Chapter 6

Deming

-All employees are responsible for quality -Variability is the source of most problems -The customer is the final arbiter of quality

Features

-Description for Tangible Good/Intangible: Presence of unique product characteristics that supplement basic functions

Conformance

-Description for a Tangible Good/Intangible The degree to which a product meets its design specifications

Durability

-Description for a Tangible Good/Intangible: Length of product life or the amount of use one gets before a product deteriorates

performance

-Description for a Tangible Good/Intangible: The degree to which the product meets or exceeds certain operating characteristics

Support/Responsiveness

-Description for a Tangible Good: Competence of product support in terms of installation, information, maintenance, or repair -Description for a Intangible Good: Willingness to help customers and provide prompt service

reliability

-Description for a Tangible Good: Length of time a product performs before it must be repaired -Description for an Intangible Service Ability to perform the promised service dependably and accurately

Perceived Quality (Reputation/Assurance/ Empathy)

-Description for a Tangible Good: Subjective assessment based on image, advertising, brand names, reputation, or other information indirectly associated with the product's attributes -Description for an Intangible Service: Subjective assessment of the knowledge and courtesy of employees and their ability to convey trust and confidence Subjective assessment of the caring, individualized attention paid to customers

Aesthetics

-Description for a Tangible Good: Subjective assessment of a product's look, feel, sound, taste, or smell -Description for a Intangible Good: Appearance of physical facilities, equipment, personnel, and communication materials

The standard emphasizes many of quality management's core values.

-First, it is customer-oriented, with a great emphasis placed on defining, meeting, and achieving customer satisfaction. -Second, it emphasizes the role of leadership in engaging people to make improvements on a regular basis. -Third, it recognizes the importance of a process-oriented approach, including the definition, measurement, and documentation of processes. -Fourth, it places a high priority on evidence-based decision making. -Finally, the standard emphasizes the importance of managing inter- and intraorganizational relationships.

Values that Characterize TQM

-Holistic view of product quality and its impacts -Emphasis on customer requirements -Extended process view of operations -Emphasis on prevention rather than inspection -Disdain for variability -Data-based decision making (vs. opinion-based) -Employee empowerment -Top management support -Supplier involvement -Continuous improvement

Imai

-Kaizen system of continuous improvement -Need a process-oriented view -Frontline workers have important insights -Worker training and development are key

The PDCA cycle consists of four separate but linked activities:

-Plan. Identify a problem by studying the current situation to detect a gap between it and the desired future situation. Identify actions to improve the situation (i.e., close the gap). Formulate a plan for closing the gap (e.g., a plan for reducing the number of defects coming from a specific process). -Do. Having formulated a plan, implement it. -Check. Use performance metrics to monitor and inspect the results. Identify unplanned problems elsewhere in the system or previously hidden problems uncovered by the changes. -Act. Review information collected in the check step and take corrective actions to prevent reoccurrence of problems. Institutionalize changes (through revised procedures and associated training) as a starting point for the next PDCA cycle. -The PDCA method is simple, giving all employees the impetus and guiding structure for attacking problems on a daily basis. Workers at all levels can be trained in the PDCA process and in the use of the quality tools referenced above.

Juran

-Quality has many dimensions -Quality management is change management -Cost of quality analysis highlights need for change

Crosby

-Quality is free; zero defects is an appropriate goal -Focus on incremental and continuous change

Factors Affecting the Success of TQM

-Strong, charismatic leadership -Trust between labor and management -Crisis situation or compelling reason for change -Adequate resourcing of training and improvement projects -Clear, well-communicated, uncomplicated change process -Unquestionable success of early efforts

Variability in repeated activities is often the major source of problems in operations processes. For example:

-Variability in the time it takes to complete a task often disrupts work flows. -Variations in a purchased material characteristic, such as in the diameter of a ball bearing, can cause unreliability in product performance. -Variations in marketing promotions can cause large swings in product demand, which make production processes less stable.

