1. Chapter 7Quality Management

2. OBJECTIVES • Total Quality Management Defined • Quality Specifications and Costs • Six Sigma Quality and Tools • External Benchmarking • ISO 9000 • Service Quality Measurement

3. Definitions of Quality • ASC: Product characteristics & features that affect customer satisfaction • User-Based: What consumer says it is • Manufacturing-Based: Degree to which a product conforms to design specification • Product-Based: Level of measurable product characteristic

4. Market Gains Reputation Volume Price Improved Increased Quality Profits Lower Costs Productivity Rework/Scrap Warranty Importance of Quality • Costs & market share • Company’s reputation • Product liability • International implications

5. Ways in Which Quality Can Improve Productivity Sales Gains • Improved response • Higher Prices • Improved reputation Improved Quality Increased Profits Reduced Costs • Increased productivity • Lower rework and scrap costs • Lower warranty costs

6. Quality Principles • Customer focus • Continuous improvement • Employee empowerment • Benchmarking • Just-in-time • Tools of TQM Yields: How to do what is important and to be accomplished

7. Quality movement

8. Malcom Baldrige National Quality Award • Established in 1988 by the U.S. government • Designed to promote TQM practices • Some criteria • Senior executive leadership; strategic planning; management. of process quality • Quality results; customer satisfaction • Recent winners • Corning Inc.; GTE; AT&T; Eastman Chemical.

9. Quality Specifications • Design quality: Inherent value of the product in the marketplace • Dimensions include: Performance, Features, Reliability, Durability, Serviceability, Response, Aesthetics, and Reputation. • Conformance quality: Degree to which the product or service design specifications are met

10. Target Specification Example • A study found U.S. consumers preferred Sony TV’s made in Japan to those made in the U.S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences. Japanese factory (Target-oriented) U.S. factory (Conformance-oriented)

11. Costs of Quality • Prevention costs - reducing the potential for defects • Appraisal costs - evaluating products • Internal failure - of producing defective parts or service • External costs - occur after delivery

12. Appraisal Costs External Failure Costs Prevention Costs Internal FailureCosts Costs of Quality Costs of Quality

13. Total Quality Management (TQM)Defined • Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer

14. TQM Encompasses entire organization, from supplier to customer Stresses a commitment by management to have a continuing company-wide drive toward excellence in all aspects of products and services that are important to the customer.

15. Achieving Total Quality Management CustomerSatisfaction EffectiveBusiness Attitudes (e.g., Commitment) Employee Fulfillment How to Do Quality Principles What to Do Organizational Practices

16. Deming’s Fourteen Points • Create consistency of purpose • Lead to promote change • Build quality into the products • Build long term relationships • Continuously improve product, quality, and service • Start training • Emphasize leadership

17. Deming’s Points - continued • Drive out fear • Break down barriers between departments • Stop haranguing workers • Support, help, improve • Remove barriers to pride in work • Institute a vigorous program of education and self-improvement • Put everybody in the company to work on the transformation

18. Concepts of TQM • Continuous improvement • Employee empowerment • Benchmarking • Just-in-time (JIT) • Taguchi concepts • Knowledge of tools

19. Continuous Improvement • Represents continual improvement of process & customer satisfaction • Involves all operations & work units • Other names • Kaizen (Japanese) • Zero-defects • Six sigma © 1984-1994 T/Maker Co.

20. Shewhart’s PDCA Model 4.Act 1.Plan Identify the improvement and make a plan Implement the plan 2.Do 3.Check Is the plan working Test the plan

21. Employee Empowerment • Getting employees involved in product & process improvements • 85% of quality problems are due to process & material • Techniques • Support workers • Let workers make decisions • Build teams & quality circles © 1995 Corel Corp.

22. Quality Circles • Group of 6-12 employees from same work area • Meet regularly to solve work-related problems • 4 hours/month • Facilitator trains & helps with meetings © 1995 Corel Corp.

23. Benchmarking Selecting best practices to use as a standard for performance • Determine what to benchmark • Form a benchmark team • Identify benchmarking partners • Collect and analyze benchmarking information • Take action to match or exceed the benchmark

24. Resolving Customer ComplaintsBest Practices • Make it easy for clients to complain • Respond quickly to complaints • Resolve complaints on the first contact • Use computers to manage complaints • Recruit the best for customer service jobs

25. Tools for TQM • Quality Function Deployment • House of Quality • Taguchi technique • Quality loss function • Pareto charts • Process charts • Cause-and-effect diagrams • Statistical process control

26. Six Sigma Quality • A philosophy and set of methods companies use to eliminate defects in their products and processes • Seeks to reduce variation in the processes that lead to product defects • The name, “six sigma” refers to the variation that exists within plus or minus three standard deviations of the process outputs

