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1OM, Ch. 15 Quality Management
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QUALITY MANAGEMENT
DAVIDA. COLLIER
AND
JAMES R. EVANS
QM
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LO1 Explain the concepts and definitions of quality.
LO2 Describe the quality philosophies and principles ofDeming, Juran, and Crosby.
LO3 Explain the GAP model and its importance.LO4 Describe the concepts and philosophy of ISO
9000:2000.
LO5 Describe the philosophy and methods of Six Sigma.
LO6 Explain the categories of cost of qualitymeasurement.
LO7 Describe how to apply the 7 QC Tools.
LO8 Explain the concepts of kaizen and poka-yoke.
l e a r n i n g o u t c o m e s
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3OM, Ch. 15 Quality Management
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ow! exclaimed Lauren when she saw the ski runs at Deer ValleyResort in Park City, Utah. Deer Valley has been called The Ritz-Carlton of ski resorts, and Laurens dad was expecting
exceptional services and a superior ski vacation experience after all he hadread in ski magazines. He wasnt disappointed. When he drove up to theslopes, a curbside ski valet took their equipment from his car, parking lotattendants directed him to the closest available parking, and a shuttle
transported them from the lot to Snow Park Lodge. From the shuttle, he andhis daughter walked to the slopes on heated pavers that prevent freezing andassist in snow removal. Staff provided complimentary mountain tours tofamiliarize them with the slopes. At the end of the day, they were able tostore their skis without charge at the lodge and easily retrieve them the nextmorning. The resort limits the number of skiers on the mountain to reduce
lines and congestion. Everyone is committed to ensuring that each guest has awonderful experience. Even the food is consistently rated number one by ski-enthusiast magazines.
Chapter15 Quality Management
What do you think? What satisfying service experiences similar tothe Deer Valley episode have you personally encountered?
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4OM, Ch. 15 Quality Management
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Qualitymanagementrefers to systematicpolicies, methods, and procedures used toensure that goods and services are producedwith appropriate levels of quality to meet the
needs of customers. Organizations today integrate quality principles
into their management systems using toolssuch as Total Quality Management (TQM), Six
Sigma, and LeanOperating Systems (Chapter17).
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A Brief
History
of
Quality
Management
Historical usesofquality managementincludetheprecisioninvolvedin buildingofEgyptianpyramids,interchangeablepartsduring Industrial Revolution,and
statisticaltoolsusedfor qualitycontrolduring WorldWar II.
Dr. Joseph JuranandDr. W. EdwardsDemingwerepioneersinthefield (morelateronthesetwo qualitygurus).
The Japaneseintegrated qualityideasandmethodsthroughouttheirorganizationsanddevelopedacultureofcontinuousimprovement.
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Understanding
Quality
Qualitycan beaconfusingconcept,partlybecausepeopleview qualityinrelationtodifferingcriteria basedontheirindividualrolesinthevaluechain,suchas:
perfection,
delightingorpleasingthecustomer,
eliminatingwaste, doingitrightthefirsttime,and/or
consistency.
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Understanding
Quality
Fitness for use is the ability of a good orservice to meet customer needs.
Qualityof conformance is the extent towhich a process is able to deliver output thatconfirms to design specifications.
Specificationsare targets and tolerancesdetermined by designers of goods andservices.
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Understanding
Quality
Quality Control means ensuringconsistencyinprocessestoachieve
conformance. Service Quality is consistentlymeeting
or exceedingcustomer expectations
(externalfocus)andservice deliverysystemperformancecriteria (internalfocus)duringallservice encounters.
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9OM, Ch. 15 Quality Management
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Understanding
Quality
Principles of Total Quality
1. A focusoncustomersandstakeholders,
2. A processfocussupported bycontinuousimprovementandlearning,and
3. Participationandteamwork by everyoneintheorganization.
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10OM, Ch. 15 Quality Management
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W. Edwards
Deming
Focuson bringingaboutimprovementsinproductandservice quality byreducinguncertaintyandvariabilityingoodsandservicesdesignand
associatedprocesses (the beginningofhisideasin 1920sand 1930s).
Higher qualityleadstohigherproductivityandlowercosts.
