Reid & Sanders, Operations Management © Wiley 2002 Total Quality Management 5 C H A P T E R

Reid & Sanders, Operations Management © Wiley 2002 Page 2 Learning Objectives Define Total Quality Management (TQM) Identify the TQM philosophy Describe the four dimensions of quality Identify the costs of quality Describe problem-solving tools Describe quality awards & certifications Identify quality gurus & their contributions

Reid & Sanders, Operations Management © Wiley 2002 Page 3 What is TQM? Total Quality Management –An integrated effort designed to improve quality performance at every level of the organization. Customer-defined quality –The meaning of quality as defined by the customer.

Reid & Sanders, Operations Management © Wiley 2002 Page 4 Defining Quality Conformance to Specifications –How well the product or service 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.

Reid & Sanders, Operations Management © Wiley 2002 Page 5 Defining Quality 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.

Reid & Sanders, Operations Management © Wiley 2002 Page 6 Manufacturing vs. Service Manufacturing produces a tangible product –Quality is often defined by tangible characteristics –Conformance, Performance, Reliability, Features Service produces an intangible product –Quality is often defined by perceptual factors –Courtesy, Friendliness, Promptness, Atmosphere, Consistency

Reid & Sanders, Operations Management © Wiley 2002 Page 7 Changing Focus of Quality Management

Reid & Sanders, Operations Management © Wiley 2002 Page 8 Overview of TQM Philosophy Focus on identifying root causes of reoccurring problems & correcting them –A proactive, not reactive approach Allow customers to determine what’s important (customer-driven quality) Involve everyone in the organization

Reid & Sanders, Operations Management © Wiley 2002 Page 9 TQM Philosophy Maintain a Customer Focus: –Identify and meet current customer needs –Continually gather data (look for changing preferences) Continuous Improvement: –Continually strive to improve –Good enough, isn’t good enough Quality at the Source: –Find the source of quality problems & correct them

Reid & Sanders, Operations Management © Wiley 2002 Page 10 TQM Philosophy Employee Empowerment: –Empower all employees to find quality problems and correct them Focus on internal & external customer needs: –External customers: People who purchase the company’s goods and services –Internal customers: Other downstream employees who rely on preceding employees to do their job

Reid & Sanders, Operations Management © Wiley 2002 Page 11 TQM Philosophy Understanding Quality Tools: –All employees should be trained to properly utilize quality control tools Team Approach: –Quality is an organization-wide effort –Quality circles: work groups acting as problem- solving teams Benchmarking –Studying the business practices of other companies for purposes of comparison.

Reid & Sanders, Operations Management © Wiley 2002 Page 12 TQM Philosophy Manage Supplier Quality: –Ensuring that suppliers engage in the same high quality practices –Strategic partnering with key suppliers Quality of Design: –Determining which features will be included in the final design of a product to meet customers’ needs & preferences Ease of Use: –Ergonomics, easy to understand directions, etc.

Reid & Sanders, Operations Management © Wiley 2002 Page 13 TQM Philosophy Quality of Conformance to Design: –Degree to which the product conforms to it’s design specifications (a measure of consistency & lack of variation) Post-Sale Service: –Assisting with issues that arise after the purchase –Warranty & repair issues, follow through on any promises to build a continuing relationship with the customer

Reid & Sanders, Operations Management © Wiley 2002 Page 14 Costs of Quality

Reid & Sanders, Operations Management © Wiley 2002 Page 15 Ways to Improve Quality PDSA Cycle Quality Function Deployment Problem-solving tools

Reid & Sanders, Operations Management © Wiley 2002 Page 16 Plan-Do-Study-Act Cycle (PDSA)

Reid & Sanders, Operations Management © Wiley 2002 Page 17 Plan-Do-Study-Act Cycle (PDSA) Plan: Plan experiments to uncover the root cause of problems Do: Conduct the experiments Study : Study the data generated Act: Implement improvements or start over Repeat: Continuously improve

Reid & Sanders, Operations Management © Wiley 2002 Page 18 Quality Function Deployment Compares customer requirements & product’s characteristics Understand how the product delivers quality to the customer

Reid & Sanders, Operations Management © Wiley 2002 Page 19 Comparing “Voices” Voice of the Customer Voice of the Engineer Customer-based Benchmarks

Reid & Sanders, Operations Management © Wiley 2002 Page 20 QFD In addition, QFD: Provides for competitive evaluation (benchmarks) Considers design trade-offs & synergies Facilitates target setting & developing product specifications

Reid & Sanders, Operations Management © Wiley 2002 Page 21 Setting Specifications Trade-offs Targets Technical Benchmarks

Reid & Sanders, Operations Management © Wiley 2002 Page 22 Problem Solving Tools Cause-and-Effect Diagrams Flow Charts Check Lists Control Charts Scatter Diagrams Pareto Charts Histograms

Reid & Sanders, Operations Management © Wiley 2002 Page 23 Cause-and-Effect Diagrams Also called Fishbone Diagrams Help identify potential causes of specific ‘effects’ (quality problems)

Reid & Sanders, Operations Management © Wiley 2002 Page 24 Flow Charts Diagrams of the steps involved in an operation or process

Reid & Sanders, Operations Management © Wiley 2002 Page 25 Checklists Simple forms used to record the appearance of common defects and the number of occurrences

Reid & Sanders, Operations Management © Wiley 2002 Page 26 Control Charts Track whether a process is operating as expected

Reid & Sanders, Operations Management © Wiley 2002 Page 27 Scatter Diagrams Illustrate how two variables are related to each other

Reid & Sanders, Operations Management © Wiley 2002 Page 28 Pareto Analysis Helps identify the degree of importance of different quality problems

Reid & Sanders, Operations Management © Wiley 2002 Page 29 Histograms Illustrate a frequency distribution

Reid & Sanders, Operations Management © Wiley 2002 Page 30 Quality Awards Malcolm Baldrige National Quality Award is given annually to companies demonstrating excellence –Manufacturing –Service –Small Business –Education –Healthcare

Reid & Sanders, Operations Management © Wiley 2002 Page 31 MBNQA Criteria

Reid & Sanders, Operations Management © Wiley 2002 Page 32 Quality Standards ISO 9000 Standards: –Set of internationally recognized quality standards –Companies are periodically audited & certified ISO 14000: –Focuses on a company’s environmental responsibility QS 9000: –Auto industry’s version of ISO 9000

Reid & Sanders, Operations Management © Wiley 2002 Page 33 Quality Gurus W. Edwards Deming Joseph Juran Phillip Crosby

Reid & Sanders, Operations Management © Wiley 2002 Page 34 W. Edwards Deming Focus on optimizing the system - not individual components Management is responsible for the system (source of 85% of problems) Continuous improvement (focus on prevention, not after-the-fact inspection) Understand variation (special versus common causes)

Reid & Sanders, Operations Management © Wiley 2002 Page 35 Joseph Juran Quality = fitness for use Developed the quality trilogy: –Quality planning (future orientation/design quality) –Quality control (statistical control of variation) –Quality improvement (continuous improvement) Emphasized the costs of quality: –Understand the trade-offs between prevention & appraisal costs with failure costs

Reid & Sanders, Operations Management © Wiley 2002 Page 36 Phillip Crosby Quality requires leadership: –Do it right the first time –The goal is zero defects Argued that ‘quality is free’: –The benefits far outweigh the cost of achieving zero defects

Reid & Sanders, Operations Management © Wiley 2002 Page 37 The End Copyright © 2002 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United State Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.