MGMT 330 Ch 16 Quality Management

Quality

Meeting or exceeding customers expectations

Quality of Conformance

the extent to which a process is able to deliver output that conforms to the design specifications.

Specifications

targets and tolerances determined by designers of goods and services.

Service Quality

Consistently meeting or exceeding customer expectations and service-delivery system performance criteria

Dimensions of Service Quality:

Reliability, Responsiveness, Competence, Access, Courtesy, Communication, Credibility, Security, Understanding/knowing customer, and Tangibles

Principles of Quality

A focus on customers and stakeholders.

A process focus supported by continuous improvement and learning.

Participation and teamwork by everyone in the organization.

W. Edwards Deming’s Quality Management Philosophy

Focuses on improving product and service quality by reducing variability in goods and services design

− Higher quality leads to higher productivity and lower costs

▪ Leads to improved market share and long-term competitive strength

− Deming cycle - Plan, do, study, and act (PDSA)

Jordan Juran Principle

Defined quality as fitness for use

• Sought to improve quality by working within a familiar cultural system

• Advocated the use of quality cost measurement

• Focused on elimination of defects using statistical tools for analysis

Crosby’s Absolutes of Quality Management

• Quality means conformance to requirements, not elegance

• There is no such thing as a quality problem

• Doing the job right the first time is always cheaper

• Only performance measurement is the cost of quality, which is the expense of nonconformance

• Only performance standard is Zero Defects

What is true of Dr. W. Edwards Deming's philosophy of quality management?

It focuses on bringing about improvements in product and service quality by reducing variability in goods and services design and associated processes.

Gap Model

• Evaluates the quality of both goods and services

• Identifies where to focus design and improvement efforts

• Recognizes that there are several ways to mismanage the creation and delivery of high levels of quality

Gap 1

is the discrepancy between customer expectations and management perceptions of those expectations.

Gap 2

is the discrepancy between management perceptions of what features constitute a target level of quality and the task of translating these perceptions into executable specifications.

Gap 3

is the discrepancy between quality specifications documented in operating and training manuals and plans and their implementation.

Gap 4

is the discrepancy between actual manufacturing and service-delivery system performance and external communications to the customers.

Gap 5

is the difference between the customer’s expectations and perceptions.

ISO 9000

Define quality system standards, based on the premise that management practices can be standardized

• Internationally recognized

• Prescribe documentation for all processes affecting quality

Principles of ISO 9000

Customer Focus, Leadership, Engagement of People, Process Approach, Improvement, Evidence-based Decision Making, and Relationship Management.

Six Sigma

a business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers, resulting in a clear financial return for the organization.

Defect

any mistake or error that is passed on to the customer.

Unit of Work

the output of a process or an individual process step.

Defects per unit

number of defects / number of units processed

The core philosophy of Six Sigma is based on some key concepts:

Emphasizing dpmo or epmo as a standard metric that can be applied to all parts of an organization: manufacturing, engineering, administrative, software, and so on.

Providing extensive training followed by project team deployment to improve profitability, reduce non-value-added activities, and achieve cycle time reduction.

Focusing on corporate sponsors responsible for supporting team activities to help overcome resistance to change, obtain resources, and focus the teams on overall strategic objectives.

Creating highly qualified process improvement experts (“green belts,” “black belts,” and “master black belts”) who can apply improvement tools and lead teams.

Ensuring that appropriate metrics are identified early in the process and that they focus on business results.

Setting stretch objectives for improvement.

GE’s Six Sigma problem-solving approach (DMAIC) employs five phases:

Define, Measure, Analyze, Improve and Control.

Define (DMAIC)

− Identify customers and their priorities

− Identify and define a suitable project

− Identify CTQs (critical-to-quality characteristics)

Measure (DMAIC)

− Determine how to measure a process and how it is performing

− Identify key internal processes that influence CTQs

− Measure current defects

Analyze (DMAIC)

− Determine likely causes of defects

− Understand why defects are generated by identifying the key variables that cause process variation

Improve (DMAIC)

− Identify means to remove the causes of defects

− Confirm key variables and quantify their effects on CTQs

− Identify the maximum acceptable ranges of key variables and a system for measuring deviations of the variables

− Modify the process to stay within an acceptable range

Control (DMAIC)

− Determine how to maintain the improvements

− Put tools in place to ensure that the key variables remain within acceptable ranges under the modified process

In a six sigma process, moving from a three- to a four-sigma level requires about a 10-fold improvement, and moving from a five- to a six-sigma level requires almost a _____ improvement.

70 Fold

In General Electric's Six Sigma problem-solving approach, the define phase involves:

Identifying customers and their priorities.

In General Electric's Six Sigma problem-solving approach, the improve phase involves:

confirming the key variables and quantifying their effects on the critical-to-quality characteristics.

Cost of Quality

refers specifically to the costs associated with avoiding poor quality or those incurred as a result of poor quality.

Prevention Cost

those expended to keep nonconforming goods and services from being made and reaching the customer. Include quality planning cost, process control cost, information system cost and training and management cost.

Appraisal Cost

Those expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems. Include test/inspection cost, instrument maintenance cost and process-measurement and process control cost. 

Internal Failure Cost

the costs incurred as a result of unsatisfactory quality that is found before the delivery of a good or service to the customer. Includes scrap and rework costs, costs of corrective action, downgrading cost and process failures.

External Failure Cost

incurred after poor-quality goods or services reach the customer. Includes cost due to customer complaints and returns, goods and services recall costs and warranty and service guarantee claims, and public liability cost. 

7 QC Tools

Flowcharts, Run and Control Charts, Checksheets, Histogram, Pareto Diagrams, Cause-and-Effect Diagrams and Scatter Diagrams.

_____ are special types of data collection forms in which the results may be interpreted on the form directly without additional processing.

Checksheets

A _____ is a quality control (QC) tool that helps separate the vital few causes from the trivial many and provides direction for selecting projects for improvement.

Pareto Diagram

In the context of root cause analysis, the approach that forces one to redefine a problem statement as a chain of causes and effects to identify the source of the symptoms is specifically called _____.

5-Why Technique

5-Why Technique of Root Cause Analysis

Helps redefine a problem statement as a chain of causes and effects to identify the source of the symptoms. Uses the 7 QC tools.

Kaizen

focuses on small, gradual, and frequent improvements over the long term, with minimum financial investment and with participation by everyone in the organization.

Kaizen event

an intense and rapid improvement process in which a team or a department throws all its resources into an improvement project over a short time period, as opposed to traditional kaizen applications, which are performed on a part-time basis.

Breakthrough Improvement

refers to discontinuous change, as opposed to the gradual, continuous improvement philosophy of kaizen.

Benchmarking

the search for industry best practices that lead to superior performance.

Best practices

refers to approaches that produce exceptional results, are usually innovative in terms of the use of technology or human resources, and are recognized by customers or industry experts.