Arnold, Chapman, & Clive: Intro Materials Management, 6 th ed. © 2008 Pearson Education, Upper...

Arnold, Chapman, & Clive: Intro Materials Management, 6th ed.

© 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Total Quality Management

Chapter 16



What is Quality?

Quality means user satisfaction: that goods or services satisfy the needs and

expectations of the user.



Quality and Product Policy

• Established by management

• Product planning

– wants and needs of the marketplace

– level of product performance

– price to be charged

– expected sales volume



Quality and Product Design

• General specifications set by the marketplace– expected perfomance, appearance, price,

volume

• Product designers– materials to be used, dimensions,

tolerances, product capability, service requirements



Product Development Cycle



Quality and Manufacturing

• Strive for excellence in products

• All products must be within specification

• The less the variation (from the nominal) the better

• Tolerance– the amount of variation allowed from the

desired value



Quality and Use

• Performance– reliability, durability, maintainability

• Features• Conformance to specification• Warranty• Service• Aesthetics• Perceived quality• Price



Total Quality Management (TQM)

“TQM is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which the work.”

• APICS 11th Edition Dictionary



TQM - Basic Concepts

1. A committed and involved management

2. Focus on the customer

3. Involvement of the total workforce

4. Continuous process improvement

5. Supplier partnering

6. Performance measures



Management Commitment

• Vision Statement– what the organization will be in 5 years

• Mission statement– who we are, who are our customers, what

we do, how we do it• Quality policy

– how goods and services are provided• Strategic plan

– includes TQM objectives



Customer Focus

X-plicit– I want a car that will comfortably carry 5

passengers and some gear

X-pected– we arrived safely at our campsite

X-citing– there’s a 110 volt outlet in the back!



Customer Focus

• Meeting and exceeding customer expectations

• External customers– people we sell our goods to

• Internal customers– people or departments who receive output

from another person or department– treat them like a customer



Customer Requirements

1. High quality

2. Flexibility to change in volume, etc.

3. High service level

4. Short lead times

5. Consistency in meeting targets

6. Low cost

Customers expect improvements



Employee Involvement

• TQM is everyone’s responsibility

• Employees are expected to do their jobs and to work at improving their jobs (and) other’s jobs



Commitment to TQM

1. Training– their own job skills– cross trained on other jobs– tools of continuous improvement

2. Organization– to keep close contact with customers

3. Local ownership of processes– empowerment



Empowerment

A condition whereby employees have the authority to make decisions and take actions in their work areas without approval. For example, a customer service representative can send out a replacement product if a customer calls with a problem.

• APICs 11th Edition Dictionary



TQM - Teams

• Move beyond the contribution of individuals

• Sum of the total effort is increased

• Requires skill and training

• Fundamental part of TQM



Supplier Partnerships

• Used in JIT and TQM

• Treat the supplier as a partner and not as an adversary– quality improvements– mutual sharing of savings– team approach



Performance Measures

“That what gets measured is that what gets done” - Anonymous

• Decide which processes need improvement

• Evaluate alternatives• Compare actual to target• Evaluate employees• Show trends



Measurements

• Need to give useful feedback– Quantity of good parts per unit time– Cost– On time delivery– Quality

• function• aesthetics• accuracy (defects/tolerance)



Measurements

• Simple, understandable, relevant and visible to the user, preferably developed by the user, designed to promote improvement, few in number



Measurements

• Customer– number of complaints– on-time delivery

• Production– inventory turns, scrap,

cost per unit, time to delivery

• Suppliers– on-time delivery– rating– quality performance– billing accuracy

• Sales– expense to revenue– new customers– sales per square foot



Quality Cost Concepts

• Cost of failure to control quality– failure

• Cost of controlling quality– prevention– appraisal



Costs of Failure

• Internal failure costs– scrap– rework– spoilage

– these costs diminish with improved quality

• External failure costs

• After the customer receives the goods

• Most costly– warranty costs– field service– other costs to satisfy

the customer– decrese with

improved quality



Costs of Controlling Quality

• Prevention costs– training– statistical process

control– maintenance– quality planning

• Appraisal costs– inspection– quality audits– testing– calibration



Impact of Quality Improvements



Variation• All things vary, the question is how much

variablity is acceptable



Chance Variation

1. People - poorly trained vs skilled

2. Machine - well maintained?

3. Material - should be consistent

4. Method - often by different operators

5. Environment - temperature, humidity

6. Measurement - poor adjustments



Chance Variation

There is no way to alter chance variation except to change the process. If the process produces too many defects,

then it must be changed.



