Total Quality Management

1
Total Quality Management

• Chapter 16

2
What is Quality?

• Quality means user satisfaction that goods or
  services satisfy the needs and expectations of
  the user.

3
Quality and Product Policy

• Established by management
• Product planning
• wants and needs of the marketplace
• level of product performance
• price to be charged
• expected sales volume

4
Quality and Product Design

• General specifications set by the marketplace
• expected perfomance, appearance, price, volume
• Product designers
• materials to be used, dimensions, tolerances,
  product capability, service requirements

5
Product Development Cycle
6
Quality and Manufacturing

• Strive for excellence in products
• All products must be within specification
• The less the variation (from the nominal) the
  better
• Tolerance
• the amount of variation allowed from the desired
  value

7
Quality and Use

• Performance
• reliability, durability, maintainability
• Features
• Conformance to specification
• Warranty
• Service
• Aesthetics
• Perceived quality
• Price

8
Total Quality Management (TQM)

• TQM is based on the participation of all members
  of an organization in improving processes, goods,
  services, and the culture in which the work.
• APICS 11th Edition Dictionary

9
TQM - Basic Concepts

• 1. A committed and involved management
• 2. Focus on the customer
• 3. Involvement of the total workforce
• 4. Continuous process improvement
• 5. Supplier partnering
• 6. Performance measures

10
Management Commitment

• Vision Statement
• what the organization will be in 5 years
• Mission statement
• who we are, who are our customers, what we do,
  how we do it
• Quality policy
• how goods and services are provided
• Strategic plan
• includes TQM objectives

11
Customer Focus

• X-plicit
• I want a car that will comfortably carry 5
  passengers and some gear
• X-pected
• we arrived safely at our campsite
• X-citing
• theres a 110 volt outlet in the back!

12
Customer Focus

• Meeting and exceeding customer expectations
• External customers
• people we sell our goods to
• Internal customers
• people or departments who receive output from
  another person or department
• treat them like a customer

13
Customer Requirements

• 1. High quality
• 2. Flexibility to change in volume, etc.
• 3. High service level
• 4. Short lead times
• 5. Consistency in meeting targets
• 6. Low cost
• Customers expect improvements

14
Employee Involvement

• TQM is everyones responsibility
• Employees are expected to do their jobs and to
  work at improving their jobs (and) others jobs

15
Commitment to TQM

• 1. Training
• their own job skills
• cross trained on other jobs
• tools of continuous improvement
• 2. Organization
• to keep close contact with customers
• 3. Local ownership of processes
• empowerment

16
Empowerment

• A condition whereby employees have the authority
  to make decisions and take actions in their work
  areas without approval. For example, a customer
  service representative can send out a replacement
  product if a customer calls with a problem.
• APICs 11th Edition Dictionary

17
TQM - Teams

• Move beyond the contribution of individuals
• Sum of the total effort is increased
• Requires skill and training
• Fundamental part of TQM

18
Supplier Partnerships

• Used in JIT and TQM
• Treat the supplier as a partner and not as an
  adversary
• quality improvements
• mutual sharing of savings
• team approach

19
Performance Measures

• That what gets measured is that what gets done
  - Anonymous
• Decide which processes need improvement
• Evaluate alternatives
• Compare actual to target
• Evaluate employees
• Show trends

20
Measurements

• Need to give useful feedback
• Quantity of good parts per unit time
• Cost
• On time delivery
• Quality
• function
• aesthetics
• accuracy (defects/tolerance)

21
Measurements

• Simple, understandable, relevant and visible to
  the user, preferably developed by the user,
  designed to promote improvement, few in number

22
Measurements

• Customer
• number of complaints
• on-time delivery
• Production
• inventory turns, scrap, cost per unit, time to
  delivery

• Suppliers
• on-time delivery
• rating
• quality performance
• billing accuracy
• Sales
• expense to revenue
• new customers
• sales per square foot

23
Quality Cost Concepts

• Cost of failure to control quality
• failure
• Cost of controlling quality
• prevention
• appraisal

24
Costs of Failure

• Internal failure costs
• scrap
• rework
• spoilage
• these costs diminish with improved quality

• External failure costs
• After the customer receives the goods
• Most costly
• warranty costs
• field service
• other costs to satisfy the customer
• decrese with improved quality

25
Costs of Controlling Quality

• Prevention costs
• training
• statistical process control
• maintenance
• quality planning

• Appraisal costs
• inspection
• quality audits
• testing
• calibration

26
Impact of Quality Improvements
27
Variation

• All things vary, the question is how much
  variablity is acceptable

28
Chance Variation

• 1. People - poorly trained vs skilled
• 2. Machine - well maintained?
• 3. Material - should be consistent
• 4. Method - often by different operators
• 5. Environment - temperature, humidity
• 6. Measurement - poor adjustments

29
Chance Variation

• There is no way to alter chance variation except
  to change the process. If the process produces
  too many defects, then it must be changed.

