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Operations Management. Chapter 6 – Managing Quality. PowerPoint presentation to accompany Heizer/Render Principles of Operations Management, 6e Operations Management, 8e . © 2006 Prentice Hall, Inc. Sales Gains. Improved response Higher Prices Improved reputation. Improved Quality.

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slide1
Operations Management

Chapter 6 – Managing Quality

PowerPoint presentation to accompany

Heizer/Render

Principles of Operations Management, 6e

Operations Management, 8e

© 2006 Prentice Hall, Inc.

ways quality improves productivity
Sales Gains
  • Improved response
  • Higher Prices
  • Improved reputation

Improved Quality

Increased Profits

Reduced Costs

  • Increased productivity
  • Lower rework and scrap costs
  • Lower warranty costs
Ways Quality Improves Productivity

Figure 6.1

defining quality
Defining Quality

The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs

American Society for Quality

malcom baldrige national quality award
Malcom Baldrige National Quality Award
  • Established in 1988 by the U.S. government
  • Designed to promote TQM practices
  • http://www.quality.nist.gov/
international quality standards
International Quality Standards
  • To do business globally, being listed on an ISO directory is crucial
  • ISO 9000
    • Organizations must go through a 9 to 18 month process involving documenting procedures, on-site assessment, and ongoing product/service audits
  • ISO 14000 series
    • An environmental management standard which focuses on pollution prevention and ecological impact
slide6
TQM

Encompasses entire organization, from supplier to customer

Stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer

seven concepts of tqm
Seven Concepts of TQM
  • Continuous improvement
  • Six Sigma
  • Employee empowerment
  • Benchmarking
  • Just-in-time (JIT)
  • Taguchi concepts
  • Knowledge of TQM tools
continuous improvement
Continuous Improvement
  • Represents continual improvement of all processes
  • Involves all operations and work centers including suppliers and customers
    • People, Equipment, Materials, Procedures
six sigma
Six Sigma
  • Originally developed by Motorola, Six Sigma refers to an extremely high measure of process capability
  • A Six Sigma capable process will return no more than 3.4 defects per million operations (DPMO)
  • Highly structured approach to process improvement
six sigma implementation
Six Sigma Implementation
  • Emphasize DPMO as a standard metric
  • Provide extensive training
  • Focus on corporate sponsor support (Champions)
  • Create qualified process improvement experts (Black Belts, Green Belts, etc.)
  • Set stretch objectives

This cannot be accomplished without a major commitment from top level management

employee empowerment
Employee Empowerment
  • Getting employees involved in product and process improvements
    • 85% of quality problems are due to process and material
  • Techniques
    • Build communication networks that include employees
    • Develop open, supportive supervisors
    • Move responsibility to employees
    • Build a high-morale organization
    • Create formal team structures
quality circles
Quality Circles
  • Group of employees who meet regularly to solve problems
  • Trained in planning, problem solving, and statistical methods
  • Often led by a facilitator
  • Very effective when done properly
benchmarking
Benchmarking

Selecting best practices to use as a standard for performance

Use internal benchmarking if you’re big enough

  • Determine what to benchmark
  • Form a benchmark team
  • Identify benchmarking partners
  • Collect and analyze benchmarking information
  • Take action to match or exceed the benchmark
best practices for resolving customer complaints
Best Practices for Resolving Customer Complaints
  • Make it easy for clients to complain
  • Respond quickly to complaints
  • Resolve complaints on first contact
  • Use computers to manage complaints
  • Recruit the best for customer service jobs
just in time jit
Just-in-Time (JIT)
  • ‘Pull’ system of production scheduling including supply management
    • Production only when signaled
  • Allows reduced inventory levels
    • Inventory costs money and hides process and material problems
  • Encourages improved process and product quality
taguchi concepts
Taguchi Concepts
  • Experimental design methods to improve product and process design
  • Uses Robust Design method
    • Plan for the worst conditions and design quality around the worst conditions
    • Example: Grocery Stores and coming Hurricane (design store to handle the traffic associated with this worst condition)
tools of tqm
Tools of TQM
  • Tools for Generating Ideas
    • Check sheets
    • Scatter diagrams
    • Cause and effect diagrams
  • Tools to Organize the Data
    • Pareto charts
    • Flow charts
  • Tools for Identifying Problems
    • Histogram
    • Statistical process control chart
seven tools for tqm
Seven Tools for TQM

(a) Check Sheet: An organized method of recording data

/

/

/ / /// /

// ///

// ////

///

//

/

Hour

Defect 1 2 3 4 5 6 7 8

A

B

C

/

/

//

/

Figure 6.5

seven tools for tqm19
Productivity

Absenteeism

Seven Tools for TQM

(b) Scatter Diagram: A graph of the value of one variable vs. another variable

Figure 6.5

seven tools for tqm20
Cause

Materials

Methods

Effect

Manpower

Machinery

Seven Tools for TQM

(c) Cause and Effect Diagram: A tool that identifies process elements (causes) that might effect an outcome

Figure 6.5

cause and effect diagrams
Machinery

Material

Insufficient clean pillows

& blankets on-board

Deicing equipment not available

Inadequate

supply of magazines

Mechanical delay on plane

Broken luggage carousel

Inadequate special meals on-board

Dissatisfied Airline Customer

Understaffed crew

Overbooking policies

Understaffed ticket counters

Bumping policies

Poor check-in policies

Poorly trained attendants

Mistagged bags

Manpower

Methods

Cause-and-Effect Diagrams

Figure 6.6

seven tools for tqm22
Percent

Frequency

A B C D E

Seven Tools for TQM

(d) Pareto Charts: A graph to identify and plot problems or defects in descending order of frequency

Figure 6.5

pareto charts
Data for October

70 –

60 –

50 –

40 –

30 –

20 –

10 –

0 –

– 100

– 93

– 88

– 72

54

Frequency (number)

Number of occurrences

Cumulative percent

12

4

3

2

Room svc Check-in Pool hours Minibar Misc.

72% 16% 5% 4% 3%

Causes and percent

Pareto Charts
seven tools for tqm24
Seven Tools for TQM

(e) Flow Charts (Process Diagrams): A chart that describes the steps in a process

Figure 6.5

flow charts
Sealing Weighing Labeling

Quick freeze storage

(60 Mins)

Packing station

Storage

(4 to 6 hrs)

Shipping dock

Flow Charts

Packing and shipping process

seven tools for tqm26
Distribution

Frequency

Repair time (minutes)

Seven Tools for TQM

(f) Histogram: A distribution showing the frequency of occurrence of a variable

Figure 6.5

seven tools for tqm27
Upper control limit

Target value

Lower control limit

Time

Seven Tools for TQM

(g) Statistical Process Control Chart: A chart with time on the horizontal axis to plot values of a statistic

Figure 6.5

statistical process control spc
Statistical Process Control (SPC)
  • Uses statistics and control charts to tell when to take corrective action
  • Drives process improvement
inspection
Inspection
  • Involves examining items to see if an item is good or defective
  • Detect a defective product
    • Does not correct deficiencies in process or product
    • It is expensive
  • Issues
    • When to inspect
    • Where in process to inspect
tqm in services
TQM In Services
  • Service quality is more difficult to measure than the quality of goods
  • Service quality perceptions depend on
    • Intangible differences between products
    • Intangible expectations customers have of those products
determinants of service quality
Determinants of Service Quality
  • Reliability
  • Responsiveness
  • Competence
  • Access
  • Courtesy
  • Communication
  • Credibility
  • Security
  • Understanding/ knowing the customer
  • Tangibles
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