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MBF2213 | Operations Management Prepared by Dr Khairul Anuar
L8: Quality Management
Quality management
Design
Planning and control
Operations strategy
Improvement
The operation supplies… the consistent delivery of products and services at
specification or above
The market requires… consistent quality of
products and services
Capacity planning and control
2
Quality planning and control – Slack et al. identify the following key questions:
• What is quality and why is it so important?
• How can quality problems be diagnosed?
• What steps lead towards conformance to specification?
• What is Total Quality Management (TQM)?
Key operations questions
3
Quality up
Profits up
Processing time down
Inventory down
Capital costs down
Complaint and warranty costs
down
Rework and scrap costs
down
Inspection and test costs
down
Productivity up
Image up
Scale economies up
Price competition
down
Sales volume up
Revenue up
High quality puts costs down and revenue up
Operation costs down
Service costs down
4
Customers’ expectations
for the product or
service
Customers’ perceptions
of the product or
service
Gap
Expectations > perceptions
Expectations = perceptions
Expectations < perceptions
Perceived quality is governed by the gap between customers’ expectations and their perceptions of the product or service
Gap
Perceived quality is poor Perceived quality is good
Perceived quality is acceptable
Customers’ expectations
for the product or
service
Customers’ perceptions
of the product or
service
Customers’ expectations
for the product or
service
Customers’ perceptions
of the product or
service
5
The operation’s domain
Management’s concept of the
product or service
The customer’s
domain
Previous Experience
Word of mouth communications
Image of product or service
Customers’ own specification of
quality
Organization’s specification of
quality
The actual product or service Gap 1
Gap 2 Gap 3
Gap 4
A ‘Gap’ model of Quality
Customers’ expectations concerning a
product or service
Customers’ perceptions
concerning the product or service
Is there
a Gap ?
6
The perception – expectation gap
Gap Action required to ensure high perceived quality
Main organizational responsibility
Gap 3 Operations Ensure actual product or service conforms to internally specified quality level
Gap 4 Marketing Ensure that promises made to customers concerning the product or service can really be delivered
Gap 1 Ensure consistency between internal quality specification and the expectations of customers
Marketing, operations, product/service development
Gap 2 Ensure internal specification meets its intended concept of design
Marketing, operations, product/service development
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Quality characteristics of goods and services
Functionality – how well the product or service does the job for which it was intended.
Appearance – aesthetic appeal, look, feel, sound and smell of the product or service.
Reliability – consistency of product or services performance over time.
Durability – the total useful life of the product or service.
Recovery – the ease with which problems with the product or service can be rectified or resolved.
Contact – the nature of the person-to-person contacts that take place.
8
Attribute and variable measures of quality
Attributes Variables
Defective or not defective? Measured on a
continuous scale
Light bulb works or does not work?
Light emission of bulb
Number of defects in a turbine blade . Length of blade
9
Variables things you can measure
Attributes things you can assess
accept/reject
Quality fitness for purpose
Reliability ability to continue
working at accepted quality level
Quality
Quality of Design degree to which
design achieves purpose
Quality of Conformance faithfulness with which the
operation agrees with design
Aspects of quality
10
What does Total Quality Management include?
Total Quality Management
• Includes all parts of the organization
• Includes all staff of the organization
• Includes consideration of all costs
• Includes every opportunity to get things right
• Includes all the systems that affect quality
• And it never stops!
11
Total quality management can be viewed as a natural extension of earlier approaches to quality management
• Quality is strategic • Teamwork • Staff empowerment • Involves customers and suppliers
• Quality systems • Quality costing • Problem solving • Quality planning
• Statistics • Process analysis • Quality standards
• Error detection • Rectification
Prevents ‘out of specification’ products and services reaching market
Solves the root cause of quality
problems
Broadens the organizational
responsibility for quality
Makes quality central and strategic in the
organization
Inspection Quality control
Quality assurance
Total Quality Management
12
External supplier
External customer
The internal customer–supplier concept involves understanding the relationship between processes
Process 1
Process 3
Process 2
Process 4
Process 5
Process 6
The traditional cost of quality model
Cost of errors = costs of prevention and appraisal
Total cost of quality Cost of quality provision = costs of internal and external
failure
Co
sts
‘Optimum’ amount of quality effort
Amount of quality effort
14
Co
sts
Amount of quality effort
Total cost of quality Cost of errors = costs of
prevention and appraisal Cost of quality provision =
costs of internal and external failure
‘Optimum’ amount of quality effort
The traditional cost of quality model with adjustments to reflect TQM criticisms
15
The cost of rectifying errors becomes increasingly expensive the longer the errors remain uncorrected in the development and launch process
Co
st t
o r
ecti
fy e
rro
r
Stage in the development and launch process
Pilot production
Market use Prototype Design Concept
1000
100
10 1
10, 000
16
Time
Co
sts
of
qu
alit
y
Appraisal
Internal failure
Appraisal
Prevention
Total cost of quality
Increasing the effort spent on preventing errors occurring in the first place brings a more than equivalent reduction in other cost categories
17
Effe
ctiv
enes
s o
f th
e T
QM
init
iati
ve
The pattern of some TQM programmes which run out of enthusiasm
Introduction
Learning and understanding
Growth
Increasing enthusiasm
Levelling off
Starting to hit the more difficult
problems
Disillusionment
Waning enthusiasm
Repackaging
Attempts to revitalize the programme
18
