Topic 3. TOTAL QUALITY MANAGEMENT

1. Topic 3. TOTAL QUALITY MANAGEMENT

2. I. Introduction -- What is quality? • “The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs” -- ASQC

3. Quality Criteria • User-based: • Fitness of intended use • Quality is determined by what a customer wants • Product-based: • A function of a specific, measurable variable and that differences in quality reflect differences in quantity of some product attribute, such as stitches per inch on a shirt, number of cylinders in a engine

4. Quality Criteria (continuous) • Manufacturing-based: • The desirable outcome of engineering and manufacturing practice, or conformance to specification,

5. Why quality is important? • Costs and market share • Internal failure, external failure, appraisal, prevention costs • Company’s reputation • Product liability • International implications

6. Quality Management History • Up to 1920: Fredrick W. Taylor --- Concept of Scientific Management • 1920-1940: Inspection QC period • Pioneers: Watter Shewart, Harold Dodge, George Edwards, etc. • 1924 - Statistical process control charts • 1930 - Tables for acceptance sampling • 1940’s - Statistical sampling techniques

7. Quality Management History • 1940 – 1960 Statistical QC period • ASQC (American Society for Quality Control) • Sampling inspection • 1950’s - Quality assurance/TQC • Deming (1950) and Juran (1954) introduced statistical quality control to Japanese workers. Top Japanese managers were convinced that quality improvement would open new world market and necessary for the survival of their nation

8. Quality Management History • 1950 – 1970, Japanese quality revolution • 1950, Deming Award, Japanese National Highest Quality Award • Many businesses in U.S. lost significant market share

9. Quality Management History • 1987 Business Week “Quality, remember it? American manufacturing has slumped a long way from the glory days of the 1950s and 60s when ‘Made in U.S.A.’ proudly stood for the best that industry could turn out…While the Japanese were developing remarkable higher standards for a whole host of products, from consumer electronics to cars and machines tools, many U.S. managers were smugly dozing at the switch. Now, aside from aerospace and agriculture, there are few markets left where the U.S. carries its own weight in international trade. For American industry, the message is simple. Get better or get beat.

10. Quality Management History • 1980, NBC aired “If Japan can, Why can’t we?” -- introduced Deming • 1980s: Quality Revolution in America • 1984 – U.S. government designed October as national quality month • 1987 – Congress established the Malcolm Baldrige National Quality Award

11. The Quality Gurus • Walter Shewhart • “Father of statistical quality control” • W. Edwards Deming (14 points) • Joseph M. Juran (Pareto) • Armand Feigenbaum (TQM) • Philip B. Crosby (Zero Defects) • Kaoru Ishikawa (Fishbone Diagram) • Genichi Taguchi (Taguchi Technique)

12. Key Contributors to Quality Management

13. Quality Awards • Malcolm Baldrige National Quality Award (U.S.) • European Quality Award • The Deming Prize (Japan)

14. Malcolm Baldrige National Quality Award • 1.0 Leadership (125 points) • 2.0 Strategic Planning (85 points) • 3.0 Customer and Market Focus (85 points) • 4.0 Information and Analysis (85 points) • 5.0 Human Resource Focus (85 points) • 6.0 Process Management (85 points) • 7.0 Business Results (450 points)

15. Benefits of Baldrige Competition • Financial success • Winners share their knowledge • The process motivates employees • The process provides a well-designed quality system • The process requires obtaining data • The process provides feedback

16. European Quality Award • Prizes intended to identify role models • Leadership • Customer focus • Corporate social responsibility • People development and involvement • Results orientation

17. The Deming Prize • Honoring W. Edwards Deming • Japan’s highly coveted award • Main focus on statistical quality control

18. Quality Certification • ISO 9000 • Set of international standards on quality management and quality assurance, critical to international business • ISO 14000 • A set of international standards for assessing a company’s environmental performance

19. ISO 9000 Standards Requirements • System requirements • Management • Resource • Realization • Remedial

20. ISO 9000 Quality Management Principles • Customer focus • Leadership • People involvement • Process approach • A systems approach to management • Continual improvement • Factual approach to decision making • Mutually beneficial supplier relationships

21. ISO 14000 • ISO 14000 - A set of international standards for assessing a company’s environmental performance • Standards in three major areas • Management systems • Operations • Environmental systems

22. ISO 14000 • Management systems • Systems development and integration of environmental responsibilities into business planning • Operations • Consumption of natural resources and energy • Environmental systems • Measuring, assessing and managing emissions, effluents, and other waste

23. Six Sigma Six sigma: A business process for improvingquality, reducing costs, and increasingcustomer satisfaction.

24. Six Sigma • Statistically • Having no more than 3.4 defects per million • Conceptually • Program designed to reduce defects • Requires the use of certain tools and techniques

25. Six Sigma Programs • Six Sigma programs • Improve quality • Save time • Cut costs • Employed in • Design • Production • Service • Inventory management • Delivery

