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1 1 2002 South-W estern/Thom son Learning 2002 South-W estern/Thom son Learning TM TM Slides prepared Slides prepared by John Loucks by John Loucks
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1 1 2002 South-Western/Thomson Learning 2002 South-Western/Thomson Learning TMTM

Slides preparedSlides preparedby John Loucksby John Loucks

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Chapter 7Chapter 7Chapter 7Chapter 7

Operations Quality ManagementOperations Quality Management

World-

Class

Service

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OverviewOverviewOverviewOverview

Nature of QualityNature of Quality Traditional Quality ManagementTraditional Quality Management Modern Quality ManagementModern Quality Management Quality Management RecognitionQuality Management Recognition Total Quality Management (TQM) ProgramsTotal Quality Management (TQM) Programs Quality Management in ServicesQuality Management in Services Wrap-Up: What World-Class Producers DoWrap-Up: What World-Class Producers Do

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What is Quality?What is Quality?What is Quality?What is Quality?

““The quality of a product or service is a customer’s The quality of a product or service is a customer’s perception of the degree to which the product or perception of the degree to which the product or service meets his or her expectations.”service meets his or her expectations.”

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Nature of QualityNature of QualityNature of QualityNature of Quality

Dimensions of QualityDimensions of Quality Determinants of QualityDeterminants of Quality Costs of QualityCosts of Quality

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Best-In-Class and World-ClassBest-In-Class and World-ClassBest-In-Class and World-ClassBest-In-Class and World-Class

Customers’ expectations of quality are not the same Customers’ expectations of quality are not the same for different for different classesclasses of products or services. of products or services.

Best-in-class qualityBest-in-class quality means being the best product or means being the best product or service in a particular class of products or services.service in a particular class of products or services.

Being a Being a world-class companyworld-class company means that each of its means that each of its products and services are considered best-in-class by products and services are considered best-in-class by its customers.its customers.

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Some Dimensions of Product QualitySome Dimensions of Product QualitySome Dimensions of Product QualitySome Dimensions of Product Quality

Performance – relative to customer’s intended usePerformance – relative to customer’s intended use Features – special characteristicsFeatures – special characteristics Reliability – likelihood of breakdowns, malfunctionsReliability – likelihood of breakdowns, malfunctions Serviceability – speed/cost/convenience of servicingServiceability – speed/cost/convenience of servicing Durability – amount of time/use before repairsDurability – amount of time/use before repairs Appearance – effects on human sensesAppearance – effects on human senses Customer service – treatment before/during/after saleCustomer service – treatment before/during/after sale Safety – user protection before/during/after useSafety – user protection before/during/after use

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Determinants of QualityDeterminants of QualityDeterminants of QualityDeterminants of Quality

Quality of designQuality of design – products/service designed based – products/service designed based on customers’ expectations and desireson customers’ expectations and desires

Quality capability of production processesQuality capability of production processes – – processes must be capable of producing the products processes must be capable of producing the products designed for the customersdesigned for the customers

Quality of conformanceQuality of conformance – capable processes can – capable processes can produce inferior product if not operated properlyproduce inferior product if not operated properly

Quality of customer serviceQuality of customer service – a superior product does – a superior product does not mean success; must have quality service alsonot mean success; must have quality service also

Organization quality cultureOrganization quality culture – superior product and – superior product and service requires organization-wide focus on qualityservice requires organization-wide focus on quality

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Costs of QualityCosts of Quality

Scrap and reworkScrap and rework - rescheduling, repairing, retesting - rescheduling, repairing, retesting Defective products in the hands of the customerDefective products in the hands of the customer - -

recalls, warranty claims, law suits, lost business, …recalls, warranty claims, law suits, lost business, … Detecting defectsDetecting defects - inspection, testing, …. - inspection, testing, …. Preventing defectsPreventing defects - training, charting performance, - training, charting performance,

product/process redesign, supplier development, ….product/process redesign, supplier development, ….