30
Assignable Variation

• Where variation can be related to a given action
• tool wear, movement
• operator error
• changes in the process

31
Statistical Process Control (SPC)

• Attempts to find the assignable causes (so they
  can be eliminated)
• Helps select processes that are capable of
  producing quality products
• Monitors process to be sure it remains capable of
  producing quality products

32
Patterns of Variability

• A histogram of a number of readings gives a
  predictable pattern
• Normal curve exists in all natural processes
• If a process is studied and detects an odd shape,
  something is causing the change (assignable
  cause)

33
Patterns of Variability

• Shape
• bell curve
• symetrical (even on both sides)
• Center
• computed as the average
• represented by the Greek letter µ mu
• Spread
• measured and represented by the Greek letter s
  sigma

34
Normal Distribution
35
Areas Under the Normal Curve
36
Variation - Example
37
Tolerance

• Allowable departure from a nominal value
  established by design engineers that is deemed
  acceptable for the functioning of the good or
  service over its life cycle.
• APICS 11th Edition Dictionary
• Nominal value
• desired value

38
Process Capability

• Refers to the ability of the process to produce
  parts that conform to (engineering)
  specifications. Process capability relates to the
  inherent variability of a process )
• APICS 11th Edition Dictionary

39
Process Capability

• Compares the 6 sigma spread of a process with the
  specification limits
• LSL - lower specification limit
• USL - upper specification limit
• specification doorway USL - LSL
• The 6 sigma spread of the process should be
  smaller than the specification doorway

40
Process Capability
LSL
USL
Specification Doorway
-3s
3s
6 s Total Process Spread
41
Process Capability
42
Capable?
43
Process Capability
44
Process Capability

• The process spread is not related to the product
  specification tolerance
• A process must be selected that can meet the
  specifications
• or defects will be produced
• Processes can produce defects in one of two ways,
  by having too big a spread (s) or by a shift in
  the average (µ)

45
Process Capability - Example Problem

• In the previous example the process had a
  standard deviation of 0.0016 and a mean of 1.
  If the specification called for a diameter of 1
  /- .005
• a. Approximately what percent of the shafts will
  be within tolerance?
• b. If the tolerance were changed to 1 /- .002,
  approximately what percent of the shafts will be
  within tolerance?

46
Process Capability - Example Problem

• a. Approximately 99.7 of the shafts will be in
  tolerance

47
Process Capability - Example Problem

• b. Approximately 68.3 of the shafts will be in
  tolerance

48
Process Capability Index Cp

• Cp USL - LSL
• 6 s
• If the Cp is greater than one, then the process
  is capable of producing 99.7 of parts within
  tolerance
• Many companies use a Cp of 1.33 or 2 since
  processes may shift
• Note Cp assumes the process is centered

49
Process Capability Index Cp
50
Cp - Example Problem

• The specifications for the weight of a chemical
  in a compound is 10 /- 0.05 grams. If the
  standard deviation of the weighing scales is 0.02
  grams, is the process considered capable?
• Cp 10.05 - 9.95
• 6 x 0.02
• 0.83
• Since 0.83 is less than one, the process is not
  capable.

51
Process Capability Cpk Index

• Cpk the lesser of
• (Mean - LSL) (USL - Mean)
• 3s or 3s
• Cpk Value Evaluation
• Less than 1 Unacceptable process
• 1 to 1.33 Marginal process
• Greater than 1.33 Acceptable process

52
Cpk Index
53
Cpk - Example Problem

• A company produces shafts with a nominal diameter
  of 1 and a tolerance of /- .005 on a lathe. The
  process has a standard deviation of .001. For
  each of the following cases calculate the Cpk and
  evaluate the process capability.
• a. A sample has an average of .997.
• b. A sample has an average of .998.
• c. A sample has an average of 1.001

