Total Quality Management BUS 3 – 142 Mr. Jess Marino Spring, 2011.

Total Quality Management

BUS 3 – 142

Mr. Jess MarinoSpring, 2011

Page 2 2

Agenda

– Introduction

– Green sheet Review

– Additional comments on the course

– Initial Lecture

Page 3 3

Course Overview and Objectives

– Defining various dimensions and definitions of Quality and developing the ability to determine how to best match the appropriate methods and tools across multiple environments, industries, business processes, and customer preferences

– Introducing and mastering specific tools, techniques, and formulas for data gathering and analysis to enable fact-based decision-making

– Applying the Total Quality principles introduced in sections one and two to enhance business performance and results in Supply Chain Management, Product and Process Design, Service Operations, and Supplier Selection and Management

Page 4 4

Student Learning Objectives for the Course

– Understand the scope and definitions of Total Quality Management

– Recognize how Customers and Markets influence quality

– Understand Develop skills in Statistical Process Control and other quality monitoring techniques

– Incorporating a quality management perspective into all functions and processes of a business

– Leveraging knowledge of quality management to achieve career goals

Semester Calendar

Introduction toQuality Management

Page 7 7

Eight Quality Dimensions - Products

– Performance

– Features

– Reliability

– Conformance

– Durability

– Serviceability

– Aesthetics

– Perceived Quality

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Can vary in importance based on the requirements, tastes, and expectations of the Customer. Can also

vary across functional groups within an organization

Page 8 8

Five Quality Dimensions - Service

– Tangibles

– Reliability

– Responsiveness

– Assurance

– Empathy

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Unlike product quality, with Service quality the Customercan be directly involved.

Service quality can also be directly applicable tocareer performance

Page 9 9

Functional Perspectives on Quality

– Supply Chain

– Operations

– Engineering

– Marketing

– Finance

– Human Resources

Different groups in an organization emphasize different Quality Dimensions

Page 10 10

Functional Perspectives on Quality – Supply Chain

– Supplier Qualification

– Supplier Selection

– Supplier Development

– Inspection, Test, and Sampling

– Process mapping and Value mapping

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Page 11 11

Functional Perspectives on Quality - Operations

– Maximum yields

– Lowest cost

– Least rework

– Repeatability

– Predictability

Page 12 12

Functional Perspectives on Quality - Engineering

– Product and Process (concurrent engineering)

– Life testing

– Redundancy

– Design for Manufacturing and Assembly

– Statistical Process Control

Page 13 13

Functional Perspectives on Quality

– Voice of the Customer

– Perceived quality

– Pricing and Value

Marketing

– Time horizons and Payback times

– Calculating costs of poor quality

– Business Case development

– Avoiding diminishing returns

Finance

– Employee empowerment

– Organizational design

– Measurement and Reward Systems

Human Resources

Page 14 14

The “Three Spheres” of Quality

QualityAssurance

QualityControl

QualityManagement

Page 15 15

Quality Control

– Monitoring Process capability and stability

– Measuring process performance

– Reducing process variability

– Optimizing key metrics

– Acceptance sampling

– Developing and maintaining Control Charts

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Page 16 16

Quality Assurance

– Failure Mode and Effects Analysis (FMEA)

– Concurrent Engineering

– Design Of Experiments

– Process improvement

– Design teams

– Reliability and durability

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Page 17 17

Quality Management

– Planning for quality improvement

– Creating a quality organization culture

– Providing leadership and support

– Providing training and retraining

– Employee recognition

– Communication

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Page 18 18

Basic Assumptions

The HIGHER the Quality, the higher the Customer Service, the lower the Inventory, and the lower the Cost

The LOWER the Quality, the lower the Customer Service, the higher the Inventory, and the higher the Cost

Page 19 19

The Contingency Perspective

There is no “One Size Fits All” way to manage Quality.Good quality managers learn many tools and techniques,

develop the ability to recognize which approaches are mostappropriate in different situations, and deploy the rightsolution and improvement plan for the right situation

