COLLEGE OF MANAGEMENT IN TRENN

TOOLS AND METHODS FOR THE IMPROVEMENT OF QUALITY BACHELOR THESIS

MARTIN HUDY

2009/2010

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BACHELOR THESIS

TOOLS AND METHODS FOR THE IMPROVEMENT OF QUALITY by Martin Hudy Advisor: doc. Ing. CSc. Jaroslav Kral A Bachelor Thesis to be Submitted to City University of Seattle / Vysok kola manamentu In Partial Fulfillment of the Requirements for the Degree of Bachelor in 3.3.16 Economics and Business Administration

Submitted by ________________________________________________Date__________ Candidate Signature

Approved by ________________________________________________Date__________ Bachelor Thesis/Project Advisor

Approved by ________________________________________________Date__________ Rector (or his representative)

Trenn

2009

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Table of Contents
List of Abbreviations .................................................................................................................4 1 Quality Defined ....................................................................................................................5 2 What Is Quality Improvement? ............................................................................................6 3 Advantages of Quality Improvement ...................................................................................7 4 Cost of Quality .....................................................................................................................8 5 How to Choose the Best Quality Improvement Method ......................................................9 6 Methods of Quality Improvement ......................................................................................10 6.1 Total Quality Management (TQM) ......................................................................10 6.2 Quality Function Deployment (QFD) ..................................................................11 6.3 Quality Circle .......................................................................................................12 6.4 Quality Certification Programs: ISO 9000 ...........................................................13 6.5 Shewharts Quality Improvement Method ...........................................................13 6.6 The Deming Quality Improvement Method .........................................................14 6.7 Jurans Improvement Program .............................................................................16 6.8 The Crosby Program ............................................................................................17 6.9 Six Sigma .............................................................................................................18 6.10 Kano Model of Quality Improvement ..................................................................19 7 Quality Tools .....................................................................................................................20 7.1 Flowchart ..............................................................................................................20 7.2 Run Chart .............................................................................................................21 7.3 Cause and Effect Diagram ....................................................................................21 7.4 Pareto Chart ..........................................................................................................22 7.5 Histogram .............................................................................................................22 7.6 Check Sheet ..........................................................................................................22 7.7 Scatter Diagram ....................................................................................................22 7.8 Six Sigma Quality and Statistical Process Control ..............................................23 7.9 X-Bar Chart and R-Bar Chart ...............................................................................24 8 Summary of Quality Improvement Methods and Tools ....................................................26 ___________________________________________________________________________ PRACTICAL PART 9 Overview of the XRAY Company.....................................................................................27 10 XRAY on the RC Market ..................................................................................................29 11 Problems with Quality in XRAY .......................................................................................30 12 Implementation of Quality Function Deployment .............................................................31 12.1 Step 1: Product Planning ......................................................................................32 12.2 Step 2: Part Deployment.......................................................................................33 12.3 Step 3: Process Planning ......................................................................................40 13 Conclusion .........................................................................................................................43 List of Figures ..........................................................................................................................46 List of Tables ...........................................................................................................................46 Bibliography ............................................................................................................................47
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List of Abbreviations
CEO - Chief executive officer CNC - Computer numerical controlled ISO - International Organization for Standardization PDCA - Plan, Do, Check, Act QFD - Quality Function Deployment RC - Radio-controlled TQM - Total Quality Management

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Quality Defined
Each company which is producing or providing services is trying to be as efficient as

possible. The reason for that is very simple: profit. Profit is very closely connected to efficiency because the more efficient the company is, the higher the profit is. Many more companies are searching for the best way how to improve efficiency these days due to the economic crisis. A few years back, when the companies were making profits due to high sales, efficiency was not the number one goal. However, these days when sales have dropped down for many industries and services, companies are searching for the best way to decrease production costs in order to have at least some profit and to go out of negative numbers which leads to bankruptcy. One of the ways to increase a companys efficiency is improvement of quality. Quality is the key to success in business, and quality is one of the main factors of value. Value basically means the amount of money that a customer is willing to pay for a particular product or service. If customers do not see any value in your product, they may go to purchase it from your competition where their needs for value are better fulfilled. Quality has a direct effect on profitability because when quality increases, the product value increases as well and more customers are willing to purchase this product. When companies want to provide a quality product, managers have to understand what actually quality is. According to Oakland, author of TQM Text with Cases book, Quality is meeting the customer requirements (2000). Entrepreneurs must meet those customers requirements when they want to make salable products or services and be competitive on the market. As Finch, author of Operations Now book, pointed out, Quality dimensions specific to products include performance, features, durability, and serviceability (Finch, 2006). Performance actually represents the functions of the product. Features are extra functions of a particular product and make the product unique among others on the market. Durability represents the lifespan of the product, and serviceability represents how quickly the product can be repaired.

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What Is Quality Improvement?

If a company is facing a quality problem, quality improvement needs to be applied.

Quality improvement is a technique that helps to analyze the performance of the company and define methods of how to improve it. Due to the quality improvement technique, the company is able to analyze what needs to be done better in order to increase productivity, and also to find the best model for eliminating possible errors in the future. There are many models of quality improvement which can be applied depending on the type of business or service, culture, size of the business, and many other factors. The main factor of choosing the method of the quality improvement is maximum effectiveness. The most used and wellknown methods of quality improvement include: Total Quality Management, Quality Function Deployment, the Deming method, the Crosby program, Jurans improvement program, Zero Defect program, Six Sigma, Quality Circle, Shewhart method, Kano model, theory of inventive problem solving, Tagushi method, and many more. Quality improvement is the process and entrepreneurs need to understand that if that particular model succeeds, it does not mean that the problem is solved forever. As Russell, author of the book The Quality Master Plan, pointed out; The quality improvement process is a continuous, never-ending series of actions based on new business principles that will result in a competitive business or organization (Russell, 1990, p.13).

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Advantages of Quality Improvement

Almost each companys goal is to have satisfied customers. Chiefs and CEOs stress it

prominently these days when competition is very high in nearly all industries and businesses. Many customers shift their determining factors of choosing products from price to quality. Therefore, each company should focus on quality products as much as possible. Quality improvement does not mean forcing employees to work harder or inspecting them more often; that method will not succeed. Instead, entrepreneurs should look for possible new ways of producing the products or providing the services in the most effective way. If they succeed, they will gain benefits. Quality improvement would not only lead to increased sales, but it would also have cost savings. Cost represents the expense associated with producing each product, and cost has a direct effect on profitability. As Finch pointed out, The greater the cost, the greater the price, the less the perceived value by customers, the less the net sales, and, ultimately, the less the net income (Finch, 2006). This shows how costs have high effects on sales and profit; therefore, it is important to keep costs as low as possible by quality improvement. Costs can be reduced by reduction of employees, inventory, waste, repairs, recalls, and other things.

