Total Quality Management

Total Quality Management (TQM)

- never-ending pursuit of quality that involves everyone in an organization from supplier to customer

- philosophy of continual effort to improve quality and achieve customer satisfaction

Seven Concepts of TQM

1. continuous improvement

2. six sigma

3. employee empowerment

4. benchmarking

5. just-in-time

6. taguchi concepts

7. knowledge of tqm tools

Continuous Improvement

- represents continual improvement to the process of converting inputs into outputs and customer satisfaction

- involves all operations and work units

- other names include kaizen, zero-defects, siz sigma

- kaizen describes the ongoing process of unending improvement

Shewhart's PDCA Model

1. plan: plan a change aimed at improvement

2. do: execute the change

3. check: study the results, did it work?

4. act: institutionalize the change, abandon, or do it again

Six Sigma

- statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities

- program designed to reduce defects, lower costs, and improve customer satisfaction

- comprehensive system for achieving and sustaining business success

Six Sigma Discipline (DMAIC)

1. defines the project's purpose, scope, and outputs, 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

4. improves by modifying or redesigning existing processes and procedures

5. controls the new process to make sure performance levels are maintained

Six Sigma Implementation

- emphasize defects per million opportunities (dpmo) as a standard metric

- provide extensive training

- focus on corporate sponsor support

- create qualified process improvement experts

- set stretch objectives

*this cannot be accomplished without major commitment from top level management

Employee Empowerment

- getting employees involved in product and process improvements

- talk to workers, support workers, let workers make decisions, build teams and quality circles

Quality Circles

- group of 6-12 employees from same work area

- meet regularly to solve work-related problems (approx 4 hours per month)

- facilitator trains and helps with meetings

Benchmarking

- selecting best practices to use as a standard for performance

- steps: determine what to benchmark, form benchmarking team, identify benchmarking partners, collect benchmarking information, take action to meet or exceed benchmark

Best Practices for Resolving Customer Complaints

- make it easy for clients to complain

- respond quickly to complaints

- resolve complaints on first contact

- use computers to manage complaints

- recruit the best for customer service jobs

Just-In-Time (JIT)

- relationship to quality: jit cuts the cost of quality, jit improves quality, better quality means less inventory and better, easier-to-employ jit system

- pull system of production scheduling including supply management (production only when signalled)

- allows reduced inventory levels (inventory costs money and hides process and material problems)

- encourages improved process and product quality

Taguchi Concepts

- engineering and experimental design methods to improve product and process design (identify key component and process variables affecting product variation)

- quality robustness, quality loss function, target-oriented quality

Quality Robustness

- ability to produce products uniformly regardless of manufacturing conditions

- product insensitive to environmental factors (small variations in materials and process do not destroy product quality)

Quality Loss Function

- shows that costs increase as the product moves away from what the customer wants

- costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society

- traditional conformance specifications are too simplistic

- shows social cost of deviation from target value

- assumptions: most measurable quality characteristics have a target value, deviations from target value are undesirable

Tools of TQM

- tools for generating ideas: check sheets (organized method of recording data), scatter diagrams (graph value of one variable vs another), cause and effect diagrams (used to find problem sources and solutions, identifies process elements that might effect outcome)

- tools to organize the data: pareto charts (vertical bar chart showing relative importance of problems or defects, makes identifying and solving them easier), flow charts (process diagram, describes the steps in a process, depicts activity relationships)

- tools for identifying problems: histogram (distribution showing the frequency of occurrence of a variable), statistical process control chart (chart with time on the horizontal axis to plot values of a statistic)

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

Quality Function Deployment (QFD)

- product design process using cross-functional teams (marketing, engineering, etc)

- translates customer preferences into specific product characteristics

- involves creating 4 tabular matrices or houses (breakdown product design into increasing levels of detail)

Inspection

- involves examining items to see if an item is good or defective

- detects a defective product (does not correct deficiencies in process or product since it is expensive)

- issues include when to inspect and where in process to inspect

When and Where to Inspect

1. at the supplier's plant while the supplier is producing

2. at your facility upon receipt of goods from the supplier

3. before costly or irreversible processes

4. during the step-by-step production processes

5. when production or service is complete

6. before delivery from your facility

7. at the point of customer contact

Problems with Inspection

- worker fatique

- measurement error

- process variability

- cannot inspect quality into a product

- robust design, empowered employees, and sound processes are best solutions

Source Inspection

- "source control"

- next step in process is your customer

- ensure perfect product to your customer

- poka-yoke is the concept of foolproof devices or techniques designed to pass only acceptable product

- checklists ensure consistency and completeness

TQM in Services

- service quality is more difficult to measure than the quality of goods

- service quality perceptions depend on intangible differences between products, intangible expectations customers have of those products

Service Quality

- 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

- determinants include reliability, tangibles, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer

Service Recovery Strategy

- managers should have a plan for when services fail

- learn: listen, empathize, apologize, react, notify