Chapter 5 Total Quality ManagementOperations ManagementbyR. Dan Reid & Nada R. Sanders3rd Edition Wiley 2007

Learning ObjectivesExplain the meaning of TQMIdentify features of the TQM philosophyDescribe the four dimensions of QualityIdentify the costs of QualityIdentify tools used for solving Quality problemsQuality awards and Quality certificationsIdentify Quality leaders and their contributions

What is TQM?Meeting quality expectations as defined by the customer

Integrated organizational effort designed to improve quality of processes at every business level

Defining Quality 5 WaysConformance to specificationsDoes product/service meet targets and tolerances defined by designers?Fitness for use Evaluates performance for intended useValue for price paidEvaluation of usefulness vs. price paidSupport servicesQuality of support after salePsychologicale.g. Ambiance, prestige, friendly staff

Manufacturing Quality vs. Service QualityManufacturing quality focuses on tangible product featuresConformance, performance, reliability, featuresService organizations produce intangible products that must be experiencedQuality often defined by perceptional factors like courtesy, friendliness, promptness, waiting time, consistency

Evolution of TQM New Focus

TQM Philosophy Whats Different?Focus on CustomerIdentify and meet customer needsStay tuned to changing needs, e.g. fashion stylesContinuous ImprovementContinuous learning and problem solving, e.g. Kaizen, 6 sigmaQuality at the SourceInspection vs. prevention & problem solvingEmployee EmpowermentEmpower all employees; external and internal customers

TQM Philosophy Whats Different? (continued)Understanding Quality ToolsOngoing training on analysis, assessment, and correction, & implementation toolsTeam ApproachTeams formed around processes 8 to 10 peopleMeet weekly to analyze and solve problemsBenchmarkingStudying practices at best in class companies Managing Supplier QualityCertifying suppliers vs. receiving inspection

Four Dimensions of QualityQuality of designDetermining which features to include in the final designQuality of conformance to designProduction processes are set up to meet design specificationsEase of useInstructions, operation, maintenance, safety Post-sale service Responsiveness, rapid repair, p.m., spare parts

Cost of QualityQuality affects all aspects of the organizationQuality has dramatic cost implications of;Quality control costsPrevention costsAppraisal costsQuality failure costsInternal failure costsExternal failure costs

Cost of Quality 4 CategoriesEarly detection/prevention is less costly May be less by a factor of 10

Ways of Improving QualityPlan-Do-Study-Act Cycle (PDSA)Also called the Deming Wheel after originatorCircular, never ending problem solving process

Quality Function DeploymentUsed to translate customer preferences to design

Seven Tools of Quality ControlTools typically taught to problem solving teams

PDSA DetailsPlanEvaluate current processCollect procedures, data, identify problemsDevelop an improvement plan, performance objectivesDoImplement the plan trial basisStudyCollect data and evaluate against objectivesActCommunicate the results from trialIf successful, implement new process

PDSA (continued)Cycle is repeated After act phase, start planning and repeat process

QFD DetailsProcess used to ensure that the product meets customer specificationsVoice of theengineerVoice of the customerCustomer-basedbenchmarks

QFD - House of QualityAdding trade-offs, targets & developing product specificationsTrade-offsTargetsTechnicalBenchmarks

Seven Problem Solving ToolsCause-and-Effect DiagramsFlowchartsChecklistsControl ChartsScatter DiagramsPareto AnalysisHistograms

Cause-and-Effect DiagramsCalled Fishbone DiagramFocused on solving identified quality problem

FlowchartsUsed to document the detailed steps in a processOften the first step in Process Re-Engineering

ChecklistSimple data check-off sheet designed to identify type of quality problems at each work station; per shift, per machine, per operator

Control ChartsImportant tool used in Statistical Process Control Chapter 6The UCL and LCL are calculated limits used to show when process is in or out of control

Scatter DiagramsA graph that shows how two variables are related to one anotherData can be used in a regression analysis to establish equation for the relationship

Pareto AnalysisTechnique that displays the degree of importance for each elementNamed after the 19th century Italian economistOften called the 80-20 RulePrinciple is that quality problems are the result of only a few problems e.g. 80% of the problems caused by 20% of causes

HistogramsA chart that shows the frequency distribution of observed values of a variable like service time at a bank drive-up window

Displays whether the distribution is symmetrical (normal) or skewed

Quality Awards and StandardsMalcolm Baldrige National Quality AwardThe Deming Prize ISO 9000 CertificationISO 14000 Standards

Quality Awards and StandardsMalcolm Baldrige National Quality Award (MBNQA)The Deming Prize ISO 9000 CertificationISO 14000 Standards

MBNQA- What Is It?Award named after the former Secretary of Commerce Reagan AdministrationIntended to reward and stimulate quality initiativesGiven to no more that two companies in each of three categories; manufacturing, service, and small businessPast winners; FedEx, 3M, IBM, Ritz-CarltonTypical winners have scored around 700 points

The Deming PrizeGiven by the Union of Japanese Scientists and Engineers since 1951Named after W. Edwards Deming who worked to improve Japanese quality after WWIINot open to foreign companies until 1984Florida P & L was first US company winner

ISO StandardsISO 9000 Standards: Certification developed by International Organization for StandardizationSet of internationally recognized quality standards Companies are periodically audited & certifiedISO 9000:2000 QMS Fundamentals and StandardsISO 9001:2000 QMS RequirementsISO 9004:2000 QMS - Guidelines for PerformanceMore than 40,000 companies have been certified ISO 14000: Focuses on a companys environmental responsibility

Quality GurusFigure 5-10 summarizes the contributions of the seven Quality GurusWalter A. ShewhartW. Edwards DemingJoseph M. JuranArmand V. FeigenbaumPhillip CrosbyKaoru IshikawaGenichi Taguchi

Why TQM Efforts FailLack of a genuine quality culture

Lack of top management support and commitment

Over- and under-reliance on SPC methods

Chapter 5 HighlightsTQM focuses on serving the customers quality needsTQM uses continuous improvement, quality at the source, employee empowerment, quality tools, teams, benchmarking, and supplier certificationFour dimensions: product/service design, conformance, easy of use, post-sale supportQuality costs; prevention, appraisal, internal & external failuresQFD and Seven Quality Tools used in managing qualityThe MBNQA, Deming Prize, and ISO Certification help focus on quality improvement and excellenceThe seven Quality Gurus all made key contributions

Chapter 5 Homework HintsThis is not required, but for extra credit!Research on TQM:Internet probably best, but library OK.Link on my website: http://www.csus.edu/mgmt/blakeh/www.html Find an article that tells how a firm uses one (or more) of the quality concepts in Chapter 5.Write a summary of the article:One pagesingle space paragraphs, double space between paragraphs.Give the source, like in a bibliography.