processes)