Presentation is loading. Please wait.

Presentation is loading. Please wait.

© 2008 Prentice Hall, Inc.6 – 1 Operations Management Chapter 6 – Managing Quality PowerPoint presentation to accompany Heizer/Render Principles of Operations.

Similar presentations


Presentation on theme: "© 2008 Prentice Hall, Inc.6 – 1 Operations Management Chapter 6 – Managing Quality PowerPoint presentation to accompany Heizer/Render Principles of Operations."— Presentation transcript:

1 © 2008 Prentice Hall, Inc.6 – 1 Operations Management Chapter 6 – Managing Quality PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 7e Operations Management, 9e Extensive chages have been made to this slide set by Ömer Yağız.

2 © 2008 Prentice Hall, Inc.6 – 2 Outline Global Company Profile: Arnold Palmer Hospital Global Company Profile: Arnold Palmer Hospital Quality and Strategy Quality and Strategy Defining Quality Defining Quality Implications of Quality Implications of Quality Malcolm Baldrige National Quality Award Malcolm Baldrige National Quality Award Cost of Quality (COQ) Cost of Quality (COQ) Ethics and Quality Management Ethics and Quality Management

3 © 2008 Prentice Hall, Inc.6 – 3 Outline – Continued International Quality Standards International Quality Standards ISO 9000 ISO 9000 ISO14000 ISO14000

4 © 2008 Prentice Hall, Inc.6 – 4 Outline – Continued Total Quality Management Total Quality Management Continuous Improvement Continuous Improvement Six Sigma Six Sigma Employee Empowerment Employee Empowerment Benchmarking Benchmarking Just-in-Time (JIT) Just-in-Time (JIT) Taguchi Concepts Taguchi Concepts Knowledge of TQM Tools Knowledge of TQM Tools

5 © 2008 Prentice Hall, Inc.6 – 5 Outline – Continued Tools of TQM Tools of TQM Check Sheets Check Sheets Scatter Diagrams Scatter Diagrams Cause-and-Effect Diagrams Cause-and-Effect Diagrams Pareto Charts Pareto Charts Flowcharts Flowcharts Histograms Histograms Statistical Process Control (SPC) Statistical Process Control (SPC)

6 © 2008 Prentice Hall, Inc.6 – 6 Outline – Continued The Role of Inspection The Role of Inspection When and Where to Inspect When and Where to Inspect Source Inspection Source Inspection Service Industry Inspection Service Industry Inspection Inspection of Attributes versus Variables Inspection of Attributes versus Variables TQM in Services TQM in Services

7 © 2008 Prentice Hall, Inc.6 – 7 Learning Objectives When you complete this chapter you should be able to: Define quality and TQM Define quality and TQM Describe the ISO international quality standards Describe the ISO international quality standards Explain Six Sigma Explain Six Sigma Explain how benchmarking is used Explain how benchmarking is used Explain quality robust products and Taguchi concepts Explain quality robust products and Taguchi concepts Use the seven tools of TQM Use the seven tools of TQM

8 © 2008 Prentice Hall, Inc.6 – 8 Managing Quality Provides a Competitive Advantage Arnold Palmer Hospital Deliver over 13,000 babies annually Deliver over 13,000 babies annually Virtually every type of quality tool is employed Virtually every type of quality tool is employed Continuous improvement Continuous improvement Employee empowerment Employee empowerment Benchmarking Benchmarking Just-in-time Just-in-time Quality tools Quality tools

9 © 2008 Prentice Hall, Inc.6 – 9 To Make the Quality Focus Work Motorola: –Aggressively began a worldwide education program to be sure that employees understood quality and statistical process control –Established goals stretch goal - a goal which is very ambitiousstretch goal - a goal which is very ambitious –Established extensive employee participation and employee teams –originator of the six-sigma approach to quality –winner of the Baldrige national quality award

10 © 2008 Prentice Hall, Inc.6 – 10 What is a stretch goal ? A stretch goal is an ambitious goal. Sometimes it is called a breakthrough objective. Stretch goals force an organization to think radically different to encourage major improvements, as well as incremental ones. Stretch goals can be set for all areas of the company, including manufacturing, sales, accounting, product design, etc.