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Traditional Quality ManagementTraditional Quality ManagementTraditional Quality ManagementTraditional Quality Management

Rigorous system of inspectionRigorous system of inspection Defective products will be identified and discardedDefective products will be identified and discarded Quality can be inspected into productsQuality can be inspected into products Main decision is how many products to inspect Main decision is how many products to inspect

(largely a question of economics)(largely a question of economics)

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Traditional View of How Much to InspectTraditional View of How Much to InspectTraditional View of How Much to InspectTraditional View of How Much to Inspect

Annual Cost ($)Annual Cost ($)

% of Products Inspected% of Products Inspected00

OptimalOptimalLevel ofLevel of

InspectionInspection

Cost of Scrap,Cost of Scrap, Rework, andRework, and

Detecting DefectsDetecting Defects

Cost of DefectiveCost of DefectiveProducts toProducts toCustomersCustomers

Total QualityTotal QualityControl CostsControl Costs

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Modern Quality ManagementModern Quality Management

Quality GurusQuality Gurus Quality Drives the Productivity MachineQuality Drives the Productivity Machine Other Aspects of the Quality PictureOther Aspects of the Quality Picture

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Quality GurusQuality GurusQuality GurusQuality Gurus

W. Edwards DemingW. Edwards Deming Assisted Japan in improving productivity and Assisted Japan in improving productivity and

quality after World War IIquality after World War II In 1951 Japan established In 1951 Japan established Deming PrizeDeming Prize US was slow in recognizing his contributionsUS was slow in recognizing his contributions Introduced Japanese companies to the Introduced Japanese companies to the Plan-Do-Plan-Do-

Check-Act (PDCA)Check-Act (PDCA) cycle (developed by Shewart) cycle (developed by Shewart) Developed Developed 14 Points14 Points for managers for managers

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PDCA CyclePDCA CyclePDCA CyclePDCA Cycle

2. DO2. DO

Try plan onTry plan on a test basisa test basis

1. PLAN 1. PLAN

Identify im-Identify im- provements andprovements and

develop plandevelop plan

3. CHECK3. CHECK

Evaluate planEvaluate plan to see if itto see if it worksworks

4. ACT4. ACT

PermanentlyPermanentlyimplementimplement

improvementsimprovements

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Deming’s 14 Points for ManagersDeming’s 14 Points for ManagersDeming’s 14 Points for ManagersDeming’s 14 Points for Managers

1. Create constancy of purpose toward product quality 1. Create constancy of purpose toward product quality to achieve organizational goalsto achieve organizational goals

2. Refuse to allow commonly accepted levels of poor 2. Refuse to allow commonly accepted levels of poor qualityquality

3. Stop depending on inspection to achieve quality3. Stop depending on inspection to achieve quality4. Use fewer suppliers, selected based on quality and 4. Use fewer suppliers, selected based on quality and

dependability instead of pricedependability instead of price5. Instill programs for continuous improvement of 5. Instill programs for continuous improvement of

costs, quality, service, and productivitycosts, quality, service, and productivity

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Deming’s 14 Points for ManagersDeming’s 14 Points for ManagersDeming’s 14 Points for ManagersDeming’s 14 Points for Managers

6. Train all employees on quality concepts6. Train all employees on quality concepts7. Focus supervision on helping people do a better job7. Focus supervision on helping people do a better job

8. Eliminate fear, create trust, and encourage two-way 8. Eliminate fear, create trust, and encourage two-way communications between workers and managementcommunications between workers and management

9. Eliminate barriers between departments and 9. Eliminate barriers between departments and encourage joint problem-solvingencourage joint problem-solving

10. Eliminate the use of numerical goals and slogans to 10. Eliminate the use of numerical goals and slogans to make workers work hardermake workers work harder

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Deming’s 14 Points for ManagersDeming’s 14 Points for ManagersDeming’s 14 Points for ManagersDeming’s 14 Points for Managers

