MBA Course : Operations Management 1Quality& Total Quality Management Operations Management

MBA Course : Operations Management

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Quality Quality

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Total Quality ManagementTotal Quality Management

Operations Management


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Touch

Noise

Weight

Shape

?Colour

CostProfitCost

Due datesameDue date

CustomerSupplier

Quantitative requirements between supplier and customer

Touch

Noise

Weight

Shape

Colour


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Ταξινόμηση πελατών/καταναλωτών

Who is really your customer?


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Company’sprocesses

Humanresources

Customer’sexpectations

Customer satisfaction

Customer Satisfaction: Integration


5Definition of Quality

QUALITY: Conformance to requirements

If a RR conforms to all requirements of a RR, then it is a quality car. If a SKODA car conforms to all requirements of a SKONDA, then it is a quality car.


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CROSBY: “Don’t talk about poor quality or high quality. Talk about conformance and non-conformance.”

FEIGENBAUM :"The total composite product and service characteristics of marketing, engineering, manufacturing and maintenance through which the product or service in use will meet the expectations of the customer."

JURAN:"Quality is fitness for purpose or use.”

DEMINGSatisfying customer’s needs.

TAGUCHIThe loss which is imparted by the product or service to society from the time is created.

Be aware: requirements, purpose or use means those of the CUSTOMER

Definition of Quality


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Managing Quality: GARVIN, D (1988)1. the transcendent approach – a quality watch is a Rolex

2. the manufacturing based approach [free of errors, confirming precisely to design specs] – a watch though not the “best” available is defined as a “quality” product provided it has been built or delivered precisely to its design specs

3. the user-based approach [fit for its purpose] - a

watch that is manufactured precisely to its design specs yet fails to pieces after 2 days is clearly not “fit for its purpose”

4. the product-based approach [precise and measurable set of characteristics] – a watch may be designed to run, without the need for servicing, for at least 5 years while keeping time correct to within 5 seconds

5. the value-based approach [cost & price] – compromise quality for price


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•Important as they affect the company’s profitability

•Quality Costs range between 10 – 20 % of sales (1985 study)• Quality Costs range between 4– 20 % of sales (Montgomery, 1996) Crosby recommends that a proper managed quality <2.5% sales (1979)

FEIGENBAUM’S 'HIDDEN PLANT‘15-40% of resources producing scrap, re-work, detecting defects, replacing faulty products

Quality Costs


9Costs of Quality

External Failure Costs

Appraisal Costs

Prevention Costs

Internal FailureCosts

Costs ofQuality


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A conventional Quality Organization will include two sections:1. Quality Assurance2. Quality Control

Quality Assurance: Quality Planning: - What features should be inspected

- Who should carry out the inspection- When the inspection should be made- What equipment should be used- 100 % or sampling inspection

Failure Analysis: - Investigation of the causes of failure (i.e. failure due to the design of the product/service or due to the process, which produces it) - What should be done in the event of non-

conformance (scrap or re-work?)

Vendor Appraisal:- Assessment of suppliers, materials & services

Conventional Quality Management (detection)


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A conventional Quality Organization will include two sections:1. Quality Assurance2. Quality Control

Quality Control

Inspection: Inspection of - incoming materials/services - in process work, and - final product to establish whether or

not they conform to requirements

Recording : - Compilation of numbers (statistics) indicating non-

conformance rates and trends - Communication of the findings to key personnel

Conventional Quality Management (detection)


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Features commonly found in TQM programmes - TOTAL means that the idea of continuous improvement applies to all

personnel (and not to QA or QC)- KAIZEN which refers to a concern for the quality of people’s lives and

focuses on improvements resulting from an EDLESS series of small changes, directed towards the elimination of waste in all its forms.

- CUSTOMER FOCUS- external customer focus approach in quality (i.e. what the external customer perceives as quality)- each individual is encouraged to identify his internal suppliers and customers

- TRAINING is a major feature in moving to a TQM culture (firstly change the “mind-set” approach and then introduce the relevant tools and techniques)

- LEADERSHIP “walk as you talk”

Total Quality Management (prevention)


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•Error detection•Rectification (επανόρθωση)

•Statistical methods•Process performance•Quality standards

•Whole operation involved•Involves customers & suppliers •Staff empowerment •Quality strategy•Teamwork

•Quality systems•Quality costing•Quality planning

TOTAL QUALITY MANAGEMENT

QUALITY ASSURANCE

QUALITY CONTROL

INSPECTION

Total Quality Management (prevention)


