2 Quality and Total Quality Management Quality is the ability of a product or service to consistently meet or exceed customer expectations.A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.
3 “UTD provides quality education.” Definition 1: The ability of a product or service to consistently meet or exceed customer expectations.Definition 2: a: Peculiar and essential character. b : an inherent feature. c: degree of excellence. d : superiority in kind. e : a distinguishing attribute. f : an acquired skill. g : the character in a logical proposition of being affirmative or negative. h : vividness of hue.Definition 3: The ability to meet standards.“UTD provides quality education.”
4 Quality Assurance vs. Strategic Approach Emphasis on finding and correcting defects before reaching marketStrategic ApproachProactive, focusing on preventing mistakes from occurringGreater emphasis on customer satisfaction
5 Dimensions of QualityPerformance - main characteristics of the product/serviceAesthetics - appearance, feel, smell, tasteSpecial features - extra characteristicsConformance - how well product/service conforms to customer’s expectationsSafety - Risk of injuryReliability - consistency of performance
6 Dimensions of Quality (Cont’d) Durability - useful life of the product/servicePerceived Quality - indirect evaluation of quality (e.g. reputation)Service after sale - handling of customer complaints or checking on customer satisfaction
9 Service QualityTangiblesConvenienceReliabilityResponsivenessTimeAssuranceCourtesy
10 Examples of Service Quality DimensionExamples1. TangiblesWere the facilities clean, personnel neat?2. ConvenienceWas the service center conveniently located?3. ReliabilityWas the problem fixed?4. ResponsivenessWere customer service personnel willing and able to answer questions?5. TimeHow long did the customer wait?6. AssuranceDid the customer service personnel seem knowledgeable about the repair?7. CourtesyWere customer service personnel and the cashier friendly and courteous?
11 Determinants of Quality Ease ofuseDesignConforms to designService
12 Determinants of Quality 1. Design, planned qualityIntension of designers to include or exclude features in a product or serviceEX: Designed size, actual durabilityCustomer input is accounted for2. Conformance to design (standards), executed qualityThe degree to which goods or services conform to the intent of the designersEX: Actual size, actual durabilityDesign for quality: Design with quality in mind3. Ease of useEX: Directions, instructions, training4. Service after delivery
13 The Consequences of Poor Quality Loss of businessLiabilityProductivityCosts
14 The Consequences of Poor Quality Loss of business: Customer quietly stops buying. Customer complaints rarely reach to the upper management.Liability: Due to damages or injuries resulting from poor quality (design, conformance, ease of use, service)Low productivity: Rework or scrap. More input but does not increase the output.High costs
15 Costs of QualityFailure Costs - costs incurred by defective parts/products or faulty services.Internal Failure CostsCosts incurred to fix problems that are detected before the product/service is delivered to the customer.External Failure CostsAll costs incurred to fix problems that are detected after the product/service is delivered to the customer.
16 Costs of Quality (continued) Appraisal CostsProduct and/or service inspection costs.EX: Time and effort spent for course evaluationsPrevention CostsQuality training, planning, customer assessment, process control, and quality improvement costs to prevent defects from occurringEX: Instructor training for better course presentation
17 Why do we need quality? Quality makes customer happy Companies exist to “delight the customer”Poor Quality reduces productivity and increases costs.“It is not quality that costs, it is all the things you do because you do not have quality in the first place.” [Crosby 1979]Quality is no longer an order winner, it is merely an order qualifier.High technology and complicated products make quality a necessity. Computerization and automation increases standardization and quality levels.“What technology makes possible today, it makes necessary tomorrow.” [Kolesar 1991]
18 Responsibility for Quality Top management, past vs. currentDesign teamsProcurement departments, standard inputProduction/operations, processes conform to standardsQuality assurancePackaging and shipping, damaged in transitMarketing and sales, customer wishesCustomer service, quality feedback
19 Ethics and Quality Substandard work Defective products Substandard servicePoor designsShoddy workmanshipOwnership of the workSubstandard parts and materialsHaving knowledge of this and failing to correctand report it in a timely manner is unethical.
