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Chapter 14. Quality Management. Sales Order Management. Aggregate Planning. Master Scheduling. Production Activity Control. Quality Control. Distribution Mngt. Business Processes. © 2001 Victor E. Sower, Ph.D., C.Q.E. What Is Quality?.

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chapter 14

Chapter 14

Quality Management

business processes

Sales Order

Management

Aggregate

Planning

Master

Scheduling

Production Activity

Control

Quality

Control

Distribution

Mngt.

Business Processes

© 2001 Victor E. Sower, Ph.D., C.Q.E.

what is quality
What Is Quality?
  • “The degree of excellence of a thing” (Webster’s Dictionary)
  • “The totality of features and characteristics that satisfy needs” ( ASQ)
  • Fitness for use (Juran)

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 2

dimensions of product quality garvin
Dimensions Of Product Quality (Garvin)

1. Performance

  • basic operating characteristics

2. Features

  • “extra” items added to basic features

3. Reliability

  • probability product will operate over time

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 3

slide5
4. Conformance
  • meeting pre-established standards

5. Durability

  • life span before replacement

6. Serviceability

  • ease of getting repairs, speed & competence of repairs

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 4

slide6
7. Aesthetics
  • look, feel, sound, smell or taste

8. Safety

  • freedom from injury or harm

9. Other perceptions

  • subjective perceptions based on brand name, advertising, etc

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 5

service quality
Service Quality

1. Time & Timeliness

  • customer waiting time, completed on time

2. Completeness

  • customer gets all they asked for

3. Courtesy

  • treatment by employees

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 6

slide8
4. Consistency
  • same level of service for all customers

5. Accessibility & Convenience

  • ease of obtaining service

6. Accuracy

  • performed right every time

7. Responsiveness

  • reactions to unusual situations

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 7

quality of conformance
Quality Of Conformance
  • Ensuring product or service produced according to design
  • Depends on
    • design of production process
    • performance of machinery
    • materials
    • training

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 8

slide10

The Meaning of Quality

Producer’s Perspective

Consumer’s Perspective

Quality of Conformance

Quality of Design

Production

Marketing

  • Quality characteristics
  • Price
  • Conformance to
  • specifications
  • Cost

Fitness for

Consumer Use

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 9

quality philosophers
Quality Philosophers
  • Walter Shewhart
  • W. Edwards Deming
  • Joseph Juran
  • Philip Crosby
  • Armand Feigenbaum

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 10

deming s 14 points
Deming’s 14 Points

1. Create constancy of purpose

2. Adopt philosophy of prevention

3. Cease mass inspection

4. Select a few suppliers based on quality

5. Constantly improve system and workers

6. Institute worker training

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 11

slide13
7. Instill leadership among supervisors

8. Eliminate fear among employees

9. Eliminate barriers between departments

10. Eliminate slogans

11. Remove numerical quotas

12. Enhance worker pride

13. Institute vigorous training & education programs

14. Implement these 13 points

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 12

the deming wheel or p d c a cycle
The Deming Wheel(or P-D-C-A Cycle)

Identify problem

Develop plan for

improvement

1. Plan

Institutionalize

improvement

Continue cycle

4. Act

Implement plan on

test basis

2. Do

3. Study / Check

Is the plan working

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 13

total quality management
Total Quality Management

1. Customer defined quality

2. Top management leadership

3. Quality as a strategic issue

4. All employees responsible for quality

5. Continuous improvement

6. Shared problem solving

7. Statistical quality control

8. Training & education for all employees

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 14

tqm throughout the organization
TQM Throughout The Organization
  • Marketing, sales, R&D
  • Engineering
  • Purchasing
  • Personnel
  • Management
  • Packing, storing, shipping
  • Customer service

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 15

strategic implications of tqm
Strategic Implications Of TQM
  • Quality is key to effective strategy
  • Clear strategic goal, vision, mission
  • High quality goals
  • Operational plans & policies
  • Feedback mechanism
  • Strong leadership

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 16

tqm in service companies
TQM In Service Companies
  • Inputs similar to manufacturing
  • Processes & outputs are different
  • Services tend to be labor intensive
  • Quality measurement is harder
  • Timeliness is important measure
  • TQM principles apply to services

