Quality Management

1. Quality Management Chapter 2

2. Today�s Objectives Definition of Quality Total Quality Management (�TQM�) Role of employees in Quality Improvement Strategic Implications of TQM Six Sigma ISO 9000

3. Quality Perspectives Are the perspectives the same? Should they be?

4. Quality: A Summary Perspective Consumer�s perspective dominated by PRICE Producer�s perspective dominated by COST Consumer�s view must reign supreme

5. Dimensions of Quality*: Products 1. Performance basic operating characteristics of a product; how well a car accelerates, brakes, handles, or its gas mileage 2. Features �extra� items added to basic features, such as leather interior 3. Reliability probability that a product will operate properly within an expected time frame; that is, the car will work without repair for about 100,000 miles *Adapted from: �What does quality really mean?�, Sloan Management Review 26(1;1984)25-43.

6. Dimensions of Quality: Products (cont.) 4. Conformance degree to which a product meets pre�established standards (e.g. gas economy, crash tests, etc.) 5. Durability how long product lasts before replacement 6. Serviceability ease of getting repairs, speed of repairs, courtesy and competence of repair person

7. Dimensions of Quality: Products (cont.) 7. Aesthetics how a product looks, feels, sounds, smells, or tastes 8. Safety assurance that customer will not suffer injury or harm from a product; an especially important consideration for automobiles 9. Perceptions subjective perceptions based on brand name, advertising, and the like

8. Dimensions of Quality: Service 1. Timeliness How long must a customer wait for service, and is it completed on time? 2. Completeness: Is everything customer asked for provided?

9. Dimensions of Quality: Service (cont.) 3. Courtesy: How are customers treated by employees? 4. Consistency Is the same level of service provided to each customer each time?

10. Dimensions of Quality: Service (cont.) 5. Accessibility and convenience How easy is it to obtain service? Does a service representative answer you calls quickly? 6. Accuracy Is the service performed right every time? Is your bank or credit card statement correct every month? 7. Responsiveness How well does the company react to unusual situations? How well is a telephone operator able to respond to a customer�s questions?

11. Another way of thinking about Quality* Three categories of satisfaction Basic or expected attributes Performance attributes Surprise and delight attributes

12. Customer Satisfaction as an attribute of Quality Categories of satisfaction: Cell phones Basic or expected attributes: widespread service good voice quality Performance attributes Video camera Speed of web browsing Surprise and delight attributes Integrated phone book that works with all phones GPS integrated with location-based applications

13. The Operations Frontier

14. The Operations Frontier

15. Achieving Quality: A Broader Perspective Consumer: a person that buys goods or services for direct use or ownership Customer: an entity that buys goods or services

16. Customers � Suppliers Review Using a circle for suppliers and a square for customers, draw the customer-supplier relationships for the following in-class examples

17. Situation analysis You purchase a new textbook online using your credit card. Identify all the supplier-customer relationships to which we could apply the customer orientation model.

18. Situation analysis We could continue to add details to supplier-customer relationships and ever expand the number. All must work properly for the book purchase to complete Your transaction benefits from improving each one using supplier-customer analysis

19. TQM Throughout the Organization Marketing, sales, R&D define what customer wants Engineering specifications, parts requirements, job design Purchasing acquire high quality parts & material Personnel hire qualified employees Management maintain smooth flow through processes Packing, storing, shipping prevent product damage Customer service install & provide instructionsMarketing, sales, R&D define what customer wants Engineering specifications, parts requirements, job design Purchasing acquire high quality parts & material Personnel hire qualified employees Management maintain smooth flow through processes Packing, storing, shipping prevent product damage Customer service install & provide instructions

20. Seven Quality Control Tools Pareto Analysis Flow Chart Control Chart Cause-and-Effect Diagram Check Sheet Histogram Scatter Diagram

21. Pareto Analysis Identify the possible sources of defects that would cause a product or service to fail Examine failed items to determine which source(s) caused it to fail Accumulate a count of each to chart a frequency distribution

22. Pareto Analysis

23. Pareto Chart 23

24. American Customer Satisfaction Index Measures customer satisfaction Established in 1994 Web site: http://www.theacsi.org/

25. Six Sigma A process for developing and delivering near perfect products and services pioneered by Motorola in 1986 Measure of how much a process deviates from perfection: 3.4 defects per million

26. ISO 9000 A set of procedures and policies for international quality certification of suppliers ISO 9000:2000 Quality Management Systems�Fundamentals and Vocabulary defines fundamental terms and definitions used in ISO 9000 family ISO 9001:2000 Quality Management Systems�Requirements standard to assess ability to achieve customer satisfaction ISO 9004:2000 Quality Management Systems�Guidelines for Performance Improvements guidance to a company for continual improvement of its quality-management system