OM 300 1st Edition Lecture 9 Outline of Last Lecture I Spreadsheet Modeling II Breakeven Point III Using Goal Seek IV Using Data Tables and Charts Outline of Current Lecture 1 Define quality and TQM 2 Describe the ISO international quality standards 3 3 Explain what Six Sigma is 4 4 Explain how benchmarking is used in TQM Current Lecture Managing Quality Quality An operations manager s objective is to build a total quality management system that identifies and satisfies customer needs 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 Quality and Strategy Managing quality supports differentiation low cost and response strategies Quality helps firms increase sales and reduce costs Building a quality organization is a demanding task Different Views User based better performance more features Manufacturing based conformance to standards making it right the first time Product based specific and measurable attributes of the product Implications of Quality 1 Company reputation a Perception of new products b Employment practices c Supplier relations 2 Product liability a Reduce risk 3 Global implications a Improved ability to compete These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Costs of Quality Prevention costs reducing the potential for defects Appraisal costs evaluating products parts and services Internal failure costs producing defective parts or service before delivery External failure costs defects discovered after delivery Ethics and Quality Management Operations managers must deliver healthy safe quality products and services Poor quality risk injuries lawsuits recalls and regulation Ethical conduct must dictate response to problems All stakeholders must be considered Total Quality Management TQM Encompasses entire organization from supplier to consumer 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 organization Seven Concepts of TQM 1 Continuous improvement a Represents continual improvement of all processes b Involves all operations and work centers including suppliers and customers i People Manpower Equipment Machinery Materials Procedures Methods 2 Six Sigma a Two meanings i Statistical definition of a process that is 99 9997 capable 3 4 defects per million opportunities DPMO ii A program designed to reduce defects lower costs save time and improve customer satisfaction 1 Six Sigma Program a Originally developed by Motorola adopted and enhanced by Honeywell and GE b Highly structured approach to process improvement i A strategy ii A discipline iii A set of 7 tools iii 1 2 3 4 5 Defines critical outputs and identify gaps for improvement Measures the work and collects process data Analyzes the data Improves the process Controls the new process to make sure new performance is maintained iv Implementing Six Sigma 1 Emphasize defects per million opportunities as a standard metric 2 Provide extensive training 3 Focus on corporate sponsor support Champions 4 Create qualified process improvement experts Black Belts Green Belts etc 5 Set Program objectives 3 Employee empowerment a Getting employees involved in product and process improvements i 85 of quality problems are due to process and material b Techniques i Build communication networks that include employees ii Develop open supportive supervisors iii Move responsibility to employees iv Build a high morale organization v Create formal team structures 4 5 6 7 c Quality Circles i Group of employees who meet regularly to solve problems ii Trained in planning problem solving and statistical methods iii Often led by a facilitator iv Very effective when done properly Benchmarking a Selecting best practices to use as a standard for performance i Determine what to benchmark ii Form a benchmark team iii Identify benchmarking partners iv Collect and analyze benchmarking information v Take action to match or exceed the benchmark Just in time JIT a Relationship to quality i JIT cuts the cost of quality ii JIT improves quality iii Better quality means less inventory and better easier to employ JIT system b Pull system of production scheduling including supply management i Production only when signaled c Allows reduced inventory levels i Inventory costs money and hides process and material problems d Encourages improved process and product quality i Reducing inventory reveals problems so they can be solved Taguchi concepts QLF NOT ON TEST Knowledge of TQM tools a Tools for generating ideas i Check sheet ii Scatter Diagram iii Cause and Effect Diagram b Tools to Organize the Data i Pareto Chart ii Flowchart Process Diagram c Tools for Identifying Problems i Pareto Chart ii Statistical Process Control Chart