Assignable Variation

• Where variation can be related to a given action– tool wear, movement– operator error– changes in the process



Statistical Process Control (SPC)

• Attempts to find the assignable causes (so they can be eliminated)

• Helps select processes that are capable of producing quality products

• Monitors process to be sure it remains capable of producing quality products



Patterns of Variability

• A histogram of a number of readings gives a predictable pattern

• Normal curve exists in all natural processes

• If a process is studied and detects an odd shape, something is causing the change (assignable cause)



Patterns of Variability

• Shape– ‘bell curve’– symetrical (even on both sides)

• Center– computed as the average– represented by the Greek letter μ ‘mu’

• Spread– measured and represented by the Greek

letter σ ‘sigma’



Normal Distribution



Areas Under the Normal Curve

μ-1σ-2σ-3σ +1σ +2σ +3σ68.3%

95.4%

99.7%



Variation - Example

σ = 0.0016

μ = 1.000

1.000 1.0016

68.3%

95.4%

99.7%

1.0032 1.00480.99840.99680.9952



Tolerance

“Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle.”


• Nominal value– desired value



Process Capability

“Refers to the ability of the process to produce parts that conform to (engineering) specifications. Process capability relates to the inherent variability of a process …”)




Process Capability

• Compares the 6 sigma spread of a process with the specification limits– LSL - lower specification limit– USL - upper specification limit– specification doorway = USL - LSL

• The 6 sigma spread of the process should be smaller than the specification doorway



Process CapabilityLSL USL

x

6 σ Total Process Spread

SpecificationDoorway

-3σ +3σ



Process Capability



Capable?



Process Capability



Process Capability

• The process spread is not related to the product specification tolerance

• A process must be selected that can meet the specifications– or defects will be produced

• Processes can produce defects in one of two ways, by having too big a spread (σ) or by a shift in the average (μ)



Process Capability - Example Problem

In the previous example the process had a standard deviation of 0.0016” and a mean of 1”. If the specification called for a diameter of 1” +/- .005”:

a. Approximately what percent of the shafts will be within tolerance?

b. If the tolerance were changed to 1” +/- .002”, approximately what percent of the shafts will be within tolerance?



1.000 1.0016

68.3%

95.4%

99.7%

1.0032 1.00480.99840.99680.9952

σ = 0.0016

μ = 1.000

LSL0.995

USL1.005


a. Approximately 99.7% of the shafts will be in tolerance




b. Approximately 68.3% of the shafts will be in tolerance

1.000 1.0016

68.3%

95.4%

99.7%

1.0032 1.00480.99840.99680.9952

σ = 0.0016

μ = 1.000

LSL0.998

USL1.002



Process Capability Index Cp

Cp = USL - LSL

6 σ

• If the Cp is greater than one, then the process is

capable of producing 99.7% of parts within tolerance

• Many companies use a Cp of 1.33 or 2 since

processes may shift

• Note: Cp assumes the process is centered



Process Capability Index Cp



Cp - Example Problem

The specifications for the weight of a chemical in a compound is 10 +/- 0.05 grams. If the standard deviation of the weighing scales is 0.02 grams, is the process considered capable?

Cp = 10.05 - 9.95

6 x 0.02

= 0.83

Since 0.83 is less than one, the process is not capable.



Process Capability Cpk Index

Cpk = the lesser of:

(Mean - LSL) (USL - Mean)3σ or 3σ

Cpk Value Evaluation

Less than +1 Unacceptable process

+1 to +1.33 Marginal process

Greater than +1.33 Acceptable process



Cpk Index



Cpk - Example Problem

A company produces shafts with a nominal diameter of 1” and a tolerance of +/- .005 on a lathe. The process has a standard deviation of .001”. For each of the following cases calculate the Cpk and evaluate the process capability.

a. A sample has an average of .997.

b. A sample has an average of .998.

c. A sample has an average of 1.001



Cpk - Example Problem

a. Cpk = 1.005 - .997 = 2.67 or = .997 - .995 = .067

3 x .001 3 x .001

Cpk is less than 1. Process is not capable

b. Cpk = 1.005 - .998 = 2.33 or = .998 - .995 = 1.00

3 x .001 3 x .001

Cpk is 1. Process is marginal

c. Cpk = 1.005 - 1.001 = 1.33 or = 1.001 - .995 = 2.00

3 x .001 3 x .001

Cpk is 1.33. Process is capable



Process Control

• Attempts to prevent defects by showing when there is assignable cause

• The process should exhibit only normal variation when there is no assignable cause

• This variation is monitored on a control chart



Control Charts

Run chart: A graphical technique that illustrates how a process is performing over time.

