Quality Management & TQM-modified

8/11/2013
UserUser-based:
based: better performance, more
features, value, fitness for use,
support
ManufacturingManufacturing-based:
based: conformance to
standards, making it right the first
time
ProductProduct-based:
based: specific and
measurable attributes of the product
2011 Pearson Education,
Inc. publishing as Prentice
Hall
When you complete this chapter you should be able to:
1. Define quality and TQM
The totality of features and

characteristics of a product or service
that bears on its ability to satisfy stated
or implied needs
2. Describe the ISO international quality

standards
3. Explain Six Sigma
4. Explain how benchmarking is used
5. Use the seven tools of TQM
American Society for Quality

Hall

Hall
Sales Gains via
Quality in Goods
Quality in Services
o Performance
o Tangibles
Improved response
o Features
o Reliability
Flexible pricing
o Reliability
o Responsiveness
Improved reputation
o Durability
o Competence
o Conformance
o Courtesy
o Serviceability
o Credibility
o Aesthetics
o Security
o Perceived quality
o Access
Improved
Quality
Reduced Costs via
Increased
Profits
Increased productivity
Lower rework and scrap costs
o Communication
Lower warranty costs
o Understanding the customer

Hall
Figure 6.1
Fundamentals of Operations
Management 4e
The McGraw-Hill Companies, Inc., 2003

66
8/11/2013
1. Company reputation
Perception of new products
Employment practices
Supplier relations
2. Product liability
Reduce risk
3. Global implications
Improved ability to compete
Hall
Appraisal costs
Failure costs
Management 4e
Costs associated with the development of

programs to prevent defectives from
occurring in the first place (e.g., training,
quality improvement programs)
Costs associated with the test and
inspection of subassemblies and products
after they have been made.
Costs associated with the failure of a
defective product.
Internal failure costsproducing
defective products that are identified
before shipment.
External failure costsproducing
defective products that are delivered to
the
The McGraw-Hill
Companies, Inc., 2003
customer.
68
Established in 1988 by the U.S.

government
Designed to promote TQM practices
Recent winners include
Honeywell Federal, Midway USA,
AtlantiCare,
AtlantiCare, Heartland Health, Cargill Corn
Milling, PROPRO-TEC Coating Co., City of Coral
Springs, Premier Inc., Sunny Fresh Foods,
Park Place Lexus, Richland College
Hall
Categories
Leadership
Strategic Planning
Customer & Market Focus
Measurement, Analysis, and Knowledge
Management
Workforce Focus
Process Management
Results
Points
120
85
85
90
85
85
450

Hall
Cost Category
Prevention costs
Applicants are evaluated on:
Leader
Philosophy/Contribution
W. Edwards Deming
14 Points for Management
Joseph M. Juran
Top management
commitment, fitness for use
Armand Feigenbaum
Total Quality Control
Philip B. Crosby
Quality is Free, zero defects

Hall
Table 6.1
Operations managers must deliver

healthy, safe, quality products and
services
Poor quality risks injuries, lawsuits,
recalls, and regulation
Organizations are judged by how they
respond to problems
All stakeholders much be considered
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8/11/2013
ISO 9000 series (Europe/EC)

Common quality standards for products sold in
Europe (even if made in U.S.).
U.S.). The standard is
being accepted worldwide.

2008 update places greater emphasis on

leadership, and customer requirements and
satisfaction
ISO 14000 series (Europe/EC)

Hall
An approach for integrating quality at all functional

areas and levels within an organization.
Encompasses entire organization, from supplier to
customer.
Stresses a commitment by management to have a
continuing, companywide drive toward excellence in
all aspects of products and services that are
important to the customer.
Focuses on producing high quality goods and
services.

Hall
1. Create consistency of purpose
Core Elements:
Environmental management
Auditing
Performance evaluation
Labeling
Life cycle assessment
Hall
Advantages:
Positive public image and reduced
exposure to liability
Systematic approach to pollution
prevention
Compliance with regulatory requirements
and opportunities for competitive
advantage
2. Lead to promote change

3. Build quality into the product; stop
depending on inspections
4. Build long-term relationships based on
performance instead of awarding
business on price
5. Continuously improve product, quality,
and service
Hall
Table 6.2
6. Start training
7. Emphasize leadership
8. Drive out fear
9. Break down barriers between
departments
10. Stop haranguing workers
11. Support, help, and improve
Reduction in multiple audits

Hall

Hall
Table 6.2
8/11/2013
12. Remove barriers to pride in work
Successful Implementation of TQM

o Requires total integration of TQM into dayday-toto-day
13. Institute education and selfimprovement
operations.
Causes of TQM Implementation Failures
14. Put everyone to work on the

transformation
o Lack of focus on strategic planning and core
competencies
o Obsolete, outdated organizational cultures.
Table 6.2

Hall
Management 4e
Leadership
Lack of a companycompany-wide definition of quality.

