1. Total Quality Management BUS 3 – 142 Mr. Jess Marino Spring, 2011

2. Page 2 2 Agenda –Introduction –Green sheet Review –Additional comments on the course –Initial Lecture

3. Page 3 3 Course Overview and Objectives –Defining various dimensions and definitions of Quality and developing the ability to determine how to best match the appropriate methods and tools across multiple environments, industries, business processes, and customer preferences –Introducing and mastering specific tools, techniques, and formulas for data gathering and analysis to enable fact-based decision-making –Applying the Total Quality principles introduced in sections one and two to enhance business performance and results in Supply Chain Management, Product and Process Design, Service Operations, and Supplier Selection and Management

4. Page 4 4 Student Learning Objectives for the Course –Understand the scope and definitions of Total Quality Management –Recognize how Customers and Markets influence quality –Understand Develop skills in Statistical Process Control and other quality monitoring techniques –Incorporating a quality management perspective into all functions and processes of a business –Leveraging knowledge of quality management to achieve career goals

5. Semester Calendar

6. Introduction to Quality Management

7. Page 7 7 Eight Quality Dimensions - Products –Performance –Features –Reliability –Conformance –Durability –Serviceability –Aesthetics –Perceived Quality * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall Can vary in importance based on the requirements, tastes, and expectations of the Customer. Can also vary across functional groups within an organization

8. Page 8 8 Five Quality Dimensions - Service –Tangibles –Reliability –Responsiveness –Assurance –Empathy * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall Unlike product quality, with Service quality the Customer can be directly involved. Service quality can also be directly applicable to career performance

9. Page 9 9 Functional Perspectives on Quality –Supply Chain –Operations –Engineering –Marketing –Finance –Human Resources Different groups in an organization emphasize different Quality Dimensions

10. Page 10 10 Functional Perspectives on Quality – Supply Chain –Supplier Qualification –Supplier Selection –Supplier Development –Inspection, Test, and Sampling –Process mapping and Value mapping * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

11. Page 11 11 Functional Perspectives on Quality - Operations –Maximum yields –Lowest cost –Least rework –Repeatability –Predictability

12. Page 12 12 Functional Perspectives on Quality - Engineering –Product and Process (concurrent engineering) –Life testing –Redundancy –Design for Manufacturing and Assembly –Statistical Process Control

13. Page 13 13 Functional Perspectives on Quality –Voice of the Customer –Perceived quality –Pricing and Value Marketing –Time horizons and Payback times –Calculating costs of poor quality –Business Case development –Avoiding diminishing returns Finance –Employee empowerment –Organizational design –Measurement and Reward Systems Human Resources

14. Page 14 14 The “Three Spheres” of Quality Quality Assurance Quality Control Quality Management

15. Page 15 15 Quality Control –Monitoring Process capability and stability –Measuring process performance –Reducing process variability –Optimizing key metrics –Acceptance sampling –Developing and maintaining Control Charts * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

16. Page 16 16 Quality Assurance –Failure Mode and Effects Analysis (FMEA) –Concurrent Engineering –Design Of Experiments –Process improvement –Design teams –Reliability and durability * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

17. Page 17 17 Quality Management –Planning for quality improvement –Creating a quality organization culture –Providing leadership and support –Providing training and retraining –Employee recognition –Communication * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

18. Page 18 18 Basic Assumptions The HIGHER the Quality, the higher the Customer Service, the lower the Inventory, and the lower the Cost The LOWER the Quality, the lower the Customer Service, the higher the Inventory, and the higher the Cost

19. Page 19 19 The Contingency Perspective There is no “One Size Fits All” way to manage Quality. Good quality managers learn many tools and techniques, develop the ability to recognize which approaches are most appropriate in different situations, and deploy the right solution and improvement plan for the right situation

20. Quality Management is BUSINESS Management

21. Page 21 21 The Quality Discipline continues to Evolve * From Table 2-1, Foster, Quality Management, Fourth Edition, Prentice Hall

22. Page 22 22 Deming’s 14 Points 1.Create Constancy of Purpose 2.Adapt a new philosophy 3.Cease mass inspection 4.End awarding business on the basis of price tag 5.Constantly improve the system 6.Institute training on the job 7.Improve leadership 8.Drive out fear 9.Break down barriers between departments 10.Eliminate slogans 11.Eliminate work standards 12.Remove barriers to pride 13.Institute education and self-improvement 14.Put everybody to work * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

23. Page 23 23 Constancy of Purpose –Highest quality keeps you Competitive –Quality becomes a competitive advantage –Improvement takes time –Keeping people employed is a management responsibility –Quality is not negotiable –Good quality does not add to cost but reduces cost

24. Page 24 24 Cease Mass Inspection –Design quality in –Implement “error-proofing” as much as possible –Inline monitoring –Responsibility for quality does not belong to the “quality department” –Non conforming product inevitable “escapes” through the inspection process

25. Page 25 25 Improve Leadership and Drive out Fear –Management is most responsible for Quality and has the most leverage –Supervisors are to help people Training Removing barriers Encouraging learning Empowering problem identification, root cause analyisis, and improvement suggestions –Driving out Fear Employees cannot improve quality and efficiency and then get laid off “Healthy dissatisfaction” is a good thing Identifying problems cannot be tied to blame Changing processes and methods are often necessary –Let data lead to objectivity

26. Page 26 26 Eliminate Work Standards –Remove the temptation to purposely produce low quality goods –Establish metrics that span the entire process, rather than individual steps or machines –Avoid conflicting objectives Output vs. Units scrapped Output vs. Throughput Cost vs. Inventory –Teams (hourly workers and Managers together) are still responsible for output and quality

27. Page 27 27 Quality Improvement Planning (Juran) –“Plan your work and work your plan” –Manage a portfolio of improvement initiatives, balancing continuous improvement with breakthrough changes (Evolutionary & Revolutionary) –Plan and execute discrete projects for improvement Business case Project plans Deliverables and milestones Measurable business results

28. Page 28 28 Pareto’s Law – The “80/20” Rule The majority (80%) of problems are the result of relatively few (20%) causes Focus your improvement efforts on the few causes that make the BIGGEST DIFFERENCE to your business

29. Page 29 29 ABC Classification – the 80/20 Rule Applied * From Leenders, Johnson, Flynn, and Fearon, Purchasing and Supply Management, Thirteenth Edition, McGraw Hill Irwin

30. Page 30 30 ABC Classification is not based on unit cost Unit CostAnnual VolumeAnnual Spend AHigh A MediumHigh AMediumHigh ALowVery HighHigh B LowMedium B BLowHighMedium C Low C MediumLow C C Items can still stop a production line and cause Customer Shipments to be missed!

31. Page 31 31 Key Points from Ishikawa –Involve ALL employees in improving quality –Know the requirements of the Customer –Attack Root Causes –Know what the statistics are telling you Averages have some value but not without how the data are distributed Variability drives poor quality

32. Page 32 32 Other Points for Consideration –Toguchi Method: Robust Design Concept design Parameter design Tolerance design –Crosby “Quality is free” –Quality Management is strategic to the entire enterprise; not one, or a few, functional groups

33. Page 33 33 Another summarized view * Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall Outer Ring Environmental characteristics Quality breakthrough Inner Ring Information analysis Strategic Planning Core Leadership Employee improvement Quality assurance Customer role Philosophy Quality department focus Team approach