Topic6 - Managing Quality - ch06 - 240220

24/02/2020
Managing Quality
6
PowerPoint presentation to accompany
Heizer, Render, Munson
Operations Management, Twelfth Edition, Global Edition
Principles of Operations Management, Tenth Edition, Global Edition
PowerPoint slides by Jeff Heyl
Copyright © 2017 Pearson Education, Ltd. 6-1
Outline
▶ Global Company Profile:
Arnold Palmer Hospital
▶ Defining Quality
▶ Quality and Strategy
▶ Total Quality Management
▶ Tools of TQM
▶ The Role of Inspection
▶ TQM in Services
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Managing Quality Provides a

Competitive Advantage
Arnold Palmer Hospital
▶ Delivers over 12,000 babies annually
▶ Virtually every type of quality tool is
employed
▶ Continuous improvement
▶ Employee empowerment
▶ Benchmarking
▶ Just-in-time
▶ Quality tools
Learning Objectives
When you complete this chapter you
should be able to:
6.1 Define quality and TQM
6.2 Describe the ISO international quality
standards
6.3 Explain Six Sigma
6.4 Explain how benchmarking is used in TQM
6.5 Explain quality robust products and
Taguchi concepts
6.6 Use the seven tools of TQM
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Defining Quality
The totality of features and

characteristics of a product or service
that bears on its ability to satisfy stated
or implied needs
American Society for Quality
Garvin’s Product Quality characteristics

and
Parasuraman, Zeithamel, and Berry's (PZ&B’s)
Service Quality characteristics
Product Services
ØPerformance
ØService Reliability
Ø Features
Ø Responsiveness
Ø Reliability
Ø Assurance
Ø Conformance Ø Empathy
Ø Durability
Ø Tangibles
Ø Serviceability
Ø Aesthetics
Ø Perceived Quality
Copyright © 2017 Pearson Education, Ltd. 6 -16 - 6
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What is Quality?
Garvin’s Product Quality characteristics
ØPerformance ØEfficiency with which a product

ØFeature achieves its intended purpose
ØReliability
ØConformance
Copyright © 2017 Pearson Education, Ltd. 1-7 6-7
What is Quality
Garvin’s Product Quality Dimensions
ØPerformance Ø Attributes that supplement

ØFeatures the product’s basic performance
ØReliability
ØConformance
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What is Quality
ØPerformance ØProduct’s readiness to perform

ØFeatures consistently over the product’s
ØReliability
useful life.
ØConformance
What is Quality
ØPerformance ØAdherence to quantifiable

ØFeatures specifications
ØReliability
ØConformance
Copyright © 2017 Pearson Education, Ltd. 1 - 10 6 - 10
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What is Quality
Ø Ability
to tolerate stress or ØDurability
trauma without failing Ø Serviceability
Ø Aesthetics
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What is Quality
Ø The ease and low ØDurability

cost of repair for a Ø Serviceability
product Ø Aesthetics
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What is Quality
Ø Degree to which ØDurability

product attributes Ø Serviceability
are matched to Ø Aesthetics
consumer
preferences
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What is Quality
Ø Quality as the customer ØDurability

perceives it…image, Ø Serviceability
recognition, word of mouth. Ø Aesthetics
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Service Quality Dimensions / Parameters

▶ Reliability: Perform promised service dependably
and accurately. Example: receive drinking water
supply at same day and time every week. Receive
mail at same time each day.
▶ Responsiveness: Willingness to help customers

promptly. Example: avoid keeping customers waiting
for no apparent reason.
▶ Access: involves approachability and ease of contact
▶ Assurance / Credibility: Ability to convey trust and

confidence and Credibility - involves trustworthiness,
believability, andLtd.honesty.
6-15
Copyright © 2017 Pearson Education, 6 - 15
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Dimensions of Service Quality

n Empathy / Courtesy: involves politeness, respect,
consideration, and friendliness.
Ability to be approachable, e.g., being a good
listener. Ability to feel others issues and problems
n Tangibles: Physical facilities and facilitating goods,