Lack of a formalized strategic plan for change.
Lack of a customer focus.
Poor interinter-organizational communication.
Lack of real employee empowerment.
Lack of employee trust in senior management.
View of the quality program as a quick fix.
Drive for shortshort-term financial results.
Politics and turf issues.
o Top management vision, planning and support
Employee involvement
o All employees assume responsibility for inspecting the
quality of their work.

Product/Process Excellence
o Involves product design quality and monitoring the
process for continuous improvement.

PokaPoka-yokes are devices that prevent defect products
from being produced..
Management 4e

620
Continuous Improvement
Management 4e
1.
o A concept that recognizes that quality improvement is a
journey with no end and that there is a need for continually

looking for new approaches for improving quality.
Customer Focus on Fitness for Use
o Design quality
Specific characteristics of a product that determine its

value in the marketplace.
o Conformance quality
The degree to which a product meets its design

specifications.
Management 4e

622

621
2.
3.
4.
5.
6.
7.

623
Continuous improvement
(Kaizen)
Six Sigma
Employee empowerment
Benchmarking
JustJust-inin-time (JIT)
Taguchi concepts
Knowledge of TQM tools

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8/11/2013
Lower limits
Represents continual improvement of all

processes (never
process)
(never ending process)
Involves all operations and work centers
including suppliers and customers
People, Equipment, Materials, Procedures
The end goal is perfection,

perfection, which is never
achieved but always sought
Upper limits
Two meanings
2,700 defects/million
Statistical definition of a process that is

3.4 defects/million
99.9997% capable, 3.4 defects per
million opportunities (DPMO)
A program designed to reduce defects,
lower costs, and improveMean
customer
satisfaction
3
3
6
6
Figure 6.4

Hall

Hall
Originally developed by Motorola,

adopted and enhanced by Honeywell
and GE
4. Act
1.Plan
1.Plan
Implement the Identify the pattern
plan document and make a plan
Highly structured approach to process

improvement
3. Check
Is the plan
working?
A strategy
2. Do
Test the plan
A discipline - DMAIC
Figure 6.3

Hall
Two meanings
Statistical definition of a process that is
99.9997% capable, 3.4 defects per
million opportunities (DPMO)
A program designed to reduce defects,
lower costs, and improve customer
satisfaction

Hall

Hall
1. Define critical outputs

and identify gaps for
improvement
DMAIC Approach
2. Measure the work and

collect process data
3. Analyze the data
4. Improve the process
5. Control the new process to make
sure new performance is
maintained
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8/11/2013
Emphasize defects per million opportunities as

a standard metric
Provide extensive training
Focus on corporate sponsor support
(Champions)
Create qualified process improvement experts
(Black Belts, Green Belts, etc.)
Set stretch objectives
This cannot be accomplished without a major commitment from top
level management
Hall
Getting employees involved in product and

process improvements
Selecting best practices to use as a standard

for performance
1. Determine what to
benchmark
2. Form a benchmark team
3. Identify benchmarking partners
4. Collect and analyze benchmarking
information
5. Take action to match or exceed the
benchmark
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Best Practice
Justification
Make it easy for clients

to complain
It is free market research
Respond quickly to
complaints
It adds customers and loyalty
Build communication networks

that include employees
Resolve complaints on
first contact
It reduces cost
Develop open, supportive supervisors
Use computers to
manage complaints
Discover trends, share them, and

align your services
Recruit the best for

customer service jobs
It should be part of formal training

and career advancement
85% of quality problems are due

to process and material
Techniques
Move responsibility to employees

Build a highhigh-morale organization
Create formal team structures
Hall
Group of employees who meet

regularly to solve problems

Hall
Table 6.3
Relationship to quality:
Trained in planning, problem solving,

and statistical methods
JIT cuts the cost of quality
Often led by a facilitator
Better quality means less inventory

and better, easiereasier-toto-employ JIT
system
Very effective when done properly

Hall
JIT improves quality

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8/11/2013
Pull system of production scheduling

including supply management
Production only when signaled
Engineering and experimental design

methods to improve product and process
design
Identify key component and process
variables affecting product variation
Allows reduced inventory levels