11. Use statistical methods for continuous improvement 11. Use statistical methods for continuous improvement of quality and productivity instead of numer. quotasof quality and productivity instead of numer. quotas

12. Remove barriers to pride of workmanship12. Remove barriers to pride of workmanship

13. Encourage education and self-improvement13. Encourage education and self-improvement

14. Clearly define management’s permanent 14. Clearly define management’s permanent commitment to quality and productivitycommitment to quality and productivity

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Quality GurusQuality GurusQuality GurusQuality Gurus

Philip B. CrosbyPhilip B. Crosby Wrote Wrote Quality Is FreeQuality Is Free in 1979 in 1979 Company should have the goal of Company should have the goal of zero defectszero defects Cost of poor quality is greatly underestimatedCost of poor quality is greatly underestimated Traditional trade-off between costs of improving Traditional trade-off between costs of improving

quality and costs of poor quality is erroneousquality and costs of poor quality is erroneous

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Quality GurusQuality GurusQuality GurusQuality Gurus

Armand V. FeigenbaumArmand V. Feigenbaum Developed concept of Developed concept of total quality control (TQC)total quality control (TQC) Responsibility for quality must rest with the Responsibility for quality must rest with the

persons who do the work (persons who do the work (quality at the sourcequality at the source)) Kaoru IshikawaKaoru Ishikawa

Wrote Wrote Guide to Quality Control Guide to Quality Control in 1972in 1972 Credited with the concept of Credited with the concept of quality circlesquality circles Suggested the use of Suggested the use of fishbone diagramsfishbone diagrams

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Quality GurusQuality Gurus

Joseph M. JuranJoseph M. Juran Like Deming, discovered late by US companiesLike Deming, discovered late by US companies Played early role in teaching Japan about qualityPlayed early role in teaching Japan about quality Wrote Wrote Quality Control HandbookQuality Control Handbook

Genichi TaguchiGenichi Taguchi Contends that constant adjustment of processes to Contends that constant adjustment of processes to

achieve product quality is not effectiveachieve product quality is not effective Instead, products should be designed to be robust Instead, products should be designed to be robust

enough to handle process and field variation enough to handle process and field variation

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Quality Drives the Productivity MachineQuality Drives the Productivity Machine

If production does it right the first time and produces If production does it right the first time and produces products and services that are defect-free, waste is products and services that are defect-free, waste is eliminated and costs are reduced.eliminated and costs are reduced.

Estimated that 20-25% of COGS in the US is spent Estimated that 20-25% of COGS in the US is spent on finding and correcting errorson finding and correcting errors

Quality management programs today are viewed by Quality management programs today are viewed by many companies as productivity improvement many companies as productivity improvement programs.programs.

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Other Aspects of the Quality PictureOther Aspects of the Quality Picture

Just-in-time (JIT) and lean manufacturingJust-in-time (JIT) and lean manufacturing Product standardizationProduct standardization Automated equipmentAutomated equipment Preventive maintenancePreventive maintenance

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JIT ManufacturingJIT ManufacturingJIT ManufacturingJIT Manufacturing

““A system of enforced problem solving”A system of enforced problem solving” Lot sizes are cutLot sizes are cut In-process inventories are drastically reducedIn-process inventories are drastically reduced Any interruption causes production to stopAny interruption causes production to stop Quality problems are immediately addressedQuality problems are immediately addressed The necessary teamwork contributes to increased The necessary teamwork contributes to increased

pride in qualitypride in quality

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Quality Management RecognitionQuality Management Recognition

Malcolm Baldrige National Quality AwardMalcolm Baldrige National Quality Award Deming PrizeDeming Prize ISO 9000 StandardsISO 9000 Standards

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Malcolm Baldrige National Quality Award Malcolm Baldrige National Quality Award Malcolm Baldrige National Quality Award Malcolm Baldrige National Quality Award

