MOS 330: Operations Management Professor Burjaw Fall/Winter 2009-10 3.5 Total Quality Management MOS 330: Operations Management Professor Burjaw Fall/Winter 2009-10 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT Learning Objectives: What is TQM Quality evolution and quality gurus Similarities/differences to other concepts Implementation issues Six sigma quality program Quality awards ISO 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT What is TQM? An organization-wide effort to achieve quality in processes and product based on a set of guiding principles: 1) Customer focus Anticipate customer needs & expectations and obtain feedback 2) Continual improvement Constantly seek to improve processes, products, productivity, effectiveness, responsiveness, etc 3) Total participation and teamwork Workers are inspectors: provide training, authority, rewards Cross-functional, process improvement teams Top management commitment Supplier relationship 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 1.1 Stages of QM 1) Quality Inspection 2) Quality Control Obtain management support Choose a SPC leader Select a process for pilot study Provide SPC training Construct control charts Continual improvement 3) Quality Assurance Project-by-project Process-by-process Empowered workers Mgmt. commitment Cross-functional 4) TQM Company-wide Customer focus 3.5 TQM

1.2 Quality Evolution Events/People Ideas Industrial Revolution/ early 1900s Quality inspection 1920s- 1950s Quality control Process improvement Statistical methods Shewhart Deming, Juran, Crosby ISO, JIT, Oil Crisis, Foreign competition Management philosophy Continual improvement Cost of quality Zero defects 1960s- 1970s Quality assurance Organizational focus Customer driven quality More choices and info Higher expectations Affordable quality 1980s to present Feigenbaum Ishikawa TQM 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 1.3 Quality Gurus Shewhart Promoted SPC, Shewhart Cycle Deming Deming Wheel, 14-point quality management philosophy, promoted quality management in Japan  Deming Prize Juran Quality Control Handbook, quality trilogy (planning, control and improvement), cost of quality Crosby Cost of poor quality, zero defects, Quality is Free Feigenbaum, Ishikawa (cause-and-effect diagram) Total quality control, company-wide commitment 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 1.4 TQM vs. JIT Customer focus JIT: to achieve good forecast of customer demand Continuous improvement (“kaizen”) JIT: require high quality products; undercapacity scheduling Total participation and teamwork JIT: well-trained, multifunctional, empowered employees; group problem solving TQM JIT Recognition in Japan 1950 1960 1970 1980 1990 Recognition in the West 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 1.5 TQM vs. BPR Business Process Reengineering (BPR): the total redesign of a process Leading to organizational and cultural changes, empowered and multi-functional employees, management leadership Aim for rapid, dramatic improvement in process performance (BPR) vs. continuous improvement (TQM) Common BPR characteristics Combining several jobs into one, processes have multiple versions, work is done where it makes the most sense 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 1.6 Common Problems with TQM Lack of a genuine quality culture Forgetting customer-focus Conflict with existing systems (e.g., compensation and promotion systems, policies and procedures) Lack of top management support and commitment Forgetting long-term benefits (“bottom line” approach) Inadequate training Over-or under-reliance on quality tools Over-emphasis on teams, under-emphasis on individual efforts 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 2. Six Sigma Quality Program Six sigma: A high level of quality with 3.4 defective parts per million Coined by Motorola in 1986 Motorola won Baldridge Award in 1988 A business philosophy/strategy focusing on cutting costs and explicit compensation systems Six sigma black belt certification Offered by Motorola and American Society for Quality Black belt: Employee trained and experienced in application of statistical techniques, problem solving, project management, team leadership skills Requirements: training, quality projects, work experience, written exam 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT Methodology DMAIC model Define problem/opportunity Measure characteristics that are critical-to-quality Analyze the problem using benchmarking and gap studies Improve by reducing variation and reducing defects Control performance Other tools Computer simulation Part standardization Supplier qualification, SPC Design of experiments Measurement system analysis 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT 3. Quality Awards Baldridge Award (USA): created by law in 1987 Manufacturing, service, small business, education, health care Customer focus, process management, leadership, HR, strategic planning, information and analysis, business results Application, initial screening, in-depth examination Deming Prize (Japan): created in 1957 Company, business unit, individual Allowed foreign companies to apply in 1984 Minimum application standards Common Themes Privilege, worthy experience, expensive 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT Quality Standards ISO (International Organization for Standardization) Headquarter in Geneva, officially established in 1947 Network of national standards institutes of 146 countries To promote a uniform quality standard for cross-border transactions Focus on a quality system that defines how an organization documents processes and procedures Certification of suppliers, not products Common themes Marketing strategy, customer requirement, international trade requirement 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT ISO 9000 series for quality management (1987) ISO 9001 (production, procurement, installation, design, servicing) ISO 9001 (production, procurement, installation) ISO 9003 (inspection and test) ISO 9004 (quality management) I SO 9000: 2000 – consistency, easier to understand ISO 14000 series for environmental management (1996) Environmental management systems, technical standards Applicable in all nations, promote the interests of public and user, cost effective and flexible Other standards QS 9000: For Chrysler, Ford and GM suppliers AS 9000: Aerospace industry 3.5 TQM

3.5 TOTAL QUALITY MANAGEMENT Registration process Application  documentation review  pre-assessment  registration audit  registration decision  surveillance audit Cost Internal: analysis, project planning, system development, system documentation, system implementation, training, internal audit, system modifications External: ISO publication and software, registrars (fees & travel), consultants (fees & travel) Time: “3 months to 3 years” 3.5 TQM