2008 Prentice Hall, Inc. 6 – 1 Operations Management Chapter 5 – Chapter 5 – Managing Quality Managing Quality PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer/Render Heizer/Render Principles of Operations Management, 7e Principles of Operations Management, 7e Operations Management, 9e Operations Management, 9e
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
PowerPoint presentation to accompany PowerPoint presentation to accompany Heizer/Render Heizer/Render Principles of Operations Management, 7ePrinciples of Operations Management, 7eOperations Management, 9e Operations Management, 9e
The Role of InspectionThe Role of Inspection When and Where to InspectWhen and Where to Inspect Source InspectionSource Inspection Service Industry InspectionService Industry Inspection Inspection of Attributes versus Inspection of Attributes versus
Learning ObjectivesLearning ObjectivesWhen you complete this chapter you When you complete this chapter you should be able to:should be able to:
Define quality and TQMDefine quality and TQM Describe the ISO international Describe the ISO international
quality standardsquality standards Explain Six SigmaExplain Six Sigma Explain how benchmarking is used Explain how benchmarking is used Explain quality robust products and Explain quality robust products and
Taguchi conceptsTaguchi concepts Use the seven tools of TQMUse the seven tools of TQM
User-based – better performance, User-based – better performance, more featuresmore features
Manufacturing-based – Manufacturing-based – conformance to standards, conformance to standards, making it right the first timemaking it right the first time
Product-based – specific and Product-based – specific and measurable attributes of the measurable attributes of the product product
Malcom Baldrige National Malcom Baldrige National Quality AwardQuality Award
Established in 1988 by the U.S. Established in 1988 by the U.S. governmentgovernment
Designed to promote TQM practicesDesigned to promote TQM practices Recent winnersRecent winners
Premier Inc., MESA Products, Sunny Premier Inc., MESA Products, Sunny Fresh Foods, Park Place Lexus, North Fresh Foods, Park Place Lexus, North Mississippi Medical Center, The Bama Mississippi Medical Center, The Bama Companies, Richland College, Texas Companies, Richland College, Texas Nameplate Company, Inc.Nameplate Company, Inc.
A Japanese character A Japanese character that symbolizes a that symbolizes a broader dimension broader dimension than quality, a deeper than quality, a deeper process than process than education, and a more education, and a more perfect method than perfect method than persistencepersistence
Ethics and Quality Ethics and Quality ManagementManagement
Operations managers must deliver Operations managers must deliver healthy, safe, quality products and healthy, safe, quality products and servicesservices
Poor quality risks injuries, lawsuits, Poor quality risks injuries, lawsuits, recalls, and regulationrecalls, and regulation
Organizations are judged by how Organizations are judged by how they respond to problemsthey respond to problems
All stakeholders much be All stakeholders much be consideredconsidered
International Quality International Quality StandardsStandards
ISO 9000 series (Europe/EC)ISO 9000 series (Europe/EC) Common quality standards for products Common quality standards for products
sold in Europe (even if made in U.S.)sold in Europe (even if made in U.S.) 2000 update places greater emphasis on 2000 update places greater emphasis on
leadership and customer satisfactionleadership and customer satisfaction ISO 14000 series (Europe/EC)ISO 14000 series (Europe/EC)
Deming’s Fourteen PointsDeming’s Fourteen Points1.1. Create consistency of purposeCreate consistency of purpose2.2. Lead to promote changeLead to promote change3.3. Build quality into the product; stop Build quality into the product; stop
depending on inspectiondepending on inspection4.4. Build long-term relationships based on Build long-term relationships based on
performance, not priceperformance, not price5.5. Continuously improve product, quality, Continuously improve product, quality,
and serviceand service6.6. Start trainingStart training7.7. Emphasize leadershipEmphasize leadership
Deming’s Fourteen PointsDeming’s Fourteen Points8.8. Drive out fearDrive out fear9.9. Break down barriers between Break down barriers between
departmentsdepartments10.10. Stop haranguing workersStop haranguing workers11.11. Support, help, improveSupport, help, improve12.12. Remove barriers to pride in workRemove barriers to pride in work13.13. Institute a vigorous program of Institute a vigorous program of
education and self-improvementeducation and self-improvement14.14. Put everybody in the company to work Put everybody in the company to work
