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Quality Management
Lecture Outline
• What Is Quality? • Quality in Service
• Evolution of Quality Companies
Management • Six Sigma
• Quality Tools • Cost of Quality
• TQM and QMS • Effect of Quality
• Focus of Quality Management on
Management— Productivity
Customers • Quality Awards
• Role of Employees in • ISO 9000
Quality Improvement
• Courtesy:
• how are customers treated by employees?
• are catalogue phone operators nice and are their
voices pleasant?
• Consistency
• is same level of service provided to each customer
each time?
• is your newspaper delivered on time every morning?
• Cause-and-effect matrix
– grid used to prioritize causes of quality problems
• Frequency diagram of
data for quality problem
• Pareto analysis
– most quality problems result from a few causes
Problem
Solution Identification
Problem results List alternatives
Consensus
Problem Brainstorming
Analysis
Cause and effect
Data collection
and analysis
2-37
Six Sigma
1. Align
• executives create balanced scorecard
2. Mobilize
• project teams formed and empowered to act
3. Accelerate
• black and green belts execute project
4. Govern
• monitor and review projects
• Champion
• an executive responsible for project success
• Define
• problem is defined
• Measure
• process measured, data collected
• Analyze
• data analysis to find cause of problem
• Improve
• develop solutions to problem
• Control
• ensure improvement is continued
3.4 DPMO
67,000 DPMO
cost = 25% of sales
• t-Test
• test for differences between groups
• Statistical Process Control (SPC) Chart
• monitor a process over time for variations
• Design of Experiments (DOE)
• determining relationships between factors affecting
inputs and outputs of a process
• Index numbers
• ratios that measure quality costs against a base value
• labor index
• ratio of quality cost to labor hours
• cost index
• ratio of quality cost to manufacturing cost
• sales index
• ratio of quality cost to sales
• production index
• ratio of quality cost to units of final product
• Cost of quality
• difference between price of nonconformance
and conformance
• cost of doing things wrong
• 20 to 35% of revenues
• cost of doing things right
• 3 to 4% of revenues
or
Y=(I)(%G)+(I)(1-%G)(%R)
where
I = initial quantity started in production
%G = percentage of good units produced
%R = percentage of defective units that are successfully reworked
( Kd )( I ) ( Kr )( R)
Product Cost
Y
where:
Kd = direct manufacturing cost per unit
I = input
Kr = rework cost per unit
R = reworked units
Y = yield
( K d )( I ) ( K r )( R ) $30*100 + $12*10 =
= $34.67/motor
Y 90 motors
Y = (I)(%g1)(%g2) … (%gn)
where:
I = input of items to the production process that will
result in finished products
gi = good-quality, work-in-process products at stage i
Y = (I)(%g1)(%g2) … (%gn)
100
= = 126.88 127
100 * .93 * .95 * .97 * .92
QPR
• productivity index that includes productivity and
quality costs
(good-quality units)
QPR = (100)
(input) (processing cost) + (reworked units) (rework cost)
Base Case
80 + 10
QPR = (100) = 2.89
100 * $30 + 10 * $12
• ISO 9004:2008
• Quality Management Systems—Guidelines for
Performance Improvements
• guidance to a company for continual improvement of
its quality-management system
2-74
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