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Quality Management

Dr. Chandana Perera


Dept. of Management of
Technology
University of Moratuwa
Quality Definitions... from the Gurus
 Crosby: conformance to requirements
 Feigenbaum: meeting customer
expectation
 Juran: fitness for use
 ASQC: the totality of features and
characteristics of a product or service
that bear on its ability to satisfy given
needs

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Dimensions of Quality
 Design quality: Inherent value of the
product in the marketplace

 Dimensions include: Performance, Features,


Reliability, Durability, Serviceability, Response,
Aesthetics, and Reputation.

 Conformance quality: Degree to which


the product or service design specifications
are met
Design Quality
1. Performance
basic operating characteristics
2. Features
“extra” items added to basic features
3. Reliability
probability product will operate over time
5. Durability
life span before replacement

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6. Serviceability
ease of getting repairs, speed & competence of repairs
7. Aesthetics
look, feel, sound, smell or taste
8. Safety
freedom from injury or harm
9. Other perceptions
subjective perceptions based on brand name, advertising, etc

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Quality Of Conformance
 Ensuring product or service produced
according to design
 Depends on
design of production process
performance of machinery

materials

training

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The Meaning of Quality

Producer’s Perspective Consumer’s Perspective

Quality of Conformance Quality of Design

Production •Conformance to •Quality characteristics Marketing


specifications •Price
•Cost

Fitness for
Consumer Use

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The Definitions of Quality and their Link to Profitability

Improved quality Improved quality


of design of conformance

Higher perceived Higher Lower


value prices manufacturing and
service costs
Increased market Increased
share revenues

Higher profitability

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Quality, Customer Satisfaction, Competitiveness, and Profits

Reliability Overall satisfaction


Product and Customer
service quality On-time delivery satisfaction Customer retention

Error/defects Complaints

Market share
Competitiveness
Profits

Costs
What initiatives should Cycle time
an organization take Organization Turnover
to ensure “quality” benefits
Satisfaction

Safety & health

Productivity

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Dimensions of Service Quality
 Reliability: Perform promised service
dependably and accurately.
Example: receive mail at same time
each day.
 Responsiveness: Willingness to help
customers promptly. Example: avoid
keeping customers waiting for no
apparent reason.
Dimensions of Service Quality
 Assurance: Ability to convey trust
and confidence.
 Empathy: Ability to be
approachable.
 Tangibles: Physical facilities and
facilitating goods.
Gaps in Quality
Word -of-mouth
Personal needs Past experience
communications

Customer

Expected quality

GAP 5
Perceived qulity

Service delivery (including External communications


pre- and post-contacts) to consumers

GAP 1 GAP 3 GAP 4


Translation of perceptions into
quality specifications
GAP 2
Provider
Management perceptions of
consumer expectations
Two Issues in Quality Management
% defectives

Sporadic problem

5%

Chronic
problem

2%
The Quality Hierarchy (Evolution)

Prevention Total Quality Management (TQM)


Stop problems at incorporates QC/QA activities into
a company-wide system aimed at
Source; greater satisfying the customer.
Design emphasis (involves all organizational functions)
(proactive)
Quality Assurance (QA)
planned and systematic actions to
insure that products or services
conform to company requirements
Detection (example: reliability analysis)
Finding and fixing Quality Control (QC)
Mistakes
operational techniques to make
(Reactive) inspection more efficient & to reduce
the costs of quality. (example: SPC)

Inspection inspect products

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Factors Influencing Quality at the Firm Level

Planning

Co
m
m
ure un
t ic a
ul t io
C n
Performance

People Commitment Process

The 4P and 3C Framework for Total Quality Management (TQM)

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What is Total Quality Management?

