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Management ofQuality
Chapter 9
McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc !ll rights reser"e#
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Chapter 9: Learning Objectives
You should be able to:1. Dene the term quality as it relates to products and
as it relates to services
2. Explain why quality is important and the
consequences of poor quality. !dentify the determinants of quality
". Distinguish the costs associated with quality
#. $ompare the quality awards
%. Discuss the philosophies of quality gurus
&. Descri'e (QM). *ive an overview of pro'lem solving
+. *ive an overview of process improvement
1,. Descri'e and use various quality tools
Instructor Slides 9-2
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Quality Management
Quality
(he a'ility of a product or serviceto consistently meet or exceed
customer expectations
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Dimensions of roduct Quality
erformance! main characteristics of theproduct
"esthetics! appearance- feel- smell- taste
#pecial features! extra characteristics
Conformance! how well the product conforms todesign specications
$eliability! consistency of performance
Durability! the useful life of the producterceived %uality! indirect evaluation of quality
#erviceability! handling of complaints or repairs
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Dimensions&'(amples
erformance! Everything wors/ 0it and 0inish-ride- handling -acceleration
"esthetics! Exterior and !nterior design
#pecial features! $onvenience/ lacement ofgauges
igh tech/ *3 system
3afety/ anti4sid- air'ags
Conformance! car matches manufacturer5s
specication
$eliability! !nfrequent need for repair
Durability! useful life in miles- resistant to rust
erceived %uality! top rated#erviceabilit ! ease of re airInstructor Slides 5
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Dimensions of #ervice Quality
Convenience! the availa'ility and accessi'ility of the service
$eliability! a'ility to perform a service dependa'ly- consistently-and accurately
$esponsiveness! willingness to help customers in unusualsituations and to deal with pro'lems
)ime! the speed with which the service is delivered
"ssurance! nowledge exhi'ited 'y personnel and their a'ilityto convey trust and condence
Courtesy! the way customers are treated 'y employees
)angibles! the physical appearance of facilities- equipment-personnel- and communication materials
Consistency! the a'ility to provide the same level of goodquality repeatedly
Instructor Slides 9-6
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"ssessing #ervice Quality
"udit service to identify strengths and*ea+nesses
,n particular- loo+ for discrepanciesbet*een:1. $ustomer expectations and management perception of
those expectations
2. Management perceptions customer expectations andservice4quality specications
. 3ervice quality and service actually delivered
". $ustomers5 expectations of the service provider andtheir perceptions of provider delivery
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Determinants of Quality
Quality of design !ntention of designers to include or exclude features in a product
or service
Quality of conformance (he degree to which goods or services conform to the intent of
the designers 'ase&of&.se and user instructions !ncrease the lielihood that a product will 'e used for its intended
purpose and in such a way that it will continue to functionproperly and safely
"fter&the&sale service (aing care of issues and pro'lems that arise after the sale
Instructor Slides 9-8
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$esponsibility for Quality
(op management
Design
rocurement
roduction6operations
Quality assurance
acaging andshipping
Mareting and sales
$ustomer service
Everyone in theorgani7ation has someresponsi'ility forquality- 'ut certain
areas of theorgani7ation areinvolved in activitiesthat mae them ey
areas of responsi'ility.
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/ene0ts of 1ood Quality
Enhanced reputation for quality
8'ility to command premium prices
!ncreased maret share
*reater customer loyalty9ower lia'ility costs
0ewer production or service pro'lems
9ower production costs
igher prots
Instructor Slides 9-10
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)he Conse%uences of oor Quality
9oss of 'usiness
9ia'ility
roductivity
$osts
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Costs of Quality
"ppraisal Costs$osts of activities designed to ensure quality or
uncover defects
revention Costs8ll (Q training- (Q planning- customer
assessment- process control- and qualityimprovement costs to prevent defects fromoccurring
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Costs of Quality
2ailure Costs & costs incurred bydefective parts3products or faultyservices4,nternal 2ailure Costs
$osts incurred to x pro'lems that are detected'efore the product6service is delivered to thecustomer.
'(ternal 2ailure Costs8ll costs incurred to x pro'lems that are detected
after the product6service is delivered to thecustomer
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'thics and Quality
#ubstandard *or+ Defective products3u'standard serviceoor designs3hoddy wormanship3u'standard parts and materials
Having knowledge of this and failing to correctand report it in a timely manner is unethical.
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Quality Contributors
Contributor 5ey Contributions
#he*art $ontrol charts: variance reduction
Deming 1" points: special vs. common causes of variation
6uran Quality is tness4for4use: quality trilogy
2eigenbaum Quality is a total eld: the customer denes quality
Crosby Quality is free: 7ero defects
,shi+a*a $ause4and4e;ect diagrams: quality circles
)aguchi (aguchi loss function
Ohno and #hingo $ontinuous improvementInstructor Slides 9-15
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Deming7s 8 oints
Deming7s 8 oints1. $reate constancy of purpose toward improvement of product and service with
a plan to 'ecome competitive and stay in 'usiness.2. 8dopt the new philosophy.
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$reate a constant purpose towardsimprovement.
8dopt the new philosophy.
3top depending on inspections@se a single supplier for any one item.
!mprove constantly and forever.
@se training on the =o'
!mplement leadership
Eliminate fear
Deming7s 8 oints
17Instructor Slides
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>rea down 'arriers 'etween departments
*et rid of unclear slogans
Eliminate management 'y o'=ective
?emove 'arriers to pride of wormanship!mplement education and self improvement
Mae Atransformation5 everyone5s =o'
Cont44
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Quality "*ards and Certi0cation
Quality "*ardsDeming ri7eMalcolm >aldrige Bational Quality 8wardEuropean Quality 8ward
Quality Certi0cations!3C +,,,!3C 1",,,
!3C 2"&,,
Instructor Slides 9-19
http://www.juse.or.jp/e/deming/http://www.nist.gov/baldrige/http://www.efqm.org/http://www.efqm.org/http://www.nist.gov/baldrige/http://www.juse.or.jp/e/deming/
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/ene0ts of the /aldrige Competition
1.