Awards given annually to US firmsAwards given annually to US firms Nearly all states have quality award programs styled Nearly all states have quality award programs styled

after the Baldrige Awardafter the Baldrige Award Criteria includeCriteria include

LeadershipLeadership Strategic planningStrategic planning Customer and market focusCustomer and market focus Information and analysisInformation and analysis Human resource focusHuman resource focus Process managementProcess management Business resultsBusiness results

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The Deming PrizeThe Deming PrizeThe Deming PrizeThe Deming Prize

Awarded by the Union of Japanese Scientists and Awarded by the Union of Japanese Scientists and EngineersEngineers

Recognizes companies that have demonstrated Recognizes companies that have demonstrated successful quality improvement programssuccessful quality improvement programs

All (not just Japanese) firms are eligibleAll (not just Japanese) firms are eligible Four top-management activities recognizedFour top-management activities recognized

Senior management activitiesSenior management activities Customer satisfaction activityCustomer satisfaction activity Employee involvement activitiesEmployee involvement activities Training activityTraining activity

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ISO 9000 StandardsISO 9000 Standards

Quality management guidelines developed by the Quality management guidelines developed by the International Organization for StandardizationInternational Organization for Standardization

Companies become certified by applying to third-Companies become certified by applying to third-party providers who assess the level of conformity to party providers who assess the level of conformity to the standardsthe standards

More than 300,000 companies worldwide are ISO More than 300,000 companies worldwide are ISO 9000-certified9000-certified

The US big three automakers have adopted a similar The US big three automakers have adopted a similar set of standards called QS-9000set of standards called QS-9000

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ISO 9000 StandardsISO 9000 StandardsISO 9000 StandardsISO 9000 Standards

Standards based on 8 quality management principlesStandards based on 8 quality management principles Customer focused organizationCustomer focused organization LeadershipLeadership Involvement of peopleInvolvement of people Process approachProcess approach System approach to managementSystem approach to management Continual improvementContinual improvement Factual approach to decision makingFactual approach to decision making Mutually beneficial supplier relationshipMutually beneficial supplier relationship

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Total Quality Management (TQM) ProgramsTotal Quality Management (TQM) ProgramsTotal Quality Management (TQM) ProgramsTotal Quality Management (TQM) Programs

Motorola - Motorola - Six SigmaSix Sigma Xerox - Xerox - Leadership through QualityLeadership through Quality Intel - Intel - (PDQ)(PDQ)22 or or Perfect Design Quality, Pretty Perfect Design Quality, Pretty

Darn Quick Darn Quick Hewlett-Packard - Hewlett-Packard - Total Quality ControlTotal Quality Control

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Elements of TQMElements of TQM

Top management commitment and involvementTop management commitment and involvement Customer involvementCustomer involvement Design products for qualityDesign products for quality Design production processes for qualityDesign production processes for quality Control production processes for qualityControl production processes for quality Developing supplier partnershipsDeveloping supplier partnerships Customer service, distribution, and installationCustomer service, distribution, and installation Building teams of empowered employeesBuilding teams of empowered employees Benchmarking and continuous improvementBenchmarking and continuous improvement

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Top ManagementTop ManagementCommitment and InvolvementCommitment and Involvement

Top ManagementTop ManagementCommitment and InvolvementCommitment and Involvement

Support must be genuine or TQM will be seen as just Support must be genuine or TQM will be seen as just another passing fadanother passing fad

Fundamental changes must occur in the culture of the Fundamental changes must occur in the culture of the organizationorganization

Such fundamental changes are not easy, but are Such fundamental changes are not easy, but are impossible without top management’s commitment impossible without top management’s commitment and involvementand involvement

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Customer InvolvementCustomer InvolvementCustomer InvolvementCustomer Involvement

Mechanisms to involve the customerMechanisms to involve the customer Focus groupsFocus groups Market surveysMarket surveys Customer questionnairesCustomer questionnaires Market research programsMarket research programs

