Quality Management and

3
International Standards
Weeks 3 (Chapter 6)

Operations Management, Sustainability and Supply Chain Management,

Global Edition, Eleventh Edition, PEARSON
Jay Heizer and Barry Rander © 2014 Pearson Education1
 Textbook for
Used

Operations Management, Sustainability and

Supply Chain Management,
Global Edition, Eleventh Edition, PEARSON
Jay Heizer and Barry Rander 2
 Outline

► Global Company Profile: Arnold Palmer

Hospital
► Quality and Strategy
► Defining Quality
► Total Quality Management
► Tools of TQM
► The Role of Inspection
► TQM in Services
3
© 2014 Pearson Education
 Global Company Profile
arnold PALMER HOSPITAL
4
arnold PALMER HOSPITAL

► Deliver over 12,000 babies annually

► Virtually every type of quality tool is employed
 Continuous improvement
 Employee empowerment
 Benchmarking
 Just-in-time
 Quality tools
5
 10
OM
STRATEGY
DECISION
▶ Design of Goods and Services
▶ Managing Quality
▶ Process Strategy
▶ Location Strategy
▶ Layout Strategy
▶ Human Resources
▶ SCM
▶ Inventory Management
▶ Scheduling
▶ Maintenace 6
© 2014 Pearson Education
 Two Ways Quality
Improves Profitability

Sales Gains via

• Improved response
• Flexible pricing
• Improved reputation

Improved Increased
Quality Reduced Costs via Profits
• Increased productivity
• Lower rework and scrap costs
• Lower warranty costs

7
 The Flow of Activities

Organizational Practices
Leadership, Mission statement, Effective operating procedures,
Staff support, Training
Yields: What is important and what is to be
accomplished
Quality Principles
Customer focus, Continuous improvement, Benchmarking, Just-in-
time, Tools of TQM
Yields: How to do what is important and to be
accomplished
Employee Fulfillment
Empowerment, Organizational commitment
Yields: Employee attitudes that can accomplish
what is important
Customer Satisfaction
Winning orders, Repeat customers
Yields: An effective organization
with
a competitive advantage
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© 2014 Pearson Education
 defining QUALITY
An operations manager’s objective is to build a total
quality management system that identifies and
satisfies customer needs
Jay Heizer and Barry Render (2014)

The totality of features and characteristics of a

product or service that bears on its ability to satisfy
stated or implied needs
The American Society for Quality (ASQ; www.asq.org)
9
 implications of QUALITY

1. company REPUTATION
An organization can expert its reputation for quality – be it
good or bad-to follow it
2. product LIABILITY
The courts increasingly hold organization that design,
produce or distribute faulty products or service liable for
damages or injuries resulting from their use.
3. global IMPLICATIONS
In this technological age, quality is an international, as well
as OM concern
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 MALCOLM
BALDRIGE
National Quality Award (MBNQA)
Baldrige Criteria for Performance Excellence:
Leadership: How upper management leads the organization, and how the organization leads within the
community.
Strategic planning: How the organization establishes and plans to implement strategic directions.
Customer and market focus: How the organization builds and maintains strong, lasting relationships with
customers.
Measurement, analysis, and knowledge management: How the organization uses data to support key
processes and manage performance.
Human resource focus: How the organization empowers and involves its workforce.
Process management: How the organization designs, manages and improves key processes.
Business/organizational performance results: How the organization performs in terms of customer
satisfaction, finances, human resources, supplier and partner performance, operations, governance and
social responsibility, and how the organization compares to its competitors.
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 ISO 9000
International Quality Standards

top management LEADERSHIP - 1

customer satisfaction - 2
continual improvement - 3
involvement of people - 4
process analysis - 5
use of data-driven decision making - 6
a systems approach to MANAGEMENT - 7
mutually beneficial supplier relationships - 8
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 TOTAL
QUALITY
management
Management of an entire organization so that it excels in all aspects of
products and services that are important to the customer

7 concepts of TQM
1. Continuous improvement
2. Six Sigma
3. Employee empowerment
4. Benchmarking
5. Just-in-time (JIT)
6. Taguchi concepts
7. Knowledge of TQM tools
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 CONTINUOUS
IMPROVEMENT
4. Act 1. Plan
Implement Identify the
the plan, pattern and
document make a plan

Shewhart’s PDCA
Model 3. Check 2. Do
Is the plan Test the
working? plan

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© 2014 Pearson Education
 SIX
SIGMA
1. Defines the project’s purpose, scope, and
outputs, identifies the required process
information keeping in mind the customer’s
definition of quality
2. Measures the process and collects data
3. Analyzes the data ensuring
repeatability and reproducibility
4. Improves by modifying or

6
redesigning existing
processes and procedures
5. Controls the new process
to make sure performance
levels are maintained
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© 2014 Pearson Education
 TQM
in
service

important role operations manager

1. The tangible component of many service is important
2. Another aspect of service and service quality is the process
3. The operations manager should realize the customer’s expectations
are the standard against which the service is judged
4. The manager must expect exceptions
 Thankyou very much
Operations Management, Sustainability and Supply Chain
Management,
Global Edition, Eleventh Edition, PEARSON
Jay Heizer and Barry Rander (2014) 17