Operations Management Managing Quality Chapter 6

Operations Management Managing Quality Chapter 6
PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Outline GLOBAL COMPANY PROFILE: MOTOROLA QUALITY AND STRATEGY
DEFINING QUALITY Implications of Quality Malcolm Baldrige National Quality Award Cost of Quality (COQ) INTERNATIONAL QUALITY STANDARDS ISO 9000 ISO14000 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Outline - Continued TOTAL QUALITY MANAGEMENT Continuous Improvement
Employee Empowerment Benchmarking Just-in-Time (JIT) Taguchi Concepts Knowledge of TQM Tools PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Outline - Continued TOOLS OF TQM Check sheets Scatter Diagrams
Cause-and-Effect Diagram Pareto Charts Flow Charts Histograms Statistical Process Control (SPC) PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Outline - Continued THE ROLE OF INSPECTION TQM IN SERVICES
When and Where to Inspect Source Inspection Service Industry Inspection Inspection of Attributes vs Variables TQM IN SERVICES PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Learning Objectives When you complete this chapter, you should be able to: Identify or Define: Quality Malcolm Baldrige National Quality Award ISO International Quality Standards Demings, Juran, and Crosby Taguchi Concepts PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Learning Objectives - continued
When you complete this chapter, you should be able to : Explain: Why quality is important Total Quality Management (TQM) Pareto charts Process charts Quality robust products Inspection PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

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 Established extensive employee participation and employee teams One of the most useful points to made from this slide is that the Motorola example illustrates that quality must be a concern of the enterprise - not an individual or department. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Ways in Which Quality Can Improve Productivity
Sales Gains Improved response Higher Prices Improved reputation Improved Quality Increased Profits Reduced Costs Increased productivity Lower rework and scrap costs Lower warranty costs This slide not only looks at the impact of quality on productivity - it also enables you to begin a discussion as to the meaning of quality (or perhaps the differing meanings among different people). To many people, the notion of “high quality” carries with it the assumption of “high price.” This slide provides an initial point to challenge that assumption. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Flow of Activities Necessary to Achieve Total Quality Management
Organizational Practices Quality Principles Employee Fulfillment This slide simply introduces the four activities. Subsequent slides expand on each. Customer Satisfaction PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organizational Practices
Leadership Mission statement Effective operating procedure Staff support Training Yields: What is important and what is to be accomplished One might begin discussion of this slide by introducing the difference between “leadership” and “management.” The point should also be made, again, about the need for involvement and commitment throughout the organization. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Principles Customer focus Continuous improvement
Employee empowerment Benchmarking Just-in-time Tools of TQM Yields: How to do what is important and to be accomplished Some students may find the notion of “continuous improvement” (Why can’t we do it right the first time?) and “employee empowerment” (Doesn’t this reduce or abrogate the role of the manager?) the most difficult to accept. If you have not done so already, this might be a good time to discuss each in some depth. The following slide may be used in a discussion of empowerment. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Employment Fulfillment
Empowerment Organizational commitment Yields: Employees’ attitudes that they can accomplish what is important and to be accomplished This slide can be used to form the basis for a discussion of empowerment. If you wish to discuss empowerment - begin by asking students to define the term. You may find students are already comfortable with the term, in which case the discussion can be rather short; or, you may find they have unrealistic expectations (or desires?) - in which case you may wish to pursue the discussion at greater length. It may be helpful to ask students to identify the benefits and pitfalls to both management and worker. (For example, empowerment requires workers to assume greater responsibility.) PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Customer Satisfaction
Winning orders Repeat customers Yields: An effective organization with a competitive advantage The main point that one might make with this slide is that the customer is, ultimately, the most important person in your business. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Definitions of Quality
ASC: Product characteristics & features that affect customer satisfaction User-Based: What consumer says it is Manufacturing-Based: Degree to which a product conforms to design specification Product-Based: Level of measurable product characteristic Once you have introduced these definitions of quality, ask students to provide example of products that use them. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Dimensions of Quality for Goods
Operation Reliability & durability Conformance Serviceability Appearance Perceived quality Quality It may be most helpful to provide, or ask you students to provide, examples of products for which the notion of quality is based upon one or more of the dimensions listed. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Service Quality Attributes
Tangibles Reliability Communication Credibility Security Responsiveness Competence Courtesy Access © 1995 Corel Corp. Under- standing Although the text considers service quality at the end of the chapter, you may wish, at this point, to contrast the notion of quality for goods with that for services. If not, skip this slide - it is repeated at the point at which the issues are raised in the text. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Importance of Quality Costs & market share Company’s reputation
Product liability International implications Market Gains Reputation Volume Price Improved Quality Increased Profits Lower Costs Productivity Rework/Scrap Warranty This slide simply illustrates the relationships between quality and other elements of the firm. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Malcom Baldrige National Quality Award
Established in 1988 by the U.S. government Designed to promote TQM practices Some criteria Senior executive leadership; strategic planning; management. of process quality Quality results; customer satisfaction Recent winners Corning Inc.; GTE; AT&T; Eastman Chemical. You might make the point that companies actually do consider this a prestigious award. For further information, visit the web site: PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Costs of Quality Prevention costs - reducing the potential for defects
Appraisal costs - evaluating products Internal failure - of producing defective parts or service External costs - occur after delivery PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Costs of poor quality “are huge, but the amounts are not known with precision. In most companies, the accounting system provides only a minority of the information needed to quantify this cost of poor quality Juran on Quality by Design, The Free Press (1992), p. 119 PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