Inventory costs money and hides process and
material problems
Encourages improved process and product

quality
Taguchi Concepts
Quality robustness
Quality loss function
TargetTarget-oriented quality

Hall

Hall
Ability to produce products uniformly in

adverse manufacturing and
environmental conditions
Work in process
inventory level
(hides problems)
Unreliable
Vendors
Scrap
Remove the effects of adverse conditions

Small variations in materials and process
do not destroy product quality
Capacity
Imbalances

Hall
2011 Pearson Education, Inc. publishing as Prentice

Hall
Shows that costs increase as the

product moves away from what the
customer wants
Reducing inventory reveals

problems so they can be solved
Costs include customer

dissatisfaction, warranty
and service, internal
scrap and repair, and costs to society
Unreliable
Vendors
Hall
Scrap
Capacity
Imbalances
Traditional conformance specifications

are too simplistic
Hall
8/11/2013
L = D2C
High loss
where
L = loss to society
D = distance from target
value
C = cost of deviation
Unacceptable
Loss (to
producing
organization,
customer, and
society)
Poor
Fair
Good
Best
Low loss
yields more product in
the best category
brings product toward the
target value
Frequency
(a) Check Sheet: An organized method of recording data
Defect
A
B
1
///
//
2
/
/
//
3
/
4
/
/
Hour
5
/
6
/
7
///
//
8
/
///
//
////
ConformanceConformance-oriented
quality keeps products
within 3 standard
deviations
Lower
Hall
Target
Specification
Upper
Figure 6.5
Tools for Generating Ideas
Figure 6.6

Hall
(b) Scatter Diagram: A graph of the value of one variable vs.

another variable
Check sheets
CauseCause-andand-effect diagrams
Tools to Organize the Data

Pareto charts
Productivity
Scatter diagrams
Flowcharts
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Tools for Identifying Problems
Absenteeism
Figure 6.6

Hall
(c) Cause
Cause--andand-Effect Diagram: A tool that identifies process
elements (causes) that might effect an outcome
Histogram
Statistical process control chart
Cause
Materials
Methods
Effect
Manpower
Hall

Hall
Machinery
Figure 6.6
8/11/2013
Data for October
Method
(shooting process)
Grain/Feel
(grip)
60
Bend knees
Air pressure
Hand position
Lopsidedness
Balance
FollowFollow-through
Training
Missed
freefree-throws
Rim size
Conditioning
Rim height
Motivation
Consistency
Backboard
stability
Rim alignment
Concentration

Hall
Number of
occurrences
30
20
12
10
CheckCheck-in
16%
Pool hours
5%
Minibar
4%
Misc.
3%
Causes and percent of the total
Figure 6.7
Hall
(e) Flowchart (Process Diagram): A chart that describes the steps in a

process
Passenger processing at gate
Aircraft late to gate

Other
72
40
Room svc
72%
Personnel
Equipment
54
50
Machine
(hoop &
backboard)
Manpower
(shooter)
100
93
88
70
Aiming point
Frequency (number)
Size of ball
Cumulative percent
Material
(ball)
Late cabin cleaners
Mechanical failures
Unavailable cockpit crew
Weather
Late cabin crew
Air traffic delays
Late baggage to aircraft
Poor announcement of departures
Late fuel
Weight/balance sheet late
Late food service
Delayed check-in procedure
Contractor not provided

updated schedule
Materials
Delayed
flight
departures
Waiting for late passengers
Procedures
To Accompany Krajewski &

Ritzman Operations
Figure 4.11
Source:
Adapted from
D. Daryl Wyckoff,
Management:
Strategy
and New Tools for Achieving Service Quality. The Cornell Hotel and Restaurant
Administration Quarterly, November 1984, pg. 89. 1984 Cornell H.R.A. Quarterly. Used by permission. All rights reserved.
Analysis, Seventh Edition

2004 Prentice Hall, Inc. All
(d) Pareto Chart: A graph to identify and plot problems or defects in

descending order of frequency
MRI Flowchart
1.
2.
3.
4.
5.
6.
Physician schedules MRI

Patient taken to MRI
Patient signs in
Patient is prepped
Technician carries out MRI
Technician inspects film
7.
8.
9.
10.
If unsatisfactory, repeat
Patient taken back to room
MRI read by radiologist
MRI report transferred to
physician
11. Patient and physician discuss
Percent
Frequency
Figure 6.6

Hall
8
1
80%
11
9
A
Hall
10
20%
Figure 6.6

Hall
8/11/2013
(f)
Histogram: A distribution showing the frequency of occurrences of a

variable
Frequency
Distribution
Plots the percent of free throws missed

20%
Upper control limit
10%
Coachs target value
0%
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
Lower control limit
Game number
Repair time (minutes)