X-bar (averages) chart: A control chart in which the subgroup average, X-bar, is used to evaluate the stability of the process level.

R chart: A control chart in which the subgroup range, R, is used to evaluate the stability or variability within a process.




Run Charts



X (X-bar) and R Charts

• Small samples (3 - 9 pieces) are taken on a regular basis to find the the average (X) and range (R) of the sample

• These values are then plotted on a chart– X-bar chart– R chart



Control Limits

• Lines on a control chart showing the normal (99.7%) of expected variation of a process

• Readings (X-bar or R) outside of these limits indicates assignable cause of variation



X-bar and R Control Charts



Interpretting Control Charts

• A shift in the average (X-bar)– something has moved– change in method or material– worn tools

• A change in the range (R)– loose tools– change in method or material



Action on Out of Control Points

• Out-of-control points indicate that something unusual has occurred

• Current conditions should be recorded

• The operator is probably the most aware of what has ‘changed’

• The sooner an investigation is conducted the better



Attributes

• Items that do not conform to specification (difficult to measure)– scratches, dents– light bulbs– go-no-go inspection– sterility– dissatsified customers– missing items



Attribute Charts

• “p-chart”

• Frequency of defects are charted

• Investigation is made of unusual changes in number of defects

• After-the-fact and do not prevent defects



Other Quality Tools

1. Pareto charts

2. Checksheets

3. Process flow charts

4. Scatterplots

5. Cause and effect (fishbone) diagrams



Pareto Charts

• Histograms arranged in decending order– typically: problems or defects (scrap,

customer complaints)

• Identifies most significant area to start investigation



Checksheets

• Lists source of quality problems– customer complaints– missing parts, defects

• Occurances are simpy checked on the sheet

• Totals should show where the most problems occur

Reasons for return______________

Customer not satisfied with productWrong colorPaint chippedWrong sizeMissing partsBroken partsDelivered late



Process Flow Charts

• Show in detail the steps required to produce the product or service

• Can show where problems occur– delays– wasted activity– excess travelling



Scatterplots

• Shows the relationship between two variables

• temperature and strength• length of stay and

satisfaction• price and number sold• study hours and grade



Cause and Effect (Fishbone) Diagrams

• Plots potential causes of a quality problem

• Encourages input from group members

• Sorts by category– People– Machine– Method– Material– Measurement – Environment



Cause and Effect (Fishbone) Diagrams

QualityProblem

Man Machine Material

Method EnvironmentMeasurement



Sampling Inspection

• 100% inspection– inspect every part – when the consequence of failure is critical– when its easy to do– medical, aeronautics– tends to be expensive

• Acceptance sampling– take a sample of parts– accept or reject the entire batch



When to Use Acceptance Sampling

• Testing is destructive– ultimate pull strength of chain, sterility, firecrackers

• Not enough time to sample– election polls

• It is too expensive to test the whole batch– machine output, market surveys

• Human error will be in the sampling– as high as 3%– judgement is involved



Conditions Necessary for Sampling

• All items are processed under the same conditions– same machine, same load of corn

• Samples must be random– inspectors are not allowed to choose

• The lot should be homogeneous– start, middle and end of the batch

• Batches are large– need enough samples to be significant



Sampling Plans

• Establish a level of acceptance– “if more than 2% defects are found, reject”

• AQL - Acceptable Quality Level

• Requires a pre-determined number of samples

• Procedures are set down to keep sampling methods consistant



Sampling Plans



Sampling Plans

• Consumer’s risk– the probability of accepting a batch which

is actually worse than the value found in the sample

• Producer’s risk– the probability of a rejecting a batch that is

actually better than the sample indicates

• Larger samples help to reduce these risks



Sampling PlansT

rue

% D

efec

tive

Sample % Defective - - -

Producer’s Risk

Consumer’sRisk



Sampling Plans - Cost

• Inspection costs money– employees time– destroyed product

• Need to balance the cost of sampling between the consumer’s risk and the producer’s risk



ISO Certification

• International Organization for Standardization - Geneva Switzerland

• “Iso” Greek for equality

• Management standards

• May be a requirement of doing business

• Most recent standard - ISO9000:2000



Third Party Registration System

• Registrar Accreditation Board

• American Society for Quality - ASQ

• Registers and regularly audits – quality system is in place– it is being followed– documentation is provided