EC Environmental Standard ISO 14000
Core Elements: Environmental management Auditing Performance evaluation Labeling Life-cycle assessment PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

International Quality Standards
Industrial Standard Z (Japan) Specification for TQM ISO 9000 series (Europe/EC) Common quality standards for products sold in Europe (even if made in U.S.) ISO series (Europe/EC) Standards for recycling, labeling etc. ASQC Q90 series; MILSTD (U.S.) One of the most important points to be made from this slide is that quality standards are now international. Students might be asked to explain the benefits of international as opposed to national standards. They might also be asked to consider the limitations we would face if there were no such standards. The problems to be encountered in developing international standards also make for good discussion. Note to your students that Crosby has great reservations about the standard and the procedures building an effective quality program. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Traditional Quality Process (Manufacturing)
Customer Marketing Engineering Operations Specifies Interprets Designs Produces Need Need Product Product Defines Plans Students might be asked what problems they would foresee in implementing this process. Quality Quality Quality is customer driven! Monitors Quality PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Encompasses entire organization, from supplier to customer
TQM Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing, company-wide, drive toward excellence in all aspects of products and services that are important to the customer. A point to be made here is that TQM is not a program but a philosophy. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Achieving Total Quality Management
Customer Satisfaction Effective Business Attitudes (e.g., Commitment) Employee Fulfillment How to Do Quality Principles Again, a point to be made here is the universality required to achieve TQM. What to Do Organizational Practices PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Deming’s Fourteen Points
Create consistency of purpose Lead to promote change Build quality into the products Build long term relationships Continuously improve product, quality, and service Start training Emphasize leadership One point to make here is that this list represents a recent expression of Demings 14 points - the list is still evolving. Students may notice that many of these fourteen points seem to be simply common sense. If they raise this issue - ask them to consider jobs they have held. Were these points emphasized or implemented by their employers? If not, why not? This part of the discussion can be used to raise again the issue that proper approaches to quality are not “programs,” with limited involvement and finite duration, but rather philosophies which must become ingrained throughout the organization. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Deming’s Points - continued
Drive out fear Break down barriers between departments Stop haranguing workers Support, help, improve Remove barriers to pride in work Institute a vigorous program of education and self-improvement Put everybody in the company to work on the transformation PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Concepts of TQM Continuous improvement Employee empowerment
Benchmarking Just-in-time (JIT) Taguchi concepts Knowledge of TQM tools This slide simply introduces concepts of TQM. These concepts are expanded upon in subsequent slides. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Continuous Improvement
Represents continual improvement of process & customer satisfaction Involves all operations & work units Other names Kaizen (Japanese) Zero-defects Six sigma Students may have a number of questions with respect to the notion of continuous improvement. - Why do we need continuous improvement? Why can’t we do it right the first time? - Doesn’t implementation of continuous improvement introduce a certain instability? - Are we never “done”? - Etc. © T/Maker Co. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Shewhart’s PDCA Model 4.Act 1.Plan 3.Check 2.Do Implement the plan
Identify the improvement and make a plan 3.Check 2.Do Is the plan working Test the plan PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Employee Empowerment Getting employees involved in product & process improvements 85% of quality problems are due to process & material Techniques Support workers Let workers make decisions Build teams & quality circles © 1995 Corel Corp. If you have not done so already, you might at this point discuss: - why employee empowerment works - the role of information technology in enabling employee empowerment - the role of information technology in making employee empowerment a requirement PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Circles Group of 6-12 employees from same work area
Meet regularly to solve work-related problems 4 hours/month Facilitator trains & helps with meetings You might discuss: - the benefits and the limitations of quality circles - the impact of quality circles on workers - requirements for quality circles to be successful - implementation of quality circles in the U.S. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J © 1995 Corel Corp.

