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World class management


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World class management

  1. 1. 0WORLD CLASS SERVICE THROUGHQUALITY MANAGEMENTProfessor Jayashree Sadri and Dr. SorabSadri
  2. 2. 1Quality Management
  3. 3. 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
  4. 4. 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.”
  5. 5. 4Nature of Quality Dimensions of Quality Determinants of Quality Costs of Quality
  6. 6. 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.
  7. 7. 6Some Dimensions of Product Quality Performance Features Reliability Serviceability Durability Appearance Customer service Safety
  8. 8. 7Determinants of Quality Quality of design Quality capability of production processes Quality of conformance Quality of customer service Organizational quality culture
  9. 9. 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 ….
  10. 10. 9Modern Quality Management Quality Gurus Quality Drives the Productivity Machine Other Aspects of the Quality Picture
  11. 11. 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
  12. 12. 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
  13. 13. 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.
  14. 14. 13Other Aspects of the Quality Picture Just-In-Time (JIT) manufacturing Product standardization Automated equipment Preventive maintenance
  15. 15. 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
  16. 16. 15Emerging Quality Standards Malcolm Baldrige National Quality Award Deming Prize ISO 9000 Standards
  17. 17. 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
  18. 18. 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
  19. 19. 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
  20. 20. 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
  21. 21. 20Elements of TQM Develop supplier partnerships Customer service, distribution and installation Building teams of empowered employees Benchmarking and continuous improvement
  22. 22. 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
  23. 23. 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
  24. 24. 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.
  25. 25. 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
  26. 26. 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.
  27. 27. 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.
  28. 28. 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?
  29. 29. 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.
  30. 30. 29Developing Supplier Partnerships Supplier becomes part of the customer’s TQMprogram The relationship between the supplier and thecustomer becomes long-lasting and durable
  31. 31. 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.
  32. 32. 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.
  33. 33. 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
  34. 34. 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
  35. 35. 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