Chapter 5, Part 1

1. Chapter 5, Part 1 The TQM Philosophy

2. What is Quality? • What do we mean by quality? • Newer, more widely accepted definition of quality is the ability of a product or service to consistently meet or exceed the customer’s expectations. • This definition of quality is “customer driven.”

3. What is Quality? • Customer driven quality starts with having the customer determine the characteristics of a product or service that are important to them. • What are important characteristics of a • Cake?

4. What is Quality? • Technical support? • TV set? • Laptop?

5. What is Quality? • These characteristics are called quality characteristics. • To insure that they are set at the right levels, we need to quantify them. • We quantify them by having the customer impose acceptable numerical ranges or limits on their values:

6. What is Quality? • How sweet should a cake be? • It should have between ¼ and ¾ cup of sugar. • How moist can it be? • Moisture content can be between 13 and 15 grams. • The diameter of a steering wheel can be between 1.5 and 2.5 inches. • The weight of a laptop should be between 3.5 and 4.5 lbs.

7. What is Quality? • The limits on the product’s quality characteristics are called the product’s specification limits, or “specs.” • Some quality authorities define quality as producing units of a product that fall anywhere within the product’s spec limits. • These units are called conforming (to specs) or non-defective units. • Units that fall outside the specs limits are called nonconforming or defective units.

8. What is Quality? • Thus, according to these authorities, quality is the ability of a product to meet the spec limits. • Other authorities disagree and have a different definition of quality. • Later.

9. Prevent defects from being produced Prevent defects before production Prevent defects from being shipped Statistical Process control Design of Experiments Mass or 100% Inspection Proactive- Fix the process Reactive- Fix the Product Proactive- Design quality into product Evolution of Defect Prevention

10. Six Sigma Motorola, TI, GE Quality Dept. Evolution of Quality Organizations Quality is everyone’s responsibility Action Plan for TQM Quality is responsibly of the Quality Dept. TQM Quality at the Source Quality at the Source No ownership of quality outside Quality Dept. Philosophy of making each worker responsible for his or her own work.

11. Features of TQM – Table 5-3

12. Features of TQM – Table 5-3

13. Old vs. New Views on Quality Quality pays in form of lower cost: • Higher quality • Fewer defective units • Less rework • Less Scrap • Lower cost • Higher profit

14. Old vs. New Views on Quality Higher quality increases productivity • Higher quality, • Fewer defective units, • Don’t have to use same inputs twice to make a good unit of product • Greater productivity

15. Old vs. New Views on Quality Quality is achieved by preventing defects, not detecting them. “Can’t inspect quality into a product.” Develop LT partnerships Buy based on quality, Not price

16. Old vs. New Views on Quality Minimize inventory- Just-in-Time (JIT) Have one LT partner supplier for each part Quality is everyone’s Responsibility - TQM

17. Old vs. New Views on Quality Quality is achieved by operating on target-- Taguchi. ZD is “goal post” thinking.

18. Specification Limits • Products can have • Upper and lower spec limits • Lower only – more later! • Upper only– more later! • LSL = Lower Specification Limit • USL = Upper Specification Limit

19. Zero Defects – Goal Post Thinking Defective units Defective units Good units LSL=.35 USL=.45 QC=Tread depth, inches

20. Taguchi – Operate on Target • Being on target is more important than being within the spec limits. • Target value is the value of the quality characteristic, X, of a product or service that maximizes customer satisfaction. • Any deviation from the target value imposes an economic loss on the customer, even if all product is within spec!

21. Taguchi – Operate on Target • Losses increase with increasing deviations from target. • Thus, Taguchi’s definition of quality is defined in terms of the losses imposed on the customer. • The smaller the loss, the greater the quality. • Zero losses occur when product or service is provided ???

22. Output That Is Always On Target Units produced LSL USL Target X Amount of Toner Variability = 0 Loss = 0

23. Process That is Consistently On Target USL LSL Amount of Toner Target

24. Process That is Haphazardly On Target LSL USL Target Amount of Toner

25. Process That is Consistently Off Target USL LSL Amount of Toner Target

26. Target vs. Variability Haphazardly on target Haphazardly off target Consistently on target Consistently off target . Robust quality

27. Question • Is it better to have a process haphazardly on target, or a process that if consistently off target? • Before you answer, look at figure on next slide.

28. Who Would You Prefer to Go Hunting With? Jane Sam

29. Loss Function – Process on Target $ 0 LSL Target USL X

30. Loss Function – Process on Target $ k =2 k =8 0 LSL Target USL X

31. How Do We Compute k? X = quality characteristic T = Target value a = customer’s tolerance = half width of spec limits a = (USL – LSL)/2 LSL = lower specification limit = T - a USL = upper specification limit = T + a R = cost of repairing a unit that isat specification limits (given)

32. Loss $ R T=target T - a T + a X 0 Loss Function – Process on Target

33. How Do We Compute k? What is the loss when x = T + a?

34. Affect of k on the Loss Function • As R, cost of repair, increases, it becomes more costly to repair units prior to shipping. • This will increase k. • Increases in k increase the losses due to deviations from target.

35. Affect of k on the Loss Function • As a increases, k decreases, and so do the losses at all values of X. • An increase in a means that the customer’s tolerances are wider, meaning that the acceptable range of product performance has increased. • The wider the range of acceptable performance, the lower the losses due to deviations from target.

36. Example Given T =10, a= 3, R= $20, what is the loss function?

37. Solution

38. Graphical Display of Solution $ R= 20 13 T=10 7 X 0

39. Computing the Losses

40. Defective units Defective units Good units 0 LSL USL Target Find the Loss Function for the Zero Defects Model

41. Solution

42. Expected Loss-Process on Target Process Distribution $ Loss 0 Target= Mean X

43. Expected Loss – Process on Target E(Loss) = Sum of ($Loss x Probability of Loss) σ2 = Variance of X

44. Expected Loss – Process on Target 1. If the variance = 10.2, the repair cost = $32, and a = 4, what is the expected loss? k = R/a2 = 32/42 = 2 E(Loss) = kσ2 =2(10.2) = 20.4 2. Explain meaning. The company can expect to impose on the customer a loss of $20.40 per unit shipped.

45. $ 0 Target= Mean Expected Loss – Process on Target Process on Target, Little Variation,Small Expected Loss

46. Expected Loss – Process on Target $ 0 Target= Mean Process on Target, High Variation,High Expected Loss

47. Taguchi’s Quality Characteristics • Bigger is better • Target value =? • Smaller is better • Target value=? • Nominal is best (NIB) • Target=(LSL+USL)/2

48. Provide an Example of Each • Bigger-is-better • Smaller-is-better • Nominal-is-best

49. Repair or Ship? • It may be more better for a company to ship some off target units without repairing them to target, depending on how far off target they are. • For other off target units, it may be better to repair them prior to shipping.

50. L $ R 0 T=target T - a T + a Repair Ship as is Repair Taguchi’s “Repair or Ship” Rule