20 Evolution of Quality Management Statistical process control chartsTables for acceptance sampling1940’s - Statistical sampling techniques1950’s - Quality assurance/TQC1960’s - Zero defects1970’s - Quality assurance in services
21 The Quality Gurus Walter Shewhart W. Edwards Deming Joseph M. Juran “Father of statistical quality control”W. Edwards DemingJoseph M. JuranArmand FeignbaumPhilip B. CrosbyKaoru IshikawaGenichi Taguchi
22 Some History of Quality: Pre WWII 1920s, Physicist W.Shewhart of Bell labs studied variation in the production processes for the first great US national telephone network.Common cause variation due to minor differencesAssignable cause variation due to major differencesStatistical control (Shewhart) charts (Chapter 10)1940s, NYU stat professor W.E.Deming edits Shewhart’s bookDeming’s 14 pointsPlan-Do-Study-Act (PDSA) cycle
23 Some History of Quality: During WWII 1930s, H.Dodge and H.Romig of Bell labs studied accepting a lot after partial inspectionAcceptance sampling: Is a lot of N products good if a sample of n (n<N) products contain only c defects? (Chapter 10 supplement)1940s, Statistical research group at Columbia University supported by US war department studied variations of acceptance sampling, such as sequential sampling. Their work grew into MIL STD 105 D quality standard which became ANSI standard for quality.
24 Some history of Quality: Post WWII US industry disregards quality. Deming and Juran (actually a body of Shewhart, Dodge and Romig in 1926) make an exodus to Japan to preach: Quality1. will be the basis for future competition2. and productivity are positively correlated3. belongs to the upper management4. best achieved with Deming wheel =continuous improvement1960’s, A.Feigenbaum’s unified and integrated view of quality also resonate in Japan rather than US.Total Quality - Control
25 Some History of Quality: About 70’s 1960’s, P.B.Crosby goes to extremezero defectsdo it right the first time –becomes a strong tenet of JITK.Ishikawa introduces cause-effect (fishbone) diagrams (Chapter 11)G.Taguchi introduces his quality cost functionQuadratic penalty for variations from standards
27 Recent Quality Trends: Awards Baldrige National Quality Award Administered by NISTPromotesUnderstanding of the requirements of performance excellence and competitiveness improvementSharing information on successful performance strategiesEligibilityFor-profit US companiesCategories: Manufacturing, Service, Small businessWinners cannot apply within 5 years
28 Baldrige National Quality Award 1.0 Leadership, 90 points2.0 Strategic Planning, 75 points3.0 Customer and Market Focus, 75 points4.0 Information and Analysis, 150 points5.0 Human Resource Development and Management, 150 points6.0 Process Management, 230 points7.0 Business Results, 230 points
30 Winners of Baldridge in the last 3 years 2000Manuf: Dana Corporation – Spicer Driveshaft Division; KARLEE Company, IncService: Operations Management International, Inc.Small business: Los Alamos National Bank1999 Manuf: STMicroelectronics, Inc. - Region AmericasService: The Ritz-Carlton Hotel Company, L.L.C.; BISmall Business: Sunny Fresh Foods1998Manuf: Boeing Airlift and Tanker Programs; Solar Turbines IncorporatedSmall Business: Texas Nameplate Company, Inc.1900 South Erway Street, Dallas
31 Benefits of Baldrige Competition Financial successWinners share their knowledgeThe process motivates employeesThe process provides a well-designed quality systemThe process requires obtaining dataThe process provides feedback
32 Critiques for Baldridge It is expensive in terms of money and time to applyCompanies nominate themselvesVery few companies applyEven fewer companies winIt is a competition not a recognitionPromotes a tendency to focus on the awardIt does not include financial results, innovation, ethics, environmental issuesIt does not correlate with success
33 Recent Quality Trends: Awards The Deming Prize Honoring W.E. Deming started in 1951 with his donationAdministrated by Japanese Union of Scientists and EngineersEverybody who meets the standard receives the prizePromotes statistical quality control
34 Recent Quality Trends: Awards European Quality Award European Foundation for Quality Management (EFQM) founded in 1988Two awards were established in 1992European Quality PrizeAwarded to all who meet the criteriaEuropean Quality AwardGiven to the bestPrizes intend to identify role modelsLeadership and constancy of purposeCustomer focusCorporate social responsibilityPeople development and involvementResults orientationEligibility: For-profit firms with a “history of significant commitment to Western Europe.”