54
Cpk - Example Problem

• a. Cpk 1.005 - .997 2.67 or .997 - .995
  .067
• 3 x .001 3 x .001
• Cpk is less than 1. Process is not capable
• b. Cpk 1.005 - .998 2.33 or .998 - .995
  1.00
• 3 x .001 3 x .001
• Cpk is 1. Process is marginal
• c. Cpk 1.005 - 1.001 1.33 or 1.001 -
  .995 2.00
• 3 x .001 3 x .001
• Cpk is 1.33. Process is capable

55
Process Control

• Attempts to prevent defects by showing when there
  is assignable cause
• The process should exhibit only normal variation
  when there is no assignable cause
• This variation is monitored on a control chart

56
Control Charts

• Run chart A graphical technique that illustrates
  how a process is performing over time.
• X-bar (averages) chart A control chart in which
  the subgroup average, X-bar, is used to evaluate
  the stability of the process level.
• R chart A control chart in which the subgroup
  range, R, is used to evaluate the stability or
  variability within a process.
• APICS 11th Edition Dictionary

57
Run Charts
58
X (X-bar) and R Charts

• Small samples (3 - 9 pieces) are taken on a
  regular basis to find the the average (X) and
  range (R) of the sample
• These values are then plotted on a chart
• X-bar chart
• R chart

59
Control Limits

• Lines on a control chart showing the normal
  (99.7) of expected variation of a process
• Readings (X-bar or R) outside of these limits
  indicates assignable cause of variation

60
X-bar and R Control Charts
61
Interpretting Control Charts

• A shift in the average (X-bar)
• something has moved
• change in method or material
• worn tools
• A change in the range (R)
• loose tools
• change in method or material

62
Action on Out of Control Points

• Out-of-control points indicate that something
  unusual has occurred
• Current conditions should be recorded
• The operator is probably the most aware of what
  has changed
• The sooner an investigation is conducted the
  better

63
Attributes

• Items that do not conform to specification
  (difficult to measure)
• scratches, dents
• light bulbs
• go-no-go inspection
• sterility
• dissatsified customers
• missing items

64
Attribute Charts

• p-chart
• Frequency of defects are charted
• Investigation is made of unusual changes in
  number of defects
• After-the-fact and do not prevent defects

65
Other Quality Tools

• 1. Pareto charts
• 2. Checksheets
• 3. Process flow charts
• 4. Scatterplots
• 5. Cause and effect (fishbone) diagrams

66
Pareto Charts

• Histograms arranged in decending order
• typically problems or defects (scrap, customer
  complaints)
• Identifies most significant area to start
  investigation

67
Checksheets

• Lists source of quality problems
• customer complaints
• missing parts, defects
• Occurances are simpy checked on the sheet
• Totals should show where the most problems occur

68
Process Flow Charts

• Show in detail the steps required to produce the
  product or service
• Can show where problems occur
• delays
• wasted activity
• excess travelling

69
Scatterplots

• Shows the relationship between two variables
• temperature and strength
• length of stay and satisfaction
• price and number sold
• study hours and grade

70
Cause and Effect (Fishbone) Diagrams

• Plots potential causes of a quality problem
• Encourages input from group members

• Sorts by category
• People
• Machine
• Method
• Material
• Measurement
• Environment

71
Cause and Effect (Fishbone) Diagrams
Man
Machine
Material
Quality Problem
Method
Environment
Measurement
72
Sampling Inspection

• 100 inspection
• inspect every part
• when the consequence of failure is critical
• when its easy to do
• medical, aeronautics
• tends to be expensive
• Acceptance sampling
• take a sample of parts
• accept or reject the entire batch

73
When to Use Acceptance Sampling

• Testing is destructive
• ultimate pull strength of chain, sterility,
  firecrackers
• Not enough time to sample
• election polls
• It is too expensive to test the whole batch
• machine output, market surveys
• Human error will be in the sampling
• as high as 3
• judgement is involved

74
Conditions Necessary for Sampling

• All items are processed under the same conditions
• same machine, same load of corn
• Samples must be random
• inspectors are not allowed to choose
• The lot should be homogeneous
• start, middle and end of the batch
• Batches are large
• need enough samples to be significant

75
Sampling Plans

• Establish a level of acceptance
• if more than 2 defects are found, reject
• AQL - Acceptable Quality Level
• Requires a pre-determined number of samples
• Procedures are set down to keep sampling methods
  consistant