Benchmarking Selecting best practices to use as a standard for performance Determine what to benchmark Form a benchmark team Identify benchmarking partners Collect and analyze benchmarking information Take action to match or exceed the benchmark Ask student to identify firms which they believe could serve as benchmarks. If students are unable to identify any firms - ask them to identify a college or university whose registration system or housing selection system could serve as a benchmark. Most students have enough knowledge of, or friends at,other colleges and universities so as to be able to respond to this question. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Resolving Customer Complaints Best Practices
Make it easy for clients to complain Respond quickly to complaints Resolve complaints on the first contact Use computers to manage complaints Recruit the best for customer service jobs One might ask students “Given that these suggestions seem to make intuitive sense, why would a company not wish to implement them?” PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Just-in-Time (JIT) Relationship to quality: JIT cuts cost of quality
JIT improves quality Better quality means less inventory and better, easier-to-employ JIT system This slide introduces a discussion about JIT. Subsequent slides elaborate. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Just-in-Time (JIT) ‘Pull’ system of production/purchasing
Customer starts production with an order Involves ‘vendor partnership programs’ to improve quality of purchased items Reduces all inventory levels Inventory hides process & material problems Improves process & product quality This might be a good time to differentiate between “push”and “pull” systems. Subsequent slides elaborate on the role of JIT and inventory levels in hiding problems. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Just-In-Time (JIT) Example
Scrap Work in process inventory level (hides problems) Unreliable Vendors Capacity Imbalances PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Just-In-Time (JIT) Example
Scrap Reducing inventory reveals problems so they can be solved. Unreliable Vendors Capacity Imbalances Note that reducing inventory enables problems to be seen - it does not necessarily fix them. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Tools for TQM Quality Function Deployment Taguchi technique
House of Quality Taguchi technique Quality loss function Pareto charts Process charts Cause-and-effect diagrams Statistical process control This slide simply enables you to introduce the tools of TQM. Particular tools are elaborated upon in subsequent slides. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Function Deployment (QFD)
Determines what will satisfy the customer Translates those customer desires into the target design PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Taguchi Techniques Experimental design methods to improve product & process design Identify key component & process variables affecting product variation Taguchi Concepts Quality robustness Quality loss function Target specifications PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Robustness © T/Maker Co. © 1995 Corel Corp. Ability to produce products uniformly regardless of manufacturing conditions Put robustness in House of Quality matrices besides functionality PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Loss Function Shows social cost ($) of deviation from target value Assumptions Most measurable quality characteristics (e.g., length, weight) have a target value Deviations from target value are undesirable Equation: L = D2C L = Loss ($); D = Deviation; C = Cost One question to pose to your students: “Of what value is the notion of a “social cost?” How might a manager use this in decision making? PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Loss Function PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Loss Function Example
The specifications for the diameter of a gear are ± 0.25 mm. If the diameter is out of specification, the gear must be scrapped at a cost of $ What is the loss function? How does one identify the “cost” given in this problem? © T/Maker Co. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Loss Function Solution
L = D2C = (X - Target)2C L = Loss ($); D = Deviation; C = Cost 4.00 = ( )2C Item scrapped if greater than (USL = ) with a cost of $4.00 C = 4.00 / ( )2 = 64 L = D2 • 64 = (X )264 Enter various X values to obtain L & plot PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Target Specification Example
A study found U.S. consumers preferred Sony TV’s made in Japan to those made in the U.S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences. Japanese factory (Target-oriented) This slide probably deserves some discussion. Some students will probably question whether consumers could tell the difference between the two. You should stress that they can tell the difference and that this will have an impact on their buying decisions. U.S. factory (Conformance-oriented) PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Quality Loss Function; Distribution of Products Produced
High loss Quality Loss Function (a) Unacceptable Loss (to producing organization, customer, and society) Target-oriented quality yields more product in the “best” category Poor Fair Good Best Low loss Target-oriented quality brings products toward the target value Conformance-oriented quality keeps product within three standard deviations Frequency This slide may help clarify the differences between conformance and target-based quality control. Distribution of specifications for product produced (b) Lower Target Upper Specification PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