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W. DEMING - management comes before technology- emphasizes the role of statistical and qualitative

methods

J. JURAN - stresses the role of internal and external customer- management involvement & commitment are

stressed

A. FEIGENBAUM - emphasis on the importance of management - promotes participation by all staff

P. CROSBY - clear methods which are easy to follow- worker participation is recognized as important

K. ISHIKAWA - strong emphasis on the importance of people- introduces the idea of quality circles management

G. TAGUCHI - strong on process control

Quality Guru


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A strategy for creative problems solving comprises the following 6 steps:

1. Understand the “mess”2. Find the facts3. Identify specific problems4. Generate ideas5. Develop solutions6. Implementation

TQM Tools & Techniques


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TOOLS:

1. Process flowcharts - Understand the “mess”2. Check sheets - Find the facts3. Histograms - Identify specific problems4. Pareto analysis - Identify specific problems

5. Ishikawa - Generate ideas6. Scatter diagram - Develop solutions7. Control charts - Implementation8. Poka Yoke – Failsafe measure9. Quality circles



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Quality Circles & Quality Improvements

• Credited to Ishikawa in the early 1960s based on Japanese culture• Small group of (~8) workers from the same work area• Membership is voluntary• Group (and not management) is responsible for choosing the problem to be

worked on• Management fully supports Q circles.

BENEFITS1. It replaces the adversarial relationship between management and workers

with trust and co-operation2. Increases employee morale and commitment to the goals of organization3. Improves quality and productivity by fostering improvement and innovation4. Reinforces the message that workers themselves should be responsible for

the quality of their own work



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Quality Circles & Quality Improvements

PROBLEMS1. Workers tend to believe that they are ideas not relevant to their way

of working2. Western management cannot accept that workers can take decisions

for the company-future (while in Japan all good ideas are welcomed wherever they come from)

3. Workers believe that quality circles are a management tool to make people work more for the benefit of the company and for theirs.

4. Western workers see quality circles as an addition work for which they must be paid (not only for the participation but for the contribution of their ideas)



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ISO 90001. Based on UK’s BS 5750 series for quality systems2. Published by the International Organization for Standards in 19873. Adopted by the EU in 1992 for the eradication of trade barriers

among member countries4. More than 250,000 around the world have become accredited.

Initially comprised five individual standards ISO 9000 – ISO 90041. ISO 9000: It provides an overview of the purpose and content of the series +

guidance for the selection of rest2. ISO 9001: Quality assurance model for organizations engaged in production,

product design, development, testing, inspection, installation and service3. ISO 9002: Quality assurance model for organizations engaged in production,

testing, inspection, installation and service to customers’ specs4. ISO 9003: Quality assurance model for organizations engaged in testing and

inspection5. ISO 9004: It provides guidance for internal use on how to facilitate the specs

contained in ISO 9001-3

Quality Standards and Awards


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ISO 9000

REVESION: December 2000ISO 9000:2000ISO 9001: revised - coreISO 9004: revisedISO 9002: abandonedISO 9003: abandoned.

• Revision changed from “procedure” focus to “business process” focus

• Many of the themes of TQM were incorporated• The “voice of the customer” is an integral part of the standard• The 20 elements of the original standard have now been replaced by

4 sections:- management responsibility- resource management, product- service realization- measurement, analysis, improvement

Quality Standards and Awards


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THE DEMING PRIZE – JAPAN• Started in 1951 and opened to non-Japanese in 1984• It has 10 major criteria• Any employee can question a submission• Objective being to establish that the quality process is firmly

established that improvement will continue long after the award

• No restriction to the number of awards given but quite hard to get it

THE MALCOM BALDRIGE NATIONAL QUALITY AWARD – USA• Established in 1987 as a result of the country’s failing

productivity and quality performance• Based on Deming prize• Small number applies as the requests and criteria are very

tough• Some are using the guideline documentation as the basis to

evaluate their existing quality systems and for designing and implementing TQM programmes.

Quality Awards


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THE EUROPEAN QUALITY AWARD – EUROPE• Established in 1991 by the European foundation

for Quality management• Award open to any company with at least 50 % of

its business operation in W. Europe and has been operating there for at least 5 years

• Awarded to the companies that best demonstrate:- how TQM has improved customer satisfaction,- employee well-being, and- service to other stakeholders.

• In Sept. 2000, it was awarded for the first time to a public sector organization (UK, Scotland)

Quality Awards

Documents

MBA Course : Operations Management 1Quality& Total Quality Management Operations Management