11 © 2008 Prentice Hall, Inc.6 – 11 MOTOROLA Co. --A famous illustration of stretch goal Six Sigma Quality concept of Motorola: Motorola set the following stretch goal in Improve product and services quality ten times by 1989, and at least one hundred fold by Achieve six sigma capability by With a deep sense of urgency, spread dedication to quality to every facet of the corporation, and achieve a culture of continuous improvement to assure total customer satisfaction. There is only one ultimate goal: zero defects--in everything we do.

12 © 2008 Prentice Hall, Inc.6 – 12 MOTOROLA Co. --A famous illustration of stretch goal Concept of six-sigma quality: Shrinking process variation (as indicated by 6 sigma) to half of the design tolerance so that only 3.4 parts out of 1 million are defective. At Motorola, six sigma became part of the common language of all employees. To them it meant near perfection, even if some did not understand the statistical details.

13 © 2008 Prentice Hall, Inc.6 – 13 Quality and Strategy Managing quality supports differentiation, low cost, and response strategies Managing quality supports differentiation, low cost, and response strategies Quality helps firms increase sales and reduce costs Quality helps firms increase sales and reduce costs Building a quality organization is a demanding task Building a quality organization is a demanding task

14 © 2008 Prentice Hall, Inc.6 – 14 Two Ways Quality Improves Profitability Improved Quality Increased Profits Increased productivity Lower rework (düzeltme) and scrap (hurda) costs Lower warranty costs Reduced Costs via Improved response Flexible pricing Improved reputation Sales Gains via Figure 6.1

15 © 2008 Prentice Hall, Inc.6 – 15 The Flow of Activities to achieve TQM Organizational Practices Leadership, Mission statement, Effective operating procedures, Staff support, Training Yields:What is important and what is to be accomplished Quality Principles Customer focus, Continuous improvement, Benchmarking, Just-in-time, Tools of TQM Yields:How to do what is important and to be accomplished Employee Fulfillment Empowerment, Organizational commitment Yields:Employee attitudes that can accomplish what is important Customer Satisfaction Winning orders, Repeat customers Yields:An effective organization with a competitive advantage Figure 6.2

16 © 2008 Prentice Hall, Inc.6 – 16 Defining Quality The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs ASQASQ - American Society for Quality ASQ

17 © 2008 Prentice Hall, Inc.6 – 17 Other Definitions of Quality QUALITY MEANS FITNESS FOR USE. QUALITY MEANS FITNESS FOR USE. QUALITY IS MEETING OR EXCEEDING CUSTOMER EXPECTATIONS. QUALITY IS MEETING OR EXCEEDING CUSTOMER EXPECTATIONS. QUALITY IS INVERSELY PROPORTIONAL TO VARIABILITY. – What does this mean? QUALITY IS INVERSELY PROPORTIONAL TO VARIABILITY. – What does this mean?

18 © 2008 Prentice Hall, Inc.6 – 18 Different Views of Quality Depending on who/where you are.. User-based – better performance, more features User-based – better performance, more features fitness for intended use, or how well the product/service performs its intended function

19 © 2008 Prentice Hall, Inc.6 – 19 Different Views of Quality Manufacturing-based – conformance to standards, making it right the first time Manufacturing-based – conformance to standards, making it right the first time quality is conformance to specifications. Specifications are targets and tolerances determined by designers of products and services. This is a key definition of quality for the technical aspects of quality planning and control. quality is conformance to specifications. Specifications are targets and tolerances determined by designers of products and services. This is a key definition of quality for the technical aspects of quality planning and control.

20 © 2008 Prentice Hall, Inc.6 – 20 Different Views of Quality Product-based – specific and measurable attributes of the productProduct-based – specific and measurable attributes of the product quality is a function of a specific, measurable variable and differences in the quality reflect differences in quantity of some product attribute ( number of knots on carpets, number of cylinders in an auto engine, percentage of silk in a shirt or blouse). quality is a function of a specific, measurable variable and differences in the quality reflect differences in quantity of some product attribute ( number of knots on carpets, number of cylinders in an auto engine, percentage of silk in a shirt or blouse).

