Quality Management. Define quality. Identify the Costs of Quality. Describe the principles of Total Quality Management. Warm-up. In your opinion, which company produces the highest quality jeans? What makes these clothes “high quality?”. Defining Product Quality.
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Quality Management Define quality. Identify the Costs of Quality. Describe the principles of Total Quality Management
Warm-up In your opinion, which company produces the highest quality jeans? What makes these clothes “high quality?”
Defining Product Quality • Conforms to specifications – works as designed • Measurable, but not tied to customer’s idea of quality • Fitness for use - product does what its supposed to do • Meets needs of targeted market segments. • Value for Price Paid – product’s usefulness is tied to the price paid by customer • Assumes quality is price sensitive
Defining Product Quality • Support Services – support provided after customer’s purchase • Business’s product and its collection of people, processes, organization • Brand – quality expectation to marketer • Environment, staff, brand, etc.
Choose a Product & Define Quality Conforms to specifications Fitness for use Value for Price Support Services Brand
Quality for Manufacturing vs. Service Organizations Manufacturing Service • Tangible product features • Conformance • Performance • Reliability • Features • Durability • Serviceability • Customer’s experience • Responsiveness • Courtesy & friendliness • Promptness • Atmosphere • Time • Consistency
The Cost of Quality Quality Control Quality Failure • Achieving high quality • Prevention – preventing defects (planning, product & process design, employee training) • Appraisal - uncovering defects ( labor & equipment for inspections and testing) • Consequences of poor quality • Internal – discovered before product reaches customer (rework, scrap costs) • External – discovered by customer • Complaints • Returns & Repairs • Warranty Claims • Recalls • Litigation • Lost sales & customers
Cost of Quality Problems Cost of Problem Product Design Product Production Customer Site Location of Defect
Importance of Quality • Competition based on quality • Customer first meet or exceed expectations • Proactive rather than Reactive • Quality built into the product & process design
Total Quality Management (TQM) • Focus = identify causes of quality problems & correct at source • Principles; • Customer Focus: meet & exceed their expectations • Continuous Improvement: never ending improvement (small steps vs. large) • Employee Empowerment:everyone involved in process& decision making • Use of Quality Tools = e.g. Six Sigma. • Product Design: meeting & exceeding customer expectations • Process Management = quality is built into process • Manage Supplier Quality: standard’s extend to suppliers
How to Implement TQM? • Create genuine “quality culture” • Down : Executive (“C” level) management Front-line workers Consumer • Up: Reach into supply chain • Define process to identify customer’s definition of quality • Ways to listen to customers • Collecting & analyzing customer feedback • Prioritizing customer needs • Set target key performance indicators (KPI’s) • Implement quality control • Measure performance against KPI’s. • Introduce improvements
Lean Production& TQM • Reducing production costs & improving quality • Eliminate “Waste”
Summary • Integral part of business activity • Crucial for maintaining customer loyalty • Vital in determining profitability & success • Organizational impact • Requires flatter & flexible structure • Empower all employees • Involves entire organization in a continuous process