PDCA Cycle 3.Check: Is the plan working 4.Act: Implement the plan
Identify the improvement and make a plan 3.Check: Is the plan working 2.Do: Test the plan PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Tools of TQM Tools for generating ideas Tools to organize data
Check sheet Scatter diagram Cause and effect diagram Tools to organize data Pareto charts Process charts (Flow diagrams) Tools for identifying problems Histograms Statistical process control chart PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Pareto Analysis of Wine Glass Defects (Total Defects = 75)
This slide probably deserves more discussion than most of us would tend to allot it. Students need to understand the cost of “going the extra mile,” - the difference between something which may be very good, and something which is perfect. The students also need to recognize that Pareto charts suggest where to place effort - on the item that looms largest on the chart. After progress is made on that item, then one performs a Pareto analysis on the remaining items, and repeats the procedure.. 72% 16% 5% 4% 3% PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Process Chart Shows sequence of events in process
Depicts activity relationships Has many uses Identify data collection points Find problem sources Identify places for improvement Identify where travel distances can be reduced This slide can be used to introduce Process Charts. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Process Chart Example SUBJECT: Request tool purchase Dist (ft)
Time (min) Symbol Description lðo D Ñ Write order ¡ðo D Ñ On desk 75 è o To buyer ¡ðn Examine ¡ = Operation; ð = Transport; o = Inspect; D = Delay; Ñ = Storage You can use this slide as an example of a process chart; use it to guide students in developing their own charts for some common activity. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Cause and Effect Diagram
Used to find problem sources/solutions Other names Fish-bone diagram, Ishikawa diagram Steps Identify problem to correct Draw main causes for problem as ‘bones’ Ask ‘What could have caused problems in these areas?’ Repeat for each sub-area. This slide introduces the Cause and Effect Diagram. The next several slide show the development of a simple example. If time is available, it would be helpful to ask students to develop their own examples. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Cause and Effect Diagram Example
Too many defects Problem PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Method Manpower Main Cause Too many defects Material Machinery Main Cause PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Method Manpower Drill Overtime Too many defects Wood Steel Lathe Material Machinery Sub-Cause PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Method Manpower Tired Old Slow Drill Overtime Steel Wood Lathe Too many defects Material Machinery PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Fishbone Chart - Problems with Airline Customer Service
This slide illustrates a Cause and Effect Chart for a practical problem. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Statistical Process Control (SPC)
Uses statistics & control charts to tell when to adjust process Developed by Shewhart in 1920’s Involves Creating standards (upper & lower limits) Measuring sample output (e.g. mean wgt.) Taking corrective action (if necessary) Done while product is being produced This slide introduces the process of Statistical Process Control. Slides illustrating the mechanics will be found in the presentation for supplement 6S. At some point, you may wish to illustrate or discuss the connection between Statistical Process Control and the Target and Conformance-based quality control discussed earlier. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Statistical Process Control Steps
Produce Good Start Provide Service No Assign. Take Sample Causes? Yes Inspect Sample Stop Process Create Find Out Why Control Chart PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Process Control Chart PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Patterns to Look for in Control Charts
This chart enables you to discuss some of the information which can be obtained from the Process Control Charts. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Inspection Involves examining items to see if an item is good or defective Detect a defective product Does not correct deficiencies in process or product Issues When to inspect Where in process to inspect This slide introduces the concept of inspection. At this point, one should probably stress the role of inspection in the overall quality control process. Some students seem to have the notion that inspection is quality control. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

