2Overview Nature of Quality Traditional Quality Management Modern Quality Management Emerging Quality Standards Total Quality Management (TQM) Programs Quality Management in Services Wrap-Up: What World-Class Producers Do
3What is Quality?“The quality of a product or service is acustomer’s perception of the degree to which theproduct or service meets his or her expectations.”
4Nature of Quality Dimensions of Quality Determinants of Quality Costs of Quality
5Best-In-Class and World-Class Customers’ expectations of quality are not the samefor different classes of products or services. Best-in-class quality means being the best product orservice in a particular class of products or services. Being a world-class company means that each of itsproducts and services are considered best-in-class byits customers.
7Determinants of Quality Quality of design Quality capability of production processes Quality of conformance Quality of customer service Organizational quality culture
8Costs of Quality Scrap and rework rescheduling, repairing, retesting .... Defective products in the hands of the customer recalls, warranty claims, law suits, lost business .... Detecting defects inspection, testing …. Preventing defects training, product/process redesign ….
9Modern Quality Management Quality Gurus Quality Drives the Productivity Machine Other Aspects of the Quality Picture
10Quality Gurus W. Edwards Deming Assisted Japan in improving productivity andquality Philip B. Crosby In Quality Is Free contends that a company shouldhave the goal of zero defects Armand V. Feigenbaum Developed the concept of total quality control
11Gurus (continued) Kaoru Ishikawa Developed the concept of quality circles and use offishbone diagrams Joseph M. Juran Wrote Quality Control Handbook Genichi Taguchi Associated with robust product design
12Quality Drives the Productivity Machine If production does it right the first time and producesproducts and services that are defect-free, waste iseliminated and costs are reduced. Quality management programs today are viewed bymany companies as productivity improvementprograms.
13Other Aspects of the Quality Picture Just-In-Time (JIT) manufacturing Product standardization Automated equipment Preventive maintenance
14JIT Manufacturing “A system of enforced problem solving” Lot sizes are cut In-process inventories are drastically reduced Any interruption causes production to stop Quality problems are immediately addressed The necessary teamwork contributes to increasedpride in quality
15Emerging Quality Standards Malcolm Baldrige National Quality Award Deming Prize ISO 9000 Standards
16Malcolm Baldrige National Quality Award Awards given annually to U.S. firms Criteria include Leadership Strategic planning Customer and market focus Information and analysis Human resource focus Process management Business results
17The Deming Prize Given by the Union of Japanese Scientists andEngineers Recognizes companies that have demonstratedsuccessful quality improvement programs All (not just Japanese) firms are eligible Four top-management activities recognized Senior management activities Customer satisfaction activity Employee involvement activities Training activity
18ISO 9000 Standards Guidelines for quality covering the manufacturingand presale inspection of products and services Specify what is required, but not how to do it Certification is administered by a third party, andmust be renewed every three years
19Elements of TQM Top management commitment and involvement Customer involvement Design products for quality Design production processes for quality Control production processes for quality . . . more
20Elements of TQM Develop supplier partnerships Customer service, distribution and installation Building teams of empowered employees Benchmarking and continuous improvement
21Top ManagementCommitment and Involvement Support must be genuine or TQM will be seen as justanother passing fad Fundamental changes must occur in the culture of theorganization Such fundamental changes are not easy, but areimpossible without top management’s commitmentand involvement
22Customer Involvement Mechanisms to involve the customer Focus groups Market surveys Customer questionnaires Market research programs Quality Function Deployment (QFD) Formal system for identifying customer wants Eliminate wasteful product features and activitiesthat do not contribute
23Designing Products for Quality Designing for RobustnessProduct will perform as intended even ifundesirable conditions occur in production or infield. Designing for Manufacturability (DFM)Products typically have fewer parts and can beassembled quickly, easily, and error-free. Designing for ReliabilityManufacturing parts to closer tolerances.Redundant components where necessary.
24Designing and ControllingProduction Processes The responsibility of producing products of highquality rests with the workers producing the product Two types of factors introduce variation inproduction processes Controllable factors - can be reduced by workersand management Uncontrollable factors - reduced only byredesigning or replacing existing processes
25Process Capability Process capability is a production process’ ability toproduce products within the desired expectations ofcustomers. The process capability index (PCI) is a way ofmeasuring that ability.
26Process Capability Index (PCI)PCI = (UL - LL) / (6 )UL = allowed upper limit of the productcharacteristic, based on customer expect.LL = allowed lower limit of the productcharacteristic, based on customer expect.= standard deviation of the productcharacteristic from the production processPCI > 1.00 Process is capable of meeting customerexpectations.PCI < 1.00 Process is not capable.
27Example: Process CapabilityIn order for a certain molded part to beconsidered acceptable, the molding process must beconducted within a limited range of temperature. Thelower limit is 455o and the upper limit is 465o.Three molding machines being considered are A,B, and C with standard deviations of A = 2.50, B =1.25, and C = 1.75.Which of these machines are capable ofproducing the part in accordance with the temperaturerequirements?
28Example: Process CapabilityPCIA = (465 - 455) / (6(2.50)) = 10/15 = 0.67PCIB = (465 - 455) / (6(1.25)) = 10/15 = 1.33PCIC = (465 - 455) / (6(1.75)) = 10/15 = 0.95Machine A is not capable, with a PCI below 1.00.Machine C falls slightly short of being capable.Machine B is capable of producing withinspecifications.
29Developing Supplier Partnerships Supplier becomes part of the customer’s TQMprogram The relationship between the supplier and thecustomer becomes long-lasting and durable
30Customer Service, Distribution, and Installation Packaging, shipping, and installation must beincluded in TQM. Warehousing, marketing, and the distributionfunction must be committed to perfect quality. Contact between the customers and the firm’s productmust be planned and managed to provide satisfiedcustomers.
31Building Teams of Empowered Employees Employee training programs Employees at all levels are trained in quality. Works teams and empowerment Workers are given the authority to act. Quality at the source Workers are responsible for their own work. Quality circles Small groups of employees who analyze andsolve quality problems and implementimprovement programs.
32Benchmarking and Continuous Improvement Benchmarking The practice of establishing internal standards ofperformance by looking to how world-classcompanies run their businesses Continuous Improvement The company makes small incrementalimprovements toward excellence on a continualbasis
33TQM in Services Since many services are intangible, it is difficult todetermine their quality Customers set their own standards for services Perceived quality of service affected by thesurroundings Performance of service employees determines inlarge part the quality of the services
34Wrap-Up: World-Class Practice Quality begins when business strategy is formulated Quality is the weapon of choice to capture globalmarkets Quality drives the productivity machine Not depending on inspection to catch defects;concentrating on doing things right the first time Committing tremendous resources to put in placeTQM programs aimed at continuous improvement