MKT 313 1nd Edition Exam 2 Study Guide Lectures 9 20 Lecture 9 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 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 Lecture 10 Statistical Process Control SPC Uses statistics and control charts to tell when to take corrective action Drives process improvement Four key steps o Measure the process o When a change is indicated find the assignable cause o Eliminate or incorporate the cause o Restart the revised process Inspection Involves examining items to see if an item is good or defective Detect a defective product o Does not correct deficiencies in process or product o It is expensive Issues o When to inspect o Where in process to inspect Many Problems o Worker fatigue o Measurement error o Process variability Cannot inspect quality into a product Robust design empowered employees and sound processes are better solutions Attributes v Variables Attributes o Items are either good or bad acceptable or unacceptable o Does not address degree of failure Variables o Measures dimensions such as weight speed height or strength o Falls within an acceptable range Use different statistical techniques TQM in Services Service quality is more difficult to measure than the quality of goods Service quality perceptions depend on o Intangible differences between products o Intangible expectations customers have of those products Service Quality The operations manager must recognize o The tangible component of services is important o The service process is important o The service is judge against the customer s expectations o Exceptions will occur Employee empowerment b Getting employees involved in product and process improvements i 85 of quality problems are due to process and material c 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 d 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 3 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 4 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 5 Taguchi concepts QLF NOT ON TEST 6 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 Lecture 11 Darden Video Quality Farm to plate Inspect all food Use TQM tools to ensure quality Train workers from global supply chain The objective of a process control system is to provide a statistical signal when assignable causes of variation are present If you can t describe and measure it then you can t control or improve it Statistical Process Control SPC Variability is inherent in every process o Natural or common causes o Assignable or special causes Provides a statistical signal when assignable causes are present Detect and eliminate assignable causes or variation Natural Variations Also called common causes Affect virtually all production processes Expected amount of variation Output measures follow a probability distribution For any distribution there is a measure of central tendency and dispersion If the distribution of outputs falls within acceptable limits the process is said to be in control Assignable Variations Also called special causes of variation o Generally this is some change in the process Variations that