Total Quality Management

1. Total Quality Management Chapter 16

2. What is Quality? Quality means user satisfaction: that goods or services satisfy the needs and expectations of the user.

3. Quality and Product Policy • Established by management • Product planning • wants and needs of the marketplace • level of product performance • price to be charged • expected sales volume

4. Quality and Product Design • General specifications set by the marketplace • expected perfomance, appearance, price, volume • Product designers • materials to be used, dimensions, tolerances, product capability, service requirements

5. Product Development Cycle

6. Quality and Manufacturing • Strive for excellence in products • All products must be within specification • The less the variation (from the nominal) the better • Tolerance • the amount of variation allowed from the desired value

7. Quality and Use • Performance • reliability, durability, maintainability • Features • Conformance to specification • Warranty • Service • Aesthetics • Perceived quality • Price

8. Total Quality Management (TQM) “TQM is based on the participation of all members of an organization in improving processes, goods, services, and the culture in which the work.” • APICS 11th Edition Dictionary

9. TQM - Basic Concepts 1. A committed and involved management 2. Focus on the customer 3. Involvement of the total workforce 4. Continuous process improvement 5. Supplier partnering 6. Performance measures

10. Management Commitment • Vision Statement • what the organization will be in 5 years • Mission statement • who we are, who are our customers, what we do, how we do it • Quality policy • how goods and services are provided • Strategic plan • includes TQM objectives

11. Customer Focus X-plicit • I want a car that will comfortably carry 5 passengers and some gear X-pected • we arrived safely at our campsite X-citing • there’s a 110 volt outlet in the back!

12. Customer Focus • Meeting and exceeding customer expectations • External customers • people we sell our goods to • Internal customers • people or departments who receive output from another person or department • treat them like a customer

13. Customer Requirements 1. High quality 2. Flexibility to change in volume, etc. 3. High service level 4. Short lead times 5. Consistency in meeting targets 6. Low cost Customers expect improvements

14. Employee Involvement • TQM is everyone’s responsibility • Employees are expected to do their jobs and to work at improving their jobs (and) other’s jobs

15. Commitment to TQM 1. Training • their own job skills • cross trained on other jobs • tools of continuous improvement 2. Organization • to keep close contact with customers 3. Local ownership of processes • empowerment

16. Empowerment A condition whereby employees have the authority to make decisions and take actions in their work areas without approval. For example, a customer service representative can send out a replacement product if a customer calls with a problem. • APICs 11th Edition Dictionary

17. TQM - Teams • Move beyond the contribution of individuals • Sum of the total effort is increased • Requires skill and training • Fundamental part of TQM

18. Supplier Partnerships • Used in JIT and TQM • Treat the supplier as a partner and not as an adversary • quality improvements • mutual sharing of savings • team approach

19. Performance Measures “That what gets measured is that what gets done” - Anonymous • Decide which processes need improvement • Evaluate alternatives • Compare actual to target • Evaluate employees • Show trends

20. Measurements • Need to give useful feedback • Quantity of good parts per unit time • Cost • On time delivery • Quality • function • aesthetics • accuracy (defects/tolerance)

21. Measurements • Simple, understandable, relevant and visible to the user, preferably developed by the user, designed to promote improvement, few in number

22. Customer number of complaints on-time delivery Production inventory turns, scrap, cost per unit, time to delivery Suppliers on-time delivery rating quality performance billing accuracy Sales expense to revenue new customers sales per square foot Measurements

23. Quality Cost Concepts • Cost of failure to control quality • failure • Cost of controlling quality • prevention • appraisal

24. Internal failure costs scrap rework spoilage these costs diminish with improved quality External failure costs After the customer receives the goods Most costly warranty costs field service other costs to satisfy the customer decrese with improved quality Costs of Failure

25. Prevention costs training statistical process control maintenance quality planning Appraisal costs inspection quality audits testing calibration Costs of Controlling Quality

26. Impact of Quality Improvements

27. Variation • All things vary, the question is how much variablity is acceptable

28. Chance Variation 1. People - poorly trained vs skilled 2. Machine - well maintained? 3. Material - should be consistent 4. Method - often by different operators 5. Environment - temperature, humidity 6. Measurement - poor adjustments

29. Chance Variation There is no way to alter chance variation except to change the process. If the process produces too many defects, then it must be changed.