21 © 2008 Prentice Hall, Inc.6 – 21 Implications of Quality 1.Company reputation Perception of new products Perception of new products Employment practices Employment practices Supplier relations Supplier relations 2.Product liability Reduce risk of faulty products or services Reduce risk of faulty products or services 3.Global implications Improved ability to compete Improved ability to compete

22 © 2008 Prentice Hall, Inc.6 – 22 Key Dimensions of Quality for goods Performance Performance Features Features Reliability Reliability Conformance Conformance Durability Durability Serviceability Serviceability Aesthetics Aesthetics Perceived quality Perceived quality Value Value

23 © 2008 Prentice Hall, Inc.6 – 23 Key Dimensions of Quality for goods Performance: A products primary operating characteristics. Will the product do the intended job? (Car example -- acceleration, braking distance, steering, maneuverability.) Performance: A products primary operating characteristics. Will the product do the intended job? (Car example -- acceleration, braking distance, steering, maneuverability.) Performans, birincil (temel) işlevler

24 © 2008 Prentice Hall, Inc.6 – 24 Features: Characteristics of secondary importance for the functioning of a product. In other words, the bells and whistles of a product. ( Power steering, antilock brakes, tape/CD deck, A/C, reclining seats.) Features: Characteristics of secondary importance for the functioning of a product. In other words, the bells and whistles of a product. ( Power steering, antilock brakes, tape/CD deck, A/C, reclining seats.) İkincil özellikler Key Dimensions of Quality for goods

25 © 2008 Prentice Hall, Inc.6 – 25 Reliability: probability of a products surviving over a specified period of time under stated conditions of use. Consistency of performance over time. How often does the product fail? (Ability to start on cold days, frequency of failure of various components). Reliability: probability of a products surviving over a specified period of time under stated conditions of use. Consistency of performance over time. How often does the product fail? (Ability to start on cold days, frequency of failure of various components).Güvenilirlik Key Dimensions of Quality for goods

26 © 2008 Prentice Hall, Inc.6 – 26 Conformance: Degree to which physical and performance characteristics of a product match preestablished standards. Is the product made exactly as the designer intended? (fit and finish, aerodynamic properties-drag coefficient, freedom from noise, fuel consumption.) Conformance: Degree to which physical and performance characteristics of a product match preestablished standards. Is the product made exactly as the designer intended? (fit and finish, aerodynamic properties-drag coefficient, freedom from noise, fuel consumption.) Uygunluk (spesifikasyonlara) Key Dimensions of Quality for goods

27 © 2008 Prentice Hall, Inc.6 – 27 Durability: Amount of use one gets from a product before it physically deteriorates or until replacement is preferable. How long does the product last ? (Corrosion resistance, wear of seat cover material, wiper blades motor, AC compressor, etc.) Durability: Amount of use one gets from a product before it physically deteriorates or until replacement is preferable. How long does the product last ? (Corrosion resistance, wear of seat cover material, wiper blades motor, AC compressor, etc.)Dayanıklılık Key Dimensions of Quality for goods

28 © 2008 Prentice Hall, Inc.6 – 28 Serviceability: The speed, courtesy, and competence of maintenance and repair. How easy is it to service and repair the product? (Access to spare parts, the number of kilometers between major maintenance service, ease and expense of service.) Serviceability: The speed, courtesy, and competence of maintenance and repair. How easy is it to service and repair the product? (Access to spare parts, the number of kilometers between major maintenance service, ease and expense of service.) Bakım / onarım kolaylığı Key Dimensions of Quality for goods

29 © 2008 Prentice Hall, Inc.6 – 29 Aesthetics: How a product looks, feels, sounds, tastes, or smells. What does the product look like? (Color, instrument panel design, placement of controls, and feel of the road.) Aesthetics: How a product looks, feels, sounds, tastes, or smells. What does the product look like? (Color, instrument panel design, placement of controls, and feel of the road.) Estetik özellikler Key Dimensions of Quality for goods

30 © 2008 Prentice Hall, Inc.6 – 30 Perceived Quality: Subjective assessment of quality resulting from image, advertising, or brand names. What is the reputation of the company or its product? (Brand image of car, repair history reported by trade magazines or friends.) Perceived Quality: Subjective assessment of quality resulting from image, advertising, or brand names. What is the reputation of the company or its product? (Brand image of car, repair history reported by trade magazines or friends.) Tüketici tarafından algılanan kalite Key Dimensions of Quality for goods

31 © 2008 Prentice Hall, Inc.6 – 31 Under- standing Tangibles Reliability CommunicationCredibility Security Responsiveness Competence Courtesy Access © 1995 Corel Corp. Service Quality Attributes

