Slide 1First, how do we Define & Measure Quality?How Important is Quality?The Cost of Quality (COQ)The Importance of QualityTotal Quality Management (TQM)Elements of TQMElements of TQMElements of TQMElements of TQMElements of TQMElements of TQMKey TQM ToolsKey TQM ToolsKey TQM ToolsKey TQM ToolsKey TQM ToolsKey TQM Ingredients1BA 341 – Lean OperationsDr. Bogdan BichescuManaging QualityFirst, how do we Define & Measure Quality?In manufacturing?In services?Recall our discussion in Ch. 1?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 (ASQ)2How Important is Quality?Should it matter as a function of strategic focus, e.g., differentiation, response, and cost?Why or why not?How costly is quality? (Cost of Quality)Prevention costsAppraisal costsInternal failure costsExternal failure costs3The Cost of Quality (COQ)4External FailureInternal FailurePreventionAppraisalTotal CostQuality ImprovementTotal CostThe Importance of QualityThere is absolutely no reason for having errors or defects in any product or service, as quality is free according to Philip Crosbycost of poor quality is typically underestimated  should include all the consequences of not building the right product or delivering the right service the first timea focus on quality is required regardless of the organizational strategy 5Total Quality Management (TQM)Refers to a consistent and comprehensive focus on quality that encompasses the entire organizationQuality is defined by identifying and meeting customer expectationsManagement is directly responsible for quality improvementRequires a continuous effort to analyze and improve organizational processes6Elements of TQMContinuous improvementNever-ending process of continual improvement the goal is zero defectsCovers people, equipment, materials, proceduresBased on Shewhart/Deming PDCA model7Elements of TQMSix SigmaOriginally developed by Motorola, adopted and enhanced by Honeywell and GEA comprehensive program focused on total customer satisfaction, including aStrong discipline – DMAIC model: Define  Measure  Analyze  Improve  ControlSet of tools, e.g., Statistical Process Control (SPC), Pareto charts & histograms, flowcharts, cause-and-effect diagrams, etc. 8Elements of TQM9Six SigmaElements of TQMSix Sigma – the DMAIC ModelDefine – project’s purpose, scope, and outputs subject to the customer’s definition of qualityMeasure – the target process and collect data Analyze – the data ensuring repeatability and reproducibilityImprove – by modifying or redesigning existing processes and proceduresControl – the new process to make sure performance levels are maintained10Elements of TQMSome additional principlesEmployee empowerment - 85% of quality issues are due to either processes or materialsQuality circlesInternal and external benchmarkingWhat are the benefits?JIT, quality at the source and effective inspection11Elements of TQMKey TQM Tools Check SheetScatter DiagramCause-and-Effect DiagramPareto ChartStatistical Process Control12Key TQM ToolsCheck Sheet - An organized method of recording data Do you notice any patterns in the table below?13HourDefect 1 2 3 4 5 6 7 8ABC/////// //// // / / ////// //// // // /Key TQM ToolsScatter Diagram – A graph of the value of one variable vs. another variableAny obvious patterns in the example below?14AbsenteeismProductivityKey TQM ToolsCause-and-Effect Diagrams (Ishikawa or fishbone)15Material(ball)Method(shooting process)Machine(hoop &backboard)Manpower(shooter)Missed free-throwsRim alignmentRim sizeBackboard stabilityRim heightFollow-throughHand positionAiming pointBend kneesBalanceSize of ballLopsidednessGrain/Feel (grip)Air pressureTrainingConditioningMotivationConcentrationConsistencyKey TQM ToolsPareto Chart - Identifies and plots problems in descending order of frequency16Number of occurrencesRoom svc Check-in Pool hours Minibar Misc.72%16%5% 4% 3%1243254– 100– 93– 88– 7270 –60 –50 –40 –30 –20 –10 –0 –Frequency (number)Causes and percent of the totalCumulative percentData for OctoberKey TQM ToolsStatistical Process Control (SPC)Uses statistics and control charts to learn systematically (rather than haphazardly) about process outputSince variability is inherent in every process, seeks to identify and differentiate between common-cause (random) and special-cause (non-random) process variation  when to take corrective action or notSystematic process improvement through elimination of special causes and gradual reduction of common causes 17Key TQM IngredientsSPC – Control ChartsConstructed from historical data, the purpose of control charts is to help distinguish between common-cause and special-cause variation18Upper control limitTarget valueLower control limitSample number| | | | | | | | |1 2 3 4 5 6 7 8