on the transformationon the transformationTable 6.1Table 6.1
Represents continual Represents continual improvement of all processes improvement of all processes
Involves all operations and work Involves all operations and work centers including suppliers and centers including suppliers and customerscustomersPeople, Equipment, Materials, People, Equipment, Materials,
Statistical definition of a process that Statistical definition of a process that is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)
A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction
Two meaningsTwo meanings Statistical definition of a process that Statistical definition of a process that
is 99.9997% capable, 3.4 defects per is 99.9997% capable, 3.4 defects per million opportunities (DPMO)million opportunities (DPMO)
A program designed to reduce A program designed to reduce defects, lower costs, and improve defects, lower costs, and improve customer satisfactioncustomer satisfaction
Originally developed by Motorola, Originally developed by Motorola, adopted and enhanced by adopted and enhanced by Honeywell and GEHoneywell and GE
Highly structured approach to Highly structured approach to process improvementprocess improvement A strategyA strategy A discipline - DMAICA discipline - DMAIC 66
Six Sigma ImplementationSix Sigma Implementation Emphasize defects per million Emphasize defects per million
opportunities as a standard metricopportunities as a standard metric Provide extensive trainingProvide extensive training Focus on corporate sponsor support Focus on corporate sponsor support
(Champions)(Champions) Create qualified process improvement Create qualified process improvement
experts (Black Belts, Green Belts, etc.)experts (Black Belts, Green Belts, etc.) Set stretch objectivesSet stretch objectives
This cannot be accomplished without a major commitment from top level management
Employee EmpowermentEmployee Empowerment Getting employees involved in product Getting employees involved in product
and process improvementsand process improvements 85% of quality problems are due 85% of quality problems are due
to process and materialto process and material TechniquesTechniques
Build communication networks Build communication networks that include employeesthat include employees
Develop open, supportive supervisorsDevelop open, supportive supervisors Move responsibility to employeesMove responsibility to employees Build a high-morale organizationBuild a high-morale organization Create formal team structuresCreate formal team structures
BenchmarkingBenchmarkingSelecting best practices to use as a Selecting best practices to use as a standard for performancestandard for performance
Determine what to Determine what to benchmarkbenchmark
Form a benchmark teamForm a benchmark team Identify benchmarking partnersIdentify benchmarking partners Collect and analyze benchmarking Collect and analyze benchmarking
informationinformation Take action to match or exceed the Take action to match or exceed the
Best Practices for Resolving Best Practices for Resolving Customer ComplaintsCustomer Complaints
Make it easy for clients to complainMake it easy for clients to complain Respond quickly to complaintsRespond quickly to complaints Resolve complaints on first contactResolve complaints on first contact Use computers to manage Use computers to manage
complaintscomplaints Recruit the best for customer Recruit the best for customer
‘‘Pull’ system of production scheduling Pull’ system of production scheduling including supply managementincluding supply management Production only when signaledProduction only when signaled
Allows reduced inventory levelsAllows reduced inventory levels Inventory costs money and hides process Inventory costs money and hides process
and material problemsand material problems Encourages improved process and Encourages improved process and
Taguchi ConceptsTaguchi Concepts Engineering and experimental Engineering and experimental
design methods to improve product design methods to improve product and process designand process design Identify key component and process Identify key component and process
Ability to produce products Ability to produce products uniformly in adverse manufacturing uniformly in adverse manufacturing and environmental conditionsand environmental conditions Remove the effects of adverse Remove the effects of adverse
conditionsconditions Small variations in materials and Small variations in materials and
process do not destroy product process do not destroy product qualityquality
Quality Loss FunctionQuality Loss Function Shows that costs increase as the Shows that costs increase as the
product moves away from what product moves away from what the customer wantsthe customer wants
