Chapter 6 Managing Quality Rapid Review

The American Society for Quality (ASQ) defines quality as

"The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs."

SERVQUAL

(1) A popular measurement scale for service quality that compares service expectations with service performance. (2) A multiple-item scale used to measure service quality across dimensions of tangibles, reliability, responsiveness, assurance, and empathy.

TQM in Services

(1) Determinants of service quality: reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, and tangibles. (2) Service quality is more difficult to measure than for goods. Service quality perceptions depend on: - Expectations versus reality - Process and outcome - Types of service quality - Normal: Routine service delivery - Exceptional: How problems are handled 1. Intangible differences between products. 2. Intangible expectations customers have about those products.

Seven Concepts of TQM

1. Continuous improvement 2. Six Sigma 3. Employee empowerment 4. Benchmarking 5. Just-in-time (JIT) 6. Taguchi concepts 7. Knowledge of TQM tools

The four major categories of costs which are associated with quality are

1. Prevention Costs 2. Appraisal Costs 1 and 2 are the Cost of Good Quality. 3. Internal failure costs 4. External failure costs 3 and 4 are the Costs of Poor Quality.

Cost of Quality (COQ)

1. The cost of doing things wrong - that is, the price of nonconformance. 2. Expenditures related to achieving product or service quality, such as the costs of prevention, appraisal, internal failure, and external failure. 3. A framework for quantifying the total cost of quality-related efforts and deficiencies. Total Cost of Quality is the sum of Cost of Good Quality: Prevention and Appraisal + Cost of Poor Quality: Internal Failure Costs and External Failure Costs

Four leaders in the field of quality management are

1. W. Edwards Deming 2. Joseph M. Juran 3. Armand Feigenbaum 4. Philip B. Crosby

A fishbone diagram is also known as a a. cause-and-effect diagram b. poka-yoke diagram c. Kaizen diagram d. Kanban diagram e. Taguchi diagram

A

A production manager at a pottery factory has noticed that about 70 percent of defects result form impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using a. a Pareto chart b. a scatter diagram c. a Taguchi loss function d. a cause and effect diagram e. a flow chart

A

A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings a. Ishikawa diagram b. Pareto chart c. process chart d. control charts e. activity chart

A

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson's ability to explain the car's features, the salesperson's friendliness, and the dealer's honesty. The dealership should be especially concerned with which determinants of service quality a. communication, courtesy, and credibility b. competence, courtesy, and security c. competence, responsiveness, and reliability d. communication, responsiveness, and reliability e. understanding/knowing customer, responsiveness, and reliability

A

Cost of dissatisfaction, repair costs, and warranty costs are elements of cost in the a. Taguchi Loss Function b. Pareto chart c. ISO 9000 Quality Cost Calculator d. process chart e. none of the above

A

If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage a. 3.4 b. 6.0 c. 34 d. 2700 e. 6 times the monthly standard deviation of passengers

A

If a sample of items is taken and the mean of the sample is outside the control limits the process is a. out of control and the cause should be established b. in control, but not capable of producing within the established control limits c. within the established control limits with only natural causes of variation d. monitored closely to see if the next sample mean will also fall outside the control limits e. producing high quality products

A

Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to a. determine whether any of the organization's stakeholders are violated by poor quality products b. gain ISO 14000 certification for the organization c. obtain a product safety certificate from the Consumer Product Safety Commission d. have the organization's legal staff write disclaimers in the product instruction booklets e. compare the cost of product liability to the external failure cost

A

Stakeholders who are affected by the production and marketing of poor quality products include a. stockholder, employees, and customers b. suppliers and creditors, but not distributors c. only stockholders, creditors, and owners d. suppliers and distributors, but not customers e. only stakeholders and organizational executives and managers

A

The "four Ms" of cause-and-effect diagrams are a. material, machinery/equipment, manpower, and methods b. material, methods, men, and mental attitude c. named after four quality experts d. material, management, manpower, and motivation e. none of the above

