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6 - 1 Course Title: Production and Operations Management Course Code: MGT 362 Course Book: Operations Management 10 th Edition. By Jay Heizer & Barry Render.

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Presentation on theme: "6 - 1 Course Title: Production and Operations Management Course Code: MGT 362 Course Book: Operations Management 10 th Edition. By Jay Heizer & Barry Render."— Presentation transcript:

1 6 - 1 Course Title: Production and Operations Management Course Code: MGT 362 Course Book: Operations Management 10 th Edition. By Jay Heizer & Barry Render

2 6 - 2 Chapter 6: Managing Quality

3 6 - 3 Summary  Quality and Strategy  Defining Quality  Implications of Quality  Malcolm Baldrige National Quality Award  Cost of Quality (COQ)  Ethics and Quality Management  International Quality Standards  ISO 9000  ISO14000

4 6 - 4 Outline  Total Quality Management  Continuous Improvement  Six Sigma  Employee Empowerment  Benchmarking  Just-in-Time (JIT)  Taguchi Concepts  Knowledge of TQM Tools

5 6 - 5 Outline  Tools of TQM  Check Sheets  Scatter Diagrams  Cause-and-Effect Diagrams  Pareto Charts  Flowcharts  Histograms  Statistical Process Control (SPC)

6 6 - 6 Outline  The Role of Inspection  When and Where to Inspect  Source Inspection  Service Industry Inspection  Inspection of Attributes versus Variables  TQM in Services

7 6 - 7 Costs of Quality  Prevention costs  Prevention costs - reducing the potential for defects  Appraisal costs  Appraisal costs - evaluating products, parts, and services  Internal failure  Internal failure - producing defective parts or service before delivery  External costs  External costs - defects discovered after delivery

8 6 - 8 External Failure Internal Failure Prevention Costs of Quality Appraisal Total Cost Quality Improvement Total Cost

9 6 - 9 Leaders in Quality Table 6.1 LeaderPhilosophy/Contribution 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

10 Ethics and Quality Management  Operations managers must deliver healthy, safe, quality products and services  Poor quality risks injuries, lawsuits, recalls, and regulation  Organizations are judged by how they respond to problems  All stakeholders much be considered

11 International Quality Standards  ISO 9000 series  ISO series

12 ISO Environmental Standard Core Elements:  Environmental management  Auditing  Performance evaluation  Labeling  Life cycle assessment

13 ISO Environmental Standard Advantages:  Positive public image and reduced exposure to liability  Systematic approach to pollution prevention  Compliance with regulatory requirements and opportunities for competitive advantage  Reduction in multiple audits

14 TQM Encompasses entire organization, from supplier to customer. Stresses on commitment by the management to have a continuing, company wide drive toward excellence in all aspects of products and services that are important to the customer.

15 Deming’s Fourteen Points (1/3) Table Create consistency of purpose 2.Lead to promote change 3.Build quality into the product; stop depending on inspections 4.Build long-term relationships based on performance instead of awarding business on price 5.Continuously improve product, quality, and service

16 Deming’s Fourteen Points (2/3) Table Start training 7.Emphasize leadership 8.Drive out fear 9.Break down barriers between departments 10.Stop haranguing workers 11.Support, help, and improve

17 Deming’s Fourteen Points (3/3) Table Remove barriers to pride in work 13.Institute education and self-improvement 14.Put everyone to work on the transformation

18 Seven Concepts of TQM 1.Continuous improvement (PDMA) 2.Six Sigma 3.Employee empowerment 4.Benchmarking 5.Just-in-time (JIT) 6.Taguchi concepts 7.Knowledge of TQM tools

19 Continuous Improvement  Represents continual improvement of all processes  Involves all operations and work centers including suppliers and customers  People, Equipment, Materials, Procedures

20 Act Implement the plan document 2. Do Test the plan 3. Check Is the plan working? 1.Plan Identify the pattern and make a plan Shewhart’s PDCA Model Figure 6.3

21 Six Sigma  Two meanings  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

22  Two meanings  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 Six Sigma Mean Lower limitsUpper limits 3.4 defects/million ±6  2,700 defects/million ±3  Figure 6.4

23 Six Sigma Program  Originally developed by Motorola, adopted and enhanced by Honeywell and GE  Highly structured approach to process improvement  A strategy  A discipline - DMAIC 66 66

24 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

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

26 Summary  Total Quality Management  Continuous Improvement  Six Sigma  Employee Empowerment  Benchmarking  Just-in-Time (JIT)  Taguchi Concepts  Knowledge of TQM Tools


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