Figure 6.6

Hall
(g) Statistical Process Control Chart: A chart with time on the horizontal
axis to plot values of a statistic
Figure 6.8
Hall
Involves examining items to see if an item is

good or defective
Detect a defective product
Upper control limit
Does not correct deficiencies in process or

product
It is expensive
Target value
Issues
Lower control limit
When to inspect
Where in process to inspect
Time
Hall
Figure 6.6
Uses statistics and control charts to tell

when to take corrective action

Hall
1. At the suppliers plant while the supplier is

producing
Drives process improvement
2. At your facility upon receipt of goods from the

supplier
Four key steps
3. Before costly or irreversible processes
Measure the process

When a change is indicated, find the assignable cause
4. During the stepstep-byby-step production process
Eliminate or incorporate the cause
5. When production or service is complete
Restart the revised process
6. Before delivery to your customer

7. At the point of customer contact

Hall

Hall
10
8/11/2013
Many problems
Worker fatigue
Measurement error
Process variability
Cannot inspect quality into a product

Robust design, empowered
employees, and sound processes are
better solutions
Hall
The Operations Manager must

recognize:
1. The tangible component of services
is important
2. The service process is important
Reliability
Consistency of performance and dependability
Responsiveness
Willingness or readiness of employees
Competence
Required skills and knowledge
Access
Approachability and ease of contact
Courtesy
Politeness, respect, consideration, friendliness
Communication
Keeping customers informed
Credibility
Trustworthiness, believability, honesty
Security
Freedom from danger, risk, or doubt
Understanding/
knowing the customer
Understand the customers needs
Tangibles
Physical evidence of the service

Hall
Managers should have a plan for when

services fail
Marriotts LEARN routine
Listen
Empathize
3. The service is judged against the

customers expectations
Apologize
4. Exceptions will occur
Notify

Hall
Table 6.5
React

Hall
Also known as source control

The next step in the process is your
customer
Ensure perfect product
to your customer
PokaPoka-yoke is the concept of foolproof devices or techniques designed
to pass only acceptable product

Hall

Hall
11
8/11/2013
Organization
What is
Inspected
Jones Law Office Receptionist

performance
Standard
Is phone answered by the
second ring
Hard Rock Hotel
Arnold Palmer
Hospital

Hall
Standard
Busboy
Serves water and bread

within 1 minute
Accurate, timely, and

correct format
Busboy
Clears all entre items and

crumbs prior to dessert
Attorney
Promptness in returning
calls
Waiter
Knows and suggest

specials, desserts
Table 6.4
What is
Inspected
What is
Inspected
Organization
Reception
desk
Use customers name
Doorman
Greet guest in less than 30

seconds
Room
All lights working, spotless

bathroom
Minibar
Restocked and charges

accurately posted to bill
Table 6.4
What is
Inspected
Table 6.4

Hall
Standard

Hall
Organization
Olive Garden
Restaurant
Billing

Hall
Organization
What is
Inspected
Organization
Standard
Nordstrom
Department
Store
Standard
Display areas Attractive, well-organized,

stocked, good lighting
Stockrooms
Rotation of goods,
organized, clean
Salesclerks
Neat, courteous, very

knowledgeable
Table 6.4

Hall
Japanese English
Term
Equivalent
Meaning in Japanese
Context
Seiri
Tidiness
Throw away all rubbish and unrelated

materials in the workplace
Billing
Accurate, timely, and

correct format
Pharmacy
Prescription accuracy,
inventory accuracy
Seiton
Orderliness
Set everything in proper place for

quick retrieval and storage
Lab
Audit for lab-test accuracy

Charts immediately
updated
Seiso
Cleanliness
Nurses
Clean the workplace; everyone

should be a janitor
Admissions
Data entered correctly and

completely
Seiketsu
Standardization
Standardize the way of maintaining

cleanliness
Shitsuke
Discipline
Practice 'Five S' daily - make it a way

of life; this also means 'commitment'
Table 6.4
12
8/11/2013
Checklists
Attributes
Items are either good or bad, acceptable or
unacceptable
Does not address degree of failure
Headliner Defects
Defect type
Variables
Tally
Total
A. Tears in fabric
Measures dimensions such as weight,
B. Discolored fabric
speed, height, or strength

Falls within an acceptable range
C. Broken fiber board
D. Ragged edges
Use different statistical techniques
Total
Ritzman Operations