A

The goal of inspection is to a. detect a bad process immediately b. add value to a product or service c. correct deficiencies in productions d. correct system deficiencies e. all of the above

A

Which of the following is false regarding control charts a. values above the upper control limits always imply that the product's quality is exceeding expectations b. control charts are built so that new data can be quickly compared to past performance data c. control charts graphically present data d. control charts plot data over time e. none of the above is false

A

Which of the following statements regarding "Six Sigma" is true? a. the term has two distinct meanings---one is statistical; the other is a comprehensive quality system b. six sigma means that about 94 percent of a firm's output is free of defects c. the six sigma program was developed by Toyota in the 1970s d. the six sigma program is for manufacturing firms, and is not applicable to services e. six sigma certification is granted by the International Standards Organization (ISO)

A

Flowchart

A block diagram that graphically describes a process or a system. Alternatives: A diagram that shows the step-by-step progression through a procedure or system, especially using connecting lines and a set of conventional symbols. A diagram that shows the different paths a program will take depending on data inputs. A diagram of the sequence of operations in a computer program or an accounting system.

PDCA

A continuous improvement model involving four stages: Plan, Do, Check, Act = PDCA

Control Chart

A graphic presentation of process data over time, with predetermined control limits. This chart of time-ordered values of sample statistics is used to determine whether observed variations are abnorma and assists in detecting a trend of plotted values toward either control limit.

Pareto Chart

A graphic that identifies the few critical items as opposed to many much less important ones. Alternative: Bar height reflects the frequency or impact of the causes. In statistics a vertical bar graph where the vertical bars are drawn in decreasing order of frequency or relative frequency.

Quality Circle (QC)

A group of employees meeting regularly with a facilitator to solve work-related problems in their work area. - This concept was devised in the 1950s and revived in the 1980s with the emergence of TQM (Total Quality Management). - Consists of a small voluntary group of employees who work together on a particular job and meet regularly to discuss job-related problems and solutions - Representatives from the group then present their solutions to management. - This has a positive impact on the employees' attitudes, but no effect on job performance. - A small group of employees who work voluntarily on company time, typically one hour per week, to address work-related problems.

Quality Loss Function (QLF)

A mathematical function that identifies all cost connected with poor quality and shows how these costs increase as product quality moves from what the customer wants. QLF estimates the cost of deviating from the target value.

Inspection

A means of ensuring that an operation is producing at the quality level expected.

Target-oriented quality

A philosophy of continuous improvement to bring a product exactly on target. Successful firms aim toward a perfect 'target' value.

Statistical Process Control (SPC)

A process used to monitor standards, make measurements and take corrective action as a product or service is being produced. The process of testing statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards. Statistical evaluation of the output of a process. Helps us to decide if a process is "in control" or if corrective action is needed.

Six Sigma

A program to save time, improve quality, lower costs; increasing customer satisfaction. In statistics, Six Sigma describes a process, product, or service with an extremely high capability which as 99.9997% accuracy, or 3.4 defects per million.

Cause-and-effect diagram (Ishikawa diagram or fish-bone chart/diagram)

A schematic technique used to discover possible locations of quality problems. The 4 Ms Material, Machinery/equipment, Manpower, and Methods may be broad causes. Traces undesirable effect to its root cause, maps out factors that are thought to affect a problem or get desired outcome.

ISO 9000

A set of international standards developed by the International Organization for Standardization (ISO). A set of international standards on quality management and quality assurance, critical to international business. ISO 9000 is the only quality standard with international recognition. To do business globally, being listed in the ISO directory is critical.