e.g., cleanliness / servicescape.
Mechanic Clues of Services, which develop customer
perception of service quality from tangibles:
▶ Building
▶ Décor
Copyright © 2017 Pearson Education, Ltd. ▶ Employees’ dress up 6 - 16
▶ Background music
16 ▶ Physical surrounding
▶ Location
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Costs of Quality
▶ Prevention costs - reducing the potential for defects
Ex: robust design, effective process, planning for quality process, DFSS
▶ Appraisal costs - evaluating products, parts, and services

ex: Inspection cost, QC, QA, Inline inspection, final inspection
▶ Internal failure costs - producing defective parts or service

before delivery
▶ External failure costs - defects discovered after delivery
Copyright © 2017 Pearson Education, Ltd. 6 - 18
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Costs of Quality
Total Total Cost

Cost
External Failure
Internal Failure
Prevention
Appraisal
Quality Improvement
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Two Ways Quality

Improves Profitability
Figure 6.1
Sales Gains via

• Improved response
• Flexible pricing
• Improved reputation
Improved Increased
Quality Profits
Reduced Costs via
• Increased productivity
• Lower rework and scrap costs
• Lower warranty costs
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Quality and Strategy

▶ Managing quality supports differentiation,
low cost, and response strategies
▶ Quality helps firms increase sales and

reduce costs
▶ Building a quality organization is a

demanding task
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Defining Quality in broader

perspective
An operations manager’s objective is to
build a total quality management system
that identifies and satisfies customer
needs
Totality in quality – each aspect of

organization perform with best practices
for achieving stakeholders satisfaction in
products and services
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The Flow of Activities achieving TQM

Organizational Practices
Leadership, Mission statement, Effective operating
procedures, Staff support, Training
Yields: What is important and what is to be
accomplished
Quality Principles
Customer focus, Continuous improvement, Benchmarking,
Just-in-time, Tools of TQM
Yields: How to do what is important and to be
accomplished
Employee Fulfillment
Empowerment, Organizational commitment
Yields: Employee attitudes that can accomplish
what is important
Customer Satisfaction
Winning orders, Repeat customers
Figure 6.2 Yields: An effective organization with
a competitive advantage
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Malcolm Baldrige National Quality Award

Quality Improvement: The American Way
▶ Established in 1988 by the U.S. government
▶ 7 Focus areas
▶ Designed to promote TQM practices
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EFQM - European Foundation for Quality Management

European Quality Award -9 categories
Popular in Arab countries and Sheikh Khalifa Excellence

Award is also based on EFQM
Ø Leadership Ø Customer Results
Ø Strategy Ø People Results
Ø People Ø Society Results
Ø Partnerships and Resources Ø Key Results
Processes, Products, and Services
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Sheikh Khalifa Excellence Award
Based on criteria of EFQM - European Foundation for Quality

Management
https://www.adaep.ae/en/Pages/default.aspx
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Abu Dhabi award for Excellence in

Government Performance
Main Criteria Awards
1. Abu Dhabi plan
Granted to entities that managed to fulfil the requirements of Abu Dhabi plan.
2. Customer Happiness
Granted to the entity which understands customer needs and provides s services exceeding their
expectations.
3. Digital Government
Granted to the most outstanding entity in the digital transformation of service delivery.
4. Happiest work Environment
Granted to the most outstanding entity in developing their employees and sustaining the
employment of UAE Nationals, to maintain a happy work environment.
5. Financial
Granted to the best entity that showed an outstanding financial performance and worked towards
the optimal use of resources while raising operational efficiency.
6. Corporate communication
Granted to the entity that demonstrates how they use internal and external corporate
communication to highlight their work and duties and raising the Abu Dhabi international
reputation.
7. Risk management & Business Continuity
Granted to the entity which implements Risk Management and Business continuity.
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How
▶ What you can not measure you can not manage,
if you can not manage – you can not improve and
achieve excellence.
▶ KPI – Key Performance Indicator
30
ISO 9000 International Quality

