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Chapter 5 - Total Quality Management : 

© Wiley 2007 1 Chapter 5 - Total Quality Management Operations Management by R. Dan Reid & Nada R. Sanders 3rd Edition © Wiley 2007 PowerPoint Presentation by R.B. Clough – UNH M. E. Henrie - UAA

Learning Objectives : 

© Wiley 2007 2 Learning Objectives Explain the meaning of TQM Identify the costs of Quality Describe the evolution of TQM Identify Quality leaders and their contributions

Learning Objectives : 

© Wiley 2007 3 Learning Objectives Identify key features of the TQM philosophy Describe tools identifying and solving quality problems Describe quality awards and quality certifications

Defining Quality : 

© Wiley 2007 4 Defining Quality Definition of quality is dependent on the people defining it There is a lack of a single, universal definition of quality 5 common definitions include Conformance to specifications Fitness for use Value for price paid Support services Psychological criteria

Defining Quality – 5 Ways : 

© Wiley 2007 5 Defining Quality – 5 Ways Conformance to specifications Does product/service meet targets and tolerances defined by designers? Fitness for use Evaluates performance for intended use Value for price paid Evaluation of usefulness vs. price paid Support services Quality of support after sale Psychological e.g. Ambiance, prestige, friendly staff

Manufacturing Quality vs. Service Quality : 

© Wiley 2007 6 Manufacturing Quality vs. Service Quality Manufacturing quality focuses on tangible product features Conformance, performance, reliability, features Service organizations produce intangible products that must be experienced Quality often defined by perceptional factors like courtesy, friendliness, promptness, waiting time, consistency

Cost of Quality : 

© Wiley 2007 7 Cost of Quality Quality affects all aspects of the organization Quality has dramatic cost implications of; Quality control costs Prevention costs Appraisal costs Quality failure costs Internal failure costs External failure costs

Cost of Quality – 4 Categories : 

© Wiley 2007 8 Cost of Quality – 4 Categories Early detection/prevention is less costly May be less by a factor of 10

Evolution of TQM – New Focus : 

© Wiley 2007 9 Evolution of TQM – New Focus

Quality Gurus : 

© Wiley 2007 10 Quality Gurus

TQM Philosophy : 

© Wiley 2007 11 TQM Philosophy TQM Focuses on identifying quality problem root causes Encompasses the entire organization Involves the technical as well as people Relies on seven basic concepts of Customer focus Continuous improvement Employee empowerment Use of quality tools Product design Process management Managing supplier quality

TQM Philosophy - concepts : 

© Wiley 2007 12 TQM Philosophy - concepts Focus on Customer Identify and meet customer needs Stay tuned to changing needs, e.g. fashion styles Continuous Improvement Continuous learning and problem solving, e.g. Kaizen, 6 sigma Benchmarking Employee Empowerment Empower all employees; external and internal customers

TQM Philosophy– Concepts (continued) : 

© Wiley 2007 13 TQM Philosophy– Concepts (continued) Team Approach Teams formed around processes – 8 to 10 people Meet weekly to analyze and solve problems Understanding Quality Tools Ongoing training on analysis, assessment, and correction, & implementation tools Studying practices at “best in class” companies Plan-Do-Study-Act

Ways of Improving Quality : 

© Wiley 2007 14 Ways of Improving Quality Plan-Do-Study-Act Cycle (PDSA) Also called the Deming Wheel after originator Circular, never ending problem solving process Seven Tools of Quality Control Tools typically taught to problem solving teams Quality Function Deployment Used to translate customer preferences to design

PDSA Details : 

© Wiley 2007 15 PDSA Details Plan Evaluate current process Collect procedures, data, identify problems Develop an improvement plan, performance objectives Do Implement the plan – trial basis Study Collect data and evaluate against objectives Act Communicate the results from trial If successful, implement new process

PDSA (continued) : 

© Wiley 2007 16 PDSA (continued) Cycle is repeated After act phase, start planning and repeat process

Seven Tools of Quality Control : 

© Wiley 2007 17 Seven Tools of Quality Control Cause-and-Effect Diagrams Flowcharts Checklists Control Charts Scatter Diagrams Pareto Analysis Histograms

Cause-and-Effect Diagrams : 

© Wiley 2007 18 Cause-and-Effect Diagrams Called Fishbone Diagram Focused on solving identified quality problem

Flowcharts : 

© Wiley 2007 19 Flowcharts Used to document the detailed steps in a process Often the first step in Process Re-Engineering

Checklist : 

© Wiley 2007 20 Checklist Simple data check-off sheet designed to identify type of quality problems at each work station; per shift, per machine, per operator

Control Charts : 

© Wiley 2007 21 Control Charts Important tool used in Statistical Process Control – Chapter 6 The UCL and LCL are calculated limits used to show when process is in or out of control

Scatter Diagrams : 

© Wiley 2007 22 Scatter Diagrams A graph that shows how two variables are related to one another Data can be used in a regression analysis to establish equation for the relationship

Pareto Analysis : 