ISO 9000:2000 8 Principles

1. Customer focus

2. Leadership

3. Involvement of

people

4. Process approach

5. System approach to management

6. Continuous improvement

7. Factual approach to decision making

8. Mutually beneficial supplier relations



ISO 9000:2000

• Product realization– bringing the product or service into reality

• Applies to services as well as manufacturing



1Policy

4Proof

3Practice

2Procedure

ISO Documentation Pyramid

1. Quality manual, organization chart, indexed to level 2

2. What the firm does to meet level 1 policies, indexed to level 3

3. Work procedures and instructions

4. Records of proof of the above



ISO Certification

• Management standard

• Process approach

• Audited by third party

• Consistency in doing business

• Continuous improvement



Benchmarking

• Compares an organization to the best in class– not necessarily in the same business

• Looks outward for ideas on improvement



Benchmarking

1. Select the process2. Identify an organization that is “best in

class”– for that process i.e. accounts receivable

3. Study the benchmarked organization4. Analyze the data

– metrics, a measure of performance• quality, response time, cost per order



Six Sigma

• Focus on improving all business functions

• Initiated by upper management

• Tasked by middle management

• Projects

• Project managers



Six Sigma

• Striving for failure rates less than 3.4 out of one million possibilities

• Applied to all business processes

• Customer focus



Six Sigma

•Scope: Systemic reduction of variability

•Quality Definition: Defects per million

•Purpose: Reduce variation - increase

profits

•Measurement: Defects per million

•Focus: Locate and eliminate sources of

process error



Six Sigma Projects

DMAIC– Design– Measure – Analyze– Improve– Control



Six Sigma Project

1. Select the appropriate metrics

2. Determine how metrics will be tracked

3. Determine current baseline

4. Determine input variables

5. Determine changes needed

6. Make the changes

7. Did changes have a positive effect?

8. Establish controls at the new level



Six Sigma

• Achieved when process capability is equal to or greater than 2

• The process variation consumes less than half the specification doorway



Project Managers

• Green Belts– specific amount of training– project savings of $10,000

• Black Belts– more training– project savings of $100,000

• Master Black Belts– Masters Degree– savings of $1,000,000



Six Sigma

• Extension of SPC to business processes

• Continuous improvement– reduced waste– decreased costs– improved opportunities

• Customer benefits



Quality Function Deployment

• Decision making method

• Voice of the customer

• Helps incorporate customer wants and needs into design features



House of Quality - Method

1. Gather information from customers and identify

wants and needs

2. Rate how we compare to the competition

3. Identify the features that affect the wants and needs

4. Identify the interactions between the features

5. Prioritise the wants/features by importance to customer

6. Set design objectives by feature

7. Assign responsibility for meeting the design objectives



Interactions+ Strong Positive* Weak Positive- Strong Negativeo Weak Negative

Customer Needs

CompetitiveEvaluation

A - Competitor AB - Competitor BU - Us

Low High

Target Values

1. Attributes desiredby the cusotmer

2. How we compareto the

competition

4. Interactions between features

6. DesignObjectives

7. Responsibility

5. Importance tocustomer

3. Features thataffect the desired

attributes



Interactions+ Strong Positive* Weak Positive- Strong Negativeo Weak Negative

Coffee Mug

Customer Needs Wal

l thi

ckne

ss

He

at

Re

ten

tion

Ap

pe

ara

nce

Lid

De

sig

n

Vo

lum

e

Sta

bili

ty

CompetitiveEvaluation

A - Competitor AB - Competitor BU - Us

Low High

Tight fitting lid 2 A B U

Insulation Value 5 5 U B A

Stability 4 B A U

Handle Grip 4 A B U

Volume 5 B U A

Appearance - Shape 5 5 A U B

Spilling 5 3 U B A

Ease of Drinking 4 A U B

Drop Test 3 U A B

Target Values

Wal

l thi

ckne

ss 3

mm

Insu

latio

n

Val

ue

AB

S P

last

ic

Clo

sure

on

Lid

Dia

me

ter

80

mm

He

igh

t 10

0 m

m

Responsibility J J J W Z Z

Figure 16.16 House of Quality for a Travel Mug

+ +

-+

-

++

House of Quality



JIT - TQM - MRPII

• JIT seeks to eliminate waste– inward looking

• TQM emphasis on customer satisfaction– outward looking

• MRPII manages resources

• All are involved in satisfying the customer



JIT - TQM - MRPII

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