Figure 1: Quality Improvement and its Beneficial Effect on Revenues and Costs (Slack, Chambers, & Johnston, 2001, p. 554)

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Cost of Quality
There is a direct link between cost and low quality. When companies sell some

defective products, the cost connected with replacement or repair occurs. There are two types of costs connected with low quality and those, according to Finch, are: external failure costs and internal failure costs (2006). External failure costs occur when the defective product is purchased by customer. This kind of cost is very expensive because the company has to spend extra money for taking defective products back from the market and pay for transportation of these products. Plus, the reputation of the company is harmed a lot. In the globalization age when there are thousands of Internet forums and chat rooms, loss of reputation can have catastrophic effect for the company because when one customer finds a defective product, within few days potential customers worldwide know about this problem. Internal failure costs occur when the company finds out that a particular product is defective before releasing it to the market. In this situation, the company has to pay extra money to redesign the product, for material, and for workers to produce new products. In order to eliminate internal failure costs to the minimum, companies have to invest in inspection and testing technologies. It is a very important part of product development because without inspection and test of the product it is almost impossible to meet the desired quality. Therefore, companies are willing to pay prevention costs. As Finch pointed out, Prevention costs are those associated with efforts to prevent errors or defects from happening. They include costs of employee training, process improvement and control activity, and quality planning activity (Finch, 2006, p.186).

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How to Choose the Best Quality Improvement Method

The success of quality improvement depends mainly on the efficiency to find and solve

the problem. As Evans and Lindsay, authors of the book The Management and Control of Quality, pointed out, Problem solving is the activity associated with changing the state of what is actually happening to what should be happening (Evans, Lindsay, 1999).

The problems in the business can be categorized into the three ways. According to Evans and Lindsay (1999), these ways are: structured, semi-structured, and ill-structured. The structured problem is a problem where all the necessary information (such as: what is happening, what should be happening and the way how to solve the problem) is available. In this case, the company can apply its own way to solve the problem. The opposite of a structured problem is an ill-structured problem because there is no information about what is happening and what should be done. The semi-structured problem falls somewhere between structured and ill-structured. The best possible category is the structured. However, if the company is facing semistructured or ill-structured problems, the best quality improvement method for problem solving needs to be analyzed.

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6
6.1

Methods of Quality Improvement

Total Quality Management (TQM)
Total Quality Management is one of the most well-known methods of quality

improvement. TQM is frequently used in manufacturing, government, and education. As Evans and Lindsay pointed out, TQM is a total, companywide effort through full involvement of the entire workforce and a focus on continuous improvement that companies use to achieve customer satisfaction. TQM is both a comprehensive managerial philosophy and a collection of tools and approaches for its implementation (Evans & Lindsay, 1999). TQM is a system of quality improvement which is dedicated for top management. The goal of the top managers is to introduce the system for quality improvement and to avoid problems in the future. According to Oakland, the goal of TQM is to recognize customers and detect their wants, meet customers requirements, control the process of quality improvement, and encourage and motivate the employees to meet the required quality (Oakland, 2000).

The structure of TQM is made of three principles: customer focus, continuous process improvement, and total involvement. According to Finch, customer focus is the first process which states that the customer is the person who defines what quality is. The second process is continuous process improvement which represents the efforts to eliminate variability. The third process is total involvement which states that all employees at all levels in the company have to be engaged in process improvement (2006).

Total Quality Management can be successful only when top managers are fully involved in quality improvement, because when employees see that top management is not fully involved they will lose interest as well.

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6.2

Quality Function Deployment (QFD)

Quality function deployment is a very popular method for reaching product and

process design missions. According to Oakland, the QFD method for quality improvement was created in Japan in 1972 by Mitsubishi and extended by Toyota (Oakland, 2000). This shows that this system was used by big automobile companies where quality is very important. As Oakland pointed out, Quality function deployment is a system for designing a product service, based on customer demands, with the participation of members of all functions of the supplier organization. It translates the customers requirements into appropriate technical requirements for each stage. The activities included in QFD are market research, basic research, innovation, concept design, prototype testing, final-product or service testing, and after-sales service and troubleshooting (Oakland, 2000). Managers are using house of quality to lead quality function deployment process. House of quality is a set of matrices that helps to understand what and how a company should improve their products.

QFD consists of four stages. According to Finch, these stages are: product planning, part deployment, process planning, and production planning (2006).

Figure 2: QFD Conceptual Model (Finch, 2006, p. 125)

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The product planning stage estimates what customer is searching for. In this stage, managers are searching for information what customers want by interviews or complains. The desired customers needs have to be analyzed and the products have to be modified according to these parameters. As Finch pointed out about product planning stage, The translation of customer expects into characteristics or capabilities of the product or service design (Finch, 2006).

The part deployment stage is based on whats and hows. Whats represents customer needs, and hows represent potential solutions of how to achieve customers wants. Process planning is a process translation stage. As Finch pointed out, In phase 3, process planning, performance goals or targets are translated into process requirements (Finch, 2006).

The last stage of house of quality is production planning. As Finch pointed out, The production planning phase of QFD consists of translating the process requirements into a system that will be able to control processes and maintain target goals. This phase provides the link between the control system and customers needs (Finch, 2006).

6.3

Quality Circle
Quality circle is a system that organizes employees into small groups that are

controlled by supervisors. The main goal of this system is to create responsibility of the employees for increasing the quality and productivity of the particular company. According to Scarpello and Ledvinka, authors of the book Personnel/Human Resource Management, quality circle was developed in the USA in 1930s but implemented in Japan (Scarpello & Ledvinka, 1988). The main advantage of this system is that employees are empowered and motivated because they have the chance to analyze the quality problem and find the way to solve it. On the other hand, this system failed in many US companies. As Evans and Lindsay pointed out, After about five or six years of use in the United States, however, quality circles were labeled as a fad. Much of the feeling of disappointment in their promise resulted from managements failure to understand how to implement and manage them successfully (Evans & Lindsay, 1999). On the other hand, this system is still taken as a starting point for quality improvement methods.

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6.4

Quality Certification Programs: ISO 9000

ISO 9000 is the quality management process model. According to Finch, ISO 9000

was accepted as a standard for quality assurance system in more than 90 countries worldwide (Finch, 2006). Therefore, this model can be considered as a standard for quality management system. These standards are made by International Organization for Standardization and they are continuously innovating. According to Quality School, the latest innovation, ISO 9001:2008, was made in November 15, 2008 (Vera, n.d.). However, ISO 9001:2008 includes only acknowledgements of already existing ISO 9001:2000. These acknowledgements are made by people who are using these standards. The most revolutionary model was the ISO 9001:2000. This model links together four main areas. As Oakland pointed out, This process model is as presented in ISO 9001:2000, and reflects graphically the integration of four major areas: management responsibility, resource management, process management, and measurement, analysis, improvement (Oakland, 2000, p.79). However, ISO 9000 does not define level of quality. As Finch pointed out, Instead, they specify a set of quality assurance systems that must be in place. By requiring quality systems, they ensure that the certified company has the infrastructure, knowledge, and capacity to produce quality products and services (Finch, 2006, p.199). The ISO is offering many advantages for businesses and the main one is that customers can trust the product because they can be sure that the company from whom they want to purchase the product meets the standards for quality and therefore they do not have to worry that product will be low quality or that good service for the product will be not provided.