Deming's 14 Points

1. Create consistency of purpose for continual improvement of goods and services. 2. Adopt the new philosophy for economic stability. 3. Cease dependency on inspection to achieve quality. 4. End the practice of awarding business on price tag alone. 5. Improve constantly and forever the system of production and service. 6. Institute training on the job. 7. Adopt and institute modern methods of supervision and leadership. 8. Drive out fear. 9. Break down barriers between departments and individuals. 10. Eliminate the use of slogans, posters, and exhortations. 11. Eliminate work standards and numerical quotas. 12. Remove barriers that rob the hourly worker of the right to pride in workmanship. 13. Institute a vigorous program of education and retraining. 14. Define top management's permanent commitment to ever-improving quality and productivity.

As project teams work through the DMAIC process, they focus on several objectives:

1. Each critical-to-quality (CTQ) characteristic should be defined from a customer's perspective and in a way in which it can be measured as objectively as possible. 2. It is important to determine and consider the future market and technology strategies for the product, as well as the strategies for the processes that are involved in delivery of the CTQ characteristics. 3. The quality improvement tools described in the supplement to this chapter are especially useful in the analyze, improve, and control steps of the process. 4. If the data do not already exist, the project team needs to develop a way to measure important outcomes on a frequent and regular basis. 5. The lessons learned from the process should be documented, and the final problem solution should be implemented in all applicable areas.

Crosby's 14 Steps for Quality Improvement

1. Management commitment. Make quality a high priority for the firm. 2. Quality improvement teams. Cross-functional teams guide and achieve improvements. 3. Quality measurement. Clear measures that relate to individual activities. 4. Cost of quality evaluation. Assess prevention, appraisal, and failure costs. 5. Quality awareness. Formal programs for creating awareness. 6. Corrective action. Teams identify, study, and resolve problems. 7. Zero defects planning. Move from correcting problems to totally eliminating them. 8. Employee education. Employees at all levels trained to fulfill their proper roles. 9. Zero defects day. Event to signal a new, higher standard of performance. 10. Goal setting. New goals to guide performance and to keep quality in the forefront. 11. Error cause removal. Moves from correcting problems to removing the underlying causes. 12. Recognition. Appreciation of employees whose actions have helped the firm achieve its quality objectives. 13. Quality council. Team leaders meet regularly to share experiences and plans. 14. Do it all over again! Repeat the steps at a higher level.

Juran's Universal Breakthrough Sequence

1. Proof of Need. Create awareness by showing the costs of not changing. 2. Project Identification. Pick an initial project that has the highest, most visible payoffs. 3. Organize for Improvement. Put in place the resources, top management, employees, and work policies needed to ensure success. 4. Diagnostic Journey. Identify and understand the critical few problems and their causes. 5. Remedial Action. Identify and implement necessary corrective actions. 6. Resistance to Change. Overcome resistance by encouraging wide participation and by giving people sufficient time to understand and accept the changes. 7. Holding Onto the Gains. Prevent a return to the "old" ways of doing things by establishing new standards, increasing training, and developing new control systems.

Imai's Kaizen Steps

1. Standardize an operation. 2. Measure the standardized operation. 3. Gauge measurements against requirements. 4. Innovate to meet requirements and increase productivity. 5. Standardize the new, improved operations. 6. Continue cycle ad infinitum.

Design for Six Sigma (DFSS)

A design approach that balances customer requirements with the constraints and capabilities of the supporting manufacturing and service processes.

cost of quality (COQ)

A framework for quantifying the total cost of quality-related efforts and deficiencies. COQ identifies and assesses four major cost categories: -prevention costs -appraisal costs -internal failure costs -external failure costs

Six Sigma

A management program that seeks to improve the quality of process outputs by identifying and removing the causes of defects and variation in the various processes.

standard deviation

A measure of the variability or dispersion of a population, data set, or distribution.

plan-do-check-act cycle (PDCA)

A process for improving quality that describes the sequence used to solve problems and improve quality continuously over time; also known as the Deming Wheel or Deming Cycle.

progressive quality management approach

A progressive quality management approach challenges this view, arguing that it is the workers on the front lines of business who should actually have primary "ownership" of operating processes. Further, managers should support workers, not the other way around. Frontline workers have the closest contact with customers and operational processes; therefore, they ultimately determine the quality level that the firm offers and how customers view the firm. In addition, they know more than anyone about the firm's problems and the best ways to solve them. Total quality management advocates believe that the entire organization should support the frontline workers, as the right-hand side of Figure 6-1 illustrates. This idea of elevating and empowering frontline workers is a core value of total quality management.