Quality Function Deployment (QFD)Quality Function Deployment (QFD) Formal system for identifying customer wantsFormal system for identifying customer wants Eliminate wasteful product features and activities Eliminate wasteful product features and activities

that do not contributethat do not contribute

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Designing Products for QualityDesigning Products for QualityDesigning Products for QualityDesigning Products for Quality

Designing for Designing for RobustnessRobustness

Product will perform as intended even if Product will perform as intended even if undesirable conditions occur in undesirable conditions occur in

production or in production or in field.field. Designing for Designing for ManufacturabilityManufacturability (DFM) (DFM)

Products typically have fewer parts and can be Products typically have fewer parts and can be assembled quickly, easily, and error-free.assembled quickly, easily, and error-free.

Designing for Designing for ReliabilityReliability

Manufacturing parts to closer tolerances. Manufacturing parts to closer tolerances. Using redundant components where necessary.Using redundant components where necessary.

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Designing for ReliabilityDesigning for ReliabilityDesigning for ReliabilityDesigning for Reliability

Each part of a product is designed for a given level of Each part of a product is designed for a given level of component reliabilitycomponent reliability

Component reliabilityComponent reliability is defined as “the probability is defined as “the probability that a part will not fail in a given time period or that a part will not fail in a given time period or number of trials under ordinary conditions of use”number of trials under ordinary conditions of use”

3 common measures of component reliability are:3 common measures of component reliability are: Reliability (CR)Reliability (CR) Failure Rates (FR and FRFailure Rates (FR and FRnn)) Mean Time Between Failures (MTBF)Mean Time Between Failures (MTBF)

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Designing for ReliabilityDesigning for ReliabilityDesigning for ReliabilityDesigning for Reliability

ReliabilityReliability CR = 1 - FRCR = 1 - FR

Failure RatesFailure Rates

Mean Time Between FailuresMean Time Between Failures

Number of failuresFR =

Number testedNumber of failures

FR = Number tested

n

Number of failuresFR =

Unit-hours of operationn

Number of failuresFR =

Unit-hours of operation

n

Unit-hours of operation 1MTBF = =

Number of failures FRn

Unit-hours of operation 1MTBF = =

Number of failures FR

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Designing for ReliabilityDesigning for ReliabilityDesigning for ReliabilityDesigning for Reliability

The combined reliability of all the components in a The combined reliability of all the components in a product forms the basis for product forms the basis for system reliabilitysystem reliability (SR) (SR)

When When nn independent critical components are independent critical components are combined into a product, the SR is determined by:combined into a product, the SR is determined by:

SR = CRSR = CR11 x x CR CR22 x x CR CR33 xx … … x x CR CRnn

Consider a product with 50 identical critical Consider a product with 50 identical critical components:components: If each component’s CR = 99.5%, then SR = 77.8%If each component’s CR = 99.5%, then SR = 77.8% If each component’s CR = 98.0%, then SR = 36.4%If each component’s CR = 98.0%, then SR = 36.4% If each component’s CR = 90.0%, then SR = 0.5%If each component’s CR = 90.0%, then SR = 0.5%

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Example: Allied SwitchExample: Allied SwitchExample: Allied SwitchExample: Allied Switch

ReliabilityReliability

Allied Switch has designed a machine having Allied Switch has designed a machine having three critical components that interact. The three three critical components that interact. The three parts have component reliability of .96, .90, and .98.parts have component reliability of .96, .90, and .98.

What is the system reliability of the machine?What is the system reliability of the machine?

SR = (CRSR = (CR11) (CR) (CR11) (CR) (CR11))

= (.96)(.90)(.98)= (.96)(.90)(.98)

= .847= .847

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Example: Allied SwitchExample: Allied SwitchExample: Allied SwitchExample: Allied Switch

ReliabilityReliability

If the machine could be redesigned to allow If the machine could be redesigned to allow redundancy for the component that presently has a redundancy for the component that presently has a reliability of .90, what would be the new system reliability of .90, what would be the new system reliability of the machine?reliability of the machine?