6.5

Shewharts Quality Improvement Method

Walter Shewhart was statistician who introduced the Plan, Do, Check, Act (PDCA)

cycle theory. As Finch pointed out, His primary contribution to product and service quality was the recognition that variability existed in all manufacturing processes and that statistical tools could help explain that variability. Shewhart developed the use of statistical process control charts, which provide an opportunity to control the variability of processes (Finch, 2006, p.180). Shewharts PDCA cycle also formed the basic framework for other quality improvement gurus such as Deming. The PDCA cycle helps managers identify and solve the problem by using data in the decision-making process.

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Figure 3: Shewharts PDCA Cycle (Finch, 2006, p. 193)

The first step of the PDCA cycle is the Plan phase. In this phase, managers have to identify and validate the problem. Simply said, managers have to admit that a problem really exists and needs to be solved. Managers have to not only identify and validate the problem, but they have to also analyze the causes of this problem. Plus, they have to understand how big an impact this problem has on the company.

The second step of PDCA cycle is the Do phase. In this phase, managers have to find possible solutions to the problem and implement them. When the solution action is implemented, managers have to move to the third step.

The third step is the Check phase. In this phase, managers have to analyze whether or not that particular change brings the desired results. The final step is the Act phase. In this phase, when managers see that the solution meets their expectations, they have to standardize it. After that, they can make conclusion and move back to the Act phase where they look for other problems.

6.6

The Deming Quality Improvement Method

William Edwards Deming was a statistician, who after studying Shewharts work and

his quality improvement method was highly influenced by him. Deming was respectable mainly in Japan, where after WWII he helped automobile companies to grow their businesses. As Finch pointed out, Deming extended the techniques and tools developed by Shewhart to a set of principles (14 points) to guide management in the development of a business system. He felt that unless upper management was committed to quality, and systems were developed to support it, the quality tools and techniques used at the process level would be ineffective. Deming stressed that significant quality improvement only comes from changing the organization, and that responsibility rests with upper management (Finch,

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2006, p.181). What is highly valuable in this method for managers is that it fits for almost all kinds of industries and it does not matter whether the corporation is big or small.

Demings 14 points of quality improvement are: 1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs. 2. Adopt the new philosophy. 3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. 4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. 5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. 6. Institute training on the job. 7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers. 8. Drive out fear, so that everyone may work effectively for the company. 9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service. 10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. 11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. 12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. 13. Institute a vigorous program of education and self-improvement. 14. Put everybody in the company to work to accomplish the transformation. The transformation is everybodys job.

(The W. Edwards Deming Institute, n.d.)

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6.7

Jurans Improvement Program

As Evans and Lindsay pointed out, Joseph Juran emphasized the importance of

developing a habit of making annual improvements in quality and annual reductions in quality-related costs. Juran defined breakthrough as the accomplishment of any improvement that takes an organization to unprecedented levels of performance (Evans & Lindsay, 1999, p.422). The breakthrough can be understood as analyzing the problem, finding, and controlling the possible solutions.

The Jurans Improvement Program is based on the six sequels which are: proof of the need, project identification, organization for breakthrough, diagnostic journey, remedial journey, and holding the gains. The proof of the need is the first step where the managers are analyzing the quality improvement based mainly on economic point of view. Project identification is the second step where managers are trying to create constructive action. Organization for breakthrough is based on the project organizing. Diagnostic journey is the fourth step where statistics specialists are needed for data collection and statistic results. The fifth step, remedial journey, is based on the alternative implementation that optimizes overall cost. Holding the gain is the last step in which the alternative is changed to the standardization.

These new standards have to be regularly controlled in order to prevent possible collapse of them. As Evans and Lindsay pointed out, Many companies have followed Jurans program religiously. A Xerox plant in Mitcheldean, England, for example, cut quality losses by 3040% and won a national prize in Britain in 1984 for quality improvement using the Juran system (Evans & Lindsay, 1999, p.423).

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6.8

The Crosby Program

The Crosby Program is based on 14 steps for quality improvement. According to

Finch, these steps are: management commitment, quality improvement team, quality measurement, cost of quality evaluation, quality awareness, corrective action, establish an ad hoc committee for the zero-defect program, supervisor training, zero defects day, goal setting, error cause removal, recognition, quality councils, and do it over again (2006).

Crosbys program for quality improvement has one very good advantage: it focuses on motivation. 1. In the first step, managers provide the information about the quality problem and try to motivate employees to cooperate in the problem solving. 2. In the second step, quality improvement teams are made. The teams are built from employees from all departments. 3. The third step shows where quality can be improved according to the standards which were set. 4. In the fourth step, the cost of quality improvement will be obtained in order to analyze if the particular improvement is profitable. 5. The fifth step is based on informing employees about the costs that are caused by bad quality. 6. In the sixth step, employees provide feedback about the problems and possible solutions. 7. In the seventh step, a few members from the team are selected in order to analyze the zero defects concept and movements to implement the program. 8. The eighth step is based on training of supervisors. 9. Zero defect day is the 9th step where the zero defect is implemented. It should be done in one day because then everyone will understand it in the same way. 10. The 10th step is about supervisors establishment of the goals that have to be achieved. 11. The goal of the 11th step is to encourage employees to communicate to management the obstacles that they face in attaining their improvement goals. 12. The 12th step recognizes and appreciates those who participate. 13. The 13th step is about establishing quality councils to communicate on a regular basis. 14. The goal of the14th step is to do it all over again to emphasize that the quality improvement program never ends.

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6.9

Six Sigma
The Six Sigma method is helping to reduce quality problems to a minimum. As Finch

pointed out, Six Sigma has come to mean more than just the number of defects. It also refers to a methodology used to obtain that level of control and an overall philosophy for managing the business, which can be described as an evolutional step for TQM (Finch, 2006, 195). Six Sigma was successfully implemented by worldwide corporations such as Motorola and General Electric. It focuses mainly on operation improvement as well as on elimination of variability. As Dhirendra Kumar, author of Six Sigma Best Practices book, noted, Six Sigma can be applied to the product design process, making the product more robust, with improved manufacturability, which may result in better quality and reliability to meet customer needs (Kumar, 2006, p.10). There are two main processes that Six Sigma is based on. As Finch pointed out, The first define, measure, analyze, improve, and control (DMAIC) is used to structure the improvement efforts for existing processes that are not performing as well as desired. The second define, measure, analyze, design, verify (DMADV) is used to guide the development of new products and services so that they meet Six Sigma quality levels (Finch, 2006, p.195). Six Sigma is not only a quality improvement method, but it is also a tool for controlling quality. Therefore, more information about Six Sigma is provided in section 7, Quality Tools.