26. Six Sigma Management • Providing strong leadership • Defining performance metrics • Selecting projects likely to succeed • Selecting and training appropriate people

27. Six Sigma Technical • Improving process performance • Reducing variation • Utilizing statistical models • Designing a structured improvement strategy

28. Six Sigma Team • Top management • Program champions • Master “black belts” • “Black belts” • “Green belts”

29. Six Sigma Process • Define • Measure • Analyze • Improve • Control DMAIC

30. Two parts of quality management • Quality Control: • Actions directly under the management control to improve quality (prevent problem to happen) • Quality Assurance: • Actions outsider of management control to assure quality (problem has already there, you just assure that it will not go to customers)

31. Traditional concept of quality management • Responsibility of quality control dept. only • Rely on the inspection process • Satisfied with meeting specifications

32. Total Quality Management A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

33. Elements of TQM • Continual improvement • Competitive benchmarking • Employee empowerment • Team approach • Decisions based on facts • Knowledge of tools • Supplier quality • Champion • Quality at the source • Suppliers

34. The TQM Approach • Find out what the customer wants • Design a product or service that meets or exceeds customer wants • Design processes that facilitates doing the job right the first time • Keep track of results • Extend these concepts to suppliers

35. Continuous Improvement • Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs. • Kaizen: Japanese word for continuous improvement.

36. Quality at the Source • The philosophy of making each worker responsible for the quality of his or her work.

37. Obstacles to Implementing TQM • Lack of: • Company-wide definition of quality • Strategic plan for change • Customer focus • Real employee empowerment • Strong motivation • Time to devote to quality initiatives • Leadership

38. Obstacles to Implementing TQM • Poor inter-organizational communication • View of quality as a “quick fix” • Emphasis on short-term financial results • Internal political and “turf” wars

39. Deming's 14 points • 1. create consistency of • purpose • 2. lead to promote change • 3. quality through design instead of inspection • 4. reduce # of suppliers, don’t buy on price alone • 5. continuously improve product, quality, and service

40. Deming's 14 points • 6. institute modern training methods • 7. emphasize leadership • 8. drive out fear • 9. break down barriers between departments • 10. eliminate numerical goals, slogans, posters for the work force

41. Deming's 14 points • 11. using statistical methods to improve quality and productivity • 12. remove barriers to pride of workmanship • 13. institute a program for retraining people in new skills • 14. put everybody to work on the transformation

42. Tools For TQM • Quality Function Deployment • Translate customer desire to product and process design

43. Correlation: Strong positive X Positive X X Negative X X X Strong negative * Engineering Characteristics Competitive evaluation Check force on level ground Energy needed to open door Energy needed to close door Accoust. Trans. Window X = Us Door seal resistance Water resistance A = Comp. A Importance to Cust. B = Comp. B Customer Requirements (5 is best) 1 2 3 4 5 AB X Easy to close 7 X AB Stays open on a hill 5 Easy to open 3 XAB A X B Doesn’t leak in rain 3 10 6 6 9 2 3 No road noise 2 X A B Importance weighting Relationships: Strong = 9 Medium = 3 Target values Reduce energy level to 7.5 ft/lb Reduce energy to 7.5 ft/lb. Small = 1 Reduce force to 9 lb. Maintain current level Maintain current level Maintain current level 5 BA BA B B BXA X Technical evaluation (5 is best) B 4 X A X A 3 A X 2 X 1

44. Tools For TQM • Taguchi Technique • Quality robustness • Quality loss function • Target specification

45. High High Incremental Cost of Variability Incremental Cost of Variability Zero Zero Lower Spec Target Spec Upper Spec Lower Spec Target Spec Upper Spec Traditional View Taguchi’s View Tools For TQM Taguchi Quality loss function Traditional view is that quality within the LS and US is good and that the cost of quality outside this range is constant, where Taguchi views costs as increasing as variability increases, so seek to achieve zero defects and that will truly minimize quality costs.

46. Monday • Billing Errors • Wrong Account • Wrong Amount • A/R Errors • Wrong Account • Wrong Amount Tools For TQM • Check Sheet

47. Diameter Time (Hours) Tools For TQM • Run Chart

48. Tools For TQM • Process Flow Charts • Standard procedure to decompose and describe a process

49. FLOW PROCESS CHART Job Requisition of petty cash ANALYST D. Kolb PAGE 1 of 2 Operation Inspection Movement Storage Delay Details of Method Requisition made by department head Put in “pick-up” basket To accounting department Account and signature verified Amount approved by treasurer Amount counted by cashier Amount recorded by bookkeeper Petty cash sealed in envelope Petty cash carried to department Petty cash checked against requisition Receipt signed Petty cash stored in safety box

50. Methods Materials Cause Cause Cause Cause Cause Cause Cause Cause Cause Cause Cause Cause Effect Environment People Equipment Tools For TQM • Cause-and-Effect Diagram • Tool to systematically identify quality problems