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"*ard Categories
1. Education
2. ealthcare
. Manufacturing
". Bonprot6*overnment
#. 3ervice
%. 3mall >usiness
)he /aldrige Competition
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/aldrige Criteria
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,nternational Organiation for #tandardiation
,#O 9;;; 3et of international standards on quality management
and quality assurance- critical to international 'usiness,#O 8;;; 8 set of international standards for assessing a
company5s environmental performance
,#O
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Quality Certi0cation
,#O 9;;;: Quality rinciples/rinciple 1 $ustomer focusrinciple 2 9eadership
rinciple !nvolvement of peoplerinciple " rocess approachrinciple # 3ystem approach to managementrinciple % $ontinual improvementrinciple & 0actual approach to decision maing
rinciple ) Mutually 'enecial supplier relationships
Instructor Slides 9-24
http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp.htmhttp://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/quality_management/qmp.htm
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Quality and the #upply Chain
>usiness leaders are increasingly recogni7ingthe importance of their supply chains inachieving their quality goals?equires/Measuring customer perceptions of quality!dentifying pro'lem areas$orrecting these pro'lems
3upply chain quality management can 'enet
from a colla'orative relationship with supplierselping suppliers with quality assurance e;orts!nformation sharing on quality4related matters
Instructor Slides 9-25
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)otal Quality Management
8 philosophy that involves everyone in anorgani7ation in a continual e;ort to improvequality and achieve customer satisfaction.
T Q M
Instructor Slides
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)QM "pproach
1. 0ind out what the customer wants
2. Design a product or service that meets orexceeds customer wants
. Design processes that facilitate doing the =o'right the rst time
". eep trac of results
#. Extend these concepts throughout the supplychain
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)QM 'lements
1. $ontinuous improvement
2. $ompetitive 'enchmaring
. Employee empowerment
". (eam approach
#. Decision 'ased on fact- not opinion%. nowledge of tools
&. 3upplier quality
). $hampion
+. Quality at the source1,. 3uppliers are partners in the process
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Continuous ,mprovementhilosophy that sees to mae never4ending
improvements to the process of convertinginputs into outputs
5aien Fapanese word for continuous improvement.
Continuous ,mprovement
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)he philosophy of ma+ingeach *or+er responsible forthe %uality of his or her *or+ GDo it rightH and G!f it isn5t right- x
itH
Quality at the #ource
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#i( #igma
#i( #igma8 'usiness process for improving quality-
reducing costs- and increasing customersatisfaction
#tatisticallyaving no more than ." defects per million
Conceptuallyrogram designed to reduce defects
?equires the use of certain tools and techniques
Instructor Slides
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Lean #i( #igma
Lean #i( #igma8 'alanced approach to process improvement
that integrates principles from lean operationand statistical tools for variation reduction
from six sigma to achieve speed and quality8n approach that is equally applica'le to
products and servicesEarly application in service support functions of
*eneral electric and $aterpillar 0inance
Instructor Slides
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Obstacles to ,mplementing )QM
Obstacles include:1. 9ac of company4wide denition of quality
2. 9ac of strategic plan for change
. 9ac of customer focus
". oor inter4organi7ational communication
#. 9ac of employee empowerment%. Iiew of quality as a Gquic xH
&. Emphasis on short4term nancial results
). !nordinate presence of internal politics and GturfH issues
+. 9ac of strong motivation
1,. 9ac of time to devote to quality initiatives11. 9ac of leadership
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D#" Cycle
lan&Dotudy&"ct ?D#"@ Cyclelan>egin 'y studying and documenting the current
process.
$ollect data on the process or pro'lem8naly7e the data and develop a plan for
improvement3pecify measures for evaluating the plan
Do!mplement the plan- document any changes made-
collect data for analysis
lan
Do#tud
y
"ct
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D#" Cycle
lan&Dotudy&"ct ?D#"@ Cycle#tudyEvaluate the data collection during the do phase$hec results against goals formulated during the plan
phase"ct!f the results are successful- standardi7e the new
method and communicate it to the relevant personnel!mplement training for the new method
!f unsuccessful- revise the plan and repeat the process
lan
Do#tud
y
"ct
Instructor Slides
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roblem #olving
Instructor Slides
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rocess ,mprovement8 systematic approach to improving a process
rocess ,mprovement
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/asic Quality )ools
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Instructor Slides
Chec+ #heet
Quality )ools
Pareto Diagram
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Methods for 1enerating ,deas
>rainstorming
8nity Diagram
Quality circles!nterviewing
>enchmaring
#
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Quality Circles
Quality Circle*roups of worers who meet to discuss ways of
improving products or processes9ess structured and more informal than teams
involved in continuous improvementQuality circle teams have historically had relatively
little authority to mae any 'ut the most minorchanges
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/enchmar+ing rocess
1. !dentify a critical process that needsimprovement
2. !dentify an organi7ation that excels in thisprocess
. $ontact that organi7ation
". 8naly7e the data
#. !mprove the critical process
Instructor Slides 9-42
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Operations #trategy
Quality is a strategic imperative fororganiations $ustomers are very concerned with the quality of goods
and services they receive
Quality is a never&ending journey !t is important that most organi7ational mem'ers
understand and 'uy into this idea
Customer satisfaction A customer loyalty
Quality needs to be incorporated throughoutthe entire supply chain- not just theorganiation itself
Instructor Slides 9-43