Quality Management

1
Quality Management
HTM 302 Operations Management

• Jim Hamerly, Ph.D.
• jhamerly_at_csusm.edu

2
Quality Management
?

• What does quality mean to you?

3
Quality Management
?

• Is quality
• Objective?
• Subjective?
• Both?

4
Quality Management
?

• Does your expectation of quality depend on the
  product area?
• Yes
• No

5
Quality Management
?

• Who decides what is quality?
• Manufacturer?
• Consumer?

6
Quality Management
?

• Higher Quality often comes at an
• increased cost
• Do you always have minimum quality standards?
• Yes
• No

7
Quality Management
?

• How much more are you willing to pay for a
• 20 increase in quality?
• 10
• 20
• 50
• 100

8
Quality Management
?

• When you spend more for quality, do you
• think you get more?
• Yes, always
• Yes, often
• Rarely
• Never

9
What Is Quality?
I dont know what it is, but Ill know it when I
see it
10
A recent customer experience
11
(No Transcript)
12
(No Transcript)
13
Dells Idea Storm

• Embracing social software by providing a
• public and transparent feedback-loop
• Highest priority contributed ideas
• Organize the sales pages by need, not product
  line (company's shopping experience is all about
  Dell, and not the user )
• Option to pre-install Linux instead of Windows
• Option to pre-install Open Office instead of
  Microsoft Office
• Option of no extra software, trial-ware
• Own the "green market
• No overseas call centers

14
Objectives

• Definition of Quality
• Total Quality Management (TQM)
• Role of employees in Quality Improvement
• Strategic Implications of TQM
• Six Sigma
• ISO 9000

15
Meaning of Quality

• Websters Dictionary
• degree of excellence of a thing
• American Society for Quality
• totality of features and characteristics that
  satisfy needs

16
Quality Perspectives

• Are the perspectives the same?
• Should they be?

Q
Consumer
Producer
Product or Service
17
Meaning of Quality Consumers Perspective

• Fitness for use
• how well product or service does what it is
  supposed to
• Quality of design
• designing quality characteristics into a product
  or service
• A Honda and a Mercedes
• may be equally fit for
• use, but with different
• design dimensions

18
Another way of thinking about Quality

• Three categories of satisfaction
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

19
Customer Satisfaction as an attribute of Quality

• Categories of satisfaction cell phones
• Basic or expected attributes
• widespread service
• good voice quality
• Performance attributes
• Good user interface
• Camera
• Surprise and delight attributes
• Integrated phone book that works with all phones

20
Select a recent purchase
?

• Write down
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

21
Customer Satisfaction as an attribute of Quality
?

• Categories of satisfaction Starbucks on campus
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

22
Customer Satisfaction as an attribute of Quality
?

• Categories of satisfaction Class registration
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

23
Customer Satisfaction as an attribute of Quality
?

• Categories of satisfaction CSUSM Parking
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

24
Customer Satisfaction as an attribute of Quality
?

• Categories of satisfaction HTM302 course
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

25
Customer Satisfaction as an attribute of Quality
?

• Categories of satisfaction school IT services
• Basic or expected attributes
• Performance attributes
• Surprise and delight attributes

26
Dimensions of QualityManufactured Products

• 1. Performance
• basic operating characteristics of a product how
  well a car accelerates, brakes, handles, or its
  gas mileage
• 2. Features
• extra items added to basic features, such as
  leather interior
• 3. Reliability
• probability that a product will operate properly
  within an expected time frame that is, the car
  will work without repair for about 100,000
  miles
• Adapted from What does quality really mean?,
  Sloan Management Review 26(11984)25-43.

27
Dimensions of QualityManufactured Products
(cont.)

• 4. Conformance
• degree to which a product meets preestablished
  standards (e.g. gas economy, crash tests, etc.)
• 5. Durability
• how long product lasts before replacement
• 6. Serviceability
• ease of getting repairs, speed of repairs,
  courtesy and competence of repair person

28
Dimensions of QualityManufactured Products
(cont.)

• 7. Aesthetics
• how a product looks, feels, sounds, smells, or
  tastes
• 8. Safety
• assurance that customer will not suffer injury
  or harm from a product an especially important
  consideration for automobiles
• 9. Perceptions
• subjective perceptions based on brand name,
  advertising, and the like

29
Dimensions of Quality Service

• 1. Timeliness
• How long must a customer wait for service, and is
  it completed on time?
• 2. Completeness
• Is everything customer asked for provided?