Checklist

A type of poka-yoke that lists the steps needed to ensure consistency and completeness in a task. Records the frequency of occurrence of certain process failures

Attribute Inspection

An inspection that classifies items as being either good or defective

"Poka-yoke" is the Japanese term for a. card b. foolproof c. continuous improvement d. fishbone diagram e, just-in-time production

B

A customer service manage at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of categories. This is most closely related to the _______ tool of TQM a. Taguchi loss function b. cause and effect diagram c. scatter diagram d. histogram e. process control chart

B

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a a. Pareto chart b. process chart c. check sheet d. Taguchi map e. poka-yoke

B

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is a. in control, but not capable of producing with in the established control limits b. out of control and the process should be investigated for assignable variation c. within the established control limits with only natural causes of variation d. monitored closely to see if the next sample mean will also fall outside the control limits e, none of the above

B

Marketing issues such as advertising, image, and promotion are important to quality because a. they define for consumers the tangible elements of a service b. the intangible attributes of a product (including any accompanying service) may not be defined by the consumer c. they educate consumers on how to use the product d. they make the product seem more valuable than it really is e. they raise expenses and therefore decrease profitability

B

The process improvement technique that sorts the "vital few" from the "trivial many" is a. Taguchi analysis b. Pareto analysis c. benchmarking d. Deming analysis e. Yamaguchi analysis

B

Three broad categories of definition of quality are a. product quality, service quality, and organizational quality b. user-based, manufacturing-based, and product-based c. internal, external, and prevention d. low-cost, response, and differentiation e. Pareto, Shewhart, and Deming

B

Total quality management emphasizes a. the responsibility of the quality control staff to identify and solve all quality-related problems b. a commitment to quality that goes beyond internal company issues to suppliers and customers c. a system where strong managers are the only decision makers d. a process where mostly statisticians get involved e. ISO 14000 certification

B

"Making it right the first time" is a. an unrealistic definition of quality b. a user-based definition of quality c. manufacturing-based definition of quality d. a product-based definition of quality e. the definition proposed by the American Society for Quality

C

"Quality Is Free," meaning that the costs of poor quality have been understated, is the work of a. W. Edwards Deming b. Joseph M. Juran c. Philip B. Crosby d. Crosby, Stills, and Nash e. Armand Feigenbaum

C

Building high-morale organizations and building communication networks that include employees are both elements of a. ISO 9000 certification b. six sigma certification c. employee empowerment d. Taguchi methods e. the tools of TQM

C

Pareto charts are used for a. identify inspection points in a process b. outline production schedules c. organize errors, problems, or defects d. show material flow e. all of the above

C

The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as a. continuous improvement b. employee empowerment c. benchmarking d. copycatting e. patent infringement

C

Which of the determinants of service quality involves having the customer's best interests at heart a. access b. courtesy c. credibility d. responsiveness e. tangibles

C

Which of the following statements is not true? a. self-promotion is not a substitute for quality products b. inferior products harm a firm's profitability and a nation's balance of payments c. product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product d. quality - be it good or bad - will show up in perceptions about a firm's new products, employment practices, and supplier relations e. legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards

C

Variable Inspection

Classifications of the inspected items as falling on a continuum scale, such as dimension or strength. Measures dimensions such as weight, speed, size, or strength to see if an item falls within an acceptable range.

Source Inspection

Controlling or monitoring at the point of production or purchase at the source. Inspection of materials, components, products, or documents at the supplier's facility by an individual not employed by the supplier.

"Employees cannot produce goods that on average exceed the quality of what the process is capable of producing" expresses a basic element in the writings of a. Vilfredo Pareto b. Armand Feigembaum c. Joseph M. Juran d. W. Edwards Deming e. Philip B. Crosby

D

"Quality is defined by the customer" is a. an unrealistic definition of quality b. a user-based definition of quality c. a manufacturing-based definition of quality d. a product-based definition of quality e. the definition proposed by the American Society for Quality

D

A manger tells her production employees, "It's no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of a. internal benchmarking b. six sigma c. ISO 9000 d. Taguchi concepts e. process control charts

D

A quality loss function includes all of the following costs except a. the cost of scrap and repair b. the cost of customer dissatisfaction c. inspection, warranty and service costs d. sales cost e. costs to society