When and Where to Inspect
At the supplier’s plant while the supplier is producing At your facility upon receipt of goods from the supplier Before costly or irreversible processes During the step-by-step production processes When production or service is complete Before delivery from your facility At the point of customer contact This slide can be used to frame a discussion about when to inspect. If your students have documented an actual production process from a local business, one of these documented processes can serve as an example. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Inspection Points in Services
Organization What is Inspected Standard Jones Law Office Receptionist performance Billing Attorney Is phone answered by the second ring Accurate, timely, and correct format Promptness in returning calls As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organization What is Inspected Standard Hard Rock Hotel Reception desk Doorman Room Minibar Use customer’s name Greet guest in less than 30 seconds All lights working, spotless bathroom Restocked and charges accurately posted to bill As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organization What is Inspected Standard Billing Pharmacy Lab Nurses Admissions Accurate, timely, and correct format Prescription accuracy, inventory accuracy Audit for lab-test accuracy Charts immediately updated Data entered correctly and completely Bayfield Community Hospital As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organization What is Inspected Standard Serves water and bread within 1 minute Clears all entrée items and crumbs prior to desert Knows and suggest specials and desserts Busboy Waiter Hard Rock Cafe As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organization What is Inspected Standard Nordstrom’s Department Store Display areas Stockrooms Salesclerks Attractive, well-organized, stocked, good lighting Rotation of goods, organized, clean Neat, courteous, very knowledgeable As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organization Some Points of Inspection Issues to Consider Bank Teller stations Loan accounts Checking Shortages, courtesy, speed, accuracy Collateral, proper credit checks, rates, terms of loans, default rates, loan rates As you discuss inspection points in services, ask students how the use of inspection should differ between goods and services. Accuracy, speed of entry, rate of overdraws PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Organization Some Points of Inspection Issues to Consider Retail store Clean, uncluttered, organized, level of stockouts, amply supply, rotation of goods Stockrooms Display areas Sales counters Attractive, well-organized, stocked, visible goods, good lighting Ask your students to consider other services: Banking, medical care (hospital), home construction, etc., and identify the points of inspection. Neat, courteous knowledgeable personnel; waiting time; accuracy in credit checking and sales entry PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Issues to Consider Organization Some Points of Inspection Restaurant Clean, proper storage, unadulterated food, health regulations observed, well-organized Kitchen Cashier station Dining areas Speed, accuracy, appearance Clean, comfortable, regular monitoring by personnel, PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

TQM In Services Service quality is more difficult to measure than for goods Service quality perceptions depend on Expectations versus reality Process and outcome Types of service quality Normal: Routine service delivery Exceptional: How problems are handled At this point, you might consider going back to the slides illustrating the differences between goods and services. Those slides are provided next. If you do not wish to use them, simply skip to the final slide in the sequence. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Goods versus Services Good Service Can be resold Can be inventoried
Some aspects of quality measurable Selling is distinct from production Reselling unusual Difficult to inventory Quality difficult to measure Selling is part of service Again, it is helpful to look at the differences between goods and services. Have your students identify the consequences of some of these differences. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Goods versus Services - continued
Good Service Product is transportable Site of facility important for cost Often easy to automate Revenue generated primarily from tangible product Provider, not product is transportable Site of facility important for customer contact Often difficult to automate Revenue generated primarily from intangible service. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Service Quality Attributes
Tangibles Reliability Communication Credibility Security Responsiveness Competence Courtesy Access © 1995 Corel Corp. Under- standing This slide is a repeat of the earlier one on Service Quality Attributes as that topic appears at this point in the text. PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Determinants of Service Quality
Reliability – consistency and dependability Responsiveness – willingness/readiness of employees to provide service; timeliness Competence – possession of skills and knowledge required to perform service Access – approachability and ease of contact Courtesy – politeness, respect, consideration, friendliness of contact personnel PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Determinants of Service Quality -Continued
Communication – keeping customers informed in languages they understand Credibility – trustworthiness, believability, honesty Security – freedom from danger, risk or doubt Understanding/knowing the customer – making the effort to understands the customer’s needs Tangibles – the physical evidence of the service PowerPoint presentation to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc. , Upper Saddle River, N.J

Operations Management Managing Quality Chapter 6

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Operations Management Managing Quality Chapter 6

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