PRODUCTIONSOPERATIONS MANAGEMENT

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Management of Quality
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Quality

• What does the term quality mean?
• Quality is the ability of a product or service to
  consistently meet or exceed customer
  expectations.
• Conformance to Specifications
• Absence of Variation (Deming)

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Other Definitions?
Good Quality product? Good Quality service?
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What Is Quality??
The totality of features and characteristics of
a product or service that bear on its ability to
satisfy implied or stated needs.
ANSI/ASQ
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What Is Quality??
Product or service that fulfills or exceeds our
expectations based on intended use and the
selling price.
Value / Good Deal!
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Different Expectations?
TI-83 - 145.95
E-Promos 4.68
Dollar Store 1.00
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Different Expectations?
Timex 20
2000
200
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Product Service Expectations
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NEWCON Monocular
Newcon is a leading manufacturer of fine optics
lenses.
700
700
300
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Competitors
100
30
150
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NEWCON Monocular
Newcon is a leading manufacturer of fine optics
lenses.
29.95 ( SH) Good Deal?
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Brief History of Quality

• 1790 - Metric system implemented to
• consolidate measuring systems
• - Eli Whitney begins production
• of interchangeable muskets
• 1881 - Frederick Taylor introduced time
• and motion studies
• - Henry Ford uses the assembly line
• 1924 - Shewhart introduces statistical
• control charts at Bell Labs

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Brief History of Quality
1945 - Post WWII - US. manufacturing boom Japan
devastated, Europe in shambles 1950s - Deming
Juran to Japan - JUSE created Deming Prize
- Feigenbaum wrote Total Quality Control
(1951) 1960s - Zero Defects Phil
Crosby 1970s - Japans auto industry
grows 1980 - Deming wrote If Japan Can - Why
Cant We?
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Brief History of Quality
1980 - 3 of 10 Americans place quality
1 1980-85 - SPC movement begins in
US - Quality circles begin - Quality is Job
One at Ford - Total Quality Management at
the US. Navy - Quality Assurance rather
than QC 1987 - MBNQA ISO 9000 1988 - DOD
mandates TQM 1990 - 9 of 10 buyers place
quality 1 1994 - QS 9000
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What Is An Example Of A High Quality Car?
Acura NSX
Mercedes Benz
Experience? Image? Cost?
Infinity G35
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Dimensions of Quality

• Performance - main characteristics of the
  product/service Does it do what it supposed to
  do?
• Conformance - how well product/service conforms
  to - specifications
• - customers expectations
• Aesthetics - appearance, feel, smell, taste

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Dimensions of Quality (Contd)

• Reliability - consistency of performance
• Durability - useful life of the product/ service
• Perceived Quality - indirect evaluation of
  quality (e.g. reputation)
• Serviceability - service after sale
• Special Features - extra characteristics

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Examples of Quality DimensionsAutomobile
Performance Everything works Conformance Specs
Accelerates correctly Customer Seat fits my
butt! Aesthetics Color, interior
design Reliability Always starts in the
cold Durability Running at 150,000
miles Perceived Quality Friends think it is
best Serviceability Free towing loaner Special
Features On Star, satellite radio
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Quality Measures
Quantitative (Measurable/Objective) Performance
(acceleration, braking) Conformance (weight,
dimensions, etc.) Aesthetics (color, texture,
etc.) Reliability (mean time between
failures) Durability (useful life)
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Quantitative
1 Year Bulb!
Soft White
Light 820 Lumens
Life 1500 Hrs.
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Quality Measures
Qualitative (Opinions/Subjective) Performance
(acceleration, braking) Conformance (meets my
expectations) Aesthetics (color, texture,
etc.) Reliability (inconvenience to
me) Durability (lasts as long as I think it
should)
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Aesthetics
What is an example of an ugly car?
NOTE Ugly can be cool!!
Citron
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Ugly?
Element
Aztec
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Ugly?
Scion
Ridgeline
Magnum
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Ugly?
Saleen
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Consequences of Poor Quality

• Loss of business
• Companies have no idea of the cost of just one
  dissatisfied customer.
• Liability
• Productivity
• Costs

Companies that produce high quality products at a
competitive price in a short time period will
realize a Larger Profit
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Responsibility for Quality

• Top management
• Design
• Procurement
• Production/operations
• Quality assurance
• Packaging and shipping
• Marketing and sales
• Customer service

Everyone!!
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Costs of Quality

• Failure Costs
• Costs incurred by defective products or faulty
  services.
• Internal Failure Costs
• Costs incurred to fix problems that are detected
  before the product/service is delivered to the
  customer.
• External Failure Costs
• All costs incurred to fix problems that are
  detected after the product/service is delivered
  to the customer.

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Costs of Quality (continued)

• Appraisal Costs
• All product and/or service inspection costs.
• Prevention Costs FOCUS AREA!
• All TQ training, TQ planning, customer
  assessment, process control, and quality
  improvement costs to prevent defects from
  occurring.

