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1997 Prentice-Hall, Inc.

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Principles of
Operations Management
Total Quality Management
Chapter 3
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Learning Objectives
Define quality
State why quality is important
Explain total quality management (TQM)
Explain tools for total quality
management
Describe inspection
1997 Prentice-Hall, Inc.
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Definitions of Quality
ASQC: Product characteristics &
features that affect customer
satisfaction
User-Based: What consumer says it is
Mfg.-Based: Degree to which a product
conforms to design specification
Product-Based: Level of measurable
product characteristic
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Dimensions of Quality for
Goods
Operation
Reliability & durability
Conformance
Serviceability
Appearance
Perceived quality
Quality
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Importance of Quality
Companys
reputation
Product
liability
International
implications
Market Gains
Reputation
Volume
Price
Lower Costs
Productivity
Rework/Scrap
Warranty
Improved
Quality
Increased
Profits
Market Gains
Reputation
Volume
Price
Lower Costs
Productivity
Rework/Scrap
Warranty
Improved
Quality
Increased
Profits
Costs & market
share
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International
Quality Standards
Industrial Standard Z8101-1981 (Japan)
Specification for TQM
ISO 9000 series (Europe/EC)
Common quality standards for products
sold in Europe (even if made in U.S.)
ISO 14000 series (Europe/EC)
Standards for recycling, labeling etc.
ASQC Q90 series; MILSTD (U.S.)
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Malcolm Baldrige National
Quality Award
Established in 1988 by the U.S. govt
Designed to promote TQM practices
Some criteria
Senior executive leadership; strategic
planning; mgt. of process quality
Quality results; customer satisfaction
Recent winners
Corning Inc.; GTE; AT&T; Eastman Chem.
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Traditional
Quality Process (Mfg.)
Interprets
Need
Specifies
Need
Designs
Product
Defines
Quality
Produces
Product
Plans
Quality
Monitors
Quality
Customer Marketing Engineering Operations
Quality is customer driven!
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Total Quality Management
Quality system involving entire
organization from supplier to customer
Objective: Meet or exceed customer
needs through company-wide
continuous improvement
Early proponents
W. Edwards Deming
J. M. Juran
Philip B. Crosby
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Total Quality Management
Principles
Continuous improvement
Employee empowerment
Benchmarking
Just-in-time (JIT)
Knowledge of TQM tools
1995 Corel Corp.
1997 Prentice-Hall, Inc.
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Continuous Improvement
Represents continual improvement
of process & customer satisfaction
Involves all operations
& work units
Other names
Kaizen (Japanese)
Zero-defects
Six sigma
1984-1994 T/Maker Co.
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Employee Empowerment
Getting employees involved in
product & process improvements
85% of quality problems are due to
process & material
Techniques
Talk to workers
Support workers
Let workers make decisions
Build teams & quality circles
1995 Corel Corp.
1997 Prentice-Hall, Inc.
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Quality Circles
Group of 6-12 employees from same
work area
Meet regularly to solve work-related
problems
4 hours/month
Facilitator trains
& helps with
meetings
1995 Corel Corp.
1997 Prentice-Hall, Inc.
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Benchmarking
Selecting best practices to use
as a standard for performance
Steps
Determine what to
benchmark
Form benchmarking team
Identify benchmarking partners
Collect benchmarking information
Take action to meet or exceed benchmark
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Benchmarking
Thinking Challenge
Accounting


Data processing


Hotel front desk


Marketing


What specific & measurable variables
would you benchmark in these areas?
Alone Group Class
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Just-In-Time (JIT)
Pull system of production/purchasing
Customer starts production with an order
Involves vendor partnership programs
to improve quality of purchased items
Reduces all inventory levels
Inventory hides process & material
problems
Improves process & product quality
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Quality function deployment (QFD)
Pareto charts
Process charts
Cause & effect diagrams
Statistical process control (SPC)
TQM Tools
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Quality Function
Deployment (QFD)
Product design process using
cross-functional teams
Marketing, engineering, manufacturing
Translates customer preferences into
specific product characteristics
Involves creating 4 tabular Matrices
or Houses
Breakdown product design into
increasing levels of detail
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Quality Function
Deployment Sequence
Product
Char.
Customer
Req.
Component
Spec.
Product
Char.
Production
Process
Component
Spec.
Quality
Plan
Production
Process
House of
Quality 1
House of
Quality 2
House of
Quality 3
House of
Quality 4
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House of Quality Example
Youve been assigned
temporarily to a QFD
team. The goal of the
team is to develop a
new camera design.
Build a House of
Quality.
1984-1994 T/Maker Co.
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House of Quality Example
O High relationship O Medium relationship

