6 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall6 Managing QualityPowerPoint presentation to accompanyHeize...
6 - 2© 2011 Pearson Education, Inc. publishing as Prentice HallOutline Global Company Profile: ArnoldPalmer Hospital Qua...
6 - 3© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued International Quality Standards ISO 9...
6 - 4© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Total Quality Management Continuous I...
6 - 5© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Tools of TQM Check Sheets Scatter Di...
6 - 6© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued The Role of Inspection When and Where...
6 - 7© 2011 Pearson Education, Inc. publishing as Prentice HallLearning ObjectivesWhen you complete this chapter youshould...
6 - 8© 2011 Pearson Education, Inc. publishing as Prentice HallManaging Quality Provides aCompetitive AdvantageArnold Palm...
6 - 9© 2011 Pearson Education, Inc. publishing as Prentice HallQuality and StrategyAn operations manager’s objectiveis to ...
6 - 10© 2011 Pearson Education, Inc. publishing as Prentice HallQuality and Strategy Managing quality supportsdifferentia...
6 - 11© 2011 Pearson Education, Inc. publishing as Prentice HallTwo Ways QualityImproves ProfitabilityImprovedQualityIncre...
6 - 12© 2011 Pearson Education, Inc. publishing as Prentice HallThe Flow of ActivitiesOrganizational PracticesLeadership, ...
6 - 13© 2011 Pearson Education, Inc. publishing as Prentice HallDefining QualityThe totality of features andcharacteristic...
6 - 14© 2011 Pearson Education, Inc. publishing as Prentice HallDifferent Views User-based: better performance,more featu...
6 - 15© 2011 Pearson Education, Inc. publishing as Prentice HallImplications of Quality1. Company reputation Perception o...
6 - 16© 2011 Pearson Education, Inc. publishing as Prentice HallKey Dimensions of Quality Performance Features Reliabil...
6 - 17© 2011 Pearson Education, Inc. publishing as Prentice HallMalcolm Baldrige NationalQuality Award Established in 198...
6 - 18© 2011 Pearson Education, Inc. publishing as Prentice HallBaldrige CriteriaApplicants are evaluated on:Categories Po...
6 - 19© 2011 Pearson Education, Inc. publishing as Prentice HallTakumiA Japanese characterthat symbolizes abroader dimensi...
6 - 20© 2011 Pearson Education, Inc. publishing as Prentice HallCosts of Quality Prevention costs - reducing thepotential...
6 - 21© 2011 Pearson Education, Inc. publishing as Prentice HallExternal FailureInternal FailurePreventionCosts of Quality...
6 - 22© 2011 Pearson Education, Inc. publishing as Prentice HallLeaders in QualityTable 6.1Leader Philosophy/ContributionW...
6 - 23© 2011 Pearson Education, Inc. publishing as Prentice HallEthics and QualityManagement Operations managers must del...
6 - 24© 2011 Pearson Education, Inc. publishing as Prentice HallInternational QualityStandards ISO 9000 series (Europe/EC...
6 - 25© 2011 Pearson Education, Inc. publishing as Prentice HallISO 14000Environmental StandardCore Elements: Environment...
6 - 26© 2011 Pearson Education, Inc. publishing as Prentice HallISO 14000Environmental StandardAdvantages: Positive publi...
6 - 27© 2011 Pearson Education, Inc. publishing as Prentice HallTQMEncompasses entire organization,from supplier to custom...
6 - 28© 2011 Pearson Education, Inc. publishing as Prentice HallDeming’s Fourteen PointsTable 6.21. Create consistency of ...
6 - 29© 2011 Pearson Education, Inc. publishing as Prentice HallDeming’s Fourteen PointsTable 6.26. Start training7. Empha...
6 - 30© 2011 Pearson Education, Inc. publishing as Prentice HallDeming’s Fourteen PointsTable 6.212. Remove barriers to pr...
6 - 31© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Concepts of TQM1. Continuous improvement2. Six Sigma...
6 - 32© 2011 Pearson Education, Inc. publishing as Prentice HallContinuous Improvement Represents continualimprovement of...