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6.10 Kano Model of Quality Improvement

The Kano model of quality improvement was developed by Japanese professor Noriaki Kano in the 1980s. His theory is based on three important quality levels. The first level of characteristics is must-be. As Finch pointed out about must-be level, In other words, the characteristic has to be present for the product to be considered on the list as a possible alternative to purchase (Finch, 2006, p.199). In reality it means that customers who are going to buy the product expect some features from the product because these features are standard so; they are not surprised by the presence of the features, but on the other hand they will be very disappointed if the features are missing. For example, these days it is common that each new car has at least two airbags. Customers do not consider this feature to be as advantage, but rather if this feature is missing it decreases the value of the car a lot. The second level of quality characteristics of the Kano model is one-dimensional. This characteristic is what the customer is actually looking for. The more desired characteristics the product has, the better the chances that the customer will choose the product. The third and final level of characteristics is called delighters. Delighter characteristics are surprising for the customer. Customers do not think that such a characteristic is attributed to the product because they did not even know that it existed. When a company introduces such a feature, there is high chance that the product will become a best seller. Unfortunately such a feature would soon become standard, and all companies within the same industry would soon have the same feature. The Kano model can be a very effective method for quality improvement for a company. As Finch pointed out, The Kano model offers a framework for moving customers beyond the point of being satisfied to being delighted with the quality (Finch, 2006, p.199).

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Quality Tools
The possible methods of quality improvement have been described in the preceding

section. It is very important for managers to choose the method that perfectly fits into their corporation, and then implement the method. However, the implementation of the quality improvement method is not the end of the process. Another important step that the managers have to take into an account in the quality improvement process is verification of implementation. As Finch pointed out, The cultural side of quality improvement is extremely important. No real quality orientation exists without it. However, the data collection and analysis part of quality management is equally important. Without it, no serious quality improvement effort can succeed (Finch, 2006, p.212). There are many existing tools of analysis and verification of quality because the quality must be verified through the measurement, data collection, and analysis. The reason for that is very simple: without verification of process, quality improvement is just a wish. When managers of some company implement a quality improvement method, they have to check if it works properly as well. There are many tools of analyzing and checking quality improvement, such as flowcharts, run charts, cause and effect diagrams, Pareto charts, histograms, check sheets, and scatter diagrams.

7.1

Flowchart
A flowchart is used to document the process. As Finch pointed out, The ability to

represent a process visually, in a way that emphasizes relationships between various activities in the process, can contribute substantially to better understanding of the process and its weaknesses. Looking at an entire production process and understanding all the relationships among resources can be difficult. A diagram, however, can be studied and analyzed to identify logical relationships and sequences (Finch, 2006, p.213). The advantage of the flowchart is that it helps to make the problem more understandable and clear. The flowchart works best when all people involved in the problem such as managers, employees, and customers meet together and discuss the problem.

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7.2

Run Chart
A run chart is also based on drawing the problem to make it more understandable and

visible. As Evans and Lindsay (1990) noted, A run chart is a line graph in which data are plotted over time. The vertical axis represents the measurement; the horizontal axis is the time scale (p.430). The advantage of a run chart is that it sums up data in a graphical way which makes the problem easier to understand. Plus, it helps in the comprehension of the connection between the changes in measurement over time. There are four steps that create the run chart. According to Evans and Lindsay (1990), these steps are: data collection, data range examination, plotting the points on the chart and connecting them together, and average enumeration of plotted points with drawing center line.

7.3

Cause and Effect Diagram

A cause and effect diagram provides information about the cause of a problem. This

structured diagram helps to analyze eventual causes and narrow them down to the furthest cause. As Finch (2006) noted, Creating the diagram typically starts with the identification of potential causes and gradually, through a process of elimination, moves to the root cause (p. 216). Aided by a cause and effect diagram, managers can better analyze the possible causes of a problem and find the main problem in a clear and understandable way. As Slack, Chambers, and Johnston, authors of Operations Management book, pointed out, They do this by asking the what, when, where, how and why questions as before, but this time adding some possible answers in an explicit way (Slack, Chambers & Johnston, 2001, p.624). The cause and effect diagram consists of 4 initial steps: identify the problem, list the potential causes of the problem, analyze the causes, and categorize the causes and by discussing, connecting, and clarifying them.

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7.4

Pareto Chart
The main advantage of the Pareto chart quality improvement tool is that it helps

eliminate unimportant problems from important problems. According to Evans and Lindsay, the Pareto chart was developed by Joseph Juran. Juran named this method after Vilfredo Pareto, an economist who found out that 85% of money in Milan was created by 15% of the people (1990). Pareto chart helps managers to make quality improvement decisions in incipiency. As Finch pointed out, Pareto charts are simple bar graphs used to categorize data and help establish priorities for action. Often, data that are collected are difficult to interpret until they are organized. Pareto analysis is the process of identifying the most important category to give a focus to improvement efforts (Finch, 2006, p.216).

7.5

Histogram
A histogram is as good as a Pareto chart bar graph, but a histogram is created

differently. The X axis represents the measurement, while the Y axis represents frequency of measurement. According to Evans and Lindsay, the histogram provides a guidepost about features of the parent population from which the data is taken (1990). The histogram helps to understand the variability in a visual and understandable way.

7.6

Check Sheet
A check sheet helps managers to organize data in a simple and clear way. The

advantage of the check sheet is that information collected can be translated clearly without any further processing. As Finch pointed out, Check sheets are frequently used for collecting and recording data that might later be used in another one of the quality tools (Finch, 2006, p.219).

7.7

Scatter Diagram
As Finch noted, The scatter diagram utilizes one variable on the X axis and another

variable on the Y axis to provide a visual means of identifying a correlation or a relationship between the two variables (Finch, 2006, p.219). The advantage of a scatter diagram is that it helps to identify the cause of the problem for the company.

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All these tools of quality improvement can be classify as general-purpose quality analysis tools. There is also another type of quality improvement tool that is known as statistical process control (SPC). As Slack, Chambers, and Johnston, pointed out, Statistical process control (SPC) is concerned with checking a product or service during its creation. If there is reason to believe that there is a problem with the process, then it can be stopped and the problem can be identified and restricted (Slack, Chambers & Johnston, 2001, p.569). There are several SPC charts, among which the most used are: X-bar chart, R-chart, Process Capability, and Six Sigma. These charts are used for identifying variables. There are also charts like P-charts and C-charts used for identifying attributes. As Finch noted, Unlike variables, which potentially have an infinite number of possible outcomes, attributes have only two possible outcomes, such as pass or fail, fit or nonfit, on or off, good or bad (Finch, 2006, p.221).

7.8

Six Sigma Quality and Statistical Process Control

As previously described in section 6.9, Six Sigma, Six Sigma is a quality improvement

method that tries to reduce quality problems to a minimum. However, Six Sigma is also a quality improvement tool that helps to keep variability within an acceptable tolerance. As Kumar pointed out, In true statistical terms, if Six Sigma (6) is used as a quality goal, Six Sigma means getting the product very close to zero defects, errors, or mistakes (Kumar, 2006, p.6). When the statistical process control is used, control limits have to be defined. When a company is using the quality improvement tool for variables elimination, it has to understand that variability will always exists but that variability must be kept within the allowable limit. According to Finch, variability exists in all production processes. When the process is highly controlled, variability exists within a very narrow range. Variability is measured by standard deviation of which the symbol is . In general, when product variability is within the limit range of 3 above and 3 below the mean, the product fulfills customers specifications. (Finch, 2006, p.232) This means that if the company is able to produce products within this range, products fulfill the desired quality. If not, the company produces defective products as a part of its normal variability.