D

A successful TQM program incorporates all of the following except a. continuous improvement b. employee involvement c. benchmarking d. centralized decision-making authority e. non of the above; a successful TQM program incorporates all of the above

D

According to the manufacturing-based definition of quality, a. quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost b. quality depends on how well the product fits patterns of consumer preferences c. even though quality cannot be defined, you know what it is d. quality is the degree to which a specific product conforms to standards e. quality lies in the eyes of the beholder

D

Based on his 14 Points, Deming is a strong proponent of a. inspection at the end of the production process b. an increase in numerical quotas to boost productivity c. looking for the cheapest supplier d. training and knowledge e. all of the above

D

ISO 9000 seeks standardization in terms of a. products b. production procedures c. suppliers' specifications d. procedures to manage quality e. all of the above

D

Suppose that a firm has historically been achieving "three-sigma" quality. If the firm later changes its quality management practices such that begins to achieve "six-sigma" quality, which of the following phenomena will result a. the average number of defects will be cut in half b. the specification limits will be moved twice as far from the mean c. the average number of defects will be cut by 99.9997% d. the average number of defects will be cut by 99.87% e. the average number of defects will be cut by 99.73%

D

The causes of variation in statistical process control are a. cycles, trends, seasonality, and random variations b. producer's causes and consumer's causes c. mean and range d. natural causes and assignable causes e. Type I and Type II

D

To become ISO 9000 certified, organizations must a. document quality procedures b. have an onsite assessment c. have an ongoing series of audits of their products or service d. all of the above e. none of the above

D

When a sample measurement falls inside the control limits, it means that a. each unit manufactured is good enough to sell b. the process limits cannot be determined statistically c. the process output exceeds the requirements d. if there is no other pattern in the samples, the process is in control e. the process output does not fulfill the requirements

D

Which of the determinants of service quality involves performing the service right the first time a. access b. courtesy c. credibility d. reliability e. responsiveness

D

Which of the following statements best describes the relationship between quality management and product strategy? a. Product strategy is set by top management; quality management is an independent activity b. Quality management is important to the low-cost product strategy, but not to the response or differentiation strategies c. High quality is important to all three strategies, but it is not a critical success factor d. Managing quality helps build successful product strategies e. Companies with the highest measures of quality were no more productive than other firms

D

Which of the following statements regarding Arnold Palmer Hospital is false? a. The hospital uses a wide range of quality management techniques b. The culture of quality at the hospital includes employees at all levels c. The hospital scores very highly in national studies of patient satisfaction d. The hospital's high quality is measured by low readmission rates, not patient satisfaction e. The design of patient rooms, even wall colors, reflects the hospital's culture of quality

D

Managing quality helps build successful strategies

Differentiation, low cost, and Response.

"Kaizen" is a Japanese term meaning a. a foolproof mechanism b. just-in-time (JIT) c. a fishbone diagram d. setting standards e. continuous improvement

E

A good description of "source inspection" is inspecting a. materials upon delivery by the supplier b. the goods at the production facility before they reach the customer c. the goods as soon as a problem occurs d. goods at the supplier's plant e. one's own work, as well as the work done at the previous work station

E

All of the following costs are likely to decrease as a result of better quality except a. customer dissatisfaction costs b. inspection costs c. scrap costs d. warranty and service costs e. maintenance costs

E

Arnold Palmer Hospital uses which of the following quality management techniques? a. Pareto charts b. flow charts c. benchmarking d. Just-in-Time e. The hospital uses all of the above techniques

E

Quality circles members are a. paid according to their contribution to quality b. external consultants designed to provide training in the use of quality tools c. always machine operators d. all trained to be facilitators e. none of the above; all of the statements are false

E

Techniques for building employee empowerment include a. building communication networks that include employees b. developing open, supportive supervisors c. moving responsibility from both managers and staff to production employees d. building high-morale organizations e. all of the above are techniques for employee empowerment

