chapter 9 operation and supply change management

Quality

is the ability of a product or service to meet or exceed customer expectations

Quality = .

meeting customer expectations

Quality isn't only about making something expensive or perfect. It is about whether the product/service

does what the customer expects it to do.

Good quality can lead to

• Customer satisfaction

• Customer loyalty

• Lower costs

• Higher productivity

• Better reputation

• Increased market share

• Greater competitiveness

Poor quality can lead to

• Returns

• Complaints

• Rework

• Scrap

• Warranty costs

• Lost customers

• Damage to reputation

Better quality can reduce costs and increase competitiveness.

Quality management

involves managing an organization's processes so that products and services consistently meet customer requirements.

Quality is everyone's responsibility.

Total Quality Management (TQM)

is an organization-wide approach focused on continuous improvement and customer satisfaction.

TQM =

Everyone + Everything + Continuous Improvement + Customer Satisfaction

Important characteristics:

• Customer focus

• Continuous improvement

• Employee involvement

• Teamwork

• Process improvement

• Management commitment

• Use of data

• Prevention rather than correction

TQM is organization-wide, customer-focused, and based on continuous improvement

Continuous improvement

means constantly looking for ways to improve products, services, and processes.

It doesn't necessarily mean making one huge improvement

Example:

An airline notices that boarding takes 35 minutes.

Instead of completely changing its operation, it makes several improvements:

• Better boarding groups

• Better communication

• Faster baggage handling

• Improved gate organization

Eventually, boarding time drops to 25 minutes.

Performance

Does the product perform its intended function?

Features

What additional characteristics does it have?

Reliability

Does it perform consistently?

Conformance

Does it meet established specifications?

Durability

How long does it last?

Serviceability

How easy is it to repair or maintain?

Aesthetics

How does it look, feel, sound, taste, or smell?

Perceived quality

How do customers perceive the overall quality?

Quality of Services

Services have some different quality considerations because services are often intangible and involve customer interaction.

Important dimensions include:

• Convenience

• Reliability

• Responsiveness

• Assurance

• Tangibles

• Empathy

Cost of Quality

includes the costs associated with preventing, detecting, and correcting quality problems.

Prevention Costs

Money spent to prevent defects from occurring.

Examples:

• Employee training

• Quality planning

• Process improvement

• Supplier evaluation

2. Appraisal Costs

Money spent to detect defects.

Examples:

• Inspection

• Testing

• Quality audits

Internal Failure Costs

Costs caused by defects that are discovered before the product reaches the customer.

Examples:

• Scrap

• Rework

• Downtime

External Failure Costs

Costs caused by defects discovered after the product reaches the customer.

Examples:

• Warranty claims

• Returns

• Repairs

• Complaints

• Lost customers

VERY IMPORTANT

External failure is especially damaging because it can involve both direct costs and damage to the company's reputation/customer relationships.

ix Sigma

is a data-driven approach for improving processes and reducing defects/variation.

Quality Function Deployment (QFD)

is a method used to translate customer requirements into specific product/service characteristics.

House of Quality

It helps connect customer requirements with technical/design requirements.

Benchmarking

means comparing an organization's processes or performance against those of other organizations or industry standards to identify opportunities for improvement.

Kaizen

refers to continuous, incremental improvement.

Six Sigma

data-driven reduction of variation and defects

Kaizen

continuous small improvements

quality of design

intention of designers to include or exclude features in a product or service

quality of conformance :

the degree to which goods or services conform to the intent of the designers

eas-of-use and user instructions :

increase the likelihood that a product will be used for its intentded purpuse and in such a way that it will continue to fuction porperly and safely.

after-the-sale service :

taking care of issues and porblems that arise the sale

Cost of Quality

Appraisal cost

cost of activities designed to ensure quality or uncover defects

Prevention Cost:

All TQ training, TQ planning, customer assessment, process control, and quality imporvement costs to prevent defects from ocurring

Failure Costs:

costs incurred by defective parts/ products or faulty services

Internal failure cost:

Cost incurred to fix problems that are detected before the product / service is delivered to the customer. IF THE CUSTOMER WANTS A RED CAR, AND YOU MAKE A BLUE ONE, BUT BEFORE SENDING THE CAR YOU NOTICE CAN BE FIXED (internal failure)

External failure costs:

all costs incurred to fix porblems that are detected after the product/service is delivered to the customers.

CUSTOMER SATISFACTION ≠ CUSTOMERS LOYALTY

Quality needs to be incorporated thorughout the entire supply chain, not just the organization itself