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7.9

X-Bar Chart and R-Bar Chart

The X-bar chart is one of the most commonly-used charts for identifying variables. As

Slack, Chambers, and Johnston pointed out, The means (X) chart can pick up changes in the average output from the process being charted. Changes in the means chart would suggest that the process is drifting generally away from its supposed process average, although the variability inherent in the process may not have changed (Slack, Chambers & Johnston, 2001, p.578). The result of the X-bar chart can be gathered from its formula. According to Finch, the values plotted on X-bar chart represents means of subgroups and the formula is:

where n represents the number of units in the subgroup X represents the mean of the subgroup represents measurements in subgroup.

When we know the means of subgroups, we can find out the center line on the control chart which is represented by X-double bar. X-double bar is the mean of subgroups means and the result can be gathered from the formula:

where k is the number of subgroup samples of size n

(Finch, 2006, p.221)

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An R-bar chart is also used for variable identification. As Slack, Chambers, and Johnston noted, The range (R) chart plots the range of each sample, that is the difference between the largest and the smallest measurement in the samples. Monitoring sample range gives an indication of whether the variability of the process is changing, even when the process average remains constant (Slack, Chambers & Johnston, 2001, p.578). The result of R-bar chart can be gathered from formula as well. According to Finch, the formula for R-bar chart which is the mean of the subgroup ranges is:

The range R for a subgroup is gathered for subtraction of the smallest value in the group from the largest (Finch, 2006, p.225).

The upper and lower control limits of X-bar and R-bar charts can be gathered from formulas as well.

According to Finch, the formula for X-bar upper control limit is: the formula for X-bar lower control limit is:

Again according to Finch, the formula for R-bar upper control limit is: and the formula for R-bar lower control limit is: (Finch, 2006, p. 227)

According to Slack, Chambers, and Johnston, factors (Slack, Chambers & Johnston, 2001, p.579).

vary based on the sample size

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Summary of Quality Improvement Methods and Tools

To summarize, in these days when the business market is globalized and competition

is very high in all kind of businesses, managers have to make a lot of effort to keep their companies competitive by creating saleable products. In the case of companies that create products, every entrepreneur has to understand that in order to be able to stay on the market the company has to produce products that create value for customers. Companies that are situated in the eastern part of the world such as China or Taiwan have a competitive advantage over western companies because they are able to produce products with lower productions costs due to the cheaper labor force. Western companies have to understand that they cannot compete with these eastern companies and therefore they have to create customer value somewhere else. One possible solution to produce products that create customer value is to produce high-quality products. Unfortunately, a company that wants to produce a high-quality product has to control the quality and when the desired quality is not met, quality improvement methods and tools have to be implemented. Quality improvement methods and tools are very important to managers who want to improve quality in their companies. Managers goal in this case is to find the problem, understand it, and find the best way(s) to improve it and afterwards control it; it does not matter if it is a product or service. Quality is one of the most important features for value; a product that does not create value for a prospective customer is almost unsellable. Therefore managers have to recognize quality as a priority and set their preferences accordingly. The quality improvement plan can be successfully implemented in a particular company only when the right plan is chosen. As previously mentioned, there are many methods that can help to improve quality and it is the managers task to choose the right method that fits their company. Managers have to understand all of them and only by understanding what, how, why, and where, are they able to choose the right one. The managers role is not over when the plan is implemented, they have to control it as well. The reason is very simple. Even though a companys products have better quality after plan implementation, it does not last forever. In this case, managers should not let up, and should continuously control the quality. For this reason, quality improvement tools should be implemented. Quality tools help to control product or service quality, and can alert managers when something is going wrong. There are many tools of quality improvement, and managers have to choose the right one. The advantage of the tool is that it shows you firm data to indicate if something is going wrong or not.

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Practical Part
To better understand the quality improvement method, how it is implemented, and how it is controlled, the practical part of this paper describes the implementation process for a particular company. The name of the company is XRAY s.r.o. This company produces highly-professional radio-controlled (RC) cars that are dedicated for racing, and also produces equipment for RC cars.

Overview of the XRAY Company

XRAY Company was established in the year 2000. Juraj Hudy is the founder as well

as the president of the company. XRAY has in total three owners: Juraj Hudy (owns 50% of the company) and his sons Mario and Martin Hudy (owning 25% each). The main business of XRAY is producing professional RC model cars. XRAY released its first model car in the year 2000, and it was a 1/10th scale electric-powered onroad model car. These days the company produces twelve model cars in various scales (1/8, 1/10, 1/12, 1/18), using electric or nitro powerplants, and designated for either on- and offroad racing. On-road model racing cars are designed for operation on flat smooth asphalt or carpet, while off-road model racing cars are designed for operation on clay or dirt surfaces with bumps and jumps. The models are controlled by radio transmitters with receiving equipment aboard each car. XRAY sells their products through their worldwide distribution network. In total, XRAY has 25 distributors that are selling the products to local dealers and RC shops. XRAY Company is situated in Trencin, Slovakia. The company has its own administration, development and marketing departments, as well as production and testing tracks within one building. The company employs nearly 100 people in all its departments. Many XRAY product components and parts are produced on new, high-quality CNC machines. In total, XRAY owns 16 CNC milling machines and 12 CNC turning machines for producing parts from duraluminum, steel, and iron. The company also produces parts from plastic composite materials. XRAY own three machines for producing injection molds and 4 injection machines for producing plastic parts from injection molds. The company has also its own anodizing machine for coloring its duraluminum products.

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Figure 4: Xray Company

Figure 5: Xrays CNC machines

Figure 6: Xrays injection molds machines

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10 XRAY on the RC Market

When XRAY entered the RC market, quality was the top priority. Customers who were searching for such value recognized that quickly and started to buy XRAY products. Thanks to globalization, positive feedback about XRAY was spread very quickly and XRAY became one of the leaders on RC market. The majority of people who buy professional RC cars are doing so for racing purposes. Simply put, they do not buy expensive cars to drive in the backyard or in their city streets, but rather they attend and participate in RC car races. RC races are organized in every county and are held nearly every weekend throughout the year. People who want to buy professional RC cars are not searching only for quality, but also for a car that performs well and is able to win races. In order to show that an XRAY car is highly competitive, the company has hired professional RC drivers whose job is to attend national and international races and try to win those races. XRAY has succeeded very well in winning races, and thanks to that the demand for XRAY cars has risen very quickly. Unfortunately, Chinese companies have recognized that the RC market is quite big, and so more and more companies have started to enter this market. The managers of some of those companies are intelligent and understand that in order to be competitive in this business, they need to become well known; unknown companies have very little chance of success in the RC market. Therefore, some of those Chinese companies who had very large capital bought some European and US companies who were well known on the RC market but who did not have enough capital to stay in it. Thanks to this, those Chinese companies could establish themselves within the market. Now competition is very high. With the RC market being quite small and the number of competitors being quite high, each company is interested in every potential customer.