Standards
▶ International recognition
▶ Encourages quality management procedures,
detailed documentation, work instructions, and
recordkeeping
▶ 2015 revision gives greater emphasis to risk-
based thinking
▶ Over one million certifications in 206 countries
▶ Critical for global business
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ISO 9000 International Quality

Standards
▶ Management principles
1) Top management leadership
2) Customer satisfaction
3) Continual improvement
4) Involvement of people
5) Process analysis
6) Use of data-driven decision making
7) A systems approach to management
8) Mutually beneficial supplier relationships
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Total Quality Management

▶ Encompasses entire organization from
supplier to customer
▶ Stresses a commitment by management

to have a continuing companywide drive
toward excellence in all aspects of
products and services that are important
to the customer
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Deming's Fourteen Points
TABLE 6.2 Deming's 14 Points for Implementing Quality Improvement

1. Create consistency of purpose
2. Lead to promote change
3. Build quality into the product; stop depending on inspections to catch
problems
4. Build long-term relationships based on performance instead of
awarding business on price
5. Continuously improve product, quality, and service
6. Start training
7. Emphasize leadership
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Deming's Fourteen Points
TABLE 6.2 Deming's 14 Points for Implementing Quality Improvement

8. Drive out fear
9. Break down barriers between departments
10. Stop haranguing workers
11. Support, help, and improve
12. Remove barriers to pride in work
13. Institute a vigorous program of education and self-improvement
14. Put everyone in the company to work on the transformation
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Seven Concepts of TQM

1) Continuous improvement
2) Six Sigma
3) Benchmarking
4) Just-in-time (JIT)
5) Employee empowerment
6) Taguchi concepts
7) Knowledge of TQM tools
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Continuous Improvement
Russell adapts the ten principles given in Hiroyuki into the following
principles for implementing a continuous improvement effort:
n Recognize that improvement knows no limits. Get in the habit of
always looking for better ways of doing things.
n Create a mind-set for improvement. Do not accept that the present
way of doing things is necessarily the best.
n Try and try again. Don’t seek immediate perfection but move to
your goal by small improvements, checking for mistakes as you
progress.
n THINK. Get to the real cause of the problem - ask why? Five
times.
n Work in Teams. Use the ideas from a number of people to
brainstorm new ways.
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Shewhart's PDCA Model

Figure 6.3
4. Act 1. Plan
Implement Identify the
the plan, pattern and
document make a plan
3. Check 2. Do
Is the plan Test the
working? plan
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Six Sigma
▶ Two meanings
▶ Statistical definition of a process that is
99.9997% capable, 3.4 defects per million
opportunities (DPMO)
▶ A program designed to reduce defects,
lower costs, save time, and improve
customer satisfaction
▶ A comprehensive system for achieving
and sustaining business success
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Six Sigma
▶ Two meanings
Lower limits Upper limits
2,700 defects/million
▶ Statistical definition of a process that is
99.9997% capable, 3.4 defects per
3.4 defects/million
million opportunities (DPMO)
▶ A program designed to reduce defects,
lower costs, save time, and improve
customer satisfaction Mean
±3s
▶ A comprehensive system for achieving
and sustaining business success
±6s
Figure 6.4
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Six Sigma Program

▶ Originally developed by Motorola,
adopted and enhanced by Honeywell
and GE
▶ Highly structured approach to process
improvement
6s
▶ A strategy
▶ A discipline – DMAIC
▶ A set of 7 tools
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Six Sigma
1. Defines the project’s purpose, scope, and outputs,
then identifies the required process information
keeping in mind the customer’s definition of quality
2. Measures the process and collects data
3. Analyzes the data ensuring
repeatability and reproducibility DMAIC Approach
4. Improves by modifying or
redesigning existing
processes and procedures
5. Controls the new process
to make sure performance
levels are maintained
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Implementing Six Sigma

▶ Emphasize defects per million opportunities as
a standard metric
▶ Provide extensive training
▶ Focus on top management leadership
(Champion)
▶ Create qualified process improvement experts
(Black Belts, Green Belts, etc.)
▶ Set stretch objectives
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Implementing Six Sigma

▶ Emphasize defects per million opportunities
as a standard metric
▶ Provide extensive training
▶ Focus on top management leadership
(Champion)
▶ Create qualified process improvement
experts (Black Belts, Green Belts, etc.)
This cannot be accomplished without a
▶ Set stretch objectives
major commitment from top level
management
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Benchmarking
A Benchmark is an organization recognized for its
exemplary operational performance.
Benchmarking is the sharing of information

between companies so that both can improve.
ØInitiator Firm
ØTarget Firm
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Benchmarking - what
ØProcess Benchmarking
ØFinancial Benchmarking
ØPerformance Benchmarking
ØProduct Benchmarking
ØStrategic Benchmarking
ØFunctional Benchmarking
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TQM Tools
▶ Tools for Generating Ideas
▶ Check Sheet
▶ Scatter Diagram
▶ Cause-and-Effect Diagram
▶ Tools to Organize the Data
▶ Pareto Chart
▶ Flowchart (Process Diagram)
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TQM Tools
▶ Tools for Identifying Problems
▶ Histogram
▶ Statistical Process Control Chart
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Seven Tools of TQM

(a) Check Sheet: An organized
method of recording data
Hour
Defect 1 2 3 4 5 6 7 8
A /// / / / / /// /
B // / / / // ///
C / // // ////
Figure 6.6
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Seven Tools of TQM

(b) Scatter Diagram: A graph of the
value of one variable vs. another
variable
Productivity
Absenteeism
Figure 6.6
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Seven Tools of TQM

(c) Cause-and-Effect Diagram: A tool
that identifies process elements
(causes) that may effect an outcome
Cause
Materials Methods
Effect
Manpower Machinery
Figure 6.6
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Seven Tools of TQM

(d) Pareto Chart: A graph to identify and
plot problems or defects in descending
order of frequency
Frequency
Percent
A B C D E
Figure 6.6
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Seven Tools of TQM

(e) Flowchart (Process Diagram): A chart
that describes the steps in a process
Figure 6.6
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Seven Tools of TQM

(f) Histogram: A distribution showing the
frequency of occurrences of a variable
Distribution
Frequency
Repair time (minutes)

Figure 6.6
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Seven Tools of TQM

(g) Statistical Process Control Chart: A chart
with time on the horizontal axis to plot
values of a statistic
Upper control limit
Target value
Lower control limit
Time
Figure 6.6
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Cause-and-Effect Diagrams
Material Method
(ball) (shooting process)
Grain/Feel Aiming point
(grip)
Size of ball
Air pressure Bend knees
Hand position
Balance
Lopsidedness
Follow-through
Missed
Training
free-throws
Rim size
Conditioning Motivation Rim height
Consistency Rim alignment Backboard

stability
Concentration
Machine
Manpower (hoop &
(shooter) Figure 6.7
backboard)
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Pareto Charts
Data for October
– 100
70 –
– 93
– 88
60 –
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Frequency (number)
Cumulative percent
50 – – 72
40 –
30 – Number of
occurrences
20 –
12
10 –
4 3 2
0 –
Room svc Check-in Pool hours Minibar Misc.
72% 16% 5% 4% 3%
Causes and percent of the total
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Flow Charts
MRI Flowchart
1. Physician schedules MRI 7. If unsatisfactory, repeat
2. Patient taken to MRI 8. Patient taken back to room
3. Patient signs in 9. MRI read by radiologist
4. Patient is prepped 10. MRI report transferred to
5. Technician carries out MRI physician
6. Technician inspects film 11. Patient and physician
discuss
8
80%
1 2 3 4 5 6 7 11
9 10
20%
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Statistical Process Control