32 © 2008 Prentice Hall, Inc.6 – 32 Malcom Baldrige National Quality Award Established in 1988 by the U.S. government Established in 1988 by the U.S. government Designed to promote TQM practices Designed to promote TQM practices Recent winners Recent winners Premier Inc., MESA Products, Sunny Fresh Foods, Park Place Lexus, North Mississippi Medical Center, The Bama Companies, Richland College, Texas Nameplate Company, Inc. Premier Inc., MESA Products, Sunny Fresh Foods, Park Place Lexus, North Mississippi Medical Center, The Bama Companies, Richland College, Texas Nameplate Company, Inc. Click

33 © 2008 Prentice Hall, Inc.6 – 33 Baldrige Criteria Applicants are evaluated on: CategoriesPoints Leadership120 Strategic Planning 85 Customer & Market Focus85 Measurement, Analysis, and Knowledge Management 90 Workforce Focus85 Process Management 85 Results450

34 © 2008 Prentice Hall, Inc.6 – 34 Baldrige Excellence Model

35 © 2008 Prentice Hall, Inc.6 – 35 Other well-known awards European Foundation for Quality Management (EFQM) (established in 1988 by the European Commission) European Foundation for Quality Management (EFQM) (established in 1988 by the European Commission) Deming Prize (established in 1951 in honor of Deming, the quality guru who helped Japan establish its famous quality system) Deming Prize (established in 1951 in honor of Deming, the quality guru who helped Japan establish its famous quality system)

36 © 2008 Prentice Hall, Inc.6 – 36 Other well-known awards KALDER Quality Award (established in 1991 by Turkish Quality Association – Kalite DerneğiKALDER Quality Award (established in 1991 by Turkish Quality Association – Kalite Derneği Has been very successful in Turkeys bid for quality excellenceHas been very successful in Turkeys bid for quality excellence

37 © 2008 Prentice Hall, Inc.6 – 37 EFQM Quality Model

38 © 2008 Prentice Hall, Inc.6 – 38 Takumi A Japanese character that symbolizes a broader dimension than quality, a deeper process than education, and a more perfect method than persistence

39 © 2008 Prentice Hall, Inc.6 – 39 Costs of Quality Prevention costs - reducing the potential for defects ( Prevention costs - reducing the potential for defects (training, quality improvement programs) Appraisal costs - evaluating products, parts, and services ( Appraisal costs - evaluating products, parts, and services (testing, labs, inspectors) Internal failure - producing defective parts or service before delivery ( Internal failure - producing defective parts or service before delivery (scrap, rework, downtime of machinery) External costs - defects discovered after delivery to customer ( External costs - defects discovered after delivery to customer (returned product, liabilities, loss of goodwill, warranty repair, costs to society)

40 © 2008 Prentice Hall, Inc.6 – 40 External Failure Internal Failure Prevention Costs of Quality Appraisal Total Cost Quality Improvement Total Cost

41 © 2008 Prentice Hall, Inc.6 – 41 Leaders in Quality W. Edwards Deming14 Points for Management Joseph M. JuranTop management commitment, fitness for use Armand FeigenbaumTotal Quality Control Philip B. CrosbyQuality is Free, zero defects

42 © 2008 Prentice Hall, Inc.6 – 42 History of Development of TQM PLEASE REFER TO SLIDE SET TITLED HISTORY OF DEVELOPMENT OF TQM

43 © 2008 Prentice Hall, Inc.6 – 43 Ethics and Quality Management Operations managers must deliver healthy, safe, quality products and services Operations managers must deliver healthy, safe, quality products and services Poor quality risks injuries, lawsuits, recalls, and regulation Poor quality risks injuries, lawsuits, recalls, and regulation Organizations are judged by how they respond to problems Organizations are judged by how they respond to problems All stakeholders much be considered All stakeholders much be considered

44 © 2008 Prentice Hall, Inc.6 – 44 International Quality Standards ISO 9000 series (Europe/EC) ISO 9000 series (Europe/EC) Common quality standards for products sold in Europe (even if made in U.S.) Common quality standards for products sold in Europe (even if made in U.S.) 2000 update places greater emphasis on leadership and customer satisfaction 2000 update places greater emphasis on leadership and customer satisfaction ISO series (Europe/EC) ISO series (Europe/EC)

45 © 2008 Prentice Hall, Inc.6 – 45 ISO Environmental Standard Core Elements: Environmental management Environmental management Auditing Auditing Performance evaluation Performance evaluation Labeling Labeling Life cycle assessment Life cycle assessment

46 © 2008 Prentice Hall, Inc.6 – 46 TQM Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer

47 © 2008 Prentice Hall, Inc.6 – 47 Demings Fourteen Points 1.Create consistency of purpose 2.Lead to promote change 3.Build quality into the product; stop depending on inspection 4.Build long-term relationships based on performance, not price 5.Continuously improve product, quality, and service 6.Start training 7.Emphasize leadership Table 6.1

48 © 2008 Prentice Hall, Inc.6 – 48 Demings Fourteen Points 8.Drive out fear 9.Break down barriers between departments 10.Stop haranguing workers 11.Support, help, improve 12.Remove barriers to pride in work 13.Institute a vigorous program of education and self-improvement 14.Put everybody in the company to work on the transformation Table 6.1

49 © 2008 Prentice Hall, Inc.6 – 49 Seven Concepts of TQM Continuous improvement Continuous improvement Six Sigma Six Sigma Employee empowerment Employee empowerment Benchmarking Benchmarking Just-in-time (JIT) Just-in-time (JIT) Taguchi concepts Taguchi concepts Knowledge of TQM tools Knowledge of TQM tools

50 © 2008 Prentice Hall, Inc.6 – 50 Continuous Improvement Represents continual improvement of all processes Represents continual improvement of all processes Involves all operations and work centers including suppliers and customers Involves all operations and work centers including suppliers and customers People, Equipment, Materials, Procedures People, Equipment, Materials, Procedures

51 © 2008 Prentice Hall, Inc.6 – 51 Continuous Improvement KAIZEN PLEASE REFER TO SLIDE SET TITLED CONTINUOUS IMPROVEMENT (KAIZEN)

52 © 2008 Prentice Hall, Inc.6 – Do Test the plan 3. Check Is the plan working? 4. Act Implement the plan 1.Plan Identify the improvement and make a plan Shewharts PDCA Model Figure 6.3

53 © 2008 Prentice Hall, Inc.6 – 53 Six Sigma Two meanings Two meanings Statistical definition of a process that is % capable, 3.4 defects per million opportunities (DPMO) Statistical definition of a process that is % capable, 3.4 defects per million opportunities (DPMO) A program designed to reduce defects, lower costs, and improve customer satisfaction A program designed to reduce defects, lower costs, and improve customer satisfaction

54 © 2008 Prentice Hall, Inc.6 – 54 Two meanings Two meanings Statistical definition of a process that is % capable, 3.4 defects per million opportunities (DPMO) Statistical definition of a process that is % capable, 3.4 defects per million opportunities (DPMO) A program designed to reduce defects, lower costs, and improve customer satisfaction A program designed to reduce defects, lower costs, and improve customer satisfaction Six Sigma Mean Lower limitsUpper limits 3.4 defects/million ±6 2,700 defects/million ±3 Figure 6.4

55 © 2008 Prentice Hall, Inc.6 – 55 Six Sigma Program Originally developed by Motorola, adopted and enhanced by Honeywell and GE Originally developed by Motorola, adopted and enhanced by Honeywell and GE Highly structured approach to process improvement Highly structured approach to process improvement A strategy A strategy A discipline - DMAIC A discipline - DMAIC 6

56 © 2008 Prentice Hall, Inc.6 – 56 Six Sigma 1.Define critical outputs and identify gaps for improvement 2.Measure the work and collect process data 3.Analyze the data 4.Improve the process 5.Control the new process to make sure new performance is maintained DMAIC Approach

57 © 2008 Prentice Hall, Inc.6 – 57 Six Sigma Implementation Emphasize defects per million opportunities as a standard metric Emphasize defects per million opportunities as a standard metric Provide extensive training Provide extensive training Focus on corporate sponsor support (Champions) Focus on corporate sponsor support (Champions) Create qualified process improvement experts (Black Belts, Green Belts, etc.) Create qualified process improvement experts (Black Belts, Green Belts, etc.) Set stretch objectives Set stretch objectives This cannot be accomplished without a major commitment from top level management

58 © 2008 Prentice Hall, Inc.6 – 58 Employee Empowerment Getting employees involved in product and process improvements Getting employees involved in product and process improvements 85% of quality problems are due to process and material 85% of quality problems are due to process and material Techniques Techniques Build communication networks that include employees Build communication networks that include employees Develop open, supportive supervisors Develop open, supportive supervisors Move responsibility to employees Move responsibility to employees Build a high-morale organization Build a high-morale organization Create formal team structures Create formal team structures