14 Pointsmanagementphilosophy.
Deming Cycle Plan,Do, Study,and Act.
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W. Edwards
Deming
14 Points
Point 1: Create a Vision and DemonstrateCommitment
Point 2: Learn the Philosophy
Point 3: Understand Inspection
Point 4: Stop Making Decisions Purely onthe Basis of Cost
Point 5: Improve Constantly and Forever
Point 6: Institute Training
Point 7: Institute Leadership
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W. Edwards
Deming
14 Points
Point 8: Drive Out Fear
Point 9: Optimize the Efforts of Teams
Point 10: Eliminate ExhortationsPoint 11: Eliminate Numerical Quotas
Point 12: Remove Barriers to Pride in Work
Point 13: Encourage Education and Self-Improvement
Point 14: Take Action
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Exhibit Extra
Plan: studycurrentsituation Do: implementplanontrial basis
Study: determineiftrialisworkingcorrectly
Act: standardizeimprovements
The DemingCycle
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Joseph
Juran
WroteQualityControlHandbookin 1951,acomprehensive qualitymanual.
Defined qualityasfitness foruse.
Advocateduseofqualitycostmeasurement.
QualityTrilogy: qualityplanning,quality
control,andqualityimprovement.
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15OM, Ch. 15 Quality Management
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Philip
B.Crosby
Wrot eQualityisFree in 1979,which broughtqualitytotheattentionoftopcorporatemanagersinthe U.S.
CrosbysAbsolutesof QualityManagementinclude:
Qualitymeansconformancetorequirements,notelegance.
Thereisnosuchthingasaqualityproblem.
Thereisnosuchthingasthe economicsofquality;doing
the jobrightthefirsttimeisalwayscheaper.
Theonlyperformancemeasurementisthecostofquality,whichisthe expenseofnonconformance.
Theonlyperformancestandardis Zero Defects (ZD).
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TheGAP model recognizesthatthereareseveralwaystomisspecifyandmismanagethecreationanddeliveryofhighlevelsofquality. Thesegapsareshowninthemodelin Exhibit15.2and explained below.
Gap 1 isthediscrepancy betweencustomerexpectationsandmanagementperceptionsofthose expectations.
Gap 2 isthediscrepancy betweenmanagement
perceptionsofwhatfeaturesconstituteatargetlevelofqualityandthetaskoftranslatingtheseperceptionsinto executablespecifications.
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Exhibit 15.2 Gap ModelofQuality
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Gap 3 isthediscrepancy betweenqualityspecificationsdocumentedinoperatingandtrainingmanualsandplansandtheirimplementation.
Gap 4 isthediscrepancy betweenactualmanufacturingandservicedeliverysystemperformanceand externalcommunicationstothecustomers.
Gap 5 isthedifference betweenthecustomer'sexpectationsandperceptions. Thefifthgapdependsontheotherfour.
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19OM, Ch. 15 Quality Management
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Exhibit 15.2 Gap ModelofQuality
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ISO 9000:2000
Qualitystandardswerecreatedin 1987 andrevisedin 1994 and2000toimproveproductquality,improvethequalityofoperationsprocesses,and
provideconfidencetoorganizationsandcustomersthatqualitysystemrequirementsarefulfilled.
Internationallyrecognized (andsometimesrequiredtodo businessincertaincountries).
Standardizeskeytermsinqualityandprovidesasetofbasicprinciplesforinitiatingqualitymanagementsystems.
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Six Sigma
Six Sigma is a business improvementapproach that seeks to find and eliminatecauses of defects and errors in manufacturing
and service processes by focusing on outputsthat are critical to customers and results in aclear financial return for the organization.
Used by companies including Motorola,AlliedSignal,Texas Instruments, and General Electric.
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Six Sigma
Defectsare any mistakes or errors that arepassed on to the customer (many people also usethe term nonconformance).
Defects per unit (DPU)=Number ofdefects discovered
Number ofunits processed
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Six Sigma
TheSixSigmaconceptcharacterizesqualityperformance bydefects per
million opportunities (dpmo),computedasDPUv 1,000,000opportunitiesfor error (or,asisoftenusedinservices, errorspermillion
opportunities epmo).