Costs include customer Costs include customer dissatisfaction, warranty dissatisfaction, warranty and service, internal and service, internal scrap and repair, and costs to scrap and repair, and costs to societysociety
Traditional conformance Traditional conformance specifications are too simplisticspecifications are too simplistic
Flow ChartsFlow ChartsMRI FlowchartMRI Flowchart1.1. Physician schedules MRIPhysician schedules MRI2.2. Patient taken to MRIPatient taken to MRI3.3. Patient signs inPatient signs in4.4. Patient is preppedPatient is prepped5.5. Technician carries out MRITechnician carries out MRI6.6. Technician inspects filmTechnician inspects film
7.7. If unsatisfactory, repeatIf unsatisfactory, repeat8.8. Patient taken back to roomPatient taken back to room9.9. MRI read by radiologistMRI read by radiologist10.10. MRI report transferred to MRI report transferred to
physicianphysician11.11. Patient and physician discussPatient and physician discuss
Statistical Process Control Statistical Process Control (SPC)(SPC)
Uses statistics and control charts to Uses statistics and control charts to tell when to take corrective actiontell when to take corrective action
Drives process improvementDrives process improvement Four key stepsFour key steps
Measure the processMeasure the process When a change is indicated, find the When a change is indicated, find the
assignable causeassignable cause Eliminate or incorporate the causeEliminate or incorporate the cause Restart the revised processRestart the revised process
When and Where to InspectWhen and Where to Inspect1.1. At the supplier’s plant while the supplier is At the supplier’s plant while the supplier is
producingproducing2.2. At your facility upon receipt of goods from At your facility upon receipt of goods from
the supplierthe supplier3.3. Before costly or irreversible processesBefore costly or irreversible processes4.4. During the step-by-step production During the step-by-step production
processprocess5.5. When production or service is completeWhen production or service is complete6.6. Before delivery to your customerBefore delivery to your customer7.7. At the point of customer contactAt the point of customer contact
Source InspectionSource Inspection Also known as source controlAlso known as source control The next step in the process is The next step in the process is
your customeryour customer Ensure perfect product Ensure perfect product
to your customerto your customer
Poka-yoke is the concept of foolproof devices or techniques designed to pass only
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Jones Law OfficeJones Law Office Receptionist Receptionist performanceperformanceBillingBilling
AttorneyAttorney
Is phone answered by the Is phone answered by the second ringsecond ringAccurate, timely, and Accurate, timely, and correct formatcorrect formatPromptness in returning Promptness in returning callscalls
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Hard Rock HotelHard Rock Hotel Reception Reception deskdeskDoormanDoorman
RoomRoom
MinibarMinibar
Use customer’s nameUse customer’s name
Greet guest in less than 30 Greet guest in less than 30 secondssecondsAll lights working, spotless All lights working, spotless bathroombathroomRestocked and charges Restocked and charges accurately posted to billaccurately posted to bill
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Arnold Palmer Arnold Palmer HospitalHospital
BillingBilling
PharmacyPharmacy
LabLabNursesNurses
AdmissionsAdmissions
Accurate, timely, and Accurate, timely, and correct formatcorrect formatPrescription accuracy, Prescription accuracy, inventory accuracyinventory accuracyAudit for lab-test accuracyAudit for lab-test accuracyCharts immediately Charts immediately updatedupdatedData entered correctly and Data entered correctly and completelycompletely
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Olive Garden Olive Garden RestaurantRestaurant
BusboyBusboy
BusboyBusboy
WaiterWaiter
Serves water and bread Serves water and bread within 1 minutewithin 1 minuteClears all entrée items and Clears all entrée items and crumbs prior to dessertcrumbs prior to dessertKnows and suggest Knows and suggest specials, dessertsspecials, desserts
Service Industry InspectionService Industry Inspection
OrganizationOrganization What is What is InspectedInspected StandardStandard
Nordstrom Nordstrom Department Department StoreStore
Display areasDisplay areas
StockroomsStockrooms
SalesclerksSalesclerks
Attractive, well-organized, Attractive, well-organized, stocked, good lightingstocked, good lightingRotation of goods, Rotation of goods, organized, cleanorganized, cleanNeat, courteous, very Neat, courteous, very knowledgeableknowledgeable