59 © 2008 Prentice Hall, Inc.6 – 59 Quality Circles Group of employees who meet regularly to solve problems Group of employees who meet regularly to solve problems Trained in planning, problem solving, and statistical methods Trained in planning, problem solving, and statistical methods Often led by a facilitator Often led by a facilitator Very effective when done properly Very effective when done properly

60 © 2008 Prentice Hall, Inc.6 – 60 Use internal benchmarking if youre big enough Benchmarking Selecting best practices to use as a standard for performance Determine what to benchmark Determine what to benchmark Form a benchmark team Form a benchmark team Identify benchmarking partners Identify benchmarking partners Collect and analyze benchmarking information Collect and analyze benchmarking information Take action to match or exceed the benchmark Take action to match or exceed the benchmark

61 © 2008 Prentice Hall, Inc.6 – 61 Benchmarking Factors for Web Sites Use of meta tags Yes: 70%, No: 30% Meaningful homepage title Yes: 97%, No: 3% Unique domain name Yes: 91%, No: 9% Search engine registration Above 96% Average loading speed 28K: 19.31, 56K: 10.88, T1: 2.59 Average number of spelling errors 0.16 Visibility of contact information Yes: 74%, No: 26% Presence of search engine Yes: 59%, No: 41% Translation to multiple languages Yes: 11%, No: 89% Table 6.3

62 © 2008 Prentice Hall, Inc.6 – 62 Best Practices for Resolving Customer Complaints Make it easy for clients to complain Make it easy for clients to complain Respond quickly to complaints Respond quickly to complaints Resolve complaints on first contact Resolve complaints on first contact Use computers to manage complaints Use computers to manage complaints Recruit the best for customer service jobs Recruit the best for customer service jobs

63 © 2008 Prentice Hall, Inc.6 – 63 Just-in-Time (JIT) Relationship to quality: JIT cuts the cost of quality JIT cuts the cost of quality JIT improves quality JIT improves quality Better quality means less inventory and better, easier-to- employ JIT system Better quality means less inventory and better, easier-to- employ JIT system

64 © 2008 Prentice Hall, Inc.6 – 64 Just-in-Time (JIT) Pull system of production scheduling including supply management Pull system of production scheduling including supply management Production only when signaled Production only when signaled Allows reduced inventory levels Allows reduced inventory levels Inventory costs money and hides process and material problems Inventory costs money and hides process and material problems Encourages improved process and product quality Encourages improved process and product quality

65 © 2008 Prentice Hall, Inc.6 – 65 Just-In-Time (JIT) Example Scrap Unreliable Vendors Capacity Imbalances Work in process inventory level (hides problems)

66 © 2008 Prentice Hall, Inc.6 – 66 Just-In-Time (JIT) Example Reducing inventory reveals problems so they can be solved Scrap Unreliable Vendors Capacity Imbalances

67 © 2008 Prentice Hall, Inc.6 – 67 Taguchi Concepts Engineering and experimental design methods to improve product and process design Engineering and experimental design methods to improve product and process design Identify key component and process variables affecting product variation Identify key component and process variables affecting product variation Taguchi Concepts Taguchi Concepts Quality robustness Quality robustness Quality loss function Quality loss function Target-oriented quality Target-oriented quality

68 © 2008 Prentice Hall, Inc.6 – 68 Quality Robustness Ability to produce products uniformly in adverse manufacturing and environmental conditions Ability to produce products uniformly in adverse manufacturing and environmental conditions Remove the effects of adverse conditions Remove the effects of adverse conditions Small variations in materials and process do not destroy product quality Small variations in materials and process do not destroy product quality

69 © 2008 Prentice Hall, Inc.6 – 69 Quality Loss Function Shows that costs increase as the product moves away from what the customer wants Shows that costs increase as the product moves away from what the customer wants Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society Traditional conformance specifications are too simplistic Traditional conformance specifications are too simplistic Target- oriented quality

70 © 2008 Prentice Hall, Inc.6 – 70 Unacceptable Poor Good Best Fair Quality Loss Function High loss Loss (to producing organization, customer, and society) Low loss Frequency LowerTargetUpper Specification Target-oriented quality yields more product in the best category Target-oriented quality brings product toward the target value Conformance-oriented quality keeps products within 3 standard deviations Figure 6.5 L = D 2 C where L =loss to society D =distance from target value C =cost of deviation

