Operations and Supply Chain Strategiespmk3153.weebly.com/uploads/9/0/7/4/90746065/bozarth... · 2018. 4. 28. · Title: Operations and Supply Chain Strategies Author: Kathryn Marley

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Managing Quality

Chapter 5

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 5 - 2

Chapter Objectives

Be able to: Discuss the various definitions and dimensions of quality and

why quality is important to operations and supply chains. Describe the different costs of quality, including internal and

external failure, appraisal, and prevention costs. Describe what TQM is, along with its seven core principles. Calculate process capability ratios and indices and set up

control charts for monitoring continuous variables and attributes.

Describe the key issues associated with acceptance sampling, as well as the use of OC curves.

Distinguish between Taguchi’s quality loss function and the traditional view of quality.

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Quality Defined

Quality – The characteristics of a product or service that bear on its ability to satisfy stated or implied needs; a product or service that is free of deficiencies.

Value perspective – A quality perspective that holds that quality must be judged, in part, by how well the characteristics of a particular product or service align with the needs of a specific user.

Conformance perspective – A quality perspective focused on whether or not a product was made or a service was performed as intended.


Eight Dimensions of Quality

Performance

Features

Reliability

Durability

Conformance

Aesthetics

Serviceability

Perceived Quality

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Quality Dimension Examples

Table 5.1


Total Cost of Quality

Prevention costs – Costs an organization incurs to actually prevent defects from occurring to begin with.

Appraisal costs – Costs a company incurs for assessing its quality levels.

Internal failure costs – Costs caused by defects that occur prior to delivery to the customer.

External failure costs – Costs incurred by defects that are not detected until a product or service reaches the customer.

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Total Cost of Quality Traditional View

Figure 5.2


Total Cost of Quality Zero Defects View

Figure 5.3

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Total Quality Management

Total Quality Management -

A managerial approach in which an organization is managed so that it excels in all

quality dimensions that are important to customers.



Customer focus

Leadership involvement

Continuous improvement

Employee empowerment

Quality assurance

Strategic partnerships

Strategic quality plan

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Customer focus

Each employee has a customer whether internal or external to the company.

Leadership involvement

Must be ‘top’ down, throughout the company.

If not, major cause of TQM failures.

Continuous improvement

There is always room for improvement.



Employee empowerment Giving employees the responsibility for managing quality.

Quality assurance Quality Function Deployment (QFD) discussed in Chapter

15

Statistical quality control (SQC), also called statistical process control (SPC)

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Supplier Partnerships

The commitment between firms and supply chain partners must be the same.

Strategic Quality Plan

Sets a broad set of objectives.

Should establish measurable goals for the short-term.


Process Capability

Answers the Question:

Can the process provide acceptable quality consistently?

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Process Capability Ratio (Cp)

Cp = Upper Tolerance Limit – Lower Tolerance Limit

6σ

Where σ is the estimated standard deviation

for the individual observations

Process Capability Ratio (Cp) – Measures whether or not a process is potentially capable of meeting certain quality standards


Normal Distribution

Figure 5.4

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Process Capability Values

Figure 5.5


Process Capability Index

3,

3min

UTLLTLCpk

Process Capability Index (Cpk) – Measures whether or not a process is capable of meeting certain quality standards and is centered between the specification limits.

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Six Sigma Quality

To achieve Six Sigma quality, the variability

of a process must be reduced to the point

that the process capability ratio is greater

than or equal to 2.


Six Sigma Quality

Figure 5.6

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Control Charts

Control Chart – A specialized run chart that helps an organization track changes in key measures over time.

Continuous variable – A variable that can be measured along a continuous scale.

Attribute – The presence or absence of a particular characteristic.


Sampling

Sampling – Using carefully selected samples to get a fairly good idea of how well a process is working.

Good sample:

Every outcome has an equal chance of being selected into the sample.

The sample size is large enough to not be swayed by any single observation.

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Continuous Variable Measurements


Control Charts

X chart - A specific type of control chart for a continuous variable that is used to track the average value for future samples.

R chart – A specific type of control chart for a continuous variable that is used to track how much the individual observations within each sample vary.

p chart – A specific type of control chart for attributes that is used to track sample proportions.

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Step 1 – Sampling the Process

Sample 1 2 3 4 5

1 136 137 144 141 138

2 143 138 140 140 139

3 140 141 144 137 135

4 139 140 141 139 141

5 137 138 143 140 138

6 142 141 140 139 138

7 143 141 143 140 140

8 139 139 141 140 136

9 140 138 143 141 139

10 139 141 142 140 136

Observation


Step 2 – Calculate the Mean and Range for each sample

Sample 𝑋 R

1 139.2 8

2 140 5

3 139.4 9

4 140 2

5 139.2 6

6 140 4

7 141.4 3

8 139 5

9 140.2 5

10 139.6 6

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Step 3 – Calculate control limits


Step 3 – Calculate control limits

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Step 4 – Plot the Data

Sample 𝑋 R

11 141.2 8

12 142 9

13 144 12

14 140 5

15 139.6 4

16 140.8 5

Figure 5.8


Sampling by Attribute

Gonzo Pizza is interested in tracking the proportion (%) of late deliveries

Like before, you take several samples of say, 50 observations each when things are “typical”

For each sample, you calculate the proportion of late deliveries and call this value p. For example:

Average all of the 15 sample proportions. For example:

p = (8 late)/(50 deliveries) = 0.16

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Calculate the standard deviation for the p chart as follows:

042.0)1(

n

ppSp

Where n = size of each sample = 50



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Although text says to go ahead with control charts, consider that it is probably too early to develop them since the process is not yet in control (i.e., late deliveries are too high a percentage at present).

A more practical approach would be:

First, fix the more obvious problem(s)

Then take new samples

Then put in place control charts


Acceptance Sampling

Some definitions Acceptable quality level (AQL)

Maximum defect level for 100% customer acceptance

Lot tolerance percent defective (LTPD) Highest defect level customer will tolerate

Consumer’s risk Probability of accepting a bad lot

Producer’s risk Probability of rejecting a good lot

Operating characteristics (OC) curve Probability of accepting a lot given the actual fraction defective in the

entire lot and the sampling plan being used

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Producer’s and Consumer’s Risk

Figure 5.10


Traditional View of the Cost of Variability

There is no failure cost associated with units that fall within the tolerance limits, while units outside the tolerance limits immediately

result in failure costs.

Figure 5.12

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Taguchi’s Quality Loss Function

Any deviation from the target value results in some failure cost. As long as there is variability in the process, there is room for

improvement.

Figure 5.13


ISO 9000 Family

ISO 9000- A family of standards supported by the International Organization for Standardization.

Goals:

Meet the customer’s quality requirements and applicable regulatory requirements.

Enhance customer satisfaction.

Achieve continual improvement of performance in pursuit of these objectives.

Documents

Operations and Supply Chain Strategiespmk3153.weebly.com/uploads/9/0/7/4/90746065/bozarth... · 2018. 4. 28. · Title: Operations and Supply Chain Strategies Author: Kathryn Marley