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Heizer om10 ch06-managing quality
 

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    Heizer om10 ch06-managing quality Heizer om10 ch06-managing quality Document Transcript

    • 10/16/2010 Managing Quality Outline 6 Global Company Profile: Arnold Palmer Hospital Quality and Strategy PowerPoint presentation to accompany Defining Quality gQ y Heizer and Render Operations Management, 10e Implications of Quality Principles of Operations Management, 8e Malcolm Baldrige National Quality PowerPoint slides by Jeff Heyl Award Cost of Quality (COQ) Ethics and Quality Management© 2011 Pearson Education, Inc. publishing as Prentice Hall 6-1 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6-2 Outline – Continued Outline – Continued International Quality Standards Total Quality Management ISO 9000 Continuous Improvement ISO14000 Six Sigma Employee Empowerment Benchmarking Just-in-Time (JIT) Taguchi Concepts Knowledge of TQM Tools© 2011 Pearson Education, Inc. publishing as Prentice Hall 6-3 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6-4 Outline – Continued Outline – Continued Tools of TQM The Role of Inspection Check Sheets When and Where to Inspect Scatter Diagrams p Source Inspection Cause-and-Effect Diagrams Service Industry Inspection Pareto Charts Inspection of Attributes versus Flowcharts Variables Histograms TQM in Services Statistical Process Control (SPC)© 2011 Pearson Education, Inc. publishing as Prentice Hall 6-5 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6-6 1
    • 10/16/2010 Learning Objectives Managing Quality Provides a When you complete this chapter you Competitive Advantage should be able to: Arnold Palmer Hospital 1. Define quality and TQM 2. Describe the ISO international Deliver over 16,000 babies annually quality standards Virtually every type of quality tool is 3. Explain Six Sigma employed 4. Explain how benchmarking is used Continuous improvement Employee empowerment 5. Explain quality robust products and Taguchi concepts Benchmarking Just-in-time 6. Use the seven tools of TQM Quality tools© 2011 Pearson Education, Inc. publishing as Prentice Hall 6-7 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6-8 Quality and Strategy Quality and Strategy An operations manager’s objective Managing quality supports is to build a total quality differentiation, low cost, and management system that identifies g y response strategies and satisfies customer needs Quality helps firms increase sales and reduce costs Building a quality organization is a demanding task© 2011 Pearson Education, Inc. publishing as Prentice Hall 6-9 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 10 Two Ways Quality The Flow of Activities Improves Profitability Organizational Practices Leadership, Mission statement, Effective operating Sales Gains via procedures, Staff support, Training Yields: What is important and what is to be Improved response accomplished Quality Principles Flexible pricing Customer focus, Continuous improvement, Benchmarking, Just-in-time, Just in time Tools of TQM Improved reputation Yields: How to do what is important and to be Improved Increased accomplished Quality Profits Employee Fulfillment Reduced Costs via Empowerment, Organizational commitment Increased productivity Yields: Employee attitudes that can accomplish what is important Lower rework and scrap costs Customer Satisfaction Winning orders, Repeat customers Lower warranty costs Yields: An effective organization with Figure 6.2 a competitive advantage Figure 6.1© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 11 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 12 2
    • 10/16/2010 Defining Quality Different Views User-based User-based: better performance, more features The totality of features and characteristics of a product or Manufacturing-based Manufacturing-based: service that bears on its ability to conformance t standards, f to t d d satisfy stated or implied needs making it right the first time Product-based Product-based: specific and American Society for Quality measurable attributes of the product© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 13 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 14 Implications of Quality Key Dimensions of Quality 1. Company reputation Perception of new products Performance Durability Employment practices Features Serviceability Supplier relations Reliability Aesthetics 2. Product liability Conformance Perceived quality Reduce risk Value 3. Global implications Improved ability to compete© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 15 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 16 Malcolm Baldrige National Baldrige Criteria Quality Award Applicants are evaluated on: Established in 1988 by the U.S. Categories Points government Leadership 120 Designed to promote TQM practices Strategic Planning 85 Recent winners include Customer & Market Focus 85 Honeywell Federal, Midway USA, Measurement, Analysis, and AtlantiCare, Heartland Health, Cargill Knowledge Management 90 Corn Milling, PRO-TEC Coating Co., Workforce Focus 85 City of Coral Springs, Premier Inc., Process Management 85 Sunny Fresh Foods, Park Place Lexus, Richland College Results 450© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 17 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 18 3
