MGMT 339 Exam 3

K3, K7,

Quality

term used by customers to describe their general satisfaction with a service or product

• Encompasses all the aspects of what a product is - beginning with its design and including how it is delivered and supported in the field.

Design quality

match between designed features and customer requirements

Quality management

how to make your process more effective

Conformance quality

meeting design specifications

Conformance to specifications

consistent quality, on-time delivery, delivery speed 

Value

how well the service or product serves its intended purpose at a price

• Expectation v experience

Fitness for use

convenience, features, appearance, style, durability, reliability, etc

Psychological impressions

atmosphere, image, aesthetics

Service quality

dimensions go beyond the specifics of the service task 

• Considers interpersonal interactions and customers’ perception

• Affected by the environment, interpersonal communication, and customer experience

• Some dimensions are difficult to measure: (i.e. aesthetics and perceived quality)

Costs of Quality

• Prevention costs

• Appraisal costs

• Internal failure costs

• External failure costs

Prevention costs

costs associated with preventing defects before they happen

• Ex: Training, quality improvement projects, data analysis, etc)

Note: Companies should spend more on prevention costs in order to balance out the other costs generated from potential defects.

Appraisal costs

costs associated with inspection to assess quality/performance levels

• Ex: Staff, tools, traning, etc

Internal failure costs

Costs from defects found before delivery to the customer

• Ex: Reword, scrap, etc

External failure costs

Costs associated with defects found after delivery to customer

• Ex: Warranty, recall, etc

Total quality management

a philosophy that stresses three principles for achieving high levels of process performance and quality

• Customer satisfaction

• Employee involvement

• Continuous improvement in a performance

Customer satisfaction

quality ultimately determined by customer 

• Consumer expectations v operating capabilities

Employee involvement

 quality management is a total, organization-wide activity 

• Responsbility for quality belongs to everyone

Continuous improvement in a performance

Quality improvement requires total commitment 

Employee empowerment

requires frontline workers to be given responsibility and authority to make decisions, have the knowledge to make good decisions, and have resources to make quality improvements 

Traditional organization

workers support the management and managers are determiners of product quality 

TQM organization

workers have primary responsibilities and ownership of the quality

• Closest contact with customers and operational processes

• Most knowledgable about the firm’s problems and best solutions

Plan do check act cycle (Deming wheel)

sequence to solve problems and improve over time

Plan

identify problem and actions for improvement

Do

implement formulated plan

Check

monitor results

Act

take corrective action and institutionalize changes

Six sigma

quality improvement through minimizing defects and variability in processes

• Goal = to reduce the spread and center the process

• Variation (std dev) should be so low that you are able to fit six variations in a range. (Between lower specification and the mean or Between upper specification and the mean)

Process average OK

too much variation (Goal = reduce spread)

• Ex: Average class time is 75 minutes but ends class at extremes such as 30 minutes or 90 minutes to meet average.

Process variability OK

inconsistency (Goal is to center process so the group of outputs that are bunched up together are bunched up at the target)

Acceptance sampling

determine whether a quantity of material should be accepted or rejected

• Based on the inspection or test of a random sample.

• Inputs to the process must be of good quality.

Acceptable quality level

quality level desired by the consumer

Variation of outputs

no two services or products are exactly alike even if the processes are working as intended (Ex: Commute time differs based on traffic, etc)

• Cannot eliminate variation in output completely

• Should minimize it by investigating the causes

Common causes

the purely random, unidentifiable sources of variation that are unavoidable with the current process

Assignable causes

any variation-causing factors that can be identified and eliminated

Statistical process control

application of statistical techniques to determine whether a process is delivering what the customer wants (monitor and manage repetitive processes)

Control chart

time-ordered diagram that is used to determine whether observed variations are abnormal (see how much variation we have in our current process)

• Ensures that the process is operating normally (predictable and stable - variation does not change over time)

• Does not ensure that output meets design specifications (need process capability study)

Variables

characteristics that can be measured

• Ex: weight, length, volume, time

Control charts for variables

• P-chart

• X̄-chart

R-chart

measures the variability of the process (plugs the range)

X̄-chart

measures whether the process is generating output, on average, consistent with a target value (plugs the average)

Attributes

characteristics that can be counted (Ex: # of errors, proportion of on-time delivery)

Control charts for attributes

• P-chart

• C-chart

P-chart

measures the proportion of defective services or products generated by the process 

C-chart

measures the number of defects when more than one defect can be present

Z control type I error

concluding a process is not in control when it actually is (producer’s risk)

Z control type II error

concluding a process is in control when it is not

Process capability

the ability for the process to meet design specification for a service or product

• Possible for process to be in “statistical control” but not “capable”

Design specifications

• Nominal value: a target for design specifications

• Tolerance: an allowance above or below the nominal value

Process capability index (C_pk)

measures the potential for a process to generate defective outputs relative to either upper or lower specifications

• Identifies if a process needs to be centered or variability needs to be reduced

Project

a temporary endeavor undertaken to create a unique product, service, or result

• Interrelated set of activities with a definite starting and ending point, which results in a unique outcome for a specific allocation of resources 

• Input -> Transformation -> Output 

  • The output of a project should be unique. 

Unique Characteristics of Projects

• Unique: presence of risk and exceptions (usually the output)

• Specific deliverables: well-defined set of desired end results

• Specific due date: clear launch date and deadline, projects have life cycles

Common Characteristics of Projects

• Multidisciplinary

• Interdependencies

• Project Management

• Project Objectives

Multidisciplinary

many interconnected elements and often need to work as a team

Interdependencies

• Inter-project interactions: An interdependent set of projects that have a common strategic purpose

• Interaction with the functional departments: marketing, finance, accounting, etc

• Interdependent activities: nonrepetitive activities need to be accomplished in a certain sequence

Project management

the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of a particular project

• Systemized, phased approach to defining, organizing, planning, monitoring, and controlling projects

Project objectives

iron triangle, importance differs based on the type of project

• Time: a specified deadline (Ex: Wedding planning - cannot push back the client’s wedding date even if you as the planner do not feel as prepared) 

• Cost: budget 

• Scope: specified deliverables (includes quality and client satisfaction)

Project life stages

*Note: From the project manager’s perspective the planning stage is the most important and the longest stage because project manager’s have a bigger influence during this stage.

Project definition and planning

only a selected few are involved

• Must define the project execution and completion (define the output)

Project objective statement

identification of project deliverables, schedule, and resources in specific, concise, clear and measurable terms

• Scope and major deliverables 

• Schedule 

• Resource required 

• Prevent scope creep

Scope creep

The client changes the scope of the project without the project manager’s knowledge

• Need to make changes through the official channel. 

• Make boundaries. 

Ex: Saloni tells Aiden the engineer to change something and he does it but without informing the project manager

Facilitator (project manager)

Must ensure that those working on project have the appropriate knowledge, resources, and time to accomplish their responsibilities

Communicator (project manager)

must communicate effectively with the various stakeholders of the project

Decision maker (project manager)

the project manager is ultimately responsible for leading the project to a successful conclusion

Project team

Every _______ ____ needs:

• Technical competence

• Sensitivity: sensitive to interpersonal conflicts

  • Need to maintain a delicate balance of power between projects and/or functional units

  • Mitigate problems with upper-level management

• Dedication: strong problem orientation and goal orientation

  • Not bound by their discipline and educational expertise

  • Dedicated to getting the project done

Functional project

managed within a functional department during each stage

• Advantage: Efficiency and cost friendly 

• Disadvantage: May not receive top priority as conflicts with other job responsibilities (everyone treats it as a side job to their actual job duties) 

• Best when:

  • Incremental, routine project

  • Majority of work is in one specific function

  • Little cross-functional integration

  • Project leadership can be handled via normal chain of command

Pure project

managed outside functional department with people dedicated to specific projects

• Advantage: when require different functional expertise 

• Disadvantage: cost, duplication of resources for small projects 

• Best when:

  • Speed is crucial

  •  Complex and uncertain tasks

  • Resources cost is not a tight constraint

  • Innovation is needed

  • Want to shield from organizational influences

  • High degree of team commitment is needed

Matrix project

cross-functional team with responsibilities to both home department and project (Compromise between the functional and pure project structure)

• Advantages: 

  • Most commonly used

  • Balances the advantages and disadvantages of functional and pure projects

  • Has a project manager (plan’s the project’s tasks and resources) and a functional manager (determine which people and technologies are used)

• Disadvantages: violation of the unity of command principle

  • Workers often faced with conflicting orders from the PM and the functional manager

• Best when:

  • A company cannot afford to tie up critical resources 

  • Efficient use of resources (cost) is important 

Work Breakdown Structure

statement of all work that has to be completed

• Detailed hierarchical list of project activities (Ex: Microsoft project) 

• Basis for planning schedule, resources, cost, quality, and risk

• Ensure that no activity / task is overlooked

• Estimate allocate and monitor resources 

• Provide a framework for time and cost estimates, and for monitoring project progress 

Critical path method

scheduling tool with an emphasis on most important activities (has 3 assumptions) 

• Activities have well-defined start and end

•  Activity sequence can be established

•  Activities are independent

  • Delay for an activity does not result in a duration change of another activity.

Network diagrams

graphic display of activities and interrelationships

• Activities on nodes network (AON) 

  • Node(box): each activity/task 

  • Arrows: technological (precedence) relationship

Start node

tasks with no predecessors

Finish node

tasks with nothing following

Critical path

the longest path of activities in time through the network, from the start node to the finish node

• Duration of the project is as long as the critical path (longest duration of all the possible paths)

• If a critical activity is delayed, the entire project will be delayed.

Earliest start

the earliest point in time an activity can begin based on predecessors

Earliest finish

the earliest time an activity can finish based on predecessors

Latest start

the latest point in time an activity can begin without delaying the entire project

Latest finish

the latest any activity can finish without delaying the entire project

Slack

amount of time an activity can be delayed without delaying the entire project

Gantt (bar) charts

most popular way of exhibiting sets of related activities in the form of schedules

• Length of the bar = duration 

• Left side of the bar = starting pt 

• Right side of the bar = finish time 

• Arrows = relationship 

Crashing

shortening the duration of activities by applying additional resources (Ex: Overtime, special equipment, additional staff or material) 

• Important to make sure the resources required to crash the project are available

• May have to expedite tasks not on critical path to make resources available to other projects

• Some tasks cannot be crashed

• Crashing often introduces unanticipated problems

  • Changes the schedule for all activities

  • Will have an impact on schedules for all the subcontractors

Execution

plan is executed and project objectives are accomplished 

• Monitor and control progress 

• Take corrective action as needed 

• Manage and control changes 

Monitoring

the collection, recording, and reporting of project information

Control

uses the monitored data to bring actual performance into agreement with the plan

Operations management

the systematic design, direction, and control of processes that transform inputs into services and products for internal, as well as external, customers

• The management of business processes!

Supply chain management

the synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services, and information with customer demands (OM has shifted from internal production to supply chain management)

Bottleneck

• limits the ability of the process to generate output (constraining activity) 

  • A constraint or “scarce resource” 

    • A facility, department, machine, a skill type, etc 

  • *Defines the maximum capacity of a system. 

Management

the process of reaching organizational goals by working with and through people and other organizational resources

• Output = Reaching organizational goals

Managerial effectiveness

• the degree to which an organization accomplishes its goals 

  • Getting a better output without using more input. 

  • More about utilizing your inputs to achieve the intended output.

Managerial efficiency

• the degree to which an organization uses its resources wisely

  • “Doing things at a lower cost” 

  • Getting the same output but using less inputs.