1. Chapter 5 Total Quality Management

2. What is TQM? Total quality management (TQM) is a philosophy that seeks to improve quality by eliminating causes of product defects and by making quality the responsibility of everyone in the organization.

3. Dimensions of “Quality” (1) Conformance to Specifications – How well the product meets the targets and tolerances determined by its designers Fitness for Use – Definition of quality that evaluates how well the product performs for its intended use. Value for Price Paid – Quality defined in terms of product or service usefulness for the price paid.

4. Dimensions of “Quality” (2) Support Services – Quality defined in terms of the support provided after the product or service is purchased Psychological Criteria – A way of defining quality that focuses on judgmental evaluations of what constitutes product or service excellence.

5. Quality in Manufacturing and Service Manufacturing produces a tangible product – Quality is often defined by easier-to-measure characteristics, such as conformance to specifications, performance, reliability, features, and durability. Service produces an intangible product – Quality is often defined by perceptual factors, such as courtesy, friendliness, promptness, atmosphere, and consistency

6. “Quality” in TQM Quality has multiple dimensions. Definition of quality comes from customers. Good quality is meeting the expectations of customers well.

7. Evolution of Quality Concept

8. Costs of Quality (1) Quality Control Costs – Prevention costs: Expense on activities for preventing poor quality from happening. – Appraisal costs: for inspecting, evaluating and testing quality

9. Costs of Quality (2) Quality Failure Costs – Internal failure costs To fix defects discovered before sale: costs of rework, scrap, … – External failure costs: To fix poor quality after sale: costs for returns, repairs, recalls,...

10. Quality Gurus

11. Core Ideas of TQM Identifying root causes (i.e., pro-active rather than re-active) Customer-driven Involve everyone in organization

12. Aspects of TQM Customer focus Continuous improvement Employee empowerment Use of quality tools Product design Process management Managing supplier quality

13. Customer Focus Identify and meet customer needs Stay tuned to ever changing customer needs and preferences

14. Continuous Improvement Continuous learning and problem solving, e.g. Kaizen, 6 sigma. Plan-D-Study-Act (PDSA). “Benchmarking” Good enough is not good enough.

15. PDSA Cycle

16. Employee Empowerment Empower all employees to identify quality problems and correct them. “Do not pass a defective item to even an internal customer.” Team Approach – Teams formed around processes – 8 to 10 people – Meet weekly to analyze and solve problems

17. Use of Quality Management Tools Cause-and-Effect Diagrams Flow Charts Check Lists Control Charts (for statistical process control) Scatter Diagrams Pareto Charts Histograms

18. 18 Cause-and-Effect Diagrams Also called Fishbone Diagrams Help identify potential causes of specific ‘effects’ (quality problems)

19. 19 Flow Charts Diagrams of the steps involved in an operation or process

20. 20 Checklists Simple forms used to record the appearance of common defects and the number of occurrences

21. 21 Control Charts Track whether a process is operating as expected

22. 22 Scatter Diagrams Illustrate how two variables are related to each other

23. 23 Pareto Analysis Helps identify the degree of importance of different quality problems

24. 24 Histograms Illustrate a frequency distribution

25. 25 Reliability Reliability tells the probability that a component or a machine works. If a component’s reliability is 0.9, then it means 90% of the component works, and 10% it does not work as expected. If a machine’s reliability in three years is 0.96, then it means the machine has 96% of chance working normally in three years, and 4% of chance being broken in three years.

26. 26 Reliability of Product (1) A product is usually composed of many components. A product works only if all the components work. If one component breaks down, the product won’t work.

27. 27 Reliability of Product (2) P(A product works) = P(All components work) P(A product breaks down) = P(At least one component breaks down).

28. 28 Reliability of Product (3) Product reliability Product reliability r s = (r 1 )(r 2 )... (r n ) r s = (r 1 )(r 2 )... (r n ) where where r s = reliability of whole product r s = reliability of whole product n = number of components (subsystems) n = number of components (subsystems) r 1, r 2, r n are reliabilities of individual components (subsystems) r 1, r 2, r n are reliabilities of individual components (subsystems)

29. 29 Example A small radio has three components: – Motherboard, reliability 0.99, – Housing assembly, reliability 0.90, – Headphone set, reliability 0.85 What is the reliability of the radio? Note: The ‘reliability’ here means the probability of being working in two years.

30. 30 Example (cont.) What is the probability that at least one component is broken in two years? If you are not satisfied with the current reliability, which components’ reliability should be improved in the first place? If reliability of headphones is improved to 0.96, then what is reliability of the radio?

31. 31 Collective < Individuals Reliability is such a thing that the collective reliability is less or much less than reliability of each individual component in the collection. A product is composed of 100 parts each with 99.73% reliability. The collective reliability is only 76.3% !

32. 32 Complex Machine Calls for Highly Reliable Components An automobile is composed of about 8,000 parts. An airplane is composed of about 15,000 parts. Not mentioning a space shuttle. Highly reliable machine requires much more reliable components.

33. Reliability of a Component with Redundancy Redundancy is placing identical components in parallel so that when one fails the other takes over. Suppose part A and B are redundancy. R c = R A + R B * P(B is needed) = R A + R B * P(A fails)

34. Example (p.170) A backup generator is build in as the redundancy of the main generator. The reliability of the main generator is 0.95. The reliability of the backup generator is 0.9. What is reliability of this generator system?

35. 35 Sigma-Ranges (  -ranges) Sigma-range (  -range) is a measure of strictness on reliability. “Keep the quality of a part in 3  -range” means the odd of a defective part is 0.27%.

36. 36 Sigma-Ranges (  -ranges) Odds of Defective 1  -range 0.3173 2  -range 0.0455 3  -range 0.0027 4  -range 0.000063 5  -range 0.00000057 6  -range 0.000000002

37. 37 Goal at Six-Sigma Six-sigma range is prevailing in current manufacturing industry, for dealing with more and more complex machines, and for dealing with intensive competition.

38. 38 Quality Function Deployment (QFD) A tool used to translate customer preferences into product design See the example on next two slides.

39. 39 Step 1. Build Relationship Matrix Voice of the Customer Voice of the Engineer Customer-based Benchmarks

40. 40 Step 2. Work out our Targets with Trade-off Matrix Trade-offs Targets Technical Benchmarks

41. 41 Quality Awards Malcolm Baldrige National Quality Award (MBNQA) is given annually to companies demonstrating excellence in quality. Past winners; Motorola Corp., Xerox, FedEx, 3M, IBM, Ritz-Carlton

42. 42 Example of MBNQA Criteria

43. 43 Quality Standards ISO 9000: – Internationally recognized quality standards – Companies are periodically audited & certified ISO 14000: – Focuses on environmental responsibility QS 9000: – Auto industry’s version of ISO 9000

44. Why May TQM Efforts Fail? Lack of a genuine quality culture Lack of top management support and commitment Over- and under-reliance on SPC methods