1. Total Quality Management Lecture #2

2. Types of Quality Control  Product Quality Control –Product Control focuses on the output  Process Quality Control –Process Control focuses on the input Materials Personnel Equipment Methods Information Environment Together produceProducts and/or services InputsTransformationOutputs

3. Product/Process Control  Emphasizes defect detection  Is after the fact  High proportion of cost incurred  Compares product/service to specification  External to process  Reactive  Emphasizes prevention  Minimizes potential for defects  Reduce costs  Compares process results to past process performance  Variation oriented  Proactive

4. Total Quality Management (TQM)  Customer expectations in the new economy: –Products/services must be delivered quickly (Fast) –Products/services must have no defects (Right) –Products/services must be inexpensive (Cheap) –Products/services must be easy to use (Easy)  Focus of the organization is to meet or exceed the expectations of its customers.

5. TQM  Statistical Quality Control –looking for defects in parts or products selected through sampling techniques  Statistical Process Control –using statistics to monitor production and making corrections when the process is out of control  Zero-Defects (six sigma) –working to eliminate essentially all defects

6. “Japanese Model” compared to U.S.  Traditional Japanese management is becoming Westernized  Mainly applies to larger Japanese corporations

7. Employment  Japan: Lifetime employment  U.S.:Short term employment

8. Careers  Japan:Non-Specialized career path Life long job rotation  U.S.:Specialized careers

9. Evaluation & Promotion  Japan:Group evaluation & promotion  U.S.:Individual evaluation & promotion

10. Decision Making  Japan:Participative decision making  U.S.:Individual decision making  Teams

11. Participative Decision Making  Newest member of department is given charge of decision process  Meets several times with every member of the department

12. Participative Decision Making 1)I believe that you understand my point of view 2)I believe that I understand the other points of view

13. Participative Decision Making 3)Whether or not I agree with the decision, I will support it, because it has been arrived at in a fair and open manner

14. Benefits to New Member  Gets to know other everyone else  Acquires an in-depth knowledge of an issue

15. Benefits to Department  New member becomes a valuable asset to the department and a resource to others

16. Auto Industry

17. Auto Industry Differences  Japan vs. U.S. practices

18. # of suggestions per worker per year  Japan:329  U.S.: 2

19. Training Hours  Japan:370  U.S.: 46

20. Tangible/Intangible Costs  Rework/repair  Scrap/discarded material  Overtime to remake products  Returns/warranty costs  Time spent waiting  Lost reputation  Lost potential sales  Lost opportunity for new markets  Inability to attract good employees

21. Deming’s 14 Points for Management  Create constancy of purpose for improvement of product and service  Adopt the new philosophy  Cease dependence on mass inspection to achieve quality  End the practice of awarding business on the basis of price tag

22. Deming’s 14 Points for Management (cont.)  Improve constantly  Institute training on the job  Institute leadership  Drive out fear  Break down barriers between departments

23. Deming’s 14 Points for Management (cont.)  Eliminate slogans, exhortations, and targets for the work force.  Eliminate work quotas  Remove barriers that rob workers of pride of workmanship.  Institute a vigorous program of education and self-improvement  Put everyone to work transforming the company

24. Malcolm Baldridge National Quality Award  An annual award administered by the U.S. Department of Commerce and given to manufacturing, service, or small business companies that meet the following 7 criteria:  leadership  information and analysis  strategic planning  human resource development and management  process management  business results  customer focus and satisfaction