27. 標準差績效層級

29. 6 Sigma

30. 六標準差基本原則 • 徹底的顧客導向。 • COPQ與CTQ是6 Sigma的指導原則。 • 重視流程。 • 以6 Sigma品質水準為目標。 • 以平均值與變異來評價流程。 • 共同語言就是統計手法。 • DMAIC是6 Sigma活動的改革戰略。

32. Six Sigma Quality (Continued) • Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO)

33. Six Sigma Quality (Continued) So, for every one million letters delivered this city’s postal managers can expect to have 1,000 letters incorrectly sent to the wrong address. Example of Defects Per Million Opportunities (DPMO) calculation. Suppose we observe 200 letters delivered incorrectly to the wrong addresses in a small city during a single day when a total of 200,000 letters were delivered. What is the DPMO in this situation? Cost of Quality: What might that DPMO mean in terms of over-time employment to correct the errors?

34. Six Sigma Quality: DMAIC Cycle • Define, Measure, Analyze, Improve, and Control (DMAIC) • Developed by General Electric as a means of focusing effort on quality using a methodological approach • Overall focus of the methodology is to understand and achieve what the customer wants • DMAIC consists of five steps….

35. Six Sigma Quality: DMAIC Cycle (Continued) 1. Define (D) Customers and their priorities 2. Measure (M) Process and its performance 3. Analyze (A) Causes of defects 4. Improve (I) Remove causes of defects 5. Control (C) Maintain quality

36. Example to illustrate the process… • We are the maker of this cereal. Consumer Reports has just published an article that shows that we frequently have less than 15 ounces of cereal in a box. • What should we do?

37. Step 1 - Define • What is the critical-to-quality characteristic? • The CTQ (critical-to-quality) characteristic in this case is the weight of the cereal in the box.

38. Define 工具 • 【SIPOC圖】通常在DMAIC界定開始成形綜觀需改善流程所劃出，用以找出品質關鍵環節(Critical-To-Quality,CTQ)，SIPOC分別代表：Supplier：供應者，提供流程所需的人、流程或公司。Input：投入，提供之物料或資訊。Process：流程，內部流程步驟。Output：產出，交給顧客的產品、服務、資訊。Customer：顧客，流程的下個步驟或終端客戶。

40. 2 - Measure • How would we measure to evaluate the extent of the problem? • What are acceptable limits on this measure? • 找出CTQ(Critical to Quality) • 比較公司內部的實際情況與與CTQ中間所發生的缺陷

41. 2 – Measure (continued) • Let’s assume that the government says that we must be within ± 5 percent of the weight advertised on the box. • Upper Tolerance Limit = 16 + .05(16) = 16.8 ounces • Lower Tolerance Limit = 16 – .05(16) = 15.2 ounces

42. 2. Measure (continued) • We go out and buy 1,000 boxes of cereal and find that they weight an average of 15.875 ounces with a standard deviation of .529 ounces. • What percentage of boxes are outside the tolerance limits?

43. Process Mean = 15.875 Std. Dev. = .529 Upper Tolerance = 16.8 Lower Tolerance = 15.2 What percentage of boxes are defective (i.e. less than 15.2 oz)? Z = (x – Mean)/Std. Dev. = (15.2 – 15.875)/.529 = -1.276 NORMSDIST(Z) = NORMSDIST(-1.276) = .100978 Approximately, 10 percent of the boxes have less than 15.2 Ounces of cereal in them!

44. FMEA (Failure Mode and Effects Analysis)

45. Step 3 - Analyze - How can we improve the capability of our cereal box filling process? • Decrease Variation • Center Process • Increase Specifications

46. Step 4 – Improve – How good is good enough?Motorola’s “Six Sigma” • 6s minimum from process center to nearest spec

47. Motorola’s “Six Sigma” • Implies 2 ppB “bad” with no process shift • With 1.5s shift in either direction from center (process will move), implies 3.4 ppm “bad”.

48. Step 5 – Control • Statistical Process Control (SPC) • Use data from the actual process • Estimate distributions • Look at capability - is good quality possible • Statistically monitor the process over time

49. Analytical Tools for Six Sigma and Continuous Improvement: Flow Chart No, Continue… Material Received from Supplier Inspect Material for Defects Defects found? Yes Can be used to find quality problems Return to Supplier for Credit

50. Tools • Tools for generating ideas • Check sheet • Scatter diagram • Cause and effect diagram • Tools to organize data • Pareto charts • Process charts (Flow diagrams) • Tools for identifying problems • Histograms • Statistical process control chart