35 Recent Quality Trends: ISO Series Quality Certification: ISO 9000 Set of international standards on quality management and Quality assurance, critical to international BusinessISO 9000 series standards, briefly, require firms to document their quality-control systems at every step so that they’ll be able to identify those areas that are causing quality problems and correct them.ISO 9000 requires companies to document everything they do that affects the quality of goods and services.Hierarchical approach to documentation of the Quality Management System
36 ISO 9000 Registration Process When an organization feels that its quality system is good enough, it may ask an accredited registrar or other third party audit team for pre-assessment.The final audit begins with a review of the company's quality manual, which the accredited registrar or third party audit team typically uses as its guide. The audit team checks if the documented quality system meets the requirement of ISO 9000.When the registrar is satisfied with the favorable recommendation of the audit team, it grants registration and issues a registration document to the company.
37 ISO 9000 Quality Management Principles A systems approach to managementContinual improvementFactual approach to decision makingMutually beneficial supplier relationshipsCustomer focusLeadershipPeople involvementProcess approach
38 ISO 14000, WEEE, RoHSISO A set of international standards for assessing a company’s environmental performanceStandards in three major areasManagement systemsSystems development and integration of environmental responsibilities into business planningOperationsConsumption of natural resources and energyEnvironmental systemsMeasuring, assessing and managing emissions, effluents, and other wasteThe Waste Electrical and Electronic Equipment (WEEE) is a EU directive on recycling regulations becoming effective in Aug 2005.Restriction of Hazardous Substances (RoHS) is another legislation starting in July 1, It limits the amount of several elements that can be used in products. Dome examples of hazardous elements are lead, mercury, cadmium.
39 Design Control and Service Purchasing,Contracting ISO SeriesISO 9001Design Control and ServiceISO 9002Purchasing,ContractingProcess controlISO 9003Production,inspection, testingISO 14000Environmental issues
40 Total Quality Management A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.Continuous improvingInvolvement of everyoneCustomer satisfactionTQM
41 Find out what the customer wants The TQM ApproachFind out what the customer wantsDesign a product or service that meets or exceeds customer wantsDesign processes that facilitates doing the job right the first timePokayoke : fail-safing : foolproofingLaptop – projector plug shapesKeep track of resultsExtend these concepts to suppliers
42 Elements of TQM Continual improvement: Kaizen Competitive benchmarking Employee empowermentTeam approachDecisions based on factsKnowledge of toolsSupplier qualityChampionQuality at the source: The philosophy of making each worker responsible for the quality of his or her work.Suppliers
43 Obstacles to Implementing TQM Lack of:Company-wide definition of qualityStrategic plan for changeResistance to a changeCustomer focusReal employee empowermentRed tapeStrong motivationTime to devote to quality initiativesLeadership
44 Blind pursuit of TQM programs Programs may not be linked to strategies Criticisms of TQMBlind pursuit of TQM programsPrograms may not be linked to strategiesQuality may not be tied tomarket performanceprofitabilityFailure to carefully plan a program
45 Six SigmaA business process for improving quality, reduce cost and increasing customer satisfaction.StatisticallyHaving no more than 3.4 defects per millionConceptuallyProgram designed to reduce defectsRequires the use of certain tools and techniquesEX: Motorola, GE, TI, Kodak
46 Six Sigma Programs Six Sigma programs Employed in Improve quality Save timeCut costsEmployed inDesignProductionServiceInventory managementDelivery
47 Six Sigma Management components: Providing strong leadershipDefining performance meritsSelecting projects likely to succeedSelecting and training appropriate peopleSix Sigma Technical components:Improving process performanceReducing variationUtilizing statistical modelsDesigning a structured improvement strategy
48 Six Sigma Team Top management: essential Program champions Master “black belts”: tools“Black belts”: pivotal roleimplement process improvement projects, facility change convey knowledge to Green belts“Green belts”Six Sigma ProcessDefine Measure Analyze Improve Control
49 Basic Steps in Problem Solving Define the problem and establish an improvement goalCollect dataAnalyze the problemGenerate potential solutionsChoose a solutionImplement the solutionMonitor the solution to see if it accomplishes the goalProblem: How to improve free-throw percentage?