Quality Management isBUSINESS Management

Page 21 21

The Quality Discipline continues to Evolve

* From Table 2-1, Foster, Quality Management, Fourth Edition, Prentice Hall

Early 1900s Scientific management

1920s Statistical Process Control

1930s Acceptance sampling

1940s Military standards

1950s Deming & Juran in Japan

1960s Taguchi method and other tools

1970s Quality as "strategic"; major adoption in the US

1980s Lean, TQM, Teams

1990s Reengineering and Six Sigma

2000s Supply Chain Mgmt, Lean Six Sigma

Page 22 22

Deming’s 14 Points

1. Create Constancy of Purpose

2. Adapt a new philosophy

3. Cease mass inspection

4. End awarding business on the basis of price tag

5. Constantly improve the system

6. Institute training on the job

7. Improve leadership

8. Drive out fear

9. Break down barriers between departments

10.Eliminate slogans

11.Eliminate work standards

12.Remove barriers to pride

13. Institute education and self-improvement

14.Put everybody to work

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Page 23 23

Constancy of Purpose

– Highest quality keeps you Competitive

– Quality becomes a competitive advantage

– Improvement takes time

– Keeping people employed is a management responsibility

– Quality is not negotiable

– Good quality does not add to cost but reduces cost

Page 24 24

Cease Mass Inspection

– Design quality in

– Implement “error-proofing” as much as possible

– Inline monitoring

– Responsibility for quality does not belong to the “quality department”

– Non conforming product inevitable “escapes” through the inspection process

Page 25 25

Improve Leadership and Drive out Fear

– Management is most responsible for Quality and has the most leverage

– Supervisors are to help people

• Training• Removing barriers• Encouraging learning• Empowering problem identification, root cause analyisis, and

improvement suggestions

– Driving out Fear

• Employees cannot improve quality and efficiency and then get laid off

• “Healthy dissatisfaction” is a good thing• Identifying problems cannot be tied to blame• Changing processes and methods are often necessary

– Let data lead to objectivity

Page 26 26

Eliminate Work Standards

– Remove the temptation to purposely produce low quality goods

– Establish metrics that span the entire process, rather than individual steps or machines

– Avoid conflicting objectives

• Output vs. Units scrapped• Output vs. Throughput• Cost vs. Inventory

– Teams (hourly workers and Managers together) are still responsible for output and quality

Page 27 27

Quality Improvement Planning (Juran)

– “Plan your work and work your plan”

– Manage a portfolio of improvement initiatives, balancing continuous improvement with breakthrough changes (Evolutionary & Revolutionary)

– Plan and execute discrete projects for improvement

• Business case• Project plans• Deliverables and milestones• Measurable business results

Page 28 28

Pareto’s Law – The “80/20” Rule

The majority (80%) of problems are the resultof relatively few (20%) causes

Focus your improvement efforts on the few causesthat make the BIGGEST DIFFERENCE

to your business

Page 29 29

ABC Classification – the 80/20 Rule Applied

* From Leenders, Johnson, Flynn, and Fearon, Purchasing and Supply Management, Thirteenth Edition, McGraw Hill Irwin

Page 30 30

ABC Classification is not based on unit cost

Unit Cost Annual Volume Annual SpendA High High HighA High Medium HighA Medium High HighA Low Very High HighB High Low MediumB Medium Medium MediumB Low High MediumC Medium Low LowC Low Medium LowC Low Low Low

C Items can still stop a production lineand cause Customer Shipments to be missed!

Page 31 31

Key Points from Ishikawa

– Involve ALL employees in improving quality

– Know the requirements of the Customer

– Attack Root Causes

– Know what the statistics are telling you

• Averages have some value but not without how the data are distributed

• Variability drives poor quality

Page 32 32

Other Points for Consideration

– Toguchi Method: Robust Design

• Concept design• Parameter design• Tolerance design

– Crosby

• “Quality is free”

– Quality Management is strategic to the entire enterprise; not one, or a few, functional groups

Page 33 33

Another summarized view

* Adapted from Foster, Quality Management, Fourth Edition, Prentice Hall

Outer RingEnvironmental characteristics

Quality breakthrough

Inner RingInformation analysisStrategic Planning

CoreLeadership

Employee improvementQuality assurance

Customer rolePhilosophy

Quality department focusTeam approach