30. Assignable Variation • Where variation can be related to a given action • tool wear, movement • operator error • changes in the process

31. Statistical Process Control (SPC) • Attempts to find the assignable causes (so they can be eliminated) • Helps select processes that are capable of producing quality products • Monitors process to be sure it remains capable of producing quality products

32. Patterns of Variability • A histogram of a number of readings gives a predictable pattern • Normal curve exists in all natural processes • If a process is studied and detects an odd shape, something is causing the change (assignable cause)

33. Patterns of Variability • Shape • ‘bell curve’ • symetrical (even on both sides) • Center • computed as the average • represented by the Greek letter μ‘mu’ • Spread • measured and represented by the Greek letter σ ‘sigma’

34. Normal Distribution

35. -3σ -2σ -1σ μ +1σ +2σ +3σ 68.3% 95.4% 99.7% Areas Under the Normal Curve

36. μ = 1.000 σ = 0.0016 0.9952 0.9968 0.9984 1.000 1.0016 1.0032 1.0048 68.3% 95.4% 99.7% Variation - Example

37. Tolerance “Allowable departure from a nominal value established by design engineers that is deemed acceptable for the functioning of the good or service over its life cycle.” • APICS 11th Edition Dictionary • Nominal value • desired value

38. Process Capability “Refers to the ability of the process to produce parts that conform to (engineering) specifications. Process capability relates to the inherent variability of a process …”) • APICS 11th Edition Dictionary

39. Process Capability • Compares the 6 sigma spread of a process with the specification limits • LSL - lower specification limit • USL - upper specification limit • specification doorway = USL - LSL • The 6 sigma spread of the process should be smaller than the specification doorway

40. x Process Capability LSL USL Specification Doorway +3σ -3σ 6 σ Total Process Spread

41. Process Capability

42. Capable?

43. Process Capability

44. Process Capability • The process spread is not related to the product specification tolerance • A process must be selected that can meet the specifications • or defects will be produced • Processes can produce defects in one of two ways, by having too big a spread (σ) or by a shift in the average (μ)

45. Process Capability - Example Problem In the previous example the process had a standard deviation of 0.0016” and a mean of 1”. If the specification called for a diameter of 1” +/- .005”: a. Approximately what percent of the shafts will be within tolerance? b. If the tolerance were changed to 1” +/- .002”, approximately what percent of the shafts will be within tolerance?

46. USL 1.005 LSL 0.995 μ = 1.000 σ = 0.0016 0.9952 0.9968 0.9984 1.000 1.0016 1.0032 1.0048 68.3% 95.4% 99.7% Process Capability - Example Problem a. Approximately 99.7% of the shafts will be in tolerance

47. USL 1.002 LSL 0.998 μ = 1.000 σ = 0.0016 0.9952 0.9968 0.9984 1.000 1.0016 1.0032 1.0048 68.3% 95.4% 99.7% Process Capability - Example Problem b. Approximately 68.3% of the shafts will be in tolerance

48. Process Capability Index Cp Cp = USL - LSL 6 σ • If the Cp is greater than one, then the process is capable of producing 99.7% of parts within tolerance • Many companies use a Cp of 1.33 or 2 since processes may shift • Note: Cp assumes the process is centered

49. Process Capability Index Cp

50. Cp - Example Problem The specifications for the weight of a chemical in a compound is 10 +/- 0.05 grams. If the standard deviation of the weighing scales is 0.02 grams, is the process considered capable? Cp = 10.05 - 9.95 6 x 0.02 = 0.83 Since 0.83 is less than one, the process is not capable.