Quality: Management of Quality Pertemuan 11 Mata kuliah: J0444 - Manajemen Operasional Tahun: 2010.

Quality: Management of Quality

Pertemuan 11

Mata kuliah : J0444 - Manajemen OperasionalTahun : 2010

Learning Objectives

• Define the term quality. • Explain why quality is important and the

consequences of poor quality. • Identify the determinants of quality. • Describe the costs associated with quality. • Describe the quality awards. • Discuss the philosophies of quality gurus. • Describe TQM. • Give an overview of process improvement. • Describe and use various quality tools.

Quality Management

• What does the term quality mean?

• Quality is the ability of a product or service to consistently meet or exceed customer expectations.

Definitions of Quality

• ASC: Product characteristics & features that affect customer satisfaction

• User-Based: What consumer says it is• Manufacturing-Based: Degree to which a

product conforms to design specification• Product-Based: Level of measurable product

characteristic

Quality Principles

• Customer focus• Continuous improvement• Employee empowerment• Benchmarking• Just-in-time• Tools of TQM

Yields: How to do what is important and to be accomplished

Dimensions of Quality

• Performance - main characteristics of the product/service

• Aesthetics - appearance, feel, smell, taste

• Special Features - extra characteristics

• Conformance - how well product/service conforms to customer’s expectations

• Reliability - consistency of performance

Dimensions of Quality (Cont’d)

• Durability - useful life of the product/service

• Perceived Quality - indirect evaluation of quality (e.g. reputation)

• Serviceability - service after sale

Examples of Quality DimensionsDimension

1. Performance 2. Aesthetics 3. Special features

(Product) Automobile

Everything works, fit & finish Ride, handling, grade of materials used Interior design, soft touch Gauge/control placement Cellular phone, CD player

(Service) Auto Repair

All work done, at agreed price Friendliness, courtesy, Competency, quickness Clean work/waiting area Location, call when ready Computer diagnostics

Examples of Quality Dimensions

Dimension

5. Reliability 6. Durability 7. Perceived quality 8. Serviceability

(Product) Automobile

Infrequency of breakdowns Useful life in miles, resistance to rust & corrosion Top-rated car Handling of complaints and/or requests for information

(Service) Auto Repair

Work done correctly, ready when promised Work holds up over time Award-winning service department Handling of complaints

Service Quality

• Convenience• Reliability• Responsiveness• Time• Assurance• Courtesy• Tangibles

Examples of Service Quality

Dimension Examples1. Convenience Was the service center conveniently located?

2. Reliability Was the problem fixed?

3. Responsiveness Were customer service personnel willing and able to answer questions?

4. Time How long did the customer wait?

5. Assurance Did the customer service personnel seem knowledgeable about the repair?

6. Courtesy Were customer service personnel and the cashierfriendly and courteous?

7. Tangibles Were the facilities clean, personnel neat?

Challenges with Service Quality

• Customer expectations often change• Different customers have different expectations• Each customer contact is a “moment of truth”• Customer participation can affect perception of

quality• Fail-safing must be designed into the system

Determinants of Quality

Service

Ease ofuse

Conforms to design

Design

Determinants of Quality (cont’d)

• Quality of design– Intension of designers to include or exclude

features in a product or service

• Quality of conformance– The degree to which goods or services

conform to the intent of the designers

The Consequences of Poor Quality

• Loss of business• Liability• Productivity• Costs

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

Responsibility for Quality

Costs of Quality

• Failure Costs - costs incurred by defective parts/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.

Costs of Quality (continued)

• Appraisal Costs– Costs of activities designed to ensure

quality or uncover defects

• Prevention Costs– All TQ training, TQ planning, customer

assessment, process control, and quality improvement costs to prevent defects from occurring

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

Ethics and Quality

Having knowledge of this and failing to correctand report it in a timely manner is unethical.

Quality Awards

Baldrige Award

Deming Prize

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)

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

Quality Certification

• ISO 9000

– Set of international standards on quality management and quality assurance, critical to international business

• ISO 14000– A set of international standards for

assessing a company’s environmental performance

ISO 9000 Standards

Requirements

• System requirements

• Management

• Resource

• Realization

• Remedial

• ISO 14000 - A set of international standards for assessing a company’s environmental performance

• Standards in three major areas– Management systems– Operations– Environmental systems

ISO 14000

• Management systems– Systems development and integration of

environmental responsibilities into business planning

• Operations– Consumption of natural resources and

energy• Environmental systems

– Measuring, assessing and managing emissions, effluents, and other waste

ISO 14000

Total Quality Management

A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

T Q M

Organizational Practices

Quality Principles

Employee Fulfillment

Attitudes (e.g., Commitment)