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11 Problems with Quality in XRAY

In the beginning when XRAY was producing only one type of car, quality was quite easy to control. However, in order to increase sales, XRAY started to diversify and produce more different types of cars; the product portfolio expanded quickly. Unfortunately due to this expansion of the product portfolio, quality problems began to occur. These days, managers are not able to control quality as well as in the beginning of the company. XRAY faces two main problems with quality, and those are related to suppliers as well as in-house production. The amount of faulty products is increasing as well as the number of reclamations from customers. Therefore, XRAY managers have to solve the problem with quality and improve it. After careful analysis and consideration, it was determined that one of the best ways that the company can improve quality, service, and efficiency is with the implementation of the Quality Function Deployment method. The reason for this is very simple: without quality, XRAY can very easily lose its customers which would decrease sales and demand for its products. With such a small and very narrowly-defined niche market, it is very easy for a company to lose its reputation, but it is very difficult to get a reputation back.

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12 Implementation of Quality Function Deployment

The basic information of how Quality Function Deployment works and how it should be implemented are described in section 6, Methods of Quality Improvement. However, to better understand the QFD model, more information must be given. As Evans and Lindsey pointed out, QFD is a customer-driven planning process to guide the design, manufacturing, and marketing of goods. Through QFD, every design, manufacturing, and control decision is made to meet the expressed needs of customers. It uses a type of matrix diagram to present data and information (Evans & Lindsay, 1999, p.405). This statement proves that QFD is guided by managers who have to meet customers requirements and expectations. According to Evans and Lindsay, QFD help to improve communication and teamwork among the departments of the companies which are responsible for design, promotion, and production of the products. Plus, the QFD model improves not only quality of the products but also productivity (Evans & Lindsay, 1999, p.406). Thanks to quality and productivity, companies can also create new products with more flexibility and in a shorter time. This can be very beneficial. All these advantages of QFD perfectly fit XRAYs needs and therefore this method was determined to be the best for the company and that XRAY should implement this method. Creating the House of Quality model consists of four steps. According to Finch (2006, p.125) these steps are: 1. Product Planning 2. Part Deployment 3. Process Planning 4. Production Planning

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Figure 7: Generic House of Quality (Finch, 2006, p. 126)

12.1 Step 1: Product Planning

Customer feedback is the most important input information, and if XRAY wants to meet customers expectations, the managers must listen to what customers want. Listening to customers can help managers recognize what should be done. An important part of listening to customers is to avoid misunderstanding; this can be avoided by having direct contact with the customers. XRAY has its own forum on its Web site where customers can ask questions regarding the products, and customers can also ask questions via telephone or e-mails to the customer service center. However, to better understand customers needs, XRAY should let customers give their feedbacks about what they like about their products (as well as what they dislike), what should be improved, and what ideas should be implemented in the future products. Customer feedback can be gathered through forums, customer service, and also at the races where drivers can discuss their ideas with XRAY representatives present at the events. By having direct interaction with the customers, managers can better understand customer needs. Also, customers would feel that XRAY cares about them and is willing to accept their ideas and feedback. Customers can feel they have more direct interaction and more involvement, which helps to increase the value of XRAY products. As Evans and Lindsey noted, Listening to customers can open the door to creative opportunities (Evans & Lindsay, 1999, p.406).

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In general, RC customers that are focused on racing are searching for high quality, good price, good service, good racing results, and continuous product development such as option parts for the model cars. Table 1: WHATs in House of Quality High-quality products Good price WHATs: Customer Needs Good service Good racing results Products development

12.2 Step 2: Part Deployment

The goal of managers in the second step is to find solutions for customer needs presented in step 1. Solutions are expressed in the language of the designers. Simply said, step 2 is about finding hows to customers whats which have already been identified. There are two relationships between hows and whats in the QFD: direct and indirect. These relationships express the strength of the connection between customers needs and managers requirements. In the case of the XRAY Company, whats were already defined, so managers have to look for hows. The customers desired high-quality products can be fulfilled in XRAY mainly by control. As was already previously mentioned, XRAY uses only high-quality materials in production in order to create the highest-quality products possible. Moreover, XRAY uses high-quality, modern machines for production in order to keep within desired tolerances and keep variables to a minimum. Unfortunately, due to the large volume of products that the company produces, some mistakes in production do occur. Therefore, XRAY should pay more attention to control in order to keep low-quality products to a minimum. Managers should look at hiring at least one additional employee who would help the control department. Plus, to analyze when and why mistakes are created, XRAY should create an analysis department where all bad products would be analyzed so as to determine who created the bad product, when it was created, and identify which machinery the bad product was manufactured on/by. Employees can influence product quality as well. In this case, managers should identify whether or not a particular employee is skilled and educated enough to produce the

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products to the desired quality level. If not, managers should look for some other employees who would fulfill this criterion. Also, materials used can play an important role in a quality problem. For example, XRAY uses an anodizing machine for coloring some products. A problem may arise in that the color between batches sometimes varies; some products meet the desired color expectations, but some may have a lighter or darker color. In this case, the material for anodizing should be analyzed. Is this material suitable for anodizing? Can this material anodize the products in the same color? All these questions should be answered in detail before starting to use those particular materials in production. By understanding the reasons why faulty products occur, managers can improve the quality within the XRAY Company. The reason why why is important to understanding the problem. Was the faulty product created because of a machine, due to an employees mistake, or perhaps because of the material used? Some products that are very complicated to make need to be produced only on a machine that is able to produce the product in the desired quality. Therefore, managers should not try to create high-quality complicated products by using a machine that is made for creating simple products. By choosing the correct machine or technology of production, a lot of faulty products can be eliminated. The reason why when is important is due to timing. For example, it is known that employees concentration varies according to time. Was the faulty product created in the morning, or before the lunch break, after the lunch break, or before the end of working time? Thanks to this, managers can find out in what time period are faulty products mostly created and pay more attention to that particular time period. Plus, even though XRAY is using only new and high-quality machines in the production, these machines can create faulty products as well. In this case, recognition of the time period is important as well. The reason for that is that CNC machines can create products within a tolerance of 0.001mm but over time the tolerances can vary. For example, after a particular machine is switched on in the morning, the diameter or length of the product that is produced immediately after startup may be slightly different than the same part produced later on. Therefore, employees should check that the tolerances of products made right after the machine starts its production are according to drawing. Plus, age of a machine should be taken into account as well. The performance of a machine is different after it has been used for a long time versus when it was new. Therefore, for products that require highest quality, managers should use only machines that are not outdated or worn out. By understanding that time has a potential dangerous impact on quality, the quality of the products can be improved.