(SPC)
▶ Uses statistics and control charts to tell
when to take corrective action
▶ Drives process improvement
▶ Four key steps
▶ Measure the process
▶ When a change is indicated, find the
assignable cause
▶ Eliminate or incorporate the cause
▶ Restart the revised process
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Control Charts
Plot the percent of free throws missed
40%
Upper
control limit
Coach’s
20% target
value
Lower
0% | | | | | | | | |
control
1 2 3 4 5 6 7 8 9 limit
Game number
Figure 6.8
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Continuous Improvement
▶ Never-ending process of continuous

improvement
▶ Covers people, equipment, suppliers,
materials, procedures
▶ Every operation can be improved
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TQM In Services
▶ Service quality is more difficult to
measure than the quality of goods
▶ Service quality perceptions depend on
1) Intangible differences between
products
2) Intangible expectations customers
have of those products
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Service Quality
The operations manager must
recognize:
▶ The tangible component of services
is important
▶ The service process is important
▶ The service is judged against the
customer’s expectations
▶ Exceptions will occur
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Service Specifications
90
Service Recovery Strategy

▶ Managers should have a plan for
when services fail
▶ Marriott's LEARN routine
▶ Listen
▶ Empathize
▶ Apologize
▶ React
▶ Notify
92
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24/02/2020

PowerPoint slides by Jeff Heyl

Copyright © 2017 Pearson Education, Ltd. 6-1

Managing Quality Provides a

The totality of features and

American Society for Quality

Copyright © 2017 Pearson Education, Ltd. 6-5

Garvin’s Product Quality characteristics

ØPerformance ØEfficiency with which a product

Copyright © 2017 Pearson Education, Ltd. 1-7 6-7

ØPerformance Ø Attributes that supplement

Copyright © 2017 Pearson Education, Ltd. 1-8 6-8

ØPerformance ØProduct’s readiness to perform

Copyright © 2017 Pearson Education, Ltd. 1-9 6-9

ØPerformance ØAdherence to quantifiable

Copyright © 2017 Pearson Education, Ltd. 1 - 10 6 - 10

Copyright © 2017 Pearson Education, Ltd. 1 - 11 6 - 11

Ø The ease and low ØDurability

Copyright © 2017 Pearson Education, Ltd. 1 - 12 6 - 12

Ø Degree to which ØDurability

Copyright © 2017 Pearson Education, Ltd. 1 - 13 6 - 13

Ø Quality as the customer ØDurability

Copyright © 2017 Pearson Education, Ltd. 1 - 14 6 - 14

Service Quality Dimensions / Parameters

▶ Responsiveness: Willingness to help customers

▶ Assurance / Credibility: Ability to convey trust and

Copyright © 2017 Pearson Education, 6 - 15

Dimensions of Service Quality

n Tangibles: Physical facilities and facilitating goods,

▶ Appraisal costs - evaluating products, parts, and services

▶ Internal failure costs - producing defective parts or service

▶ External failure costs - defects discovered after delivery

Copyright © 2017 Pearson Education, Ltd. 6 - 18

Total Total Cost

Copyright © 2017 Pearson Education, Ltd. 6 - 19

Two Ways Quality

Sales Gains via

Copyright © 2017 Pearson Education, Ltd. 6 - 20

Quality and Strategy

▶ Quality helps firms increase sales and

▶ Building a quality organization is a

Copyright © 2017 Pearson Education, Ltd. 6 - 21

Defining Quality in broader

Totality in quality – each aspect of

Copyright © 2017 Pearson Education, Ltd. 6 - 22

The Flow of Activities achieving TQM

Malcolm Baldrige National Quality Award

EFQM - European Foundation for Quality Management

Popular in Arab countries and Sheikh Khalifa Excellence

Sheikh Khalifa Excellence Award

Based on criteria of EFQM - European Foundation for Quality

Abu Dhabi award for Excellence in

Abu Dhabi award for Excellence in

Copyright © 2017 Pearson Education, Ltd. 6 - 28

Abu Dhabi award for Excellence in

Copyright © 2017 Pearson Education, Ltd. 6 - 29

Abu Dhabi award for Excellence in

▶ KPI – Key Performance Indicator