Fundamentals of Quality

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• Chapter 1
• Fundamentals of Quality
• Gitlow, Oppenheim, Oppenheim and Levine

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Chapter 1Fundamentals of Quality

• Learning Objectives
• Understand the definition of a process
• Understand variation and its causes in a process
• Special causes of variation
• Common causes of variation
• Understand the two definitions of quality
• Goal post view
• Continuous improvement view
• Understand the quality environment

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Chapter 1Fundamentals of Quality

• Learning Objectives
• Understand the three types of quality
• Quality of design or redesign
• Quality of conformance
• Quality of performance
• Understand the relationship between Quality and
  Cost
• Features and price
• Uniformity and dependability
• Understand the relationship between Quality and
  Productivity
• Understand the benefits of improving quality
• Know how to apply take-away knowledge

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Process Basics

• Definition of a process
• A process is a collection of interacting
  components that transform inputs into outputs
  toward a common aim called a mission statement.

Outputs
Inputs
Process
Manpower Equipment Materials/Goods Methods Environ
ment
Manpower Equipment Materials/Goods Methods Environ
ment
Transformation of inputs, value (time, place,
form) is added or created
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• Definition of a process
• It is managements job to optimize the entire
  process toward its aim.
• This may require the sub-optimization of selected
  components of the process.

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• Definition of a Process
• Processes exist in all facets of organizations
  and our understanding of them is crucial
• Administration
• Sales and service
• Human resources
• Maintenance
• Communication
• Production
• Relationships between people are processes
• All processes can be studied, documented,
  defined, improved, and innovated

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• Definition of a process
• An organization is a multiplicity of micro
  sub-processes, all synergistically building to
  the macro process of that firm.
• All processes have customers and suppliers these
  customers and suppliers can be internal or
  external to the organization.

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• Variation in a Process
• The outputs from all processes and their
  component parts vary over time.

Actual Values (Variation among actual values)
Number of Accidents
Variation between Ideal and Actual Values
Ideal Value 0
Time
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• Variation in a process
• Special causes of variation are due to events
  external to the usual functioning of a system.
• Examples could include (if they are not part of
  the system)
• New raw materials
• A drunk employee
• A new operator

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• Variation in a process
• Common causes of variation are due to the process
  itself.
• Process capability is determined by inherent
  common causes of variation.
• Examples of common causes of variation include
• Hiring, training and supervisory practices
• Lighting
• Stress
• Management style
• Policies and procedures
• Design of products or services

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• Variation in a process
• Employees cannot control a common cause of
  variation and should not be held accountable for,
  or penalized for, its outcomes.
• Managers must realize that unless a change is
  made in the process (which only they can make)
  the processs capability will remain the same.

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Process Basics
Workshop The Drunk Employee
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• More About the Feedback Loop
• A feedback loop relates information about outputs
  from any stage or stages back to another stage or
  stages so that an analysis of the process can be
  made.

Input
Process
Output
Feedback Loop
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• More About the Feedback Loop
• There are three feedback loop situations
• no feedback loop
• special cause only feedback loop
• special and common cause feedback loop

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DEFINITION OF QUALITY

• Goal Post View
• Continuous Improvement View

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• Goal post view
• Conformance to valid customer requirements, that
  is, as long as an output fell within acceptable
  limits, called specification limits, around a
  desired value, called the nominal value (denoted
  by m), or target value, it was deemed
  conforming, good, or acceptable.

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Definition of Quality

No Good, Loss
No Good, Loss
Good, No Loss
Loss
Nominal
LSL
USL
Quality Characteristic
m
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• Goal post view (example)
• The desired diameter of stainless steel ball
  bearings is 25 mm (the nominal value).
• A tolerance of 5 mm above or below 25 mm is
  acceptable to purchasers.
• Thus, if a ball bearing diameter measures between
  20 mm and 30 mm (inclusive), it is deemed
  conforming to specifications.
• If a ball bearing diameter measures less than 20
  mm or more than 30 mm, it is deemed not
  conforming to specifications, and is scrapped at
  a cost of 1.00 per ball bearing.

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• Continuous Improvement View
• Quality is a predictable degree of uniformity and
  dependability, at low cost and suited to the
  market.
• Losses begin to accrue as soon as a quality
  characteristic of a product or service deviates
  from the nominal value.
• As with the goal post view of quality, once the
  specification limits are reached the loss
  suddenly becomes positive and constant,
  regardless of the deviation from the nominal
  value beyond the specification limits.

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• Continuous improvement view
• L(y) k(y-m)2 loss of deviating (y-m) units
  from the nominal value of m
• y the value of the quality characteristic for a
  particular item of product or service
• m the nominal value for the quality
  characteristic
• k a constant, A/d2
• A the loss (cost) of exceeding specification
  limits (e.g., the cost to scrap a unit of
  output)
• d the allowable tolerance from m that is used
  to determine specification limits.