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Another problem with quality that XRAY Company is facing is connected with cooperation. Although most of the products are produced in-house, some products have to be purchased from suppliers. These products are mainly those that cannot be created in-house at a reasonable cost. In this case, XRAY is cooperating with six suppliers. One of these suppliers is a Chinese company that produces small duraluminum parts. Even though each batch produced is controlled in the XRAY control department, some faulty products slip by the control department and get into customers hands. This typically causes a very unpleasant situation for XRAY. Customers assume that since they bought the product from XRAY that it was XRAY that made the mistake they do not consider that one of XRAYs suppliers made the mistake. A possible solution to eliminate receiving faulty products from suppliers is to create some control tools for them. For example, XRAY can create fixtures whereby the supplier company would control the products and check to see that they meet the desired requirements. Another possible solution to this type of quality problem with suppliers could be the hiring of an XRAY agent. XRAY would hire a Chinese manager who would work as an XRAY officer, and his/her role would be controlling suppliers production processes and searching for quality problems. Alternatively, XRAY can solve this quality problem by choosing only those suppliers who do not have any problems with quality. As previously mentioned, XRAY is cooperating with six suppliers; four of those suppliers are of proven quality and therefore XRAY should work only with those suppliers. Even though it would lead to longer waiting time for products, the quality problem would be eliminated. By these actions, XRAY can eliminate the quality problems caused by suppliers. The second customer need that XRAY needs to fulfill is good price. Customers involved in RC car racing seek high quality products, but at a fair price. If the company produces very high-quality products but the price is too high, the company would interest only a small group of customers and therefore market share would be very small. A few years ago, Chinese companies produced cheap but low-quality products. However, these days they are learning to make high-quality products while still keeping the price low; they have learned from their competition and therefore the demand for their products is increasing. When XRAY wants to meet customers needs, they have to produce not only high-quality products but the cost must be low to meet customers expectations. The way to do this is by decreasing production costs and increasing flexibility. The advantage of XRAY over its competitors is that nearly all parts are produced in one physical building which also houses the engineering, marketing, and packaging departments as well. Therefore, XRAY should increase the flexibility among all these departments to decrease the time between the designing of a model and its introduction to the market. The problem in XRAY is that it takes
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too long from the first drawing of the product to the selling of the product. The cause of this low flexibility comes from low involvement, lack of responsibility, and low interest from employees. Each department believes that their work on a project is finished when the work is passed on to another department. This goes to the root of the problem, because sometimes the process of product development stops between the departments and nobody pushes the project forward. In this case, managers should define a project manager for each project being formed. This project manager will be responsible for the product and will speed up the process which will save a lot of time and create better flexibility in project processes. Production costs can be reduced by the technology used in production. Even though XRAY owns high-technology CNC machines, the process for making a product usually takes longer than it should. Therefore the time for production of such a product is much longer and this creates unwanted costs. For example, a few months ago a new product was starting to be produced and the production time of that part was 15 minutes. When the president of the company found out this production time during a manufacturing inspection, he was shocked and told the production manager that such a product cannot take longer than 6 minutes to produce. Afterwards, engineers changed the technology program and were able to produce the product in the desired time of 6 minutes. This example shows that when XRAY wants to decrease production time, each complicated product that goes to production should have its technology plan reviewed in detail by production managers. In this case, more involvement from managers is required. Next, good service is the other customers need that managers of XRAY need to fulfill. XRAY provides service to its customers via a forum on its Web site www.teamxray.com and via customer service which includes e-mail and telephone service. Using these services, customers can ask questions regarding XRAY products and can usually get an answer within one business day. However, the service can be made even better by providing service at races. XRAY has a service team that regularly attends big international races, and this is highly welcome and appreciated by racers attending those races. Unfortunately, customer service at small or club-level races is missing. To solve this problem, XRAY should request that its distributors provide customer service at those races as well. The role of the customer service would be not only to provide help, but also provide support by having necessary spare parts with them in case customers break something. In total, XRAY has 25 distributors around the world. By requesting that distributors attend smaller races in the same country where the races are held, this goal can be reached. In case of big countries like USA, the distributor should have some local suppliers that can visit races

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within the regions. By doing this, racers would feel that the desired service is provided and that XRAY cares about them. A very important customer need that must be fulfilled by managers is good racing results. Most customers are not seeking cars that have high quality or are cheap, but rather they are looking for cars with high performance that can win races. These customers decide to purchase the car according to racing results because they believe that they can win races only with the car that is winning the other races. XRAY has a racing team that visits international races. In total, XRAY is a 25-time US champion, 2-time European Champion, and 2-time podium finisher at a World Championship. But many racers decide to buy car that is not winning only big races but also those races that the customer is attending in person. In this case, XRAY should support more local drivers known as local heroes and their role would be not only to win races but also help other XRAY racers to set up their cars. By this action, potential customers would see that XRAY is the right car to choose because they have also local drivers that can help them to set up their car, help them to understand their car, and improve their driving skills. The last but not least, customers want and need product development. Many racers seek a car that offers optional parts that allow them to modify their car for even better performance or simply better esthetic value. XRAY offers such products, but unfortunately in an insufficient amount. To better understand customers needs, managers should ask the customers what they want and what should be done for them to satisfy their needs. In this case, managers should look to create optional products according to the region where customers live. For example, for customers that live and race in very hot countries Italy, Spain, Thailand, etc. engineers should develop optional products that would be beneficial for these customers such as a fan + holder to prevent overheating in hot weather. In other wetter countries Sweden, Finland, Great Britain, etc. where drivers often have to race in wet conditions, engineers should develop optional parts such mud protectors, waterproof cases for electronics, etc.

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Table 2: WHATs and HOWs in House of Quality HOWs: Potential Ways to Achieve the WHATs, in Technical Terms Elimination of costs in the production by flexibility, Employees involvement technology

Control materials used machines used

Internet forum customer service support at the races

International team drivers, local drivers

Optional parts for better performance better visage

High-quality products

WHATs: Customer Needs

Good price

Good service

Good racing results

Product development

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In the second step of QFD, the relationship between customer whats and manager hows is created. Managers should recognize not only the direct relationship but also the indirect relationship that may occur. The direct relationship shows that technical requirements are developed for customers needs; the indirect relationship shows that technical requirements can also indirectly support customers needs. The estimation of direct and indirect relationships is usually based on managers experience and customer feedback.

Table 3: WHATs and HOWs Relationship in House of Quality HOWs: Potential Ways to Achieve the WHATs, in Technical Terms Elimination of costs in the production by flexibility, Employees involvement technology

Control materials used machines used

Internet forum customer service support at the races

International team drivers, local drivers

Optional parts for better performance better visage

High-quality products

WHATs: Customer Needs

Good price

Good service

Good racing results

Product development

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12.3

Step 3: Process Planning

In the third step of QFD, managers need to analyze and rank customer needs.

Managers in XRAY are facing too many different customer needs, so by ranking the needs, the managers can recognize which needs are most important to customers. Moreover, in this third step of QFD, managers are also evaluating the competition. As Evans and Lindsey pointed out, Competitive evaluation highlights the absolute strengths and weaknesses in competing products. By using this step, designers can discover opportunities for improvement. It also links QFD to a companys strategic vision and indicates priorities for the design process (Evans, Lindsey, 1999, p. 410). In the case of XRAY, the most important customer need is high-quality products and this is also the goal of the company. Even though XRAY is facing to some quality problems it still has a competitive advantage of this customer need over the competition because all the products are produced in one building. Therefore, XRAY can control its products very closely and is able to keep product defects to a minimum. All other RC car manufactures have offices in US or Europe, but their production is situated in China. Therefore, it is more difficult for them to control quality. Due to this reason, XRAY needs to improve its quality because it has the potential and resources to do that. Other weak points that XRAY needs to improve over the competition are good price and good service. The biggest competitors for XRAY are Tamiya, Hot Bodies, and Associated who are producing and selling the same types of cars as XRAY.