6 - 33© 2011 Pearson Education, Inc. publishing as Prentice Hall4. ActImplementthe plandocument2. DoTest theplan3. CheckIs...
6 - 34© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma Two meanings Statistical definition of a proce...
6 - 35© 2011 Pearson Education, Inc. publishing as Prentice Hall Two meanings Statistical definition of a process thatis...
6 - 36© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma Program Originally developed by Motorola,adopte...
6 - 37© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma1. Define critical outputsand identify gaps forim...
6 - 38© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma Implementation Emphasize defects per millionopp...
6 - 39© 2011 Pearson Education, Inc. publishing as Prentice HallEmployee Empowerment Getting employees involved in produc...
6 - 40© 2011 Pearson Education, Inc. publishing as Prentice HallQuality Circles Group of employees who meetregularly to s...
6 - 41© 2011 Pearson Education, Inc. publishing as Prentice HallBenchmarkingSelecting best practices to use as astandard f...
6 - 42© 2011 Pearson Education, Inc. publishing as Prentice HallBest Practices for ResolvingCustomer ComplaintsBest Practi...
6 - 43© 2011 Pearson Education, Inc. publishing as Prentice HallJust-in-Time (JIT)Relationship to quality: JIT cuts the c...
6 - 44© 2011 Pearson Education, Inc. publishing as Prentice HallJust-in-Time (JIT) ‘Pull’ system of production scheduling...
6 - 45© 2011 Pearson Education, Inc. publishing as Prentice HallJust-In-Time (JIT) ExampleScrapUnreliableVendorsCapacityIm...
6 - 46© 2011 Pearson Education, Inc. publishing as Prentice HallJust-In-Time (JIT) ExampleReducing inventory revealsproble...
6 - 47© 2011 Pearson Education, Inc. publishing as Prentice HallTaguchi Concepts Engineering and experimentaldesign metho...
6 - 48© 2011 Pearson Education, Inc. publishing as Prentice HallQuality Robustness Ability to produce productsuniformly i...
6 - 49© 2011 Pearson Education, Inc. publishing as Prentice HallQuality Loss Function Shows that costs increase as thepro...
6 - 50© 2011 Pearson Education, Inc. publishing as Prentice HallUnacceptablePoorGoodBestFairQuality Loss FunctionHigh loss...
6 - 51© 2011 Pearson Education, Inc. publishing as Prentice HallTools of TQM Tools for Generating Ideas Check sheets Sc...
6 - 52© 2011 Pearson Education, Inc. publishing as Prentice HallTools of TQM Tools for Identifying Problems Histogram S...
6 - 53© 2011 Pearson Education, Inc. publishing as Prentice Hall/// / /// /// ///// //////////HourDefect 1 2 3 4 5 6 7 8AB...
6 - 54© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(b) Scatter Diagram: A graph of the valu...
6 - 55© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(c) Cause-and-Effect Diagram: A tool tha...
6 - 56© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(d) Pareto Chart: A graph to identify an...
6 - 57© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(e) Flowchart (Process Diagram): A chart...
6 - 58© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(f) Histogram: A distribution showing th...
6 - 59© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(g) Statistical Process Control Chart: A...
6 - 60© 2011 Pearson Education, Inc. publishing as Prentice HallCause-and-Effect DiagramsMaterial(ball)Method(shooting pro...
6 - 61© 2011 Pearson Education, Inc. publishing as Prentice HallPareto ChartsNumber ofoccurrencesRoom svc Check-in Pool ho...
6 - 62© 2011 Pearson Education, Inc. publishing as Prentice HallFlow ChartsMRI Flowchart1. Physician schedules MRI2. Patie...
6 - 63© 2011 Pearson Education, Inc. publishing as Prentice HallStatistical Process Control(SPC) Uses statistics and cont...
6 - 64© 2011 Pearson Education, Inc. publishing as Prentice HallAn SPC ChartUpper control limitCoach’s target valueLower c...
6 - 65© 2011 Pearson Education, Inc. publishing as Prentice HallInspection Involves examining items to see ifan item is g...