.96.96 .98.98.90.90

.90.90

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Example: Allied SwitchExample: Allied SwitchExample: Allied SwitchExample: Allied Switch

ReliabilityReliability

First, compute the CR for the redundant parts.First, compute the CR for the redundant parts.

CR = Probability of primary component workingCR = Probability of primary component working

+ [(Probability of backup component + [(Probability of backup component working) working) x (Probability of needing backup x (Probability of needing backup component)]component)]

= .90 + [(.90) x (.10)] = .90 + .09 = .99= .90 + [(.90) x (.10)] = .90 + .09 = .99

Now, compute the system reliability.Now, compute the system reliability.

SR = (.96) (.99) (.98) = .931SR = (.96) (.99) (.98) = .931

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Designing and ControllingDesigning and ControllingProduction ProcessesProduction Processes

Designing and ControllingDesigning and ControllingProduction ProcessesProduction Processes

The responsibility of producing products of high The responsibility of producing products of high quality rests with the workers producing the productquality rests with the workers producing the product

Two types of factors introduce variation in Two types of factors introduce variation in production processesproduction processes Controllable factors - can be reduced by workers Controllable factors - can be reduced by workers

and managementand management Uncontrollable factors - reduced only by Uncontrollable factors - reduced only by

redesigning or replacing existing processesredesigning or replacing existing processes

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Process CapabilityProcess CapabilityProcess CapabilityProcess Capability

Process capabilityProcess capability is a production process’ ability to is a production process’ ability to produce products within the desired expectations of produce products within the desired expectations of customers.customers.

The The process capability indexprocess capability index (PCI) is a way of (PCI) is a way of measuring that ability.measuring that ability.

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Process Capability Index (PCI)Process Capability Index (PCI)Process Capability Index (PCI)Process Capability Index (PCI)

PCI = (UL - LL) / (6PCI = (UL - LL) / (6))

UL = allowed upper limit of the product UL = allowed upper limit of the product characteristic, based on customer expect. characteristic, based on customer expect.LL = allowed lower limit of the product LL = allowed lower limit of the product characteristic, based on customer expect. characteristic, based on customer expect. = standard deviation of the product = standard deviation of the product characteristic from the production process characteristic from the production process

PCI PCI >> 1.00 Process is capable of meeting customer 1.00 Process is capable of meeting customer expectations.expectations.

PCI < 1.00 Process is not capable.PCI < 1.00 Process is not capable.

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Process Capability Index (PCI)Process Capability Index (PCI)Process Capability Index (PCI)Process Capability Index (PCI)

LLLL ULUL

PCI = 0.8PCI = 0.8

PCI = 1.0PCI = 1.0

PCI = 1.2PCI = 1.2

ProcessProcessis notis not

capablecapable

ProcessProcessisis

capablecapable

ProcessProcessis quiteis quitecapablecapable

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Example: Process CapabilityExample: Process CapabilityExample: Process CapabilityExample: Process Capability

In order for a certain molded part to be In order for a certain molded part to be considered acceptable, the molding process must be considered acceptable, the molding process must be conducted within a limited range of temperature. The conducted within a limited range of temperature. The lower limit is 455lower limit is 455o o and the upper limit is 465and the upper limit is 465oo..

Three molding machines Three molding machines being considered are being considered are A, B, and C with standard deviations of A, B, and C with standard deviations of AA = 2.50, = 2.50, BB = 1.25, and = 1.25, and CC = 1.75. = 1.75.

Which of these machines are capable of Which of these machines are capable of producing the part in accordance with the temperature producing the part in accordance with the temperature requirements?requirements?

