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©2008PrenticeHall,Inc.6–1OperationsManagementChapter6–ManagingQualityPowerPointpresentationtoaccompanyHeizer/RenderPrinciplesofOperationsManagement,7eOperationsManagement,9e©2008PrenticeHall,Inc.6–2OutlineGlobalCompanyProfile:ArnoldPalmerHospitalQualityandStrategyDefiningQualityImplicationsofQualityMalcolmBaldrigeNationalQualityAwardCostofQuality(COQ)EthicsandQualityManagement©2008PrenticeHall,Inc.6–3Outline–ContinuedInternationalQualityStandardsISO9000ISO14000©2008PrenticeHall,Inc.6–4Outline–ContinuedTotalQualityManagementContinuousImprovementSixSigmaEmployeeEmpowermentBenchmarkingJust-in-Time(JIT)TaguchiConceptsKnowledgeofTQMTools©2008PrenticeHall,Inc.6–5Outline–ContinuedToolsofTQMCheckSheetsScatterDiagramsCause-and-EffectDiagramsParetoChartsFlowchartsHistogramsStatisticalProcessControl(SPC)©2008PrenticeHall,Inc.6–6Outline–ContinuedTheRoleofInspectionWhenandWheretoInspectSourceInspectionServiceIndustryInspectionInspectionofAttributesversusVariablesTQMinServices©2008PrenticeHall,Inc.6–7LearningObjectivesWhenyoucompletethischapteryoushouldbeableto:DefinequalityandTQMDescribetheISOinternationalqualitystandardsExplainSixSigmaExplainhowbenchmarkingisusedExplainqualityrobustproductsandTaguchiconceptsUsetheseventoolsofTQM©2008PrenticeHall,Inc.6–8ManagingQualityProvidesaCompetitiveAdvantageArnoldPalmerHospitalDeliverover13,000babiesannuallyVirtuallyeverytypeofqualitytoolisemployedContinuousimprovementEmployeeempowermentBenchmarkingJust-in-timeQualitytools©2008PrenticeHall,Inc.6–9QualityandStrategyManagingqualitysupportsdifferentiation,lowcost,andresponsestrategiesQualityhelpsfirmsincreasesalesandreducecostsBuildingaqualityorganizationisademandingtask©2008PrenticeHall,Inc.6–10TwoWaysQualityImprovesProfitabilityImprovedQualityIncreasedProfitsIncreasedproductivityLowerreworkandscrapcostsLowerwarrantycostsReducedCostsviaImprovedresponseFlexiblepricingImprovedreputationSalesGainsviaFigure6.1©2008PrenticeHall,Inc.6–11TheFlowofActivitiesOrganizationalPracticesLeadership,Missionstatement,Effectiveoperatingprocedures,Staffsupport,TrainingYields:WhatisimportantandwhatistobeaccomplishedQualityPrinciplesCustomerfocus,Continuousimprovement,Benchmarking,Just-in-time,ToolsofTQMYields:HowtodowhatisimportantandtobeaccomplishedEmployeeFulfillmentEmpowerment,OrganizationalcommitmentYields:EmployeeattitudesthatcanaccomplishwhatisimportantCustomerSatisfactionWinningorders,RepeatcustomersYields:AneffectiveorganizationwithacompetitiveadvantageFigure6.2©2008PrenticeHall,Inc.6–12DefiningQualityThetotalityoffeaturesandcharacteristicsofaproductorservicethatbearsonitsabilitytosatisfystatedorimpliedneedsAmericanSocietyforQuality©2008PrenticeHall,Inc.6–13DifferentViewsUser-based–betterperformance,morefeaturesManufacturing-based–conformancetostandards,makingitrightthefirsttimeProduct-based–specificandmeasurableattributesoftheproduct©2008PrenticeHall,Inc.6–14ImplicationsofQuality1.CompanyreputationPerceptionofnewproductsEmploymentpracticesSupplierrelations2.ProductliabilityReducerisk3.GlobalimplicationsImprovedabilitytocompete©2008PrenticeHall,Inc.6–15KeyDimensionsofQualityPerformanceFeaturesReliabilityConformanceDurabilityServiceabilityAestheticsPerceivedqualityValue©2008PrenticeHall,Inc.6–16MalcomBaldrigeNationalQualityAwardEstablishedin1988bytheU.S.governmentDesignedtopromoteTQMpracticesRecentwinnersPremierInc.,MESAProducts,SunnyFreshFoods,ParkPlaceLexus,NorthMississippiMedicalCenter,TheBamaCompanies,RichlandCollege,TexasNameplateCompany,Inc.©2008PrenticeHall,Inc.6–17BaldrigeCriteriaApplicantsareevaluatedon:CategoriesPointsLeadership120StrategicPlanning85Customer&MarketFocus85Measurement,Analysis,andKnowledgeManagement90WorkforceFocus85ProcessManagement85Results450©2008PrenticeHall,Inc.6–18TakumiAJapanesecharacterthatsymbolizesabroaderdimensionthanquality,adeeperprocessthaneducation,andamoreperfectmethodthanpersistence©2008PrenticeHall,Inc.6–19CostsofQualityPreventioncosts-reducingthepotentialfordefectsAppraisalcosts-evaluatingproducts,parts,andservicesInternalfailure-producingdefectivepartsorservicebeforedeliveryExternalcosts-defectsdiscoveredafterdelivery©2008PrenticeHall,Inc.6–20ExternalFailureInternalFailurePreventionCostsofQualityAppraisalTotalCostQualityImprovementTotalCost©2008PrenticeHall,Inc.6–21LeadersinQualityW.EdwardsDeming14PointsforManagementJosephM.JuranTopmanagementcommitment,fitnessforuseArmandFeigenbaumTotalQualityControlPhilipB.CrosbyQualityisFree,zerodefects©2008PrenticeHall,Inc.6–22EthicsandQualityManagementOperationsmanagersmustdeliverhealthy,safe,qualityproductsandservicesPoorqualityrisksinjuries,lawsuits,recalls,andregulationOrganizationsarejudgedbyhowtheyrespondtoproblemsAllstakeholdersmuchbeconsidered©2008PrenticeHall,Inc.6–23InternationalQualityStandardsISO9000series(Europe/EC)CommonqualitystandardsforproductssoldinEurope(evenifmadeinU.S.)2000updateplacesgreateremphasisonleadershipandcustomersatisfactionISO14000series(Europe/EC)©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