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Total Quality Management

Total Quality Management. Chapter 5. MGMT 326. Capacity, Facilities, & Work Design. Products & Processes. Quality Assurance. Planning & Control. Foundations of Operations. Managing Quality. Product Design. Introduction. Strategy. Statistical Process Control. Process Design.

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Total Quality Management

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  1. Total Quality Management Chapter 5

  2. MGMT 326 Capacity, Facilities, & Work Design Products & Processes Quality Assurance Planning & Control Foundations of Operations Managing Quality Product Design Introduction Strategy Statistical Process Control Process Design

  3. Total Quality Management (TQM) Chapter 5 What is quality? Costs of quality Total Quality Management (TQM) Customer- Defined Quality TQM Philosophy Quality Tools Quality in Product Design (Quality Function Deployment)

  4. Why Quality is Important • Increases value of products to customers • Reduces expensive mistakes • Increases profits  Shareholder value

  5. How Customers Define Quality • Customer-defined quality: Meeting quality expectations as defined by the customer • High performance design vs. product or service consistency • Psychological (perceived quality): the quality that the customer thinks he/she got • Value: the good or service is superior to others with similar prices (getting more for your money)

  6. How Customers Define Quality (2) • How customers define quality (2) • Fitness for use: how well the product performs its intended function – differs by target market • Support services – technical support, repairs, etc. • See differences between manufacturing and service organizations, pp. 139-140, Table 5.1 • Quality includes all characteristics that are important to customers – not just the core product

  7. How Companies Meet Customer Requirements • Companies use product or service specifications to meet customer requirements • Characteristics of the product or service which will be measured to determine quality • Target values (ideal values) for each characteristic • Should be based on customer expectations • Should meet any legal requirements • Conformance quality: If a product or service consistently meets specifications, it has conformance quality.

  8. Cost of Quality – 4 Categories • Early detection/prevention is less costly • Costs may be less by a factor of 10 • See pages 140-141 for cost of quality details

  9. Total Quality Management (TQM) • Customer-defined quality: Meeting quality expectations as defined by the customer • Integrated organizational effort designed to improve quality on all quality characteristics that are important to customers (core product and anything else that affects customers) • Requires a coordinated effort • All levels of the organization • All functions (departments) in the organization • Work with suppliers and listen to customers

  10. External and internal customers • External customers buy goods and/or services from the organization • External customers may be people, businesses, government agencies, universities, or non-profit organizations • If you work in an organization, internal customers are people in the same organization who use your work product (goods, services, reports, information systems)

  11. TQM Philosophy • Focus on Customer • Identify and meet customer needs • Stay tuned to changing needs, e.g. fashion styles • Continuous Improvement: Continuous learning and problem solving • Quality at the Source: Find the problem when it occurs and fix it. • Employee Empowerment and problem solving (pages 149-150): Empower all employees. Serve external and internal customers

  12. TQM Philosophy (2) • Quality improvement teams (QIT's or quality circles) • Teams formed around processes – 8 to 10 people • Meet regularly to analyze and solve problems • Self-managed work teams: a work group is responsible for managing its responsibilities. Managers are coaches, not bosses. (less common than QIT's) • Benchmarking: Studying practices at “best in class” companies • Managing Supplier Quality: Certify suppliers and eliminate receiving inspection

  13. Plan-Do-Study-Act Cycle (PDSA) • PDSA is a problem-solving process used in continuous improvement • Plan: • Document the current process. What is being done? • Collect procedures and flowchart the process • Collect performance data and identify problems. • Evaluate the current process. What should be changed? • Set performance objectives. • Develop an improvement plan.

  14. Plan-Do-Study-Act Cycle (2) • Do: Implement the improvement plan on trial basis • Study: • Collect data on the new process. • Compare actual performance with objectives • Act • Communicate the results from the trial • If successful, implement new process throughout the organization. • If the trial was not successful or did not fully achieve objectives, go back to Plan step.

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

  16. Seven Problem Solving Tools • Cause-and-Effect Diagrams • Flowcharts • Checksheet • Control Charts • Scatter Diagrams • Pareto Analysis • Histograms

  17. Cause-and-Effect DiagramsUsed to identify the cause of a quality problem Followup: Collect data to verify the cause and develop a plan to eliminate the cause.

  18. fig_05_08 fig_05_08

  19. Flowchart • Used to document the detailed steps in a process • Often the first step in Process Reengineering

  20. ChecksheetTool Used to Collect Data for Analysis

  21. Control Chart • Set confidence intervals for the mean and range of a process (usual behavior) • LCL = lower control limit, UCL = upper control limit • Is process in control (predictable)? • Does process have conformance quality?

  22. Scatter Diagrams • A graph that shows how two variables are related to one another • Data can be used in a regression analysis to establish equation for the relationship

  23. Pareto AnalysisUsed to Prioritize Problems • Most important problems should be solved first • Prioritize by number of defects or $ cost of defects • Often called the 80-20 Rule: Most quality problems are the result of only a few causes. Example: 80% of the problems caused by 20% of causes

  24. Histogram • A 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

  25. Quality in Product Design • Quality function deployment (QFD) • Used by product design teams • Used to translate customer preferences into specific technical requirements • The technical requirements are used to develop the product specification • Operations is responsible for making the product to specifications • Products that meet specifications have conformance quality • Objective is to satisfy customers • Principal tool is House of Quality (pages 154-156)

  26. QFD Details • Process used to ensure that the product meets customer specifications Voice of the engineer Customer-based benchmarks Voice of the customer

  27. QFD - House of Quality • Adding trade-offs, targets & developing product specifications Technical Benchmarks Targets

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