6 - 66© 2011 Pearson Education, Inc. publishing as Prentice HallWhen and Where to Inspect1. At the supplier’s plant while ...
6 - 67© 2011 Pearson Education, Inc. publishing as Prentice HallInspection Many problems Worker fatigue Measurement err...
6 - 68© 2011 Pearson Education, Inc. publishing as Prentice HallSource Inspection Also known as source control The next ...
6 - 69© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedSta...
6 - 70© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedSta...
6 - 71© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedSta...
6 - 72© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedSta...
6 - 73© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedSta...
6 - 74© 2011 Pearson Education, Inc. publishing as Prentice HallAttributes Versus Variables Attributes Items are either ...
6 - 75© 2011 Pearson Education, Inc. publishing as Prentice HallTQM In Services Service quality is more difficult tomeasu...
6 - 76© 2011 Pearson Education, Inc. publishing as Prentice HallService QualityThe Operations Manager mustrecognize:1. The...
6 - 77© 2011 Pearson Education, Inc. publishing as Prentice HallServiceSpecificationsat UPS
6 - 78© 2011 Pearson Education, Inc. publishing as Prentice HallDeterminants of ServiceQualityReliability Consistency of p...
6 - 79© 2011 Pearson Education, Inc. publishing as Prentice HallService Recovery Strategy Managers should have a plan for...
6 - 80© 2011 Pearson Education, Inc. publishing as Prentice HallAll rights reserved. No part of this publication may be re...
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Heizer om10 ch06

  1. 1. 6 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall6 Managing QualityPowerPoint presentation to accompanyHeizer and RenderOperations Management, 10ePrinciples of Operations Management, 8ePowerPoint slides by Jeff Heyl
  2. 2. 6 - 2© 2011 Pearson Education, Inc. publishing as Prentice HallOutline Global Company Profile: ArnoldPalmer Hospital Quality and Strategy Defining Quality Implications of Quality Malcolm Baldrige National QualityAward Cost of Quality (COQ) Ethics and Quality Management
  3. 3. 6 - 3© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued International Quality Standards ISO 9000 ISO14000
  4. 4. 6 - 4© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Total Quality Management Continuous Improvement Six Sigma Employee Empowerment Benchmarking Just-in-Time (JIT) Taguchi Concepts Knowledge of TQM Tools
  5. 5. 6 - 5© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued Tools of TQM Check Sheets Scatter Diagrams Cause-and-Effect Diagrams Pareto Charts Flowcharts Histograms Statistical Process Control (SPC)
  6. 6. 6 - 6© 2011 Pearson Education, Inc. publishing as Prentice HallOutline – Continued The Role of Inspection When and Where to Inspect Source Inspection Service Industry Inspection Inspection of Attributes versusVariables TQM in Services
  7. 7. 6 - 7© 2011 Pearson Education, Inc. publishing as Prentice HallLearning ObjectivesWhen you complete this chapter youshould be able to:1. Define quality and TQM2. Describe the ISO internationalquality standards3. Explain Six Sigma4. Explain how benchmarking is used5. Explain quality robust products andTaguchi concepts6. Use the seven tools of TQM
  8. 8. 6 - 8© 2011 Pearson Education, Inc. publishing as Prentice HallManaging Quality Provides aCompetitive AdvantageArnold Palmer Hospital Deliver over 16,000 babies annually Virtually every type of quality tool isemployed Continuous improvement Employee empowerment Benchmarking Just-in-time Quality tools
  9. 9. 6 - 9© 2011 Pearson Education, Inc. publishing as Prentice HallQuality and StrategyAn operations manager’s objectiveis to build a total qualitymanagement system that identifiesand satisfies customer needs
  10. 10. 6 - 10© 2011 Pearson Education, Inc. publishing as Prentice HallQuality and Strategy Managing quality supportsdifferentiation, low cost, andresponse strategies Quality helps firms increasesales and reduce costs Building a quality organization isa demanding task
