Chapter 5 - Total Quality ManagementLearning ObjectivesLearning Objectives con’tDefining QualityDefining Quality – 5 WaysManufacturing Quality vs. Service QualityCost of QualityCost of Quality – 4 CategoriesEvolution of TQM – New FocusQuality GurusTQM PhilosophyTQM Philosophy - conceptsTQM Philosophy– Concepts con’tWays of Improving QualityPDSA DetailsPDSA con’tSeven Tools of Quality ControlCause-and-Effect DiagramsFlowchartsChecklistControl ChartsScatter DiagramsPareto AnalysisHistogramsProduct Design - Quality Function DeploymentQuality Function Deployment (QFD) DetailsQFD - House of QualityReliability – critical to qualitySlide 29Slide 30Process Management & Managing Supplier QualityQuality Awards and StandardsMBNQA- What Is It?The Deming PrizeISO StandardsWhy TQM Efforts FailTQM Within OMChapter 5 HighlightsChapter 5 Highlights – con’tChapter 5 Homework Hints© Wiley 2010 1Chapter 5 - Total Quality ManagementOperations ManagementbyR. Dan Reid & Nada R. Sanders4th Edition © Wiley 2010© Wiley 2010 2Learning ObjectivesExplain the meaning of TQMIdentify the costs of QualityDescribe the evolution of TQM Identify Quality leaders and their contributions© Wiley 2010 3Learning Objectives con’tIdentify key features of the TQM philosophyDescribe tools for identifying and solving quality problemsDescribe quality awards and quality certifications© Wiley 2010 4Defining QualityDefinition of quality is dependent on the people defining itThere is no single, universal definition of quality5 common definitions include:(See next slide)© Wiley 2010 5Defining Quality – 5 Ways1. Conformance to specificationsDoes product/service meet targets and tolerances defined by designers?2. Fitness for use Evaluates performance for intended use3. Value for price paidEvaluation of usefulness vs. price paid4. Support servicesQuality of support after sale5. PsychologicalAmbiance, prestige, friendly staf© Wiley 2010 6Manufacturing Quality vs. Service QualityManufacturing quality focuses on tangible product featuresConformance, performance, reliability, featuresService organizations produce intangible products that must be experiencedQuality often defined by perceptional factors like courtesy, friendliness, promptness, waiting time, consistency© Wiley 2010 7Cost of QualityQuality afects all aspects of the organizationQuality has dramatic cost implications of:Quality control costsPrevention costsAppraisal costsQuality failure costsInternal failure costsExternal failure costs© Wiley 2010 8Cost of Quality – 4 CategoriesEarly detection/prevention is less costly (Maybe by a factor of 10)© Wiley 2010 9Evolution of TQM – New Focus© Wiley 2010 10Quality Gurus© Wiley 2010 11TQM PhilosophyTQM Focuses on identifying quality problem root causes Encompasses the entire organizationInvolves the technical as well as peopleRelies on seven basic concepts ofCustomer focusContinuous improvementEmployee empowermentUse of quality toolsProduct designProcess managementManaging supplier quality© Wiley 2010 12TQM Philosophy - conceptsFocus on CustomerIdentify and meet customer needsStay tuned to changing needs, e.g. fashion stylesContinuous ImprovementContinuous learning and problem solving, e.g. Kaizen, 6 sigmaPlan-D-Study-Act (PDSA)BenchmarkingEmployee EmpowermentEmpower all employees; external and internal customers© Wiley 2010 13TQM Philosophy– Concepts con’tTeam ApproachTeams formed around processes – 8 to 10 peopleMeet weekly to analyze and solve problemsUse of Quality ToolsOngoing training on analysis, assessment, and correction, & implementation toolsStudying practices at “best in class” companies© Wiley 2010 14Ways of Improving QualityPlan-Do-Study-Act Cycle (PDSA)Also called the Deming Wheel after originatorCircular, never ending problem solving processSeven Tools of Quality ControlTools typically taught to problem solving teamsQuality Function DeploymentUsed to translate customer preferences to design© Wiley 2010 15PDSA DetailsPlanEvaluate current processCollect procedures, data, identify problemsDevelop an improvement plan, performance objectivesDoImplement the plan – trial basisStudyCollect data and evaluate against objectivesActCommunicate the results from trialIf successful, implement new process© Wiley 2010 16PDSA con’tCycle is repeated After act phase, start planning and repeat process© Wiley 2010 17Seven Tools of Quality Control1. Cause-and-Efect Diagrams2. Flowcharts3. Checklists4. Control Charts5. Scatter Diagrams6. Pareto Analysis7. Histograms© Wiley 2010 18Cause-and-Efect DiagramsCalled Fishbone DiagramFocused on solving identified quality problem© Wiley 2010 19FlowchartsUsed to document the detailed steps in a processOften the first step in Process Re-Engineering© Wiley 2010 20ChecklistSimple data check-off sheet designed to identify type of quality problems at each work station; per shift, per machine, per operator© Wiley 2010 21Control ChartsImportant tool used in Statistical Process Control – Chapter 6The UCL and LCL are calculated limits used to show when process is in or out of control© Wiley 2010 22Scatter DiagramsA graph that shows how two variables are related to one anotherData can be used in a regression analysis to establish equation for the relationship© Wiley 2010 23Pareto AnalysisTechnique that displays the degree of importance for each elementNamed after the 19th century Italian economist; often called the 80-20 RulePrinciple is that quality problems are the result of only a few problems e.g. 80% of the problems caused by 20% of causes© Wiley 2010 24HistogramsA chart that shows the frequency distribution of observed values of a variable like service time at a bank drive-up windowDisplays whether the distribution is symmetrical (normal) or skewed© Wiley 2010 25Product Design - Quality Function Deployment Critical to ensure product design meets customer expectationsUseful tool for translating customer specifications into technical requirements is Quality Function Deployment (QFD)QFD encompassesCustomer requirementsCompetitive evaluationProduct characteristicsRelationship matrixTrade-of matrixSetting Targets© Wiley 2010 26Quality Function