50 The PDSA Cycle Plan Act Do Study Document process Shewhart cycle Collect and analyze dataDevelop a planShewhart cycleDeming wheelStandardize successful method, revise unsuccessful planImplement planCollect data for evaluationUsing data to check: results match the goal?
51 Process Improvement and Tools Process improvement - a systematic approachProcess mapping, flowchartAnalyze the process, too few steps, too many stepsRedesign the processToolsThere are a number of tools that can be used for problem solving and process improvementTools aid in data collection and interpretation, and provide the basis for decision making
52 The Process Improvement Cycle Implement theImproved processSelect aprocessStudy/documentSeek ways toImprove itDesign anEvaluateDocument
65 Tracking Improvements UCLLCLProcess not centeredand not stableProcess centeredand stableAdditional improvementsmade to the process
66 Methods for Generating Ideas Brainstorminggenerate a free flow of idea in a group of peopleQuality circlesGroup of workers who find ways of improvingInterviewing:Benchmarking: Measure against best5W2H:what, why, where, when, who, how, how much
67 Quality Circles Team approach List reduction Balance sheet Choosing a movie with friends on a Friday nightBalance sheetChoosing an apartment to stay, pros and cons of each optionPaired comparisonsEliminate alternatives by comparisonPortland beats Nicks, Nicks beat Lakers,Can Portland beat Lakers?Transitivity relation assumed among pairs
68 Benchmarking Processes Identify a critical process that needs improvingIdentify an organization that excels in this processNot necessarily from the same industryContact that organizationConfidentiality is importantAnalyze the dataImprove the critical processBenchmarking numbers is much more common than benchmarking processes
69 Summary History of Quality Management: Gurus Insights of quality management:Dimensions, Determinants, Cost, Responsibility…Quality awards:Baldrige award, Deming Prize, European awardQuality certification: ISO 9000 and 14000TQMSix Sigma, Quality toolsProblem solving & Process improvementGraphical tools of problem solving
70 Practice Questions1.Poor quality has a positive effect on productivity because it usually takes longer to produce a good part.2.The primary difference between internal failures and external failures is time and place of discovery of the failure.3. TQM expands the traditional view of quality beyond looking only at the quality of the final product or service to looking at the quality of every aspect of the process.1.Answer: False Page: 3902.Answer: True Page: 3913.Answer: True Page: 398
71 The standards for ISO 14000 certification are related to: Practice questionsThe standards for ISO certification are related to:A) management systemsB) consumption of natural resources and energyC) environmental systemsD) all of the aboveE) timely filing of OSHA (Occupational Safety and Health Act) reportsAnswer: D Page:
72 A) reputation and image Practice questionsWhich of the following is not a major way in which poor quality affects an organization?A) reputation and imageB) liabilityC) productivityD) costsE) payroll taxesAnswer: E Page: 389
73 A) internal failure costs B) external failure costs C) appraisal costs Practice questionsCosts of inspectors, testing, test equipment, and labs are examples of:A) internal failure costsB) external failure costsC) appraisal costsD) prevention costsE) replacement costsAnswer: C Page:
74 The quality control improvement tool which resembles a "fishbone" is: Practice questionsThe quality control improvement tool which resembles a "fishbone" is:A) brainstormingB) check sheetsC) Pareto analysisD) cause-and-effect diagramsE) fail-safe methodsAnswer: D Page: 411