How to Do

What to Do

EffectiveBusiness

EffectiveBusiness

CustomerSatisfaction

CustomerSatisfaction

Achieving Total Quality Management

Concepts of TQM

• Continuous improvement• Employee empowerment• Benchmarking• Just-in-time (JIT)• Taguchi concepts• Knowledge of TQM tools

Continuous Improvement

Represents continual improvement of process & customer satisfaction

Involves all operations & work units

Other names Kaizen (Japanese) Zero-defects Six sigma

Shewhart’s PDCA Model

4.Act 1.Plan

3.Check 2.Do

Identify the improvement and make a plan

Test the planIs the plan working

Implement the plan

Employee Empowerment

Getting employees involved in product & process improvements 85% of quality problems are due to process &

material

Techniques Support workers Let workers make decisions Build teams & quality circles

© 1995 Corel Corp.

Benchmarking

Selecting best practices to use as a standard for performance

• Determine what to benchmark• Form a benchmark team• Identify benchmarking partners• Collect and analyze benchmarking

information• Take action to match or exceed the

benchmark

Just-in-Time (JIT)

Relationship to quality:– JIT cuts cost of quality– JIT improves quality– Better quality means less inventory and

better, easier-to-employ JIT system

Just-in-Time (JIT)

• ‘Pull’ system of production/purchasing– Customer starts production with an order

• Involves ‘vendor partnership programs’ to improve quality of purchased items

• Reduces all inventory levels– Inventory hides process & material

problems• Improves process & product quality

Taguchi Techniques

• Experimental design methods to improve product & process design– Identify key component & process variables

affecting product variation• Taguchi Concepts

– Quality robustness– Quality loss function– Target specifications

• Ability to produce products uniformly regardless of manufacturing conditions

• Put robustness in House of Quality matrices besides functionality © 1984-1994 T/Maker Co.

© 1995 Corel Corp.

Quality Robustness

• Shows social cost ($) of deviation from target value• Assumptions

– Most measurable quality characteristics (e.g., length, weight) have a target value

– Deviations from target value are undesirable• Equation: L = D2C

– L = Loss ($); D = Deviation; C = Cost

Quality Loss Function

Freq.

XTarget USLLSL

A study found U.S. consumers preferred Sony TV’s made in Japan to those made in the U.S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences.

Japanese factory (Target-oriented)

U.S. factory (Conformance-oriented)

Target Specification Example

Seven Tools for TQM

Tools of TQM

• Tools for generating ideas– Check sheet– Scatter diagram– Cause and effect diagram

• Tools to organize data– Pareto charts– Process charts (Flow diagrams)

• Tools for identifying problems– Histograms– Control chart

Check Sheet

Billing Errors

Wrong Account

Wrong Amount

A/R Errors

Wrong Account

Wrong Amount

Monday

• Used to find problem sources/solutions• Other names

– Fish-bone diagram, Ishikawa diagram• Steps

– Identify problem to correct– Draw main causes for problem as ‘bones’– Ask ‘What could have caused problems in

these areas?’ Repeat for each sub-area.

Cause and Effect Diagram

Too many defects

Too many defects

Problem

Cause and Effect Diagram Example

Method Manpower

Material Machinery

Too many defects

Too many defects

Main Cause

Main Cause

Cause and Effect Diagram Example

Method Manpower

Material Machinery

DrillDrillDrillDrillOvertimeOvertimeOvertimeOvertime

SteelSteelSteelSteel

WoodWoodWoodWood

LatheLatheLatheLathe

Too many defects

Too many defects

Sub-Cause

Cause and Effect Diagram Example

Method Manpower

Material Machinery

DrillDrillDrillDrillOvertimeOvertimeOvertimeOvertime

SteelSteelSteelSteel

WoodWoodWoodWood

LatheLatheLatheLathe

Too many defects

Too many defects

TiredTiredTiredTired

OldOldOldOld

SlowSlowSlowSlow

Cause and Effect Diagram Example

Control Chart

970

980

990

1000

1010

1020

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

UCL

LCL

Six Sigma

• Statistically– Having no more than 3.4 defects per million

• Conceptually– Program designed to reduce defects– Requires the use of certain tools and

techniques

Six sigma: A business process for improvingquality, reducing costs, and increasingcustomer satisfaction.

Six Sigma Programs

• Six Sigma programs – Improve quality– Save time– Cut costs

• Employed in – Design– Production– Service– Inventory management– Delivery

Six Sigma Management

• Providing strong leadership• Defining performance metrics• Selecting projects likely to succeed• Selecting and training appropriate people

Six Sigma Technical

• Improving process performance• Reducing variation• Utilizing statistical models• Designing a structured improvement

strategy

Six Sigma Team

• Top management• Program champions• Master “black belts”• “Black belts”• “Green belts”

Six Sigma Process

• Define• Measure• Analyze• Improve• Control

DMAIC

The End