71 © 2008 Prentice Hall, Inc.6 – 71 Tools of TQM Tools for Generating Ideas Tools for Generating Ideas Check sheets Check sheets Scatter diagrams Scatter diagrams Cause-and-effect diagrams Cause-and-effect diagrams Tools to Organize the Data Tools to Organize the Data Pareto charts Pareto charts Flowcharts Flowcharts Tools for Identifying Problems Tools for Identifying Problems Histogram Histogram Statistical process control chart Statistical process control chart

72 © 2008 Prentice Hall, Inc.6 – 72 //// ////// ///// ////// /// // / Hour Defect A B C / // / Seven Tools of TQM (a)Check Sheet: An organized method of recording data Figure 6.6

73 © 2008 Prentice Hall, Inc.6 – 73 Seven Tools of TQM (b)Scatter Diagram: A graph of the value of one variable vs. another variable Absenteeism Productivity Figure 6.6

74 © 2008 Prentice Hall, Inc.6 – 74 Seven Tools of TQM (c)Cause-and-Effect Diagram: A tool that identifies process elements (causes) that might effect an outcome Figure 6.6 CauseMaterialsMethods ManpowerMachinery Effect

75 © 2008 Prentice Hall, Inc.6 – 75 Seven Tools of TQM (d)Pareto Chart: A graph to identify and plot problems or defects in descending order of frequency Figure 6.6 Frequency Percent ABCDEABCDEABCDEABCDE

76 © 2008 Prentice Hall, Inc.6 – 76 Seven Tools of TQM (e)Flowchart (Process Diagram): A chart that describes the steps in a process Figure 6.6

77 © 2008 Prentice Hall, Inc.6 – 77 Seven Tools of TQM (f)Histogram: A distribution showing the frequency of occurrences of a variable Figure 6.6 Distribution Repair time (minutes) Frequency

78 © 2008 Prentice Hall, Inc.6 – 78 Seven Tools of TQM (g)Statistical Process Control Chart: A chart with time on the horizontal axis to plot values of a statistic Figure 6.6 Upper control limit Target value Lower control limit Time

79 © 2008 Prentice Hall, Inc.6 – 79 Cause-and-Effect Diagrams Material(ball) Method (shooting process) Machine (hoop & backboard) Manpower(shooter) Missed free-throws Figure 6.7 Rim alignment Rim size Backboard stability Rim height Follow-through Hand position Aiming point Bend knees Balance Size of ball Lopsidedness Grain/Feel (grip) Air pressure TrainingConditioning Motivation Concentration Consistency

80 © 2008 Prentice Hall, Inc.6 – 80 Pareto Charts Number of occurrences Room svcCheck-inPool hoursMinibarMisc. 72%16%5%4%3% – – – – – – – – – – – 0 0 – Frequency (number) Causes and percent of the total Cumulative percent Data for October

81 © 2008 Prentice Hall, Inc.6 – 81 Flow Charts MRI Flowchart 1.Physician schedules MRI 2.Patient taken to MRI 3.Patient signs in 4.Patient is prepped 5.Technician carries out MRI 6.Technician inspects film 7.If unsatisfactory, repeat 8.Patient taken back to room 9.MRI read by radiologist 10.MRI report transferred to physician 11.Patient and physician discuss % %

82 © 2008 Prentice Hall, Inc.6 – 82 Statistical Process Control (SPC) Uses statistics and control charts to tell when to take corrective action Uses statistics and control charts to tell when to take corrective action Drives process improvement Drives process improvement Four key steps Four key steps Measure the process Measure the process When a change is indicated, find the assignable cause When a change is indicated, find the assignable cause Eliminate or incorporate the cause Eliminate or incorporate the cause Restart the revised process Restart the revised process

83 © 2008 Prentice Hall, Inc.6 – 83 An SPC Chart Upper control limit Coachs target value Lower control limit Game number ||||||||| ||||||||| %10%0% Plots the percent of free throws missed Figure 6.8

84 © 2008 Prentice Hall, Inc.6 – 84 Inspection Involves examining items to see if an item is good or defective Involves examining items to see if an item is good or defective Detect a defective product Detect a defective product Does not correct deficiencies in process or product Does not correct deficiencies in process or product It is expensive It is expensive Issues Issues When to inspect When to inspect Where in process to inspect Where in process to inspect

