Production and Operations Management: Manufacturing and Services

1
CHASE AQUILANO JACOBS
Operations Management
For Competitive Advantage
Chapter 7
Quality Management
ninth edition
2
Chapter 7Quality Management

• Total Quality Management Defined
• Malcolm Baldrige National Quality Award
• Quality Specifications
• Costs of Quality
• Continuous Improvement
• SPC Tools
• Benchmarking
• Fail-safing
• ISO 9000

3
Total Quality Management (TQM)Defined

• Total quality management is defined as managing
  the entire organization so that it excels on all
  dimensions of products and services that are
  important to the customer.

4
1999 Malcolm Baldrige National Quality Award

• 1.0 Leadership (125 points)
• 2.0 Strategic Planning (85 points)
• 3.0 Customer and Market Focus (85 points)
• 4.0 Information and Analysis (85 points)
• 5.0 Human Resource Focus (85 Points)
• 6.0 Process Management (85 points)
• 7.0 Business Results (450 points)

5
Categories for the Baldrige Award

• Manufacturing companies or subsidiaries that
• produce and sell manufactured products or
  manufacturing processes or
• produce agricultural, mining, or construction
  products.
• Service companies or subsidiaries that sell
  service
• Small businesses
• Health care organizations
• Educational institutions

6
Characteristics of a Baldrige Award Winner

• The companies formulated a vision of what they
  thought quality was and how they would achieve
  it.
• Senior management was actively involved.
• Companies carefully planned and organized their
  quality effort to be sure it would be effectively
  initiated.
• They vigorously controlled the overall process.

7
Quality Specifications

• 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

8
Costs of Quality
9
Continuous Improvement (CI)

• Management's view of performance standards of the
  organization
• performance level of the firm as something to be
  "continuously challenged and incrementally
  upgraded."
• The way management views the contribution and
  role of its workforce
• believe employee involvement and team efforts are
  the key to improvement

10
CI Methodology PDCA Cycle (Deming Wheel)
11
Example Process Flow Chart
Material Received from Supplier
No, Continue
Inspect Material for Defects
Defects found?
Yes
Can be used to find quality problems.
Return to Supplier for Credit
12
Example Pareto Analysis
Can be used to find when 80 of the problems may
be attributed to 20 of the causes.
80
Frequency
Assy. Instruct.
Design
Purch.
Training
Other
13
Example Run Chart
Can be used to identify when equipment or
processes are not behaving according to
specifications.
0.58
0.56
Diameter
0.54
0.52
0.5
0.48
0.46
0.44
1
2
3
4
5
6
7
8
9
10
11
12
Time (Hours)
14
Example Histogram
Can be used to identify the frequency of quality
defect occurrence and display quality performance.
Number of Lots
0
1
2
3
4
Defectsin lot
Data Ranges
15
Example Scatter Diagram
Can be used to illustrate the relationships
between quality behavior and training.
12
10
8
Defects
6
4
2
0
0
10
20
30
Hours of Training
16
Example Checksheet
Can be used to keep track of defects or used to
make sure people collect data in a correct manner.
Monday
Billing Errors Wrong Account Wrong Amount A/R
Errors Wrong Account Wrong Amount
17
Example Cause Effect Diagram
The results or effect.
Possible causes
Can be used to systematically track backwards to
find a possible cause of a quality problem (or
effect).
18
Example Control Charts
Can be used to monitor ongoing production process
quality and quality conformance to stated
standards of quality.
1020
1010
1000
990
980
970
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
19
Benchmarking

• 1. Identify those processes needing improvement.
• 2. Identify a firm that is the world leader in
  performing the process.
• 3. Contact the managers of that company and make
  a personal visit to interview managers and
  workers.
• 4. Analyze data.

20
The Shingo System Fail-Safe Design

• Shingos argument
• SQC methods do not prevent defects
• Defects arise when people make errors
• Defects can be prevented by providing workers
  with feedback on errors
• Poka-Yoke includes
• Checklists
• Special tooling that prevents workers from making
  errors

21
ISO 9000

• Series of standards agreed upon by the
  International Organization for Standardization
  (ISO)
• Adopted in 1987
• More than 100 countries
• A prerequisite for global competition?
• ISO 9000 directs you to "document what you do and
  then do as you documented."

22
Three Forms of ISO Certification

• First party A firm audits itself against ISO
  9000 standards.
• Second party A customer audits its supplier.
• Third party A "qualified" national or
  international standards or certifying agency
  serves as auditor.

23
ISO 9000 versus the Baldrige Award

• Which should we pursue first?
• What are the differences between the two?
• Do you have to be ISO 9000 certified before going
  for the Baldrige Award?