  11. 11. 6 - 11© 2011 Pearson Education, Inc. publishing as Prentice HallTwo Ways QualityImproves ProfitabilityImprovedQualityIncreasedProfits Increased productivity Lower rework and scrap costs Lower warranty costsReduced Costs via Improved response Flexible pricing Improved reputationSales Gains viaFigure 6.1
  12. 12. 6 - 12© 2011 Pearson Education, Inc. publishing as Prentice HallThe Flow of ActivitiesOrganizational PracticesLeadership, Mission statement, Effective operatingprocedures, Staff support, TrainingYields: What is important and what is to beaccomplishedQuality PrinciplesCustomer focus, Continuous improvement, Benchmarking,Just-in-time, Tools of TQMYields: How to do what is important and to beaccomplishedEmployee FulfillmentEmpowerment, Organizational commitmentYields: Employee attitudes that can accomplishwhat is importantCustomer SatisfactionWinning orders, Repeat customersYields: An effective organization witha competitive advantageFigure 6.2
  13. 13. 6 - 13© 2011 Pearson Education, Inc. publishing as Prentice HallDefining QualityThe totality of features andcharacteristics of a product orservice that bears on its ability tosatisfy stated or implied needsAmerican Society for Quality
  14. 14. 6 - 14© 2011 Pearson Education, Inc. publishing as Prentice HallDifferent Views User-based: better performance,more features Manufacturing-based:conformance to standards,making it right the first time Product-based: specific andmeasurable attributes of theproduct
  15. 15. 6 - 15© 2011 Pearson Education, Inc. publishing as Prentice HallImplications of Quality1. Company reputation Perception of new products Employment practices Supplier relations2. Product liability Reduce risk3. Global implications Improved ability to compete
  16. 16. 6 - 16© 2011 Pearson Education, Inc. publishing as Prentice HallKey Dimensions of Quality Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived quality Value
  17. 17. 6 - 17© 2011 Pearson Education, Inc. publishing as Prentice HallMalcolm Baldrige NationalQuality Award Established in 1988 by the U.S.government Designed to promote TQM practices Recent winners include Honeywell Federal, Midway USA,AtlantiCare, Heartland Health, CargillCorn Milling, PRO-TEC Coating Co.,City of Coral Springs, Premier Inc.,Sunny Fresh Foods, Park PlaceLexus, Richland College
  18. 18. 6 - 18© 2011 Pearson Education, Inc. publishing as Prentice HallBaldrige CriteriaApplicants are evaluated on:Categories PointsLeadership 120Strategic Planning 85Customer & Market Focus 85Measurement, Analysis, andKnowledge Management 90Workforce Focus 85Process Management 85Results 450
  19. 19. 6 - 19© 2011 Pearson Education, Inc. publishing as Prentice HallTakumiA Japanese characterthat symbolizes abroader dimensionthan quality, a deeperprocess thaneducation, and a moreperfect method thanpersistence
  20. 20. 6 - 20© 2011 Pearson Education, Inc. publishing as Prentice HallCosts of Quality Prevention costs - reducing thepotential for defects Appraisal costs - evaluatingproducts, parts, and services Internal failure - producing defectiveparts or service before delivery External costs - defects discoveredafter delivery
  21. 21. 6 - 21© 2011 Pearson Education, Inc. publishing as Prentice HallExternal FailureInternal FailurePreventionCosts of QualityAppraisalTotalCostQuality ImprovementTotal Cost
  22. 22. 6 - 22© 2011 Pearson Education, Inc. publishing as Prentice HallLeaders in QualityTable 6.1Leader Philosophy/ContributionW. Edwards Deming 14 Points forManagementJoseph M. Juran Top managementcommitment, fitness foruseArmand Feigenbaum Total Quality ControlPhilip B. Crosby Quality is Free, zerodefects
  23. 23. 6 - 23© 2011 Pearson Education, Inc. publishing as Prentice HallEthics and QualityManagement Operations managers must deliverhealthy, safe, quality products andservices Poor quality risks injuries, lawsuits,recalls, and regulation Organizations are judged by howthey respond to problems All stakeholders much beconsidered
  24. 24. 6 - 24© 2011 Pearson Education, Inc. publishing as Prentice HallInternational QualityStandards ISO 9000 series (Europe/EC) Common quality standards for productssold in Europe (even if made in U.S.) 2008 update places greater emphasis onleadership and customer requirementsand satisfaction ISO 14000 series (Europe/EC)