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Ethics and Quality

• Substandard work
• Defective products
• Substandard service
• Poor designs
• Shoddy workmanship
• Substandard parts and materials

Having knowledge of this and failing to correct
and report it in a timely manner is unethical.
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Good Enough??
What is good enough? Is 99.9 Good Enough?
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Almost Isnt Good Enough
If 99.9 is good enough, then
Two million documents could be lost by the IRS
this year. 22,000 checks could be deducted from
the wrong account in the next 60 minutes. 1,314
phone calls could be misdirected every minute.
Insight, Syncrude Canada Ltd. Newsletter
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Almost Isnt Good Enough
If 99.9 is good enough, then
12 babies could be given to the wrong parents
each day. 5,517,200 cases of soft drinks could
be produced flat this year. 315 entries in the
Websters Third Edition could be misspelled.
Insight, Syncrude Canada Ltd. Newsletter
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Almost Isnt Good Enough
If 99 is good enough, then
20,000 pieces of mail could be lost every
hour 5,000 incorrect surgeries could be
performed per week There could be no electricity
for almost 7 hours each month
Motorola
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Key Contributors to Quality Management
W. A. Shewhart Armand V. Feigenbaum Dr. W.
Edwards Deming Dr. Joseph M. Juran Philip B.
Crosby Kaoru Ishikawa Dr. Genichi Taguchi
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Walter Shewhart

• - Physicist with Bell Labs in 1920s
• - Described variation in statistical terms
• Discovered data followed an orderly pattern
• - Found similar orderly patterns in
  manufacturing processes at Western Electric
• Discovered he could monitor a process by
• graphing the average and the variability of
• samples from the process over time
• (X-Bar and R chart)

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Armand V. Feigenbaum

• - Published the landmark book Total Quality
  Control in 1951
• First use of total quality control concept
• Concept still used today
• - Focus on the essence that company wide quality
  be connected to both customers and suppliers

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Dr. W. Edwards Deming

• - U. S. Government Statistician
• - Went to Japan in 1950 to help with
  reconstruction of Japanese industry
• - Worked with all levels of people but made
  management accountable for quality
• Focused on using statistical methods to increase
  quality and raise productivity and reduce cost
• 1951 the Japanese Union of Scientists and
• Engineers (JUSE) - Deming Award for quality
• Deming's 14 points for management

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Demings 14 Points

• 1. Innovate and allocate for the long-term needs
  rather than the short-term
• 2. Discard accepting nonconforming products and
  services
• 3. Depend on process control through statistical
  techniques not inspection
• 4. Reduce the number of multiple-source suppliers
• Use statistical techniques to reduce waste
• 6. Institute thorough training
• 7. Provide knowledge of statistical methods and
  encourage its use

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Demings 14 Points

• 8. Reduce fear by encouraging open, two-way,
  non-punitive communication
• 9. Reduce waste by understanding production
• Eliminate the use of goals and slogans
• 11. Re-evaluate work standards so not to impede
  productivity
• 12. Institute statistical training on a broad
  scale
• 13. Retrain employees in new skills
• 14. Management must push every day for
  continuous quality improvement

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Dr. Joseph M. Juran

• 1924 joined Western Electric's Hawthorne
• Plant in the inspection department.
• Eventually become consultant and wrote
• Quality Control Handbook in 1951.
• - 1954 conducted seminars in Japan.
• - 1979 founded Juran Institute.
• - Written dozens of books on quality.

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Philip B. Crosby
- 1979 founded Philip Crosby Associates Inc., a
quality consulting and training company -
Written many books on quality with Quality Is
Free being the most famous
Crosbys Absolutes 1. Definition of quality is
conformance to requirements 2. System of quality
is prevention 3. Performance standard is zero
defects 4. Measure of quality is the price of
nonconformance
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Dr. Genichi Taguchi
Improved quality and lowered cost by optimizing
product design and manufacturing using his
version of design of experiments


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Kaoru Ishikawa

• Strongly influenced by Deming Juran
• Called attention to Internal Customer
• Developed Cause and Effect Diagrams
• Fishbone Diagrams

Effect
Possible Causes
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Quality Awards
Baldrige Award
Deming Prize
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1987 U.S. Congress Established The Malcolm
Baldrige National Quality Award
This award promotes Awareness of quality as an
increasingly important element in
competitiveness, Understanding of the
requirements for performance excellence,
and Sharing of information on successful
performance strategies and the benefits derived
from implementation of these strategies.
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MBNQA Eligibility Categories
Awards may be given each year in each of the
following Manufacturing Companies Service
Companies Small Businesses
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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)

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Benefits of Baldrige Competition

• Financial success
• Winners share their knowledge
• The process motivates employees
• The process provides a well-designed quality
  system
• The process requires obtaining data
• The process provides feedback

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The Deming Prize

• Honoring W. Edwards Deming
• Japans highly coveted award
• Main focus on statistical quality control

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Quality Certification - ISO 9000

• Set of international standards on quality
  management and Quality assurance, critical to
  International Business
• These standards, briefly, require firms to
  document their quality-control systems at every
  step (incoming raw materials, product design,
  in-process monitoring and so forth) so that
  theyll be able to identify those areas that are
  causing quality problems and correct them.

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What is ISO 9000?
- It is an international protocol for organizing
and documenting processes and procedures used to
establish a quality system. - It is not a
certification of quality. - It is not meant to
replace or displace existing quality TQM programs.
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ISO 9000 Series
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ISO 14000

• ISO 14000 - A set of international standards for
  assessing a companys environmental performance
• Standards in three major areas
• Management systems
• Operations
• Environmental systems

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QS - 9000
US Auto Makers Standard Additions to
ISO Developed by Chrysler/Ford/General Motors
Supplier Requirements Task Force QS - 9000 first
printed in 1994. Applies to all internal and
external suppliers directly to Chrysler, Ford,
and General Motors or other OEM customers
subscribing to the document. Tier 1 supplier
compliance mandated by December, 1997
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QS - 9000 Goal
Development of fundamental quality systems that
provide for continuous improvement, emphasizing
defect prevention and the reduction of variation
and waste in the supply chain.