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 17

cost of quality
Cost Of Quality
  • Cost of achieving good quality
    • Prevention
    • Appraisal
  • Cost of poor quality
    • Internal failure costs
    • External failure costs

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 18

quality indexes
Quality Indexes
  • Labor index
    • quality cost / labor hours
  • Cost index
    • quality cost / manufacturing cost
  • Sales index
    • quality cost / sales
  • Production index
    • quality cost / units produced

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 19

quality is
Quality Is...
  • An important determinant of business profitability
  • Positively & significantly related to higher return on investment

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 22

quality and productivity
Quality And Productivity
  • Productivity = output / input
  • Fewer defects increase output
  • Quality improvement reduces inputs

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 23

employees quality improvement
Employees & Quality Improvement
  • Quality circles
  • Employee suggestions
  • Process improvement teams
  • Self-managed work teams

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 35

the quality circle process
The Quality Circle Process

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 36

seven quality control tools
Seven Quality Control Tools

1. Pareto analysis

2. Flowcharts

3. Check sheets

4. Histograms

5. Scatter diagrams

6. Control charts

7. Fishbone diagram

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 37

a pareto chart

70

60

50

40

30

20

10

0

A Pareto Chart

(64)

Percent from each cause

(13)

(10)

(6)

(3)

(2)

(2)

Poor Design

Defective parts

Operator errors

Machine calibrations

Defective materials

Surface abrasions

Wrong dimensions

Causes of poor quality

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 38

a flowchart
A Flowchart

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 39

check sheet

COMPONENTS REPLACED BY LAB

TIME PERIOD: 22 Feb to 27 Feb 1998

REPAIR TECHNICIAN: Bob

TV SET MODEL 1013

Integrated Circuits||||

Capacitors |||| |||| |||| |||| |||| ||

Resistors ||

Transformers||||

Commands

CRT |

Check Sheet

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 40

histogram

40

35

30

25

20

15

10

5

0

1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1

Histogram

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 41

scatter diagram
Scatter Diagram

.

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 42

control chart

27

24

UCL = 23.35

21

c = 12.67

18

15

Number of defects

12

9

6

LCL = 1.99

3

2

4

6

8

10

12

14

16

Sample number

Control Chart

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 43

fishbone diagram
Fishbone Diagram

Measurement

Human

Machines

Out of adjustment

Faulty testing equipment

Poor supervision

Tooling problems

Incorrect specifications

Lack of concentration

Improper methods

Old/worn

Inadequate training

Quality

Problem

Inaccurate

temperature

control

Defective from vendor

Poor process design

Ineffective quality

management

Not to specifications

Dust and Dirt

Deficiencies

in product design

Material-

handling problems

Environment

Materials

Process

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 44

quality awards and certifications
Quality Awards And Certifications
  • The Malcolm Baldrige Award
  • The Deming Prize
  • Industry, regional, and company awards
    • Institute of Industrial Engineers
    • NASA
    • European Quality Award

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 45

iso 9000 categories prior to 2000
ISO 9000 CategoriesPrior to 2000
  • ISO 9001 ~ Suppliers and Designers
  • ISO 9002 ~ Production
  • ISO 9003 ~ Inspection and Test
  • ISO 9004 ~ Quality Management

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 46

iso 9000 2000 categories
ISO 9000-2000 Categories
  • ISO 9001 ~ Quality Management Systems

Requirements

  • ISO 9004 ~ Quality Management Systems—

Guidelines for Performance

Improvements

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 46

implications of iso 9000
Implications Of ISO 9000
  • Truly international in scope
  • Certification required by many foreign firms
  • U.S. firms export > $100 billion/yr to Europe
  • Adopted by U.S. Navy, DuPont, 3M, AT&T, & others

© 2000by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 47

iso accreditation
ISO Accreditation
  • European registration
    • 3rd party registrar assesses quality program
    • European Conformity (CE) mark authorized
  • United States 3rd party registrars
    • American National Standards Institute (ANSI)
    • American Society for Quality Control (ASQC)
    • Registrar Accreditation Board (RAB)

© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

Ch 3 - 48