DMAIC

An acronym for the five steps at the heart of the Six Sigma process: define, measure, analyze, improve, and control.

Marketing Managers

Decisions and Activities with Potential Impacts on Product Quality: -Choices of markets to pursue and product features to offer -Design of advertising and other programs that communicate product attributes to customers -Development of new product testing programs

Supply Managers

Decisions and Activities with Potential Impacts on Product Quality: -Description of purchase requirements -Selection of suppliers -Establishment of contracts and associated incentives and penalties -Management of and interactions with suppliers

Manufacturing and Service Operations Managers

Decisions and Activities with Potential Impacts on Product Quality: -Design and execution of processing procedures -Design of work policies -Interactions with customers -Management of facilities and equipment -Scheduling of work

Human Resources Managers

Decisions and Activities with Potential Impacts on Product Quality: -Design of hiring criteria and training and development programs Setting of compensation schemes and incentives

Process Engineers

Decisions and Activities with Potential Impacts on Product Quality: -Design of manufacturing and service processes -Choices of technology and associated capabilities and capacity limits -Design of quality assurance tests and procedures

Product Engineers

Decisions and Activities with Potential Impacts on Product Quality: -Design of product specifications, service elements, dimensional tolerances, etc. -Design of product prototyping procedures

Logistics Managers

Decisions and Activities with Potential Impacts on Product Quality: -Selection of transportation providers -Development of tracking and other information systems -Design of packaging, storage, and material handling processes -Management of and interactions with transportation providers

Finance and Accounting Managers

Decisions and Activities with Potential Impacts on Product Quality: -Setting of restrictions for equipment purchases -Establishing goals for utilization of facilities and working capital -Design of measures used to assess efficiency and productivity

Sales Managers

Decisions and Activities with Potential Impacts on Product Quality: -Setting of sales targets -Interactions with customers -Interpretations of customers' needs and desires

ISO 9000

defines a set of internationally accepted standards for business quality management systems.

appraisal costs

esult from inspections used to assess products' quality levels. Such costs include resources spent on incoming material inspections, product and process inspections, inspection staff salaries, test equipment, and development of test procedures.

quality management

is a management approach that establishes an organizationwide focus on quality, merging the development of a quality-oriented corporate culture with intensive use of managerial and statistical tools

design quality

is a measure of how well a product's designed features match up to the requirements of a given customer group.

conformance quality

is a measure of whether or not a delivered product meets its design specifications.

product quality

is a product's fitness for consumption—how well it meets customers' needs and desires. Fitness for consumption is determined by both a product's design quality and its conformance quality.

total quality management

is an integrated business management strategy aimed at embedding awareness of quality in all organizational processes 1. a product's quality is ultimately determined by the customer's acceptance and use of the product 2. quality management is a total, organization wide activity, rather than a technical task 3. quality improvement requires a total commitment from all employees

internal failure costs

result from defects that are found in products prior to their shipment to customers. These costs include scrapped materials, salvage and rework, excess material inventories, and other costs of correction.

external failure costs

result from defects that are found only after products reach customers. These costs include complaint settlements, loss of customer goodwill and future sales, returned materials, warranty work, and field service or repairs.

prevention costs

result from efforts to prevent product defects (nonconforming products) and from efforts needed to limit both failure and appraisal costs. Such costs include resources spent on planning, new-product reviews, investments in more capable processing equipment, training, process control, and quality improvement projects.