Hall
Management:
Figure
4.12 Strategy and

Tools for Improving Quality
Checklists
Headliner Defects
Defect type

Step 1Checklist
Step 2Pareto chart
Step 3Cause-and-effect

diagram
Step 4Bar chart
Tally
Total
A. Tears in fabric
//
D. Ragged edges
Total

Ritzman Operations
Management: Strategy and

Ritzman Operations
Management:
Figure
4.12 Strategy and

Checklists
Checklists
Headliner Defects
Headliner Defects
Defect type
Tally
Defect type
A. Tears in fabric
A. Tears in fabric
Total
//
D. Ragged edges
D. Ragged edges
Total
Total
Ritzman Operations

Ritzman Operations
Management:
Figure
4.12 Strategy and
Management:
Figure
4.12 Strategy and

Tally
Total

13
8/11/2013
Checklists
Cause-and-Effect Diagram
Headliner Defects
Defect type
People
Tally
Total
Materials
Training
Out of specification
A. Tears in fabric
Absenteeism
Not available
Communication
D. Ragged edges
//
Humidity
Broken
fiber board
maintenance
Machine
Machine speed
Schedule changes
Wrong setup
Total
Other
Ritzman Operations
Management:
Figure
4.12 Strategy and
Process

Ritzman Operations
Management:
Figure
4.12 Strategy and
Bar Chart
Headliner Defects
Tally
Total
A. Tears in fabric
Defect type
////
///
D. Ragged edges
//// //// //// ////

//// //// //// /
//// //
Total
36
7
50

Ritzman Operations
Management:
Figure
4.12 Strategy and
20
Number of broken fiber boards
Checklists
15
10
First

Ritzman Operations
Management:
Figure
4.12 Strategy and
Pareto Chart
50
100
Second
Shift
Third
Entrance
Buffer
Work Station
Buffer
Door
Line
Teller
Served Customers
Number of defects
80
30
20
10

Ritzman Operations
Management:
Figure
4.12 Strategy and

60

D
40
20
Work Station
Teller 1
Entrance
Buffer
Buffer
Door
Line
Served Customers
Work Station
Teller 2
B
0
Defect type
Cumulative percentage
(a) Flowchart for one-teller bank
40

Flowchart for
Ritzman(b)
Operations
two-teller bank
Figure 4.13
14
8/11/2013
Element
Element
Types
Names
Entrance(s)
Door
Buffer(s)
Line
Statistics
Overall
Means
Service level
0.90
Mean inventory
4.47
Mean cycle time
11.04

Ritzman Operations
Figure
4.14
15

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8/11/2013

When you complete this chapter you should be able to:

1. Define quality and TQM

The totality of features and

2. Describe the ISO international quality

American Society for Quality

2011 Pearson Education,

2011 Pearson Education,

Sales Gains via

Reduced Costs via

Lower warranty costs

o Understanding the customer

2011 Pearson Education,

The McGraw-Hill Companies, Inc., 2003

Costs associated with the development of

Established in 1988 by the U.S.

2011 Pearson Education,

Applicants are evaluated on:

14 Points for Management

Total Quality Control

Quality is Free, zero defects

2011 Pearson Education,

Operations managers must deliver

ISO 9000 series (Europe/EC)

2008 update places greater emphasis on

ISO 14000 series (Europe/EC)

An approach for integrating quality at all functional

2011 Pearson Education,

1. Create consistency of purpose

2. Lead to promote change

Reduction in multiple audits

2011 Pearson Education,

12. Remove barriers to pride in work

Successful Implementation of TQM

13. Institute education and selfimprovement

14. Put everyone to work on the

o Lack of focus on strategic planning and core

2011 Pearson Education,

Lack of a companycompany-wide definition of quality.

o Top management vision, planning and support

quality of their work.

process for continuous improvement.

The McGraw-Hill Companies, Inc., 2003

o A concept that recognizes that quality improvement is a

journey with no end and that there is a need for continually

Specific characteristics of a product that determine its

The degree to which a product meets its design

The McGraw-Hill Companies, Inc., 2003

The McGraw-Hill Companies, Inc., 2003

The McGraw-Hill Companies, Inc., 2003

2011 Pearson Education,

Represents continual improvement of all

The end goal is perfection,

Statistical definition of a process that is

2011 Pearson Education,

2011 Pearson Education,

Originally developed by Motorola,

Highly structured approach to process

2011 Pearson Education,

2011 Pearson Education,

2011 Pearson Education,

1. Define critical outputs

2. Measure the work and

Emphasize defects per million opportunities as

Quