Mgmt 425 EXAM 1 review csuf

Crosby Philosophy

"Quality is free" "...It's not a gift, but it is free. What costs money are the unquality things-- all the actions that involve not doing jobs right the first time."

Feautres

"bells and whistles"

Statistical Thikning

-All work occurs in a system of interconnected processes -Variation exists in all processes -Understanding and reducing variation are the keys to success

History of Quality Management

-Ancient history -The age of craftsmanship -Industrial Revolution -Early 20th century -Post World War II -U.S. "Quality Revolution" -Quality crisis around 1980 -Rapid Growth in Business

*Deming's System of Profound Knowledge

-Appreciation for a system -Understanding Variation -Theory of knowledge -Psychology

Types of Customers

-Consumers -External customers -Internal customers

Identifying Customers

-Consumers -Internal Customers -External customers

Core Quality Management Principles

-Customer focus -Teamwork -Continuous improvement

Critical Differences between Service and Manufacturing

-Customer needs and performance standards are more difficult to identify and measure -Services require a higher degree of customization -Output is intangible -Services are produced and consumed simultaneously -Customers are often involved in actual process -Services are more labor-intensive than manufacturing -Services handle large numbers of transactions

Customer Segmentation

-Demographics -Geography -Volumes -"Vital few" and "useful many" -Profit potential

Quality in Business Support Functions

-Finance and Accounting: budgeting, cost of quality -Legal Services: liability -Quality Assurance: coaching and special studies

Contemporary Influences on Quality

-Global responsibility -Consumer Awareness -Globalization -Increasing rate of change -Workforce of the future -Aging population -21st century quality -Innovation

Kaoru Ishikawa Philosophy

-Instrumental in developing Japanese quality strategy -Influenced particiaptive approaches involving all workers -Advocated the use of simple visual tools and statistical techniques -Known for 'Fishbone Diagram' (Manpower, Method, Measurement, Machine, Environment, and Materials)

Theory of Knowledge

-Knowledge is not possible without theory -Experience alone does not establish a theory, it only describes it can not be tested or validated -Theory shows cause-and-effect relationships that can be used for prediction

Variation

-Many sources of uncontrollable variation exist in any process -Excessive variation results in product failures, unhappy customers, and unnecessary costs -Statistical Tools/Methods: used to identify and quantify variation (help understand, lead to improvements)

American Customer Satisfaction Index (ACSI)

-Measures customer satisfaction at a national level -based on results of telephone interviews conducted in a national sample of 46,000 consumers who recently bought or used a company's product/service

Psychology

-People are motivated intrinsically and extrinsically (intrinsic motivation is the most powerful) -Fear is demotivating -Managers should develop pride and joy in work

System of Profound Knowledge- Impact

-People who do not understand systems: see symptoms, but not the root of problems -People who don't understand variation: do not see trends and can't forecast the future -People who don't understand psychology: don't know how to motivate people -People who do not understand the TOK: do not know how to plan, learn, and improve

Defining Quality

-Perfection -Fast Delivery -Providing a good, usable product -Consistency -Eliminating waste -Doing it right the first time -Delighting or pleasing customers -Total customer service and satisfaction -Compliance with policies and procedures

Key Product Quality Dimensions

-Performance -Features -Reliability -Conformance -Durability -Serviceability -Aesthetics

Total Quality Management

-Principles: foundation of the philosophy -Practices: activities/ approaches by which principles are implemented -Techniques: tools and approaches to make practices effective

Crosby's Absolutes of Quality Management

-Quality means 'conformance to requirements' -There is no such thing as a Quality problem; problems are functional in nature -'Do it right the first time' -'Cost of quality' is the only useful measurement -'Zero defects' is the only performance standard; there is no optimum level of defects

TQ Techniques

-Statistical methods -Visual aids for problem solving (flowcharts) -Techniques specific to quality assurance activities (basic stats, control charts, measurement systems analysis, reliability models, etc)

Building Effective QMSs

-System should be integrated with enterprise systems -System should focus on actionable decision making, seeking the root causes or problems, and improving processes and systems -System should drive the principles of quality management throughout the organization (accomplished by fostering effective practices to implement the principles)

Leaders in the Quality Revolution

-W. Edwards Deming -Joseph M. Juran -Philip B. Crosby -Armand V. Feigenbaum -Kaoru Ishikawa

(CH 3) Importance of Customers

-Without customers, you don't have a business -If the customer is satisfied with the whole experience with the product, then you have a quality product

Competitive Advantage

-driven by customer wants and needs -makes significant contribution to business success -matches organization's unique resources with opportunities -is durable and lasting -provides basis for further improvement -provides direction and motivation

Quality and Personal Values

-personal initiative has a positive impact on business success -quality-focused individuals often exceed customer expectations -quality begins with personal attitudes -attitudes can be changed through awareness and effort

Components of Service Quality

1. People 2. Technology -Computers and information technology -E-commerce

A.V. Feigenbaum (Past GE CEO): 3 Steps to Quality

1. Quality Leadership: a strong focus on planning 2. Modern Quality Technology: involving the entire work force (people) 3. Organizational Commitment: supported by continuous training and motivation

Juran's Quality Trilogy

1. Quality Planning 2. Quality Control 3. Quality Improvement

Quality: 6 Perspectives

1. Transcendent (Judgmental) Perspective 2. Product Perspective 3. User Perspective 4. Value Perspective 5. Manufacturing Perspective 6. Customer Perspective

From Product Quality to Total Quality Management (History of Quality Mgmt)

Big Q of TQM Little Q of TQM Definition of TQM

External Customers

Business-to-business

Customer Engagement

Customers' investment in or commitment to a brand or product offerings. Characteristics: -Customer retention and loyalty -Customers' willingness to make an effort to do business with the organization, and -Customers' willingness to actively advocate for and recommend the brand and product offerings

Performance Excellence

Focus on customer value, organizational sustainability, improvement of effectiveness and capabilities, and organizational and personal learning

Growth of Modern Quality Mgmt

Manufacturing quality -> Improved product designs -> Service quality -> Performance excellence

Quality in Services

Service is defined as "any primary or complementary activity that does not directly produce a physical product- that is, the non-goods part of the transaction between buyer (customer) and seller (provider)"

Juran - Philosophy on Quality

Suggests quality be viewed from both external and internal perspectives: -Product performance that results in customer satisfaction -Freedom from product deficiencies, which avoids customer dissatisfaction Proposed a simple definition of quality: -He coined the phrase "Fitness for Intended Use" -Closest to the 'User Perspective'

Net Present Value of the Customer (NPVC)

The total profits discounted over time -revenues associated with a customer minus expensed need to serve a customer -NPVC is often used to segment customers by profit potential

Satisfying Customers- Customer Satisfaction

To meet or exceed customer expectations, organizations must fully understand all product and service attributes that contribute to customer value and lead to satisfaction and loyalty -Meeting specifications, reducing defects and errors, and resolving complaints -Designing new products that truly delight the customer -Responding rapidly to changing consumer and market demands -Developing new ways of enhancing customer relationships

Emergence of Six Sigma

a customer-focused, results-oriented approach to business improvement

Quality Management Systems (QMSs)

a mechanism for managing and continuously improving core processes to "achieve maximum customer satisfaction at the lowest overall cost to the organization" Objectives: -higher product conformity and less variation -fewer defects, waste, rework, and human error -improved productivity, efficiency, and effectiveness

Quality Manual

a permanent reference for implementing and maintaining the system Typical records: -Inspection reports -Test data -Audit reports -Calibration data

Quality in Purchasing

a purchasing agent should not simply be responsible for low-cost procurement, but should maintain a clear focus on the quality of purchased goods and materials

Systems

a set of functions or activities within an organization that work together for the aim of the organization -most organizational processes are cross-functional -parts of a system must work together -every system must have a purpose -management must optimize the system as a whole

Durability

amount of use before deterioration or replacement

Internal Customers

anyone who receives goods or services from someone else within an organization

Quality in Manufacturing and Assembly

both technology and people are essential to high-quality manufacturing

Manufacturing Perspective

conformance to specifications

Conformance

degree to which characteristics match standards

Transcendent Perspective

excellence

User Perspective

fitness for intended use

Deming Philosophy

focuses on continual improvements in product and service quality.. -by reducing uncertainty and variability in design, manufacturing, and service processes, -driven by the leadership of top management

Unless quality is internalized at the personal level,

it will never become rooted in the culture of an organization. Thus, quality must begin at a personal level (and that means YOU!).

Quality in Process Design

manufacturing processes must be capable of producing output that meets specifications consistently

Quality in Marketing

marketing and sales personnel are responsible for determining the needs and expectations of consumers

Customer Perspective

meeting or exceeding customer expectations

Quality in Production Planning & Scheduling

poor quality often results from time pressures caused by insufficient planning and scheduling

Performance

primary operating characteristics

Reliability (Product)

probability of operating for specific time and conditions of use

Quality in Product Design

product design and engineering functions develop technical specifications for products and production processes to meet the requirements determined by the marketing function

Value Perspective

quality vs price

Product Perspective

quantities of product attributes

Deming's 14 Points

represent the practices that advocate for achieving quality excellence: 1. Create and publish a company mission statement and commit to it 2. Learn the new philosophy 3. Understand the purpose of inspection 4. End business practices driven by price alone 5. Constantly improve system of production and service 6. Institute training 7. Teach and institute leadership 8. Drive out fear and create trust 9. Optimize team and individual effort 10. Eliminate exhortations for work force 11. Eliminate numerical quotas and Manage-By-Objectives. Focus on improvement 12. Remove barriers that rob people of pride of workmanship 13. Encourage education and self-improvement 14. Take action to accomplish the transformation

Quality in Installation and Service

service after the sale is one of the most important factors in establishing customer perception of quality and customer loyalty

Juran's Breakthrough Sequence

specifications for a detailed program for quality improvement -Proof of the Need (managers speak $) -Project Identification (project by project) -Organize for Breakthrough (teams!) -Diagnostic Journey (finding root cause) -Remedial Journey (finding a fix) -Holding the Gains (keeping the fix)

Serviceability

speed, courtesy, and competence of repair

Quality Imrovement

the process of breaking through to unprecedented levels of performance

Quality Control

the process of meeting quality goals during operations

Quality Planning

the process of preparing to meet quality goals

Quality in Finished Goods Inspection and Testing

the purposes of final product inspection are to judge the quality of manufacturing, to discover and help to resolve production problems that may arise, and to ensure that no defective items reach the customer

Customer Satisfaction

the result of delivering a product or service that meets customer requirements -Customer satisfaction drives profitability -Businesses with a 98% customer retention rate are twice as profitable as those at 94%

Consumers

ultimate buyers of goods and services