  25. 25. 6 - 25© 2011 Pearson Education, Inc. publishing as Prentice HallISO 14000Environmental StandardCore Elements: Environmental management Auditing Performance evaluation Labeling Life cycle assessment
  26. 26. 6 - 26© 2011 Pearson Education, Inc. publishing as Prentice HallISO 14000Environmental StandardAdvantages: Positive public image and reducedexposure to liability Systematic approach to pollutionprevention Compliance with regulatoryrequirements and opportunities forcompetitive advantage Reduction in multiple audits
  27. 27. 6 - 27© 2011 Pearson Education, Inc. publishing as Prentice HallTQMEncompasses entire organization,from supplier to customerStresses a commitment bymanagement to have a continuing,companywide drive towardexcellence in all aspects of productsand services that are important to thecustomer
  28. 28. 6 - 28© 2011 Pearson Education, Inc. publishing as Prentice HallDeming’s Fourteen PointsTable 6.21. Create consistency of purpose2. Lead to promote change3. Build quality into the product; stopdepending on inspections4. Build long-term relationships based onperformance instead of awardingbusiness on price5. Continuously improve product, quality,and service
  29. 29. 6 - 29© 2011 Pearson Education, Inc. publishing as Prentice HallDeming’s Fourteen PointsTable 6.26. Start training7. Emphasize leadership8. Drive out fear9. Break down barriers betweendepartments10. Stop haranguing workers11. Support, help, and improve
  30. 30. 6 - 30© 2011 Pearson Education, Inc. publishing as Prentice HallDeming’s Fourteen PointsTable 6.212. Remove barriers to pride in work13. Institute education and self-improvement14. Put everyone to work on thetransformation
  31. 31. 6 - 31© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Concepts of TQM1. Continuous improvement2. Six Sigma3. Employee empowerment4. Benchmarking5. Just-in-time (JIT)6. Taguchi concepts7. Knowledge of TQM tools
  32. 32. 6 - 32© 2011 Pearson Education, Inc. publishing as Prentice HallContinuous Improvement Represents continualimprovement of all processes Involves all operations and workcenters including suppliers andcustomers People, Equipment, Materials,Procedures
  33. 33. 6 - 33© 2011 Pearson Education, Inc. publishing as Prentice Hall4. ActImplementthe plandocument2. DoTest theplan3. CheckIs the planworking?1.PlanIdentify thepattern andmake a planShewhart’s PDCA ModelFigure 6.3
  34. 34. 6 - 34© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma Two meanings Statistical definition of a process thatis 99.9997% capable, 3.4 defects permillion opportunities (DPMO) A program designed to reducedefects, lower costs, and improvecustomer satisfaction
  35. 35. 6 - 35© 2011 Pearson Education, Inc. publishing as Prentice Hall Two meanings Statistical definition of a process thatis 99.9997% capable, 3.4 defects permillion opportunities (DPMO) A program designed to reducedefects, lower costs, and improvecustomer satisfactionSix SigmaMeanLower limits Upper limits3.4 defects/million±62,700 defects/million±3Figure 6.4
  36. 36. 6 - 36© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma Program Originally developed by Motorola,adopted and enhanced byHoneywell and GE Highly structured approach toprocess improvement A strategy A discipline - DMAIC6
  37. 37. 6 - 37© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma1. Define critical outputsand identify gaps forimprovement2. Measure the work andcollect process data3. Analyze the data4. Improve the process5. Control the new process tomake sure new performanceis maintainedDMAIC Approach
  38. 38. 6 - 38© 2011 Pearson Education, Inc. publishing as Prentice HallSix Sigma Implementation Emphasize defects per millionopportunities as a standard metric Provide extensive training Focus on corporate sponsor support(Champions) Create qualified process improvementexperts (Black Belts, Green Belts, etc.) Set stretch objectivesThis cannot be accomplished without a majorcommitment from top level management