85 © 2008 Prentice Hall, Inc.6 – 85 When and Where to Inspect 1.At the suppliers plant while the supplier is producing 2.At your facility upon receipt of goods from the supplier 3.Before costly or irreversible processes 4.During the step-by-step production process 5.When production or service is complete 6.Before delivery to your customer 7.At the point of customer contact

86 © 2008 Prentice Hall, Inc.6 – 86 Inspection Many problems Many problems Worker fatigue Worker fatigue Measurement error Measurement error Process variability Process variability Cannot inspect quality into a product Cannot inspect quality into a product Robust design, empowered employees, and sound processes are better solutions Robust design, empowered employees, and sound processes are better solutions

87 © 2008 Prentice Hall, Inc.6 – 87 Source Inspection Also known as source control Also known as source control The next step in the process is your customer The next step in the process is your customer Ensure perfect product to your customer Ensure perfect product to your customer Poka-yoke is the concept of foolproof devices or techniques designed to pass only acceptable product

88 © 2008 Prentice Hall, Inc.6 – 88 Service Industry Inspection Organization What is Inspected Standard Jones Law Office Receptionist performance BillingAttorney Is phone answered by the second ring Accurate, timely, and correct format Promptness in returning calls Table 6.5

89 © 2008 Prentice Hall, Inc.6 – 89 Service Industry Inspection Organization What is Inspected Standard Hard Rock Hotel Reception desk DoormanRoomMinibar Use customers name Greet guest in less than 30 seconds All lights working, spotless bathroom Restocked and charges accurately posted to bill Table 6.5

90 © 2008 Prentice Hall, Inc.6 – 90 Service Industry Inspection Organization What is Inspected Standard Arnold Palmer Hospital BillingPharmacyLabNursesAdmissions Accurate, timely, and correct format Prescription accuracy, inventory accuracy Audit for lab-test accuracy Charts immediately updated Data entered correctly and completely Table 6.5

91 © 2008 Prentice Hall, Inc.6 – 91 Service Industry Inspection Organization What is Inspected Standard Olive Garden Restaurant BusboyBusboyWaiter Serves water and bread within 1 minute Clears all entrée items and crumbs prior to dessert Knows and suggest specials, desserts Table 6.5

92 © 2008 Prentice Hall, Inc.6 – 92 Service Industry Inspection Organization What is Inspected Standard Nordstrom Department Store Display areas StockroomsSalesclerks Attractive, well-organized, stocked, good lighting Rotation of goods, organized, clean Neat, courteous, very knowledgeable Table 6.5

93 © 2008 Prentice Hall, Inc.6 – 93 Attributes Versus Variables Attributes Attributes Items are either good or bad, acceptable or unacceptable Items are either good or bad, acceptable or unacceptable Does not address degree of failure Does not address degree of failure Variables Variables Measures dimensions such as weight, speed, height, or strength Measures dimensions such as weight, speed, height, or strength Falls within an acceptable range Falls within an acceptable range Use different statistical techniques Use different statistical techniques

94 © 2008 Prentice Hall, Inc.6 – 94 TQM In Services Service quality is more difficult to measure than the quality of goods Service quality is more difficult to measure than the quality of goods Service quality perceptions depend on Service quality perceptions depend on Intangible differences between products Intangible differences between products Intangible expectations customers have of those products Intangible expectations customers have of those products

95 © 2008 Prentice Hall, Inc.6 – 95 Service Quality The Operations Manager must recognize: 1.The tangible component of services is important 2.The service process is important 3.The service is judged against the customers expectations 4.Exceptions will occur

96 © 2008 Prentice Hall, Inc.6 – 96 Service Specifications at UPS

97 © 2008 Prentice Hall, Inc.6 – 97 Determinants of Service Quality Reliability Reliability Responsiveness Responsiveness Competence Competence Access Access Courtesy Courtesy Communication Communication Credibility Credibility Security Security Understanding/ knowing the customer Understanding/ knowing the customer Tangibles Tangibles

98 © 2008 Prentice Hall, Inc.6 – 98 Service Recovery Strategy Managers should have a plan for when services fail Managers should have a plan for when services fail Marriotts LEARN routine Marriotts LEARN routine Listen Listen Empathize Empathize Apologize Apologize React React Notify Notify


Download ppt "© 2008 Prentice Hall, Inc.6 – 1 Operations Management Chapter 6 – Managing Quality PowerPoint presentation to accompany Heizer/Render Principles of Operations."

Similar presentations


Ads by Google