 Total quality management (TQM) may very


simply be defined as,

“continuously improving customer


satisfaction levels and simultaneously
improving business performance by
gaining the commitment and
involvement of all employees in an
organization”

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Total Quality Management
1. Customer defined quality
2. Top management leadership
3. Quality as a strategic issue
4. All employees responsible for quality
5. Continuous improvement
6. Shared problem solving
7. Statistical quality control
8. Training & education for all employees

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TQM Throughout The
Organization
 Marketing, sales, R&D
 Engineering
 Purchasing
 Personnel
 Management
 Packing, storing, shipping
 Customer service

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The Deming Wheel
(or P-D-C-A Cycle)
1. Plan
Identify problem
Develop plan for
improvement
4. Act
Institutionalize P
2. Do
A Implement plan on
improvement
Continue cycle test basis
C D

3. Study / Check
Is the plan working

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Assessing the Cost of Quality
 Quality costs can be considered
under four categories (Juran’s
Quality Handbook, Section 8)

 Internal failure costs

 External failure costs

 Appraisal costs

 Prevention costs

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 Internal failure costs
 Failure to meet customer requirements and
needs
 Scrap at site
 Scrap at supplier end
 Rework at site
 Rework at supplier end
 Failure analysis
 100% inspection
 Reinspection and retest
 Changing incorrect processes
 Redesign of hardware and software to correct
deficiencies
 Scrapping of obsolete products
 Discounting prices due to quality problems

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 Internal failure costs (continued)
 Cost of inefficient processes
 Variability of product characteristics

 Process variation from best practices

 Unplanned downtime of plant and

equipment
 Inventory (shortage or excess)

 Non-value stages in the process

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 External failure costs
 Failure to meet customer requirements and
needs
 Cost of investigations
 Warranty charges
 Returned material
 Penalties for poor quality such as late payments,
lost discounts at supplier end etc.
 Rework of billing and other support operations

 Lost opportunities for sales revenue


 Customer defection
 Loss of potential customers due to poor reputation
 Increased complexity of doing business with
remaining customers

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 Appraisal Costs
 Incoming inspection and test
 In-process inspection and test

 Final inspection and test

 Customer document review

 Product quality audits

 Maintaining test equipment

 Checking test material potency

 Checking products in field storage

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 Prevention costs (planning, review,
and analysis costs)
 Quality planning
 New product review (design review)

 Process planning

 Process control

 Quality audits

 Supplier quality evaluation and support

 Training of employees

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 Some guidelines for applying the quality cost
model
 Develop cost elements relevant to your organization
 Reach agreement as to what categories of cost to
include and how data is to be collected
 This data should become part of the organization’s MIS
 Pay special attention to the failure cost elements and
then to appraisal costs
 When evaluating any cost element do not justify it as
inevitable because they could well be due to poor
quality
 It should be made clear that assessment of costs is not
to find fault or accuse managers or employees but to
improve the existing situation

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Expected Effects of Identifying Cost of Quality
Savings

Increase in essential
first-time work to
Essential improve quality
first-time work

Prevention

Appraisal
Cost of Manage by better
Quality prevention
Cost of
Rework/failure Less Appraisal Quality
Much less
rework/failure

Reduced Costs and


Current Setting Improvements
Improved Quality

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 Figure shows only the savings due to
reduction in the cost of quality.

 However, profits also increase due to


 Greater throughput
 Increased sales due to better reputation
 Lower per unit cost of production
 Ability to charge a higher price in selected
market segments due to enhanced quality
reputation

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Quality And Productivity
 Productivity = output / input

 Fewer defects increase output

 Quality improvement reduces inputs

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Employees & Quality
Improvement
 Quality circles
 Employee suggestions
 Process improvement teams
 Self-managed work teams

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The Quality Circle Process

Organization
8-10 members
Same area Training
Presentation
Moderator Group processes
Implementation
Data collection
Monitoring
Problem analysis

Problem ID
Solution List alternatives
Problem analysis
Problem results Consensus
Cause & effect
Brainstorming
Data collection &
analysis

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Seven Quality Control Tools

1. Flowcharts
2. Histograms
3. Fishbone diagram
4. Pareto analysis
5. Check sheets
6. Scatter diagrams
7. Control charts

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Flowchart

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Histogram
40
35
30
25
20
15
10
5
0 1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1