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• Continuous improvement view
• Under the Taguchi Loss Function the continuous
  reduction of unit-to-unit variation around the
  nominal value is the most economical course of
  action, absent capital investment

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• Continuous improvement view (example)
• Returning to the production of stainless steel
  ball bearings. Every millimeter higher or lower
  than 25 mm causes a loss that can be expressed by
  the following Taguchi loss function 
• L(y) k(y-m)2 (A/d2)(y-m)2
  (1.00/5mm2)(y-25mm)2 (.04)(y-25mm)2

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Diameter of Ball Bearing (y) Value of Taguchi Loss Function L(y)
18 1.00
19 1.00
20 1.00
21 0.64
22 0.36
23 0.16
24 0.04
25 0.00
26 0.16
27 0.36
28 0.64
29 1.00
30 1.00
31 1.00
32 1.00
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The Quality Environment

• The pursuit of quality requires that
  organizations globally optimize their system of
  interdependent stakeholders.
• This system includes employees, customers,
  investors, suppliers and subcontractors,
  regulators, the environment, and the community.

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• Employees are the most critical stakeholders of
  an organization.
• According to quality expert Kaoru Ishikawa In
  management, the first concern of the company is
  the happiness of people who are connected with
  it. If the people do not feel happy and cannot
  be made happy, that company does not deserve to
  exist. . . The first order of business is to let
  the employees have adequate income. Their
  humanity must be respected, and they must be
  given an opportunity to enjoy their work and lead
  a happy life.

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Types of Quality

• There are three types of quality
• Quality of design / redesign
• Quality of conformance
• Quality of performance
• The above types of quality create the never
  ending spiral of continuous improvement of
  products, services or processes

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• Quality of design
• Quality of design / redesign focuses on
  determining the quality characteristics of
  products that are suited to the needs and wants
  of a market, at a given cost that is, quality of
  design develops products from a customer
  orientation.

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• Quality of design / redesign
• Quality of design studies begin with consumer
  research, service call analysis, and sales call
  analysis, and lead to the determination of a
  product concept that meets the consumers needs
  and wants.
• Next, specifications are prepared for the product
  concept.

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• Quality of conformance
• Quality of conformance is the extent to which a
  firm and its suppliers can produce products with
  a predictable degree of uniformity and
  dependability, at a cost that is in keeping with
  the quality characteristics determined in a
  quality-of-design study.
• The ultimate goal of process improvement and
  innovation efforts is to create products and
  services whose quality is so high that consumers
  (both external and internal) extol them.

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• Quality-of-performance
• Quality of performance studies focus on
  determining how the quality characteristics
  determined in quality-of-design studies, and
  improved and innovated in quality-of-conformance
  studies, are performing in the marketplace.
• The major tools of quality-of-performance studies
  are consumer research and sales/service call
  analysis.
• These tools are used to study after-sales
  service, maintenance, reliability, and logistical
  support, as well as to determine why consumers do
  not purchase the companys products.

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Relationship between Quality and Cost

• Features and Price
• Features and price determine whether a consumer
  will initially enter a market segment hence
  features and price determine market size.
• Dependability and uniformity determine a
  products success, and therefore its market
  share, within a market segment.

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• Generally, products or services with more
  features or fancier features have higher costs to
  the manufacturer and higher prices to the
  consumer than products or services with fewer or
  simpler features.

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• Dependability and Uniformity
• Uniformity and dependability create an inverse
  relationship between quality and cost. When the
  degree of uniformity and dependability of a
  product is high, the quality of the product is
  high, and the overall cost to both the
  manufacture and the consumer is less.
• This relationship is explained by the Taguchi
  Loss Function.

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1.5 Relationship between Quality and Cost
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• Conclusion
• Managers must balance the cost of having many
  market segments with the benefits of high
  consumer satisfaction caused by small deviations
  between an individual consumers needs and the
  product characteristic package for his market
  segment. Also, managers must continually strive
  to reduce variation in product characteristics
  for all market segments.

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• Stressing productivity often has the opposite
  effect of what management desires
• Managements ability to improve the process
  results in a decrease in defectives, yielding an
  increase in good units, quality, and productivity

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Benefits of Improving Quality

• Several benefits result from improving a process
  
• rework decreases
• productivity rises
• quality improves
• cost per good unit is decreased
• price can be cut
• workers morale goes up because they are not seen
  as the problem. This last aspect leads to
  further benefits
• less employee absenteeism
• less burnout,
• more interest in the job
• increased motivation to improve work.
• This is called the chain reaction of quality