76
Sampling Plans
77
Sampling Plans

• Consumers risk
• the probability of accepting a batch which is
  actually worse than the value found in the sample
• Producers risk
• the probability of a rejecting a batch that is
  actually better than the sample indicates
• Larger samples help to reduce these risks

78
Sampling Plans
Producers Risk
Consumers Risk
True Defective
Sample Defective - - -
79
Sampling Plans - Cost

• Inspection costs money
• employees time
• destroyed product
• Need to balance the cost of sampling between the
  consumers risk and the producers risk

80
ISO Certification

• International Organization for Standardization -
  Geneva Switzerland
• Iso Greek for equality
• Management standards
• May be a requirement of doing business
• Most recent standard - ISO90002000

81
Third Party Registration System

• Registrar Accreditation Board
• American Society for Quality - ASQ
• Registers and regularly audits
• quality system is in place
• it is being followed
• documentation is provided

82
ISO 90002000 8 Principles

• 1. Customer focus
• 2. Leadership
• 3. Involvement of people
• 4. Process approach

• 5. System approach to management
• 6. Continuous improvement
• 7. Factual approach to decision making
• 8. Mutually beneficial supplier relations

83
ISO 90002000

• Product realization
• bringing the product or service into reality
• Applies to services as well as manufacturing

84
ISO Documentation Pyramid

• 1. Quality manual, organization chart, indexed to
  level 2
• 2. What the firm does to meet level 1 policies,
  indexed to level 3
• 3. Work procedures and instructions
• 4. Records of proof of the above

85
ISO Certification

• Management standard
• Process approach
• Audited by third party
• Consistency in doing business
• Continuous improvement

86
Benchmarking

• Compares an organization to the best in class
• not necessarily in the same business
• Looks outward for ideas on improvement

87
Benchmarking

• 1. Select the process
• 2. Identify an organization that is best in
  class
• for that process i.e. accounts receivable
• 3. Study the benchmarked organization
• 4. Analyze the data
• metrics, a measure of performance
• quality, response time, cost per order

88
Six Sigma

• Focus on improving all business functions
• Initiated by upper management
• Tasked by middle management
• Projects
• Project managers

89
Six Sigma

• Striving for failure rates less than 3.4 out of
  one million possibilities
• Applied to all business processes
• Customer focus

90
Six Sigma

• Scope Systemic reduction of variability
• Quality Definition Defects per million
• Purpose Reduce variation - increase
• profits
• Measurement Defects per million
• Focus Locate and eliminate sources of
• process error

91
Six Sigma Projects

• DMAIC
• Design
• Measure
• Analyze
• Improve
• Control

92
Six Sigma Project

• 1. Select the appropriate metrics
• 2. Determine how metrics will be tracked
• 3. Determine current baseline
• 4. Determine input variables
• 5. Determine changes needed
• 6. Make the changes
• 7. Did changes have a positive effect?
• 8. Establish controls at the new level

93
Six Sigma

• Achieved when process capability is equal to or
  greater than 2
• The process variation consumes less than half the
  specification doorway

94
Project Managers

• Green Belts
• specific amount of training
• project savings of 10,000
• Black Belts
• more training
• project savings of 100,000
• Master Black Belts
• Masters Degree
• savings of 1,000,000

95
Six Sigma

• Extension of SPC to business processes
• Continuous improvement
• reduced waste
• decreased costs
• improved opportunities
• Customer benefits

96
Quality Function Deployment

• Decision making method
• Voice of the customer
• Helps incorporate customer wants and needs into
  design features

97
House of Quality - Method

• 1. Gather information from customers and identify
• wants and needs
• 2. Rate how we compare to the competition
• 3. Identify the features that affect the wants
  and needs
• 4. Identify the interactions between the features
• 5. Prioritise the wants/features by importance to
  customer
• 6. Set design objectives by feature
• 7. Assign responsibility for meeting the design
  objectives

98
4. Interactions between features
2. How we compare to the competition
3. Features that affect the desired attributes
5. Importance to customer
1. Attributes desired by the cusotmer
6. Design Objectives
7. Responsibility
99
House of Quality
100
JIT - TQM - MRPII

• JIT seeks to eliminate waste
• inward looking
• TQM emphasis on customer satisfaction
• outward looking
• MRPII manages resources
• All are involved in satisfying the customer

101
JIT - TQM - MRPII