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Example: Process CapabilityExample: Process CapabilityExample: Process CapabilityExample: Process Capability

PCIPCIAA = (465 - 455) / (6(2.50)) = 10/15 = 0.67 = (465 - 455) / (6(2.50)) = 10/15 = 0.67

PCIPCIBB = (465 - 455) / (6(1.25)) = 10/7.5 = 1.33 = (465 - 455) / (6(1.25)) = 10/7.5 = 1.33

PCIPCICC = (465 - 455) / (6(1.75)) = 10/10.5 = 0.95 = (465 - 455) / (6(1.75)) = 10/10.5 = 0.95

Machine A is not close to being capable, with a PCI Machine A is not close to being capable, with a PCI well below 1.00. Machine B is more than adequate well below 1.00. Machine B is more than adequate with a PCI well above 1.00. Machine C falls slightly with a PCI well above 1.00. Machine C falls slightly short of being capable. short of being capable.

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Developing Supplier PartnershipsDeveloping Supplier PartnershipsDeveloping Supplier PartnershipsDeveloping Supplier Partnerships

Supplier becomes part of the customer’s TQM Supplier becomes part of the customer’s TQM programprogram

The relationship between the supplier and the The relationship between the supplier and the customer becomes long-lasting and durablecustomer becomes long-lasting and durable

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Customer Service, Distribution, and Customer Service, Distribution, and InstallationInstallation

Packaging, shipping, and installation must be Packaging, shipping, and installation must be included in TQM.included in TQM.

Warehousing, marketing, and the distribution Warehousing, marketing, and the distribution function must be committed to perfect quality.function must be committed to perfect quality.

Contact between the customers and the firm’s product Contact between the customers and the firm’s product must be planned and managed to provide satisfied must be planned and managed to provide satisfied customers.customers.

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Building Teams of Empowered EmployeesBuilding Teams of Empowered Employees

Employee training programsEmployee training programs Employees at all levels are trained in quality.Employees at all levels are trained in quality.

Works teams and empowermentWorks teams and empowerment Workers are given the authority to act.Workers are given the authority to act.

Quality at the sourceQuality at the source Workers are responsible for their own work.Workers are responsible for their own work.

Quality circlesQuality circles Small groups of employees who analyze and Small groups of employees who analyze and

solve quality problems and implement solve quality problems and implement improvement programs.improvement programs.

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Benchmarking and Continuous ImprovementBenchmarking and Continuous Improvement

BenchmarkingBenchmarking The practice of establishing internal standards of The practice of establishing internal standards of

performance by looking to how world-class performance by looking to how world-class companies run their businessescompanies run their businesses

Continuous ImprovementContinuous Improvement The company makes small incremental The company makes small incremental

improvements toward excellence on a continual improvements toward excellence on a continual basisbasis

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Quality Management in ServicesQuality Management in ServicesQuality Management in ServicesQuality Management in Services

Since many services are intangible, it is difficult to Since many services are intangible, it is difficult to determine their qualitydetermine their quality

Customers set their own standards for servicesCustomers set their own standards for services Perceived quality of service affected by the Perceived quality of service affected by the

surroundingssurroundings Performance of service employees determines in Performance of service employees determines in

large part the quality of the serviceslarge part the quality of the services

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Wrap-Up: World-Class PracticeWrap-Up: World-Class PracticeWrap-Up: World-Class PracticeWrap-Up: World-Class Practice

Quality begins when business strategy is formulatedQuality begins when business strategy is formulated Quality is the weapon of choice to capture global Quality is the weapon of choice to capture global

marketsmarkets Quality drives the productivity machineQuality drives the productivity machine Not depending on inspection to catch defects; Not depending on inspection to catch defects;

concentrating on doing things right the first timeconcentrating on doing things right the first time Committing tremendous resources to put in place Committing tremendous resources to put in place

TQM programs aimed at continuous improvementTQM programs aimed at continuous improvement

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End of Chapter 7End of Chapter 7