    • 10/16/2010 Takumi Costs of Quality A Japanese character Prevention costs - reducing the that symbolizes a potential for defects broader dimension Appraisal costs - evaluating than quality, a deeper products, parts, and services process than Internal failure - producing defective education, and a more parts or service before delivery perfect method than persistence External costs - defects discovered after delivery© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 19 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 20 Costs of Quality Leaders in Quality Leader Philosophy/Contribution Total Total Cost W. Edwards Deming 14 Points for Cost Management External Failure Joseph M. Juran p Top management p g commitment, fitness for Internal Failure use Armand Feigenbaum Total Quality Control Prevention Philip B. Crosby Quality is Free, zero Appraisal defects Quality Improvement Table 6.1© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 21 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 22 Ethics and Quality International Quality Management Standards Operations managers must deliver healthy, safe, quality products and ISO 9000 series (Europe/EC) services Common quality standards for products sold in Europe (even if made in U.S.) US) Poor quality risks injuries, lawsuits, recalls, and regulation 2008 update places greater emphasis on leadership and customer requirements Organizations are judged by how and satisfaction they respond to problems ISO 14000 series (Europe/EC) All stakeholders much be considered© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 23 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 24 4
    • 10/16/2010 ISO 14000 ISO 14000 Environmental Standard Environmental Standard Core Elements: Advantages: Positive public image and reduced Environmental management g exposure to liability p y Auditing Systematic approach to pollution Performance evaluation prevention Labeling Compliance with regulatory requirements and opportunities for Life cycle assessment competitive advantage Reduction in multiple audits© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 25 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 26 TQM Deming’s Fourteen Points 1. Create consistency of purpose Encompasses entire organization, 2. Lead to promote change from supplier to customer 3. Build quality into the product; stop Stresses a commitment by y depe d g o depending on inspections spect o s management to have a continuing, 4. Build long-term relationships based on companywide drive toward performance instead of awarding excellence in all aspects of products business on price and services that are important to the 5. Continuously improve product, quality, customer and service Table 6.2© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 27 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 28 Deming’s Fourteen Points Deming’s Fourteen Points 6. Start training 12. Remove barriers to pride in work 7. Emphasize leadership 13. Institute education and self- 8. Drive out fear improvement 9. Break d 9 B k down b i barriers between b t 14. Put everyone to work on the departments transformation 10. Stop haranguing workers 11. Support, help, and improve Table 6.2 Table 6.2© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 29 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 30 5
    • 10/16/2010 Seven Concepts of TQM Continuous Improvement 1. Continuous improvement 2. Six Sigma Represents continual improvement of all processes 3. Employee empowerment 4. Benchmarking Involves all operations and work centers including suppliers and 5. Just-in-time (JIT) customers 6. Taguchi concepts People, Equipment, Materials, 7. Knowledge of TQM tools Procedures© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 31 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 32 Shewhart’s PDCA Model Six Sigma 4. Act 1.Plan Two meanings Implement Identify the Statistical definition of a process that the plan pattern and is 99.9997% capable, 3.4 defects per document make a plan million opportunities (DPMO) A program designed to reduce 3. Check 2. Do defects, lower costs, and improve Is the plan Test the customer satisfaction working? plan Figure 6.3© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 33 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 34 Six Sigma Six Sigma Program Lower limits Upper limits Two meanings Originally developed by Motorola, 2,700 defects/million adopted and enhanced by Statistical definition of a process that Honeywell and GE 3.4 defects/million is 99.9997% capable, 3.4 defects per million opportunities (DPMO) Highly structured approach to A program designed to reduce process improvement defects, lower costs, Mean improve and A strategy customer satisfaction Figure 6.4 ±3σ ±6σ A discipline - DMAIC 6σ© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 35 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 36 6
    • 10/16/2010 Six Sigma Six Sigma Implementation 1. Define critical outputs Emphasize defects per million and identify gaps for opportunities as a standard metric improvement DMAIC Approach Provide extensive training 2. Measure the work and collect process data Focus on corporate sponsor support (Champions) 3. Analyze the data Create qualified process improvement 4. Improve the process experts (Black Belts, Green Belts, etc.) 5. Control the new process to Set stretch objectives make sure new performance This cannot be accomplished without a major is maintained commitment from top level management© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 37 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 38 Employee Empowerment Quality Circles Getting employees involved in product and process improvements Group of employees who meet 85% of quality problems are due regularly to solve problems to process and material Trained in planning, problem Techniques solving, and statistical methods l i d t ti ti l th d Build communication networks that include employees Often led by a facilitator Develop open, supportive supervisors Very effective when done Move responsibility to employees properly Build a high-morale organization Create formal team structures© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 39 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 40 Benchmarking Best Practices for Resolving Selecting best practices to use as a Customer Complaints standard for performance Best Practice Justification 1. Determine what to Make it easy for clients It is free market research benchmark to complain Respond quickly to It adds customers and loyalty 2. Form a benchmark team complaints Resolve complaints on It reduces cost 3. Identify benchmarking partners first contact 4. Collect and analyze benchmarking Use computers to Discover trends, share them, and align manage complaints your services information Recruit the best for It should be part of formal training and 5. Take action to match or exceed the customer service jobs career advancement benchmark Table 6.3© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 41 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 42 7
    • 10/16/2010 Just-in- Just-in-Time (JIT) Just-in- Just-in-Time (JIT) Relationship to quality: ‘Pull’ system of production scheduling including supply management JIT cuts the cost of quality Production only when signaled JIT i improves quality lit Allows reduced inventory levels Better quality means less Inventory costs money and hides process inventory and better, easier-to- and material problems employ JIT system Encourages improved process and product quality© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 43 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 44 Just-In- Just-In-Time (JIT) Example Just-In- Just-In-Time (JIT) Example Reducing inventory reveals problems so they can be solved Work in process inventory level (hides problems) Unreliable Capacity Unreliable Capacity Vendors Scrap Vendors Scrap Imbalances Imbalances© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 45 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 46 Taguchi Concepts Quality Robustness Engineering and experimental design methods to improve product Ability to produce products and process design uniformly in adverse manufacturing Identify key component and process and environmental conditions variables affecting product variation i bl ff ti d t i ti Remove the effects of adverse Taguchi Concepts conditions Quality robustness Small variations in materials and process do not destroy product Quality loss function quality Target-oriented quality© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 47 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 48 8
    • 10/16/2010 Quality Loss Function Quality Loss Function Shows that costs increase as the High loss L = D2C Unacceptable where product moves away from what Loss (to producing Poor L = loss to society D = distance from the customer wants organization, customer, Fair target value and society) Good C = cost of deviation Costs include customer Low loss Best Target-oriented quality T t i t d lit dissatisfaction, warranty yields more product in the “best” category and service, internal Target-oriented quality scrap and repair, and costs to Frequency brings product toward the target value society Conformance-oriented quality keeps products within 3 standard Traditional conformance deviations Lower Target Upper specifications are too simplistic Specification Figure 6.5© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 49 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 50 Tools of TQM Tools of TQM Tools for Generating Ideas Tools for Identifying Problems Check sheets Histogram Scatter diagrams Statistical process control chart Cause-and-effect diagrams Tools to Organize the Data Pareto charts Flowcharts© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 51 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 52 Seven Tools of TQM Seven Tools of TQM (a) Check Sheet: An organized method of (b) Scatter Diagram: A graph of the value recording data of one variable vs. another variable Hour Defect D f t 1 2 3 4 5 6 7 8 Productivity A /// / / / / /// / B // / / / // /// C / // // //// Absenteeism Figure 6.6 Figure 6.6© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 53 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 54 9
    • 10/16/2010 Seven Tools of TQM Seven Tools of TQM (c) Cause-and-Effect Diagram: A tool that (d) Pareto Chart: A graph to identify and plot identifies process elements (causes) that problems or defects in descending order of might effect an outcome frequency Cause Materials Methods Frequency Effect Percent Manpower Machinery A B C D E Figure 6.6 Figure 6.6© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 55 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 56 Seven Tools of TQM Seven Tools of TQM (e) Flowchart (Process Diagram): A chart that (f) Histogram: A distribution showing the describes the steps in a process frequency of occurrences of a variable Distribution Frequency Repair time (minutes) Figure 6.6 Figure 6.6© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 57 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 58 Seven Tools of TQM Cause-and- Cause-and-Effect Diagrams (g) Statistical Process Control Chart: A chart with Material Method (ball) (shooting process) time on the horizontal axis to plot values of a Grain/Feel Aiming point statistic (grip) Size of ball Air pressure Bend knees Hand position Balance Lopsidedness L id d Follow-through Upper control limit Missed Training free-throws Rim size Target value Conditioning Motivation Rim height Lower control limit Backboard Consistency Rim alignment stability Concentration Time Machine Manpower (hoop & Figure 6.7 Figure 6.6 (shooter) backboard)© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 59 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 60 10
    • 10/16/2010 Pareto Charts Flow Charts Data for October – 100 MRI Flowchart 70 – – 93 – 88 1. Physician schedules MRI 7. If unsatisfactory, repeat 60 – 2. Patient taken to MRI 8. Patient taken back to room 54 Frequency (number) rcent – 72 3. Patient signs in 9. MRI read by radiologist 50 – 4. Patient is prepped p pp 10. MRI report transferred to p Cumulative per 40 – 5. Technician carries out MRI physician Number of 6. Technician inspects film 11. Patient and physician discuss 30 – occurrences 20 – 12 10 – 8 4 3 2 80% 0 – 1 2 3 4 5 6 7 11 Room svc Check-in Pool hours Minibar Misc. 9 10 72% 16% 5% 4% 3% 20% Causes and percent of the total© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 61 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 62 Statistical Process Control An SPC Chart (SPC) Plots the percent of free throws missed Uses statistics and control charts to tell when to take corrective action 20% Upper control limit Drives process improvement p p Four key steps 10% Coach’s target value Measure the process When a change is indicated, find the 0% | | | | | | | | | Lower control limit assignable cause 1 2 3 4 5 6 7 8 9 Eliminate or incorporate the cause Game number Restart the revised process Figure 6.8© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 63 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 64 Inspection When and Where to Inspect Involves examining items to see if 1. At the supplier’s plant while the supplier is an item is good or defective producing 2. At your facility upon receipt of goods from Detect a defective product the supplier Does not correct deficiencies in 3. Before costly or irreversible processes process or product 4. During the step-by-step production It is expensive process Issues 5. When production or service is complete When to inspect 6. Before delivery to your customer Where in process to inspect 7. At the point of customer contact© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 65 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 66 11
    • 10/16/2010 Inspection Source Inspection Many problems Worker fatigue Also known as source control Measurement error The next step in the process is Process variability your customer Cannot inspect quality into a Ensure perfect product product to your customer Robust design, empowered Poka-yoke is the concept of foolproof devices employees, and sound processes or techniques designed to pass only are better solutions acceptable product© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 67 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 68 Service Industry Inspection Service Industry Inspection What is What is Organization Standard Organization Standard Inspected Inspected Jones Law Office Receptionist Is phone answered by the Hard Rock Hotel Reception Use customer’s name performance second ring desk Billing Billi Accurate, timely, and A i l d Doorman D Greet guest in less than 30 G i l h correct format seconds Attorney Promptness in returning Room All lights working, spotless calls bathroom Minibar Restocked and charges accurately posted to bill Table 6.4 Table 6.4© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 69 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 70 Service Industry Inspection Service Industry Inspection What is What is Organization Standard Organization Standard Inspected Inspected Arnold Palmer Billing Accurate, timely, and Olive Garden Busboy Serves water and bread Hospital correct format Restaurant within 1 minute Pharmacy Ph Prescription accuracy, P i i Busboy B b Clears all entrée items and Cl ll é i d inventory accuracy crumbs prior to dessert Lab Audit for lab-test accuracy Waiter Knows and suggest Nurses Charts immediately specials, desserts updated Admissions Data entered correctly and completely Table 6.4 Table 6.4© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 71 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 72 12
    • 10/16/2010 Service Industry Inspection Attributes Versus Variables Attributes What is Organization Standard Items are either good or bad, Inspected Nordstrom Display areas Attractive, well-organized, acceptable or unacceptable Department stocked, good lighting Does not address degree of failure Store Stockrooms S k Rotation of goods, R i f d organized, clean Variables Salesclerks Neat, courteous, very Measures dimensions such as weight, knowledgeable speed, height, or strength Falls within an acceptable range Use different statistical techniques Table 6.4© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 73 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 74 TQM In Services Service Quality Service quality is more difficult to The Operations Manager must measure than the quality of goods recognize: Service quality perceptions depend 1. The tangible component of on services is important Intangible differences between 2. The service process is important products 3. The service is judged against the Intangible expectations customers customer’s expectations have of those products 4. Exceptions will occur© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 75 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 76 Service Determinants of ServiceSpecifications Quality at UPS Reliability Consistency of performance and dependability Responsiveness Willingness or readiness of employees Competence Required skills and knowledge Access Approachability and ease of contact Courtesy Politeness, respect, consideration, friendliness Communication Keeping customers informed Credibility Trustworthiness, believability, honesty Security Freedom from danger, risk, or doubt Understanding/ Understand the customer’s needs knowing the customer Tangibles Physical evidence of the service Table 6.5© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 77 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 78 13
    • 10/16/2010 Service Recovery Strategy Managers should have a plan for when services fail Marriott’s LEARN routine Listen All rights reserved. No part of this publication may be reproduced, stored in a retrieval Empathize system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Apologize Printed in the United States of America. React Notify© 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 79 © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 - 80 14