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9-1 Management of Quality 9-2 Management of Quality

Operations Management
William J. Stevenson
of Quality

8th edition
Operations Management, Eighth Edition, by William J. Stevenson
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.

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Quality Management Quality Assurance vs. Strategic Approach

• What does the term quality mean? • Quality Assurance

• Emphasis on finding and correcting defects
• Quality is the ability of a product or service to
before reaching market
consistently meet or exceed customer
expectations. • Strategic Approach

• Proactive, focusing on preventing mistakes

from occurring
• Greater emphasis on customer satisfaction

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The Quality Gurus Key Contributors to Quality Management

Table 9.2
• Walter Shewhart C on tribu tor K n ow n for
• “Father of statistical quality control” D em in g 14 po ints; sp ecial & com m o n cau ses o f
• W. Edwards Deming
Ju ran Q u ality is fitn ess for u se; q uality trilo gy
• Joseph M. Juran
F eign bau m Q u ality is a to tal field
• Armand Feignbaum
C ro sb y Q u ality is free; z ero d efects
• Philip B. Crosby
Ish ikaw a C ause-an d effect diagram s; qu ality
• Kaoru Ishikawa circles

• Genichi Taguchi T agu chi Tag uch i loss fu nction

Qu a
l tiy
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Dimensions of Quality Examples of Quality Dimensions

• Performance Dimension (Product) (Service)

• Aesthetics - appearance, feel, smell, taste Automobile Auto Repair
1. Performance Everything works, fit & All work done, at agreed
• Special Features finish price
Ride, handling, grade of Friendliness, courtesy,
• Conformance - to customer’s expectations materials used Competency, quickness
2. Aesthetics Interior design, soft touch Clean work/waiting area
• Reliability - consistency of performance
3. Special features Gauge/control placement Location, call when ready
• Durability - useful life of the product/service Cellular phone, CD Computer diagnostics
• Perceived Quality - (e.g. reputation)
• Serviceability - service after sale

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Examples of Quality Dimensions (Cont’d) Determinants of Quality

Dimension (Product) (Service) • Quality of design

Automobile Auto Repair • Intension of designers to include or exclude
5. Reliability Infrequency of breakdowns Work done correctly, features in a product or service
ready when promised

6. Durability Useful life in miles, resistance Work holds up over • Quality of conformance (to design)
to rust & corrosion time
• The degree to which goods or services conform to
7. Perceived Top-rated car Award-winning service the intent of the designers
quality department

8. Serviceability Handling of complaints and/or Handling of complaints Ease of

requests for information
Confo rms
to design Service

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The Consequences of Poor Quality Responsibility for Quality

• Loss of business • Top management

• Liability • Design
• Productivity • Procurement

• Costs • Production/operations
• Quality assurance
• Packaging and shipping
• Marketing and sales
• Customer service
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Ethics and Quality Quality at the Source

• Substandard work
• Defective products

• Substandard service
The philosophy of making each
• Poor designs
worker responsible for the
• Shoddy workmanship
quality of his or her work.
• Substandard parts and materials

Having knowledge of this and failing to correct

and report it in a timely manner is unethical.

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Quality Certification Total Quality Management

• ISO 9000 A philosophy that involves everyone in an

• Set of international standards on quality organization in a continual effort to improve
management and quality assurance, critical to quality and achieve customer satisfaction.
international business
• ISO 14000
• A set of international standards for assessing
a company’s environmental performance

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The TQM Approach Six Sigma

1. Find out what the customer wants • Statistically

2. Design a product or service that meets or • Having no more than 3.4 defects per million
exceeds customer wants • Conceptually
3. Design processes that facilitates doing the • Program designed to reduce defects
job right the first time • Requires the use of certain tools and
4. Keep track of results techniques
5. Extend these concepts to suppliers
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Six Sigma Management Six Sigma Technical

• Providing strong leadership • Improving process performance

• Defining performance merits • Reducing variation

• Selecting projects likely to succeed • Utilizing statistical models

• Selecting and training appropriate people • Designing a structured improvement strategy

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Six Sigma Process Obstacles to Implementing TQM

• Define • Lack of:

• Measure • Company-wide definition of quality

• Analyze • Strategic plan for change

• Improve
DMAIC • Customer focus
• Real employee empowerment
• Control
• Strong strong motivation
• Time to devote to quality initiatives
• Leadership

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Obstacles to Implementing TQM Basic Steps in Problem Solving

• Poor inter-organizational communication 1. Define the problem and establish an

• View of quality as a “quick fix” improvement goal
2. Collect data
• Emphasis on short-term financial results
3. Analyze the problem
• Internal political and “turf” wars
4. Generate potential solutions
5. Choose a solution
6. Implement the solution
7. Monitor the solution to see if it accomplishes
the goal
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Process Improvement The Process Improvement Cycle

Select a
• Process Improvement: A systematic process
approach to improving a process Document

• Process mapping Study/document

• Analyze the process Evaluate

• Redesign the process

Seek ways to
Implement the
Improve it
Improved process

Design an
Improved process
Figure 9-
9- 2

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Figure 9-
9-2 Process Improvement and Tools

• Process improvement - a systematic

approach to improving a process
• Process mapping

• Analyze the process

• Redesign the process

• Tools

• There are a number of tools that can be used

for problem solving and process improvement
• Tools aid in data collection and interpretation,
and provide the basis for decision making

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Basic Quality Tools Figure 9-


• Flowcharts
• Check sheets
• Histograms
• Pareto Charts

• Scatter diagrams
• Control charts
• Cause-and-effect diagrams

• Run charts
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Flow Chart Example:
Figure 9-
9-5 Self-
Self-Serve Gas Before Improvement

shut off walk to pay

Drive in check price self serve? to pump engine station


turn on back pump walk to wait

check card transmit approved?
pump to car gas booth
copy to
file return to car
employee check prepare sign
totals accuracy receipt copy on the road
charges copy to again

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Flow Chart Example:
Self-Serve Gas After Improvement
Check Sheet

check shut off Billing Errors Monday

self-serve? go to
Drive in price engine insert
yes pump Wrong Account
in pump
no Wrong Amount
wait for store in system
A/R Errors
approved? receipt

yes on the road Wrong Account

check wait pump gas
credit card no Wrong Amount
copy to

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Pareto Analysis Example

80%of ofthe
Exam Score
Number of defects

20%of ofthe

Off Smeared Missing Loose Other

center print label Homework Problems
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Figure 9-
9-10 Control Chart
Figure 9.11


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

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and-Effect Diagram Figure 9-
Figure 9.12

Methods Materials
Cause Cause
Environment Effect
Cause Cause

Cause Cause
Cause Cause

People Equipment

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Figure 9-
9-15 Figure 9-
9-43 Management of Quality 9-44 Management of Quality

Run Chart Tracking Improvements

Figure 9-17

0.58 UCL UCL

0.56 UCL

0.48 LCL
Additional improvements
0.46 LCL Process centered made to the process
0.44 Process not centered and stable
1 2 3 4 5 6 7 8 9 10 11 12 and not stable

Time (Hours)

Is this process stable?

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Methods for Generating Ideas Benchmarking Process

• Brainstorming • Identify a critical process that needs improving

• Quality circles
• Identify an organization that excels in this process
• Interviewing
• Benchmarking • Contact that organization (or investigate it through
publicly available information)
• 5W2H
• Who, what, when, where, why • Analyze the data
• How, how much
• Improve the critical process