© Wiley 2007 23 Pareto Analysis Technique that displays the degree of importance for each element Named after the 19th century Italian economist Often called the 80-20 Rule Principle is that quality problems are the result of only a few problems e.g. 80% of the problems caused by 20% of causes

Histograms : 

© Wiley 2007 24 Histograms A chart that shows the frequency distribution of observed values of a variable like service time at a bank drive-up window Displays whether the distribution is symmetrical (normal) or skewed

Product Design - Quality Function Deployment : 

© Wiley 2007 25 Product Design - Quality Function Deployment Critical to ensure product design meets customer expectations Useful tool for translating customer specifications into technical requirements is Quality Function Deployment (QFD) QFD encompasses Customer requirements Competitive evaluation Product characteristics Relationship matrix Trade-off matrix Setting Targets

Quality Function Deployment(QFD) Details : 

© Wiley 2007 26 Quality Function Deployment(QFD) Details Process used to ensure that the product meets customer specifications Voice of the engineer Voice of the customer Customer-based benchmarks

QFD - House of Quality : 

© Wiley 2007 27 QFD - House of Quality Adding trade-offs, targets & developing product specifications Trade-offs Targets Technical Benchmarks

Reliability – critical to quality : 

© Wiley 2007 28 Reliability – critical to quality Reliability is the probability that the product, service or part will function as expected No product is 100% certain to function properly Reliability is a probability function dependent on sub-parts or components

Reliability – critical to quality : 

© Wiley 2007 29 Reliability – critical to quality Reliability of a system is the product of component reliabilities RS = (R1) (R2) (R3) . . . (Rn) RS = reliability of the product or system R1 = reliability of the components Increase reliability by placing components in parallel

Reliability – critical to quality : 

© Wiley 2007 30 Reliability – critical to quality Increase reliability by placing components in parallel Parallel components allow system to operate if one or the other fails RS = R1 + (R2* Probability of needing 2nd component)

Process Management : 

© Wiley 2007 31 Process Management Quality products come from quality sources Quality must be built into the process Quality at the source is belief that it is better to uncover source of quality problems and correct it TQM extends to quality of product from company’s suppliers

Quality Awards and Standards : 

© Wiley 2007 32 Quality Awards and Standards Malcolm Baldrige National Quality Award (MBNQA) The Deming Prize ISO 9000 Certification ISO 14000 Standards

MBNQA- What Is It? : 

© Wiley 2007 33 MBNQA- What Is It? Award named after the former Secretary of Commerce – Regan Administration Intended to reward and stimulate quality initiatives Given to no more that two companies in each of three categories; manufacturing, service, and small business Past winners; Motorola Corp., Xerox, FedEx, 3M, IBM, Ritz-Carlton

The Deming Prize : 

© Wiley 2007 34 The Deming Prize Given by the Union of Japanese Scientists and Engineers since 1951 Named after W. Edwards Deming who worked to improve Japanese quality after WWII Not open to foreign companies until 1984 Florida P & L was first US company winner

ISO Standards : 

© Wiley 2007 35 ISO Standards ISO 9000 Standards: Certification developed by International Organization for Standardization Set of internationally recognized quality standards Companies are periodically audited & certified ISO 9000:2000 QMS – Fundamentals and Standards ISO 9001:2000 QMS – Requirements ISO 9004:2000 QMS - Guidelines for Performance More than 40,000 companies have been certified ISO 14000: Focuses on a company’s environmental responsibility

Why TQM Efforts Fail : 

© Wiley 2007 36 Why TQM Efforts Fail Lack of a genuine quality culture Lack of top management support and commitment Over- and under-reliance on SPC methods

TQM Within OM : 

© Wiley 2007 37 TQM Within OM TQM is broad sweeping organizational change TQM impacts Marketing – providing key inputs of customer information Finance – evaluating and monitoring financial impact Accounting – provides exact costing Engineering – translate customer requirements into specific engineering terms Purchasing – acquiring materials to support product development Human Resources – hire employees with skills necessary Information systems – increased need for accessible information

Chapter 5 Highlights : 

© Wiley 2007 38 Chapter 5 Highlights TQM is different from the old concept of quality as it focus is on serving customers, identifying the causes of quality problems, and building quality into the production process Four categories of quality cost of prevention, appraisal, internal and external costs Seven TQM notable individuals include Walter A. Shewhart, W. Edwards Demings, Joseph M. Juran, Armand V. Feigenbaum, Philip B. Crosby, Kaoru Ishikawa, and Genichi Taguchi

Chapter 5 Highlights - Continued : 

© Wiley 2007 39 Chapter 5 Highlights - Continued Seven features of TQM combine to create TQM philosophy; customer focus, continuous improvement, employee empowerment, use of quality tools, product design, process management, and managing supplier quality QFD is a tool used to translate customer needs into specific engineering requirements Reliability is the probability that the product will functions as expected The Malcom Baldridge Award is given to companies to recognize excellence in quality management.

The End : 

© Wiley 2007 40 The End Copyright © 2007 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United State Copyright Act without the express written permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

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