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Good price

High quality products

Good racing results

Good service

Product development

Control materials used machines used

Elimination of costs in the production by flexibility, employee involvement technology

Internet forum customer service support at the races

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3 5 2 1 X X X X

International team drivers, local drivers

Table 4: Completed House of Quality

Optional parts for better performance better visage Importance ratings First Competitive evaluation Last

Step 4: Production Planning Production planning is the final step of QFD, where managers are controlling if manager hows are fulfilling customers needs (or in other words, customer whats). As Finch pointed out, The production planning phase of QFD consists of translating the process requirements into a system that will be able to control processes and maintain target goals. The phase provides the link between the control system and customers needs (Finch, 2006, p.129). In case of XRAY, managers who would apply solutions to customers needs have to watch and evaluate if those arrangements for quality improvement are successful. In case of evaluation, different types of quality control tools can be applied. Managers should frequently ask their distributors about customer feedback, ask for feedback on the XRAY Web site, as well as gather feedback at races. However, when XRAY implements the arrangements previously mentioned in the QFD model, there is a high possibility that quality as well as sales will improve.

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13 Conclusion
In conclusion, the goal of each company is to make profit. Profit can be created when a company offers sellable products, and sellable products are those which create value for customers. One of the key factors of product value is quality. Therefore, each company that wants to offer its customers valuable products must ensure that they are also quality products. When the company has a problem with quality this does not necessarily indicate that the company will be non-competitive; however, this may happen and therefore the company should solve its quality problem(s) as soon as possible. There are many methods which help to improve quality, of the most important and efficient methods are discussed throughout this document. When the appropriate method is applied, managers must maintain control to ensure the method is successful. Therefore, quality tools have to be implemented as well. In case of XRAY, a company that produces and sells professional radio-controlled model cars, the best method for quality improvement is Quality Function Deployment. Thanks to this method, managers can better understand customer needs, and what should be done for them. This method also helps to analyze the strengths and weaknesses of the company, helps to keep quality problems to a minimum, and finds out potential ways to increase the demand for its products.

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Tools and Methods for the Improvement of Quality

I, Martin Hudy, do hereby irrevocably consent to and authorize the library of Vysok kola manamentu v Trenne to file the attached project and/or bachelor thesis Tools and Methods for the Quality Improvement and make such paper available for in-library use in all site locations.

For public access to digital form of the project/bachelor thesis on the Internet I give my permission I do not give my permission

I state at this time that the contents of this paper are my own work and all resources used are indicated.

___________________________________________________________ (Signature)

________________________________________________________________ (Date)

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Acknowledgement

I would like to thank to my advisor doc. Ing. CSc. Jaroslav Kral who led me through whole writing process of my final thesis.

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List of Figures
Figure 1: Quality Improvement and its Beneficial Effect on Revenues and Costs ....... 7 Figure 2: QFD Conceptual Model ............................................................................... 11 Figure 3: Shewharts PDCA Cycle .............................................................................. 14 Figure 4 Xray Company............................................................................................... 28 Figure 5 Xrays CNC machines ................................................................................... 28 Figure 6 Xrays injection molds machines .................................................................. 28 Figure 7: Generic House of Quality ............................................................................. 32

List of Tables
Table 1: WHATs in House of Quality ..................................................................................... 33 Table 2: WHATs and HOWs in House of Quality ................................................................. 38 Table 3: WHATs and HOWs Relationship in House of Quality ............................................. 39 Table 4: Completed House of Quality ..................................................................................... 41

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Bibliography
Caplan, F. (1990). The Quality System (2nd ed.). Pennsylvania: Chilton. Evans, J.R, & Lindsay, W.M. (1990). The Managemenet and Control of Quality (4th ed.). Ohio: South-Western College Publishing. Finch, B.J. (2006). Operations now: Profitability, processes, performance (2nd ed.). New York: McGraw-Hill Irwin. Kumar, D. (2006). Six Sigma Best Practices. USA: J.Ross Publishing Oakland, J. (2000). TQM text with cases (2nd ed.). Oxford: Butterworth-Heinemann. Russell, J.P. (1990). The Quality Master Plan. Wisconsin: ASQC Press. Scarpello, V.G. & Ledvinka, J. (1988). Personnel/Human Resource Management. Boston:PWS-Kent Publishing Company. Slack, N., Chambers, S., & Johnston, R. (2001). Operations Management (3rd ed.). Harlow: Pearson Education Limited. The W. Edward Deming Institute. (n.d.). The Deming system of profound knowledge. Retrieved October 20, 2009, from http://deming.org/index.cfm?content=66 Vera, R.C. (n.d.). Changes in ISO 9001:2008, Quality School, Retrieved May 14, 2009, from http://qualityschool.us/changes-in-iso-9000.php

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ABSTRAKT

Tma: Nstroje a Metdy pre Zlepovanie Kvality Kov slov: kvalita, nepretrit zdokonaovanie, vhody zlepovania kvality rozvinutie funkcie kvality, metdy a nstroje zlepovania kvality

tudent: Martin Hudy Vedci BP: doc. Ing. CSc. Jaroslav Kral

V predkladanej prci sme sa venovali nstrojom a metdam pre zlepovanie kvality v podnikoch. Cieom tejto prce bolo definova, o znamen kvalita a o rozumieme pod pojmom zlepovanie kvality. Spomenuli sme vhody zlepovania kvality ako aj nevhody a mon rizik spojen s ignorciou kvality v produktoch a v servisoch. Zamerali sme sa aj na jednotliv metdy vylepovania kvality, priom sme spomenuli ako funguj a ako by mali by implementovan. Nakoko metdy zlepovania kvality nemu fungova bez nstrojov ako ich kontrolova, tak sme sa zamerali aj na tieto nstroje. V prci sme sa zamerali aj na konkrtny podnik a to spolonos Xray, s.r.o., ktor sa zaober vrobou a predajom profesionlnych modelov na diakov ovldanie. Spomenuli sme zkladn informcie o spolonosti ako aj jej problmy s kvalitou. Z tohto dvodu sme implementovali QFD metdu pre zlepenie kvality v tomto podniku. Podrobne sme si preli a implementovali vetky tyri body z ktorch sa tto metda sklad. Vaka QFD modelu pre zlepovanie kvality sme boli schopn identifikova o zkaznkom spolonosti Xray, s.r.o. chba. Analzou problmov sme boli schopn njs spsoby ako uspokoji zkaznkov a mohli sme ich taktie implementova. Pri implementci sme si objasnili priame a nepriame vzahy medzi potrebami zkaznkov a rieeniami implementovanmi manarmi spolonosti Xray, s.r.o. Vaka tejto metde vylepovania kvality sa domnievame, e spolonos me vyriei svoje problmy s kvalitou ako aj implementova rieenia ako zvi zisk a zujem o produkty tejto spolonosti.

2009

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