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Six Sigma
ADPUmeasuremightbelostbagspercustomer.However,customersmayhavedifferentnumbersofbags;thusthenumberofopportunitiesfor erroris
theaveragenumberofbagspercustomer.
Iftheaveragenumberofbagspercustomeris 1.6,andtheairlinerecorded3lostbagsfor 8,000passengersinonemonth (note: 12,800opportunitiesfor errorinonemonth),then
epmo = (3/8,000DPU) v 1,000,000/1.6 = 234.375
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Six Sigmas DMAIC Process
1. Define: identifycustomersandtheirpriorities;identifyanddefineasuitableproject;identifyCTQs(criticaltoqualitycharacteristics).
2. Measure: determinehowtomeasuretheprocessandhowitisperforming;identifykeyinternalprocessesthatinfluenceCTQsandmeasurecurrentdefects.
3. Analyze: determinelikelycausesofdefectsandunderstandwhydefectsaregenerated byidentifyingkeyvariablesthatcauseprocessvariation.
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Six Sigmas DMAIC Process
4. Improve: identifymeanstoremovecausesofdefects;confirmkeyvariables;modifytheprocesstostaywithinacceptablerange.
5. Control: determinehowtomaintainimprovements;puttoolsinplaceto ensurethatkeyvariablesremainwithinacceptable
rangesunderthemodifiedprocess.
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CostofQuality Measurements
Thecostofquality refers to the costs associatedwith avoiding poor quality or those incurred as aresult of poor quality.
Preventioncostsare those expended to keepnonconforming goods and services from beingmade and reaching the customer.
Appraisalcostsare those expended onascertaining quality levels through measurementand analysis of data to detect and correctproblems.
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CostofQuality Measurements
Internal-failure costsare costs incurred asa result of unsatisfactory quality that is foundbefore delivery of good or service to the
customer.
External-failure costsare incurred afterpoor-quality goods or services reach the
customer.
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The Seven QC Tools
1. Flowcharts: processmappingtoidentifythesequenceofactivitiesorflowofmaterials/informationinaprocess.
2. RunChartsandControlCharts: arunchartisalinegraphwithdataplottedovertime;controlchartsincludecontrollimits.
3. Checksheets: simpletoolsfordatacollection,ensurecompleteness.
4. Histograms: graphicallyrepresentfrequencyofvalueswithinaspecifiedgroup.
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Exhibit 15.3 The StructureofaControlChart
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31OM, Ch. 15 Quality Management
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Source: K. Ishikawa, Guide
to Quality Control(Tokyo:
Asian Productivity
Organization, 1982), p. 33.
Exhibit 15.4 Defective ItemChecksheet
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The Seven QC Tools
5. ParetoDiagrams: separatethevitalfewfromthetrivialmanycauses;providedirectionforselectingprojectsfor
improvement.
6. Cause-and-EffectDiagrams: representchainofrelationships;oftencalledafishbone
diagram.
7. ScatterDiagrams: graphicalcomponentofregressionanalysis.
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33OM, Ch. 15 Quality Management
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Exhibit 15.5
UseofPareto Diagramsfor
Progressive Analysis
Source: Small Business Guidebook to Quality Management,
Office of the Secretary of Defense, Quality Management
Office, Washington, DC (1988).
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Exhibit 15.6 Cause-and-Effect DiagramforHospital Emergency Admission
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35OM, Ch. 15 Quality Management2009 South-Western, a part of Cengage Learning
OtherQuality Improvement Strategies
Kaizenfocuses on small, gradual, and frequentimprovements over the long term with minimumfinancial investment and with participation by
everyone in the organization.
Poka-yoke (mistake-proofing) is an approach formistake-proofing processes using automatic
devices or methods to avoid simple human error.
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Poka-Yoke Examples
Machineshavelimitswitchesconnectedtowarninglightsthattelltheoperatorwhenpartsarepositionedimproperlyonthe
machine.
Fastfoodrestaurantsuseautomatedfrench-fryingmachinesthatcanonly beoperatedone
way;thefrenchfriesareprepackagedandtheequipmentautomatedtoreducethechanceofhuman error.
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