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Fishbone Diagram
Measurement Human Machines

Faulty testing equipment Poor supervision Out of adjustment

Incorrect specifications Lack of concentration Tooling problems

Improper methods Inadequate training Old/worn

Quality
Inaccurate Problem
temperature
control Defective from vendor Poor process design
Ineffective quality
Not to specifications management
Dust and Dirt Material- Deficiencies
handling problems in product design

Environment Materials Process

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Pareto Chart

Percent from each cause

10
20
30
40
50
60
70

0
Po
o
W rD
ro es
ng ig
di n
(64)

m
D e ens
fe io
ct n
(13)

ive s
M pa
ac r ts
hi
ne
(10)

ca
O l
pe ibra
ra tio
to
(6)

r e ns
De rro
fe rs
ct
(3)

ive
m
Causes of poor quality

Su at
r fa er
ce ia
ls
(2)

ab
ra
sio
ns
(2)

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Check Sheet

COMPONENTS REPLACED BY LAB


TIME PERIOD: 22 Feb to 27 Feb 1998
REPAIR TECHNICIAN: Bob

TV SET MODEL 1013


Integrated Circuits ||||
Capacitors |||| |||| |||| |||| |||| ||
Resistors ||
Transformers ||||
Commands
CRT |

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Scatter Diagram

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Control Chart
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UCL = 23.35
21
Number of defects

18 c = 12.67

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12

6
LCL = 1.99
3

2 4 6 8 10 12 14 16
Sample number 39
Quality Awards And Certifications
 Awards
The Malcolm Baldrige Award
The Deming Prize

Industry, regional, and company awards


 Institute of Industrial Engineers
 NASA
 European Quality Award
 Certification
ISO 9000
SLS

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The
The Malcolm
Malcolm Baldrige
Baldrige
National
National Quality
Quality Award
Award
Baldrige Award Framework
Customer and Market Focused
Strategy and Action Plans

2 5
Strategic HR develop. &
planning management

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1 Business
Leadership results

3 6
Customer and Process
market focus management

4
Information and analysis
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Six-Sigma

 Six-sigma is nothing new. The concepts it uses is found


in TQM.

 However, its chief merit lies in the fact that it attempts


to deliver breakthrough benefits in the short term.

 Its chief difference with TQM lies in the intensity of


interventions and the demand for a rapid pace of
change.

 Essentially Six-Sigma will allow at the most 3.4 defects


per million opportunities

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 To bring about this rapid change
to bring about breakthrough
performance Six-Sigma uses a
modified PDCA cycle called the
DMAIC approach

1. Define
2. Measure
3. Analyze
4. Improve
5. Control

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 To implement Six-Sigma in an organization,
the following interventions are used:
 Emphasize dpm as a standard metric
 Set stretch objectives
 Provide extensive training
 Focus on corporate sponsor support (through a
leadership group/council, steering committee,
champions, process owners)
 Create qualified process improvement experts:
o master black belts as implementation leaders and six-
sigma coaches
o black belts as team leaders or project leaders
o green belts as team members
 Ensure identification of appropriate metrics to
assess progress

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Statistical Quality Control
 Statistical Process Control
 Tool: Control Charts
 Control process
 Acceptance Sampling
 Control incoming raw-material and
output (products)

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Basic Forms of Variation
 Assignable variation is caused by
factors that can be clearly identified
and possibly managed. (Assignable
cause)

 Common variation is inherent in


the production process. ( Random
cause)
Do we need to adjust the process both
situations?
Control Charts
Variable
mean Upper Control Limit (UCL)
Upper Warning Limit (UWL)

Grand
mean Sample
Number
Lower Warning Limit (LWL)
Lower Control Limit (LCL)
Acceptance Sampling Method
ACCEPTANCE SAMPLING

TAKE SAMPLE

INSPECT SAMPLE

DECISION

ACCEPT LOT REJECT LOT SAMPLE AGAIN

DECISION

RETURN LOT TO SUPPLIER 100% INSPECTION

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