E

The philosophy of zero defects is a. the result of Deming's research b. unrealistic c. prohibitively costly d. an ultimate goal; in practice, 1 to 2% defects is acceptable e. consistent with the commitment to continuous improvement

E

The role of quality in limiting a firms's product liability is illustrated by a. ensuring that contaminated products such as impure foods do not reach customers b. ensuring that products meet standards such as those of the Consumer Product Safety Act c. designing safe products to limit possible harm to consumers d. using processes that make products as safe or as durable as their design specification call for e. all of the above are valid

E

What refers to training and empowering frontline workers to solve a problem immediately a. just-in-time b. poka-yoke c. benchmarking d. kaizen e. service recovery

E

Which of the following is not a typical inspection point a. upon reciept of goods from your supplier b. during the production process c. before the product is shipped to the customer d. at the supplier's plant while the supplier is producing e. after a costly process

E

Which of the following is not one of the major categories of cost associated with quality? a. prevention costs b. appraisal costs c. internal failures d. external failures e. none of the above; they are all major categories of costs associated with quality

E

Which of the following is true about ISO 14000 certification a. it is not a prerequisite for ISO 9000 certification b. it deals with environmental management c. it offers a good systematic approach to pollution prevention d. one of its core elements is life-cycle assessment e. all of the above are true

E

Employee Empowerment

Enlarging employee jobs so that the added responsibility and authority are moved to the lowest level possible in the organization. This also gives employees more responsibility and authority to execute decisions in all aspects of product development and, or customer service.

Poka-yoke (mistake-proofing)

Literally translated, "mistake-proofing" in Japanese; it has come to mean a device or technique that ensures the production of a good unit every time. These methods are aimed at designing fail-safe systems (safeguards) built into a process to reduce the possibility of errors. A poka-yoke is any mechanism in a lean manufacturing process that helps an equipment operator avoid (yokeru) mistakes. Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur.

Total Management Quality (TQM)

Management of an entire organization so that it excels in all aspects of products and services that are important to the customers.

Quality Robust

Products that are consistently and uniformly built to meet customer needs, despite adverse manufacturing and environmental conditions in the production process.

Two ways that quality improves profitability are:

Sales gain via improved response, price flexibility, increased market share, and/or improved reputation. Reduced costs via increased productivity, lower rework and scrap costs, and/or lower warranty costs.

Benchmarking

Selecting a demonstrated standard of performance or benchmark that represents the very best performance for a process or an activity. The firm compares its practices, processes, products, and performance with the standards or benchmarks of other high-performing organizations.

Tools of TQM

TQM tools that generate ideas include check sheets (organized method of recording data), scatter diagrams (graph of the value of one variable versus another variable), cause-and-effect diagrams. Tools for organizing data are Pareto charts and flowcharts. Tools for identifying problems are the Histogram (distribution showing the frequency of occurrences of a variable) and statistical process control (SPC).

quality

The ability of a product or service to consistently meet or exceed customer expectations.

Cost of Quality (COQ)

The cost of doing things wrong that is, the price of nonconformance. Expenditures related to achieving product or service quality, such as the costs of prevention, appraisal, internal failure, and external failure. A framework for quantifying the total cost of quality-related efforts and deficiencies. Total Cost of Quality plus Cost of Good Quality equals Costs of Quality (COQ).

Just-in-time (JIT)

The philosophy of just-in-time (JIT) involves: continuing improvement and enforced problem-solving. JIT systems are designed to produce or deliver goods just as they are needed. Subassemblies and components are to be manufactured in very small numbers, delivered to the next stage of production process

Service Recovery

Training and empowering frontline workers to solve a problem immediately. Method: Listen to the customer, resolve problems quickly, provide a fair solution. This restores customer satisfaction to strongly dissatisfied customers.

Two most well-known quality awards are

U.S. Malcolm Baldrige National Quality Award, named after a former secretary of commerce Japan: Deming Prize, named after an American, Dr. W. Edwards Deming