3a. Managing Quality

1. Quality and Strategy

• Managing quality is fundamental for developing competitive advantage.

  • Differentiation: e.g., Bose differentiates its speakers by meeting high quality expectations.

  • Low Cost: e.g., Nucor produces quality steel at lower prices through efficient processes.

  • Response: e.g., Dell's quality system allows rapid response to customer orders.

2. Defining Quality

• Definition: Quality is the ability of a product or service to meet customer needs.

  • Defined as "the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs."

• Operations managers focus on building a Total Quality Management (TQM) system to fulfill customer needs.

3. Different Views of Quality

• User-Based: Focus on performance and features from the customer's perspective.

• Manufacturing-Based: Compliance with standards; making it right the first time.

• Product-Based: Focus on measurable attributes of the product.

4. Implications of Quality

• Company Reputation: Reflects in perceptions of new products, employment practices, and supplier relations.

• Product Liability: Reduces risk associated with faulty products/services.

• Global Implications: Aids competition in the global market.

5. Quality Spheres

Quality Assurance

• Activities to guarantee product/service quality.

Quality Management

• Processes to integrate control and assurance activities.

Quality Control

• Processes to consistently meet standards.

6. International Quality Standards

• ISO 9000 Standard: Set of international standards for Quality Management Systems.

  • ISO 9001:2015: Requirements.

  • ISO 9004:2018: Guidance on sustained success and continuous improvement.

  • ISO 14000: Environmental Management Standards.

  • ISO 22000: Food Safety Management Standards.

• **Key Principles of ISO 9000:

  1. Top management leadership

  2. Customer satisfaction

  3. Continual improvement

  4. Involvement of people

  5. Process analysis

  6. Data-driven decision making

  7. Systems approach to management

  8. Mutually beneficial supplier relationships

7. Costs of Quality (COQ)

• Definition: Costs associated with failing to meet specifications.

Major Categories of COQ:

1. Prevention Costs: (e.g., training, quality improvement programs).

2. Appraisal Costs: (e.g., product testing, inspections).

3. Internal Failure Costs: (e.g., rework, scrap costs).

4. External Failure Costs: (e.g., warranty claims, returns).

8. Total Quality Management (TQM)

• Definition: Management of the entire organization to excel in aspects that are important to the customer.

  • TQM emphasizes employee participation, leadership, and continuous improvement.

Flow of Activities to Achieve TQM:

• Organisational Practices: Leadership, effective procedures, training, staff support.

• Understanding Quality Principles: Customer focus, continuous improvement, TQM tools.

• Employee Fulfillment: Empowerment, commitment, and satisfaction leading to customer satisfaction.

9. Key Concepts of TQM

1. Continuous Improvement: An ongoing effort to improve products, services, or processes.

2. Six Sigma: A strategic approach aimed at reducing defects and improving quality.

3. Employee Empowerment: Involvement of employees in improvements and decision-making.

4. Benchmarking: Comparing organizational processes with best practices to enhance performance.

5. Just-in-Time (JIT): Producing goods as they are demanded to reduce waste and improve quality.

6. Taguchi Concepts: Strategies for improving quality and robustness.

7. Knowledge of TQM Tools: Understanding and utilizing TQM tools for quality management.

10. TQM Tools

Seven Tools of TQM:

1. Check Sheet: Data recording method to ensure completion of tasks.

2. Scatter Diagram: Graph showing relationship between two variables.

3. Cause-and-Effect Diagram (Fishbone Chart): Identifies factors contributing to an outcome.

4. Pareto Chart: Identifies problems in order of importance to prioritize solutions.

5. Flowchart: Visual representation of steps in a process.

6. Histogram: Frequency distribution of a variable.

7. Statistical Process Control (SPC): Monitoring processes and performance.

11. Inspection

• Ensures production quality through measurement, testing, and evaluation.

• Importance of Inspection: Critical to establish quality standards but does not correct deficiencies.

• Issues with inspection include worker fatigue and measurement error.

Methods of Inspection:

1. When to inspect: Supplier plants, upon receiving goods, before production stages, after completion.

2. Source Inspection: Best practice where employees self-check their own work.

12. Determinants of Product Quality

• Performance: Basic features functionality.

• Conformance: Adherence to specifications.

• Durability: Product longevity.

• Reliability: Consistency in performance.

• Serviceability: Repair speed and ease.

• Aesthetics: Look, feel, and other sensory attributes.

• Perceived Quality: Customer's overall impression of quality.