Quality Management

Copyright2006JohnWiley&Sons,Inc.BeniAsllaniUniversityofTennesseeatChattanoogaOperationsManagement-5thEditionChapter3RobertaRussell&BernardW.Taylor,IIIQualityManagementCopyright2006JohnWiley&Sons,Inc.3-2OutlineMeaningofQualityDimensionsofqualitySpecificationsandconformancequalityCostofqualityLevelsofqualityimprovementTotalqualitymanagement(TQM)Copyright2006JohnWiley&Sons,Inc.3-3Outline(2)QualitymanagementapproachesSixsigmaBaldrigeAwardISO9000Plan-do-check-actcycle(part2handout)QualitytoolsCopyright2006JohnWiley&Sons,Inc.3-4MeaningofQualityAmericanSocietyforQuality:QualityisthetotalityoffeaturesandcharacteristicsthatsatisfycustomerneedsCustomer-basedquality:meetingcustomerexpectationsorrequirementsAffectedbyproductpositioningDifferentfordifferenttargetmarketsDifferentfordifferentcustomersinthesametargetmarketCopyright2006JohnWiley&Sons,Inc.3-5MeaningofQuality(2)Fitnessforuse:theproductorserviceperformsasintendedFeatures:extraitemsaddedtobasiccharacteristicsQualityofdesign:thedegreetowhichqualitycharacteristicsaredesignedintoagoodorserviceValue:Productorserviceissuperiortocompetitorswithsimilarprices.Copyright2006JohnWiley&Sons,Inc.3-6MeaningofQuality(3)Perceivedquality:thequalitythatthecustomerthinksshegotDiffersbycustomerProducer-basedquality:conformancetospecifications.SpecificationsmustbebasedoncustomerexpectationsorrequirementsSpecificationswillchangeovertimeCopyright2006JohnWiley&Sons,Inc.3-7DimensionsofProductQuality(Garvin–page80)PerformanceFeaturesReliabilityConformancetospecificationsDurabilityServiceabilityandqualityofserviceAestheticsSafetyOtherperceptionsCopyright2006JohnWiley&Sons,Inc.3-8DimensionsofServiceQuality(pages81-82)TimeandtimelinessCompletenessCourtesyConsistencyAccessibilityandconvenienceAccuracyResponsivenessPhysicalelementsoftheserviceFitnessforUseProducer’sPerspectiveConsumer’sPerspectiveQualityofConformance•Conformancetospecifications•CostQualityofDesign•Qualitycharacteristics•Price•ValueMarketingProductionMeaningofQualityMeaningofQuality(3)Copyright2006JohnWiley&Sons,Inc.3-10ProductorServiceSpecificationCharacteristicsoftheproductorservicewhichwillbemeasuredtodeterminequalityTargetvaluesforeachcharacteristicShouldbebasedoncustomerexpectationsShouldmeetanylegalrequirementsIfaproductorserviceconsistentlymeetsspecifications,ithasconformancequality.Copyright2006JohnWiley&Sons,Inc.3-11MeasuringServiceQualityAbsolutemeasuresarebasedonafixedstandard.Timeliness%oftransactionswithouterrors.Perceptualmeasuresarebasedoncustomers’opinions.Howimportantwasthischaracteristictothecustomer?Howsatisfiedwasthecustomer?CustomerRequirementsProductSpecificationsStatisticalProcessControl:Measure&monitorqualityMeetsSpecifications?ProcessSpecificationsYesConformanceQualityFixprocessorinputsNoProductlaunchactivities:ReviseperiodicallyOngoingActivitiesCopyright2006JohnWiley&Sons,Inc.3-13AchievingConformanceQualityProductorservicedesignProcesstechnologyandequipmentPurchasingandmaterialsmanagementPlanningandschedulingHiring,training,andsupervisionMeasurementandcontrolCopyright2006JohnWiley&Sons,Inc.3-14CostofQualityCostofgoodqualityPreventioncostsAppraisalcostsCostofpoorqualityInternalfailurecostsExternalfailurecostsSeepages99-100Copyright2006JohnWiley&Sons,Inc.3-15Quality–CostRelationshipCostofqualityDifferencebetweenpriceofnonconformanceandconformanceCostofdoingthingswrong20to35%ofrevenuesCostofdoingthingsright3to4%ofrevenuesProfitabilityInthelongrun,qualityisfreeCopyright2006JohnWiley&Sons,Inc.3-16LevelsofqualityimprovementIncremental:manysmallimprovementsadduptomajorimprovementsatmodestcostUsesPlan-Do-Check-ActcycleandqualitytoolsBreakthroughimprovements:largeimprovementsrequiredtomeetbusinessobjectivesRe-engineertheprocessSixSigmaisoftenusedNewtechnologyisoftenneededCopyright2006JohnWiley&Sons,Inc.3-17TotalQualityManagementCommitmenttoqualitythroughoutorganizationPrinciplesofTQMCustomer-orientedLeadershipStrategicplanningEmployeeresponsibilityContinuousimprovementCooperationStatisticalmethodsTrainingandeducationCopyright2006JohnWiley&Sons,Inc.3-18SixSigma(1)1.AprocessfordevelopinganddeliveringnearperfectproductsandservicesMeasureofhowmuchaprocessdeviatesfromperfectionMaximumalloweddefects:3.4defectspermillionopportunitiesCopyright2006JohnWiley&Sons,Inc.3-19SixSigma(2)2.SixSigmaisabusinessimprovementmethodologythatfocusesanorganizationon:UnderstandingandmanagingcustomerrequirementsAligningkeybusinessprocessestoachievethoserequirementsUtilizingrigorousdataanalysistominimizevariationinthoseprocessesDrivingrapidandsustainableimprovementtobusinessprocessesCopyright2006JohnWiley&Sons,Inc.3-20SixSigma(3)3.AhighperformancemanagementsystemthathelpsanorganizationAligntheirbusinessstrategytocriticalimprovementeffortsMobilizeteamstoattackhighimpactprojectsAccelerateimprovedbusinessresultsGoverneffortstoensureimprovementsaresustainedCopyright2006JohnWiley&Sons,Inc.3-21DMAICAprocessimprovementstrategyusedinsixsigmaDef