30
Dimensions of Quality Service (cont.)

• 3. Courtesy
• How are customers treated by employees?
• 4. Consistency
• Is the same level of service provided to each
  customer each time?

31
Dimensions of Quality Service (cont.)

• 5. Accessibility and convenience
• How easy is it to obtain service?
• Does a service representative answer you calls
  quickly?
• 6. Accuracy
• Is the service performed right every time?
• Is your bank or credit card statement correct
  every month?
• 7. Responsiveness
• How well does the company react to unusual
  situations?
• How well is a telephone operator able to respond
  to a customers questions?

32
Meaning of Quality Producers Perspective

• Quality of Conformance
• Making sure a product or service is produced
  according to design
• if new tires do not conform to specifications,
  they wobble
• if a hotel room is not clean when a guest checks
  in, the hotel is not functioning according to
  specifications of its design

33
Meaning of Quality A Final Perspective

• Consumers and producers perspectives depend on
  each other
• Consumers perspective dominated by PRICE
• Producers perspective dominated by COST
• Consumers view must reign supreme

34
TQM Throughout the Organization

• Everyone owns Quality
• Marketing, sales, research
• Engineering
• Purchasing
• Human resources
• Management
• Packing, storing, shipping
• After-sale support
• As well as External Suppliers

35
Cost of Quality

• Cost of achieving good quality
• Prevention
• Planning, Product design, Process, Training,
  Information
• Appraisal
• Inspection and testing, Test equipment, Operator

36
Cost of Quality

• Cost of poor quality
• Internal failure costs
• Scrap, Rework, Process failure, Process downtime,
  Price-downgrading
• External failure costs
• Customer complaints, Product return, Warranty,
  Product liability, Lost sales

37
QualityCost Relationship

• Increased prevention costs lead to decreased
  failure costs
• Improved quality leads to increased sales and
  market share
• Quality improvement at the design stage
• Higher quality products can command higher prices

38
Profitability

• Deming Prize winners showed higher than average
  results on financial performance indicators
• Baldrige Award winners consistently exceed
  industry averages on financial performance
• Quality leads to improved profitability and ROI
• Quality is ... a profit--maker
• In the long run, quality and profitability are
  closely related

39
Quality and Productivity
40
Seven Quality Control Tools

• Pareto Analysis
• Flow Chart
• Control Chart
• Cause-and-Effect Diagram
• Check Sheet
• Histogram
• Scatter Diagram

41
Pareto Analysis
Analyze the cause of each failure and accumulate
totals
42
Pareto Chart
43
Pareto Analysis
?

• Brainstorm with the class to identify the top
  five reasons a given class might be less than
  interesting, based on previous experience
• Determine the ranking of each reason via a class
  vote

44
Flow Chart
Quality Inspections at each process input
output
45
Control Chart
24
21
18
15
Number of defects
12
9
6
3
2
4
6
8
10
12
14
16
Sample number
46
Cause-and-Effect Diagram
47
American Customer Satisfaction Index

• Measures customer satisfaction
• Established in 1994
• Web site http//www.theacsi.org/

48
Six Sigma

• A process for developing and delivering near
  perfect products and services pioneered by
  Motorola in 1986
• Measure of how much a process deviates from
  perfection 3.4 defects per million
• Champion - executive responsible for project
  success

49
ISO 9000

• A set of procedures and policies for
  international quality certification of suppliers
• ISO 90002000
• Quality Management SystemsFundamentals and
  Vocabulary
• defines fundamental terms and definitions used
  in ISO 9000 family
• ISO 90012000
• Quality Management SystemsRequirements
• standard to assess ability to achieve customer
  satisfaction
• ISO 90042000
• Quality Management SystemsGuidelines for
  Performance Improvements
• guidance to a company for continual improvement
  of its quality-management system

50
Informal feedback

• Write a 2 minute journal to be handed in
  immediately
• The journal should briefly summarize
• Areas not understood or requiring clarification