Cust.
Req.
Cust.
Importance
Target Values
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Pareto Chart
Vertical bar chart showing relative
importance of problems or defects
Makes identifying & solving them easier
Based on Pareto Principle
Most effects have relatively few causes
e.g., 80% of quality problems come from
20% of machines, materials, or operators
Focus on vital few 20% causes
Called 80-20 rule
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Pareto Chart
Thinking Challenge
Youre a quality analyst
for Corning Glass.
Youve collected data
on 100 rejected glasses:
Nicks 80
Cuts 11
Scratches 3
Porosity 3
Misc. 3
Prepare a Pareto Chart.

Alone Group Class
1997 Prentice-Hall, Inc.
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Process Chart
Shows sequence of events in process
Depicts activity relationships
Has many uses
Identify data collection points
Find problem sources
Identify places for improvement
Identify where travel distances can be
reduced
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Process Chart Example
SUBJECT: Request tool purchase
Dist (ft) Time (min) Symbol Description
=ED
Write order
O=E

On desk
75
O

ED
To buyer
O=D
Examine
SUBJECT: Request tool purchase
Dist (ft) Time (min) Symbol Description
=ED
Write order
O=E

On desk
75
O

ED
To buyer
O=D
Examine
O = Operation; = = Transport; E = Inspect;
D = Delay; = Storage
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Cause & Effect Diagram
Used to find problem sources/solutions
Other names
Fish-bone diagram, Ishikawa diagram
Steps
Identify problem to correct
Draw main causes for problem as bones
Ask What could have caused problems in
these areas? Repeat for each sub-area.
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Statistical
Process Control (SPC)
Uses statistics & control charts to tell
when to adjust process
Developed by Shewhart in 1920s
Involves
Creating standards (upper & lower limits)
Measuring sample output (e.g. mean wgt.)
Taking corrective action (if necessary)
Done while product is being produced
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Produce Good
Provide Service
Stop Process
Yes
No
Assign.
Causes?
Take Sample
Inspect Sample
Find Out Why
Create
Control Chart
Start
Produce Good
Provide Service
Stop Process
Yes
No
Assign.
Causes?
Take Sample
Inspect Sample
Find Out Why
Create
Control Chart
Start
Statistical Process Control
Steps
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0
20
40
60
80
1 3 5 7 9
1
1
X
Time
Control Chart Example
UCL
LCL
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Thinking Challenge:
Compare & Contrast
TQM Tools
Bases
TQM Tools
Bases
Alone Group Class
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Inspection
Involves examining items to see if an
item is good or defective
Objective: Detect a defective product
Does not correct deficiencies in
process or product
Issues
When to inspect
Where in process to inspect
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When & Where
to Inspect in Mfg.
At suppliers plant while
producing
Upon receipt of goods
from supplier
Before costly or
irreversible processes
During production process
When production is complete
Before shipment
1995 Corel Corp.
1997 Prentice-Hall, Inc.
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When & Where
to Inspect in Services
Bank Teller station Speed, courtesy
Checking Accuracy
Store Stockrooms Stock rotation
Display areas Attractiveness
Counters Courtesy,
knowledge

Business Where Variable
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TQM in Services
Service quality is more difficult to
measure than for goods
Service quality perceptions depend on
Expectations vs. reality
Process & outcome
Types of service quality
Normal: Routine service delivery
Exceptional: How problems are handled
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Under-
standing
Tangibles
Service Quality Attributes
Reliability
Communication Credibility
Security
Responsiveness
Competence
Courtesy
Access
1995 Corel Corp.
1997 Prentice-Hall, Inc.
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Conclusion
Defined quality
Stated why quality is important
Explained total quality management
Explained tools for total quality
management (TQM)
Described inspection

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