  39. 39. 6 - 39© 2011 Pearson Education, Inc. publishing as Prentice HallEmployee Empowerment Getting employees involved in productand process improvements 85% of quality problems are dueto process and material Techniques Build communication networksthat include employees Develop open, supportive supervisors Move responsibility to employees Build a high-morale organization Create formal team structures
  40. 40. 6 - 40© 2011 Pearson Education, Inc. publishing as Prentice HallQuality Circles Group of employees who meetregularly to solve problems Trained in planning, problemsolving, and statistical methods Often led by a facilitator Very effective when doneproperly
  41. 41. 6 - 41© 2011 Pearson Education, Inc. publishing as Prentice HallBenchmarkingSelecting best practices to use as astandard for performance1. Determine what tobenchmark2. Form a benchmark team3. Identify benchmarking partners4. Collect and analyze benchmarkinginformation5. Take action to match or exceed thebenchmark
  42. 42. 6 - 42© 2011 Pearson Education, Inc. publishing as Prentice HallBest Practices for ResolvingCustomer ComplaintsBest Practice JustificationMake it easy for clientsto complainIt is free market researchRespond quickly tocomplaintsIt adds customers and loyaltyResolve complaints onfirst contactIt reduces costUse computers tomanage complaintsDiscover trends, share them, and alignyour servicesRecruit the best forcustomer service jobsIt should be part of formal training andcareer advancementTable 6.3
  43. 43. 6 - 43© 2011 Pearson Education, Inc. publishing as Prentice HallJust-in-Time (JIT)Relationship to quality: JIT cuts the cost of quality JIT improves quality Better quality means lessinventory and better, easier-to-employ JIT system
  44. 44. 6 - 44© 2011 Pearson Education, Inc. publishing as Prentice HallJust-in-Time (JIT) ‘Pull’ system of production schedulingincluding supply management Production only when signaled Allows reduced inventory levels Inventory costs money and hides processand material problems Encourages improved process andproduct quality
  45. 45. 6 - 45© 2011 Pearson Education, Inc. publishing as Prentice HallJust-In-Time (JIT) ExampleScrapUnreliableVendorsCapacityImbalancesWork in processinventory level(hides problems)
  46. 46. 6 - 46© 2011 Pearson Education, Inc. publishing as Prentice HallJust-In-Time (JIT) ExampleReducing inventory revealsproblems so they can be solvedScrapUnreliableVendorsCapacityImbalances
  47. 47. 6 - 47© 2011 Pearson Education, Inc. publishing as Prentice HallTaguchi Concepts Engineering and experimentaldesign methods to improve productand process design Identify key component and processvariables affecting product variation Taguchi Concepts Quality robustness Quality loss function Target-oriented quality
  48. 48. 6 - 48© 2011 Pearson Education, Inc. publishing as Prentice HallQuality Robustness Ability to produce productsuniformly in adverse manufacturingand environmental conditions Remove the effects of adverseconditions Small variations in materials andprocess do not destroy productquality
  49. 49. 6 - 49© 2011 Pearson Education, Inc. publishing as Prentice HallQuality Loss Function Shows that costs increase as theproduct moves away from whatthe customer wants Costs include customerdissatisfaction, warrantyand service, internalscrap and repair, and costs tosociety Traditional conformancespecifications are too simplistic
  50. 50. 6 - 50© 2011 Pearson Education, Inc. publishing as Prentice HallUnacceptablePoorGoodBestFairQuality Loss FunctionHigh lossLoss (toproducingorganization,customer,and society)Low lossFrequencyLower Target UpperSpecificationTarget-oriented qualityyields more product inthe “best” categoryTarget-oriented qualitybrings product towardthe target valueConformance-orientedquality keeps productswithin 3 standarddeviationsFigure 6.5L = D2CwhereL = loss to societyD = distance fromtarget valueC = cost of deviation
  51. 51. 6 - 51© 2011 Pearson Education, Inc. publishing as Prentice HallTools of TQM Tools for Generating Ideas Check sheets Scatter diagrams Cause-and-effect diagrams Tools to Organize the Data Pareto charts Flowcharts
  52. 52. 6 - 52© 2011 Pearson Education, Inc. publishing as Prentice HallTools of TQM Tools for Identifying Problems Histogram Statistical process control chart
  53. 53. 6 - 53© 2011 Pearson Education, Inc. publishing as Prentice Hall/// / /// /// ///// //////////HourDefect 1 2 3 4 5 6 7 8ABC/////Seven Tools of TQM(a) Check Sheet: An organized method ofrecording dataFigure 6.6
  54. 54. 6 - 54© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(b) Scatter Diagram: A graph of the valueof one variable vs. another variableAbsenteeismProductivityFigure 6.6
  55. 55. 6 - 55© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(c) Cause-and-Effect Diagram: A tool thatidentifies process elements (causes) thatmight effect an outcomeFigure 6.6CauseMaterials MethodsManpower MachineryEffect
  56. 56. 6 - 56© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(d) Pareto Chart: A graph to identify and plotproblems or defects in descending order offrequencyFigure 6.6FrequencyPercentA B C D E
  57. 57. 6 - 57© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(e) Flowchart (Process Diagram): A chart thatdescribes the steps in a processFigure 6.6
  58. 58. 6 - 58© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(f) Histogram: A distribution showing thefrequency of occurrences of a variableFigure 6.6DistributionRepair time (minutes)Frequency
  59. 59. 6 - 59© 2011 Pearson Education, Inc. publishing as Prentice HallSeven Tools of TQM(g) Statistical Process Control Chart: A chart withtime on the horizontal axis to plot values of astatisticFigure 6.6Upper control limitTarget valueLower control limitTime
  60. 60. 6 - 60© 2011 Pearson Education, Inc. publishing as Prentice HallCause-and-Effect DiagramsMaterial(ball)Method(shooting process)Machine(hoop &backboard)Manpower(shooter)Missedfree-throwsFigure 6.7Rim alignmentRim sizeBackboardstabilityRim heightFollow-throughHand positionAiming pointBend kneesBalanceSize of ballLopsidednessGrain/Feel(grip)Air pressureTrainingConditioning MotivationConcentrationConsistency
  61. 61. 6 - 61© 2011 Pearson Education, Inc. publishing as Prentice HallPareto ChartsNumber ofoccurrencesRoom svc Check-in Pool hours Minibar Misc.72% 16% 5% 4% 3%124 3 254– 100– 93– 88– 7270 –60 –50 –40 –30 –20 –10 –0 –Frequency(number)Causes and percent of the totalCumulativepercentData for October
  62. 62. 6 - 62© 2011 Pearson Education, Inc. publishing as Prentice HallFlow ChartsMRI Flowchart1. Physician schedules MRI2. Patient taken to MRI3. Patient signs in4. Patient is prepped5. Technician carries out MRI6. Technician inspects film7. If unsatisfactory, repeat8. Patient taken back to room9. MRI read by radiologist10. MRI report transferred tophysician11. Patient and physician discuss111020%9880%1 2 3 4 5 6 7
  63. 63. 6 - 63© 2011 Pearson Education, Inc. publishing as Prentice HallStatistical Process Control(SPC) Uses statistics and control charts totell when to take corrective action Drives process improvement Four key steps Measure the process When a change is indicated, find theassignable cause Eliminate or incorporate the cause Restart the revised process
  64. 64. 6 - 64© 2011 Pearson Education, Inc. publishing as Prentice HallAn SPC ChartUpper control limitCoach’s target valueLower control limitGame number| | | | | | | | |1 2 3 4 5 6 7 8 920%10%0%Plots the percent of free throws missedFigure 6.8
  65. 65. 6 - 65© 2011 Pearson Education, Inc. publishing as Prentice HallInspection Involves examining items to see ifan item is good or defective Detect a defective product Does not correct deficiencies inprocess or product It is expensive Issues When to inspect Where in process to inspect
  66. 66. 6 - 66© 2011 Pearson Education, Inc. publishing as Prentice HallWhen and Where to Inspect1. At the supplier’s plant while the supplier isproducing2. At your facility upon receipt of goods fromthe supplier3. Before costly or irreversible processes4. During the step-by-step productionprocess5. When production or service is complete6. Before delivery to your customer7. At the point of customer contact
  67. 67. 6 - 67© 2011 Pearson Education, Inc. publishing as Prentice HallInspection Many problems Worker fatigue Measurement error Process variability Cannot inspect quality into aproduct Robust design, empoweredemployees, and sound processesare better solutions
  68. 68. 6 - 68© 2011 Pearson Education, Inc. publishing as Prentice HallSource Inspection Also known as source control The next step in the process isyour customer Ensure perfect productto your customerPoka-yoke is the concept of foolproof devicesor techniques designed to pass onlyacceptable product
  69. 69. 6 - 69© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedStandardJones Law Office ReceptionistperformanceBillingAttorneyIs phone answered by thesecond ringAccurate, timely, andcorrect formatPromptness in returningcallsTable 6.4
  70. 70. 6 - 70© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedStandardHard Rock Hotel ReceptiondeskDoormanRoomMinibarUse customer’s nameGreet guest in less than 30secondsAll lights working, spotlessbathroomRestocked and chargesaccurately posted to billTable 6.4
  71. 71. 6 - 71© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedStandardArnold PalmerHospitalBillingPharmacyLabNursesAdmissionsAccurate, timely, andcorrect formatPrescription accuracy,inventory accuracyAudit for lab-test accuracyCharts immediatelyupdatedData entered correctly andcompletelyTable 6.4
  72. 72. 6 - 72© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedStandardOlive GardenRestaurantBusboyBusboyWaiterServes water and breadwithin 1 minuteClears all entrée items andcrumbs prior to dessertKnows and suggestspecials, dessertsTable 6.4
  73. 73. 6 - 73© 2011 Pearson Education, Inc. publishing as Prentice HallService Industry InspectionOrganizationWhat isInspectedStandardNordstromDepartmentStoreDisplay areasStockroomsSalesclerksAttractive, well-organized,stocked, good lightingRotation of goods,organized, cleanNeat, courteous, veryknowledgeableTable 6.4
  74. 74. 6 - 74© 2011 Pearson Education, Inc. publishing as Prentice HallAttributes Versus Variables Attributes Items are either good or bad,acceptable or unacceptable Does not address degree of failure Variables Measures dimensions such as weight,speed, height, or strength Falls within an acceptable range Use different statistical techniques
  75. 75. 6 - 75© 2011 Pearson Education, Inc. publishing as Prentice HallTQM In Services Service quality is more difficult tomeasure than the quality of goods Service quality perceptions dependon Intangible differences betweenproducts Intangible expectations customershave of those products
  76. 76. 6 - 76© 2011 Pearson Education, Inc. publishing as Prentice HallService QualityThe Operations Manager mustrecognize:1. The tangible component ofservices is important2. The service process is important3. The service is judged against thecustomer’s expectations4. Exceptions will occur
  77. 77. 6 - 77© 2011 Pearson Education, Inc. publishing as Prentice HallServiceSpecificationsat UPS
  78. 78. 6 - 78© 2011 Pearson Education, Inc. publishing as Prentice HallDeterminants of ServiceQualityReliability Consistency of performance and dependabilityResponsiveness Willingness or readiness of employeesCompetence Required skills and knowledgeAccess Approachability and ease of contactCourtesy Politeness, respect, consideration, friendlinessCommunication Keeping customers informedCredibility Trustworthiness, believability, honestySecurity Freedom from danger, risk, or doubtUnderstanding/knowing the customerUnderstand the customer’s needsTangibles Physical evidence of the serviceTable 6.5
  79. 79. 6 - 79© 2011 Pearson Education, Inc. publishing as Prentice HallService Recovery Strategy Managers should have a plan forwhen services fail Marriott’s LEARN routine Listen Empathize Apologize React Notify
  80. 80. 6 - 80© 2011 Pearson Education, Inc. publishing as Prentice HallAll rights reserved. No part of this publication may be reproduced, stored in a retrievalsystem, or transmitted, in any form or by any means, electronic, mechanical, photocopying,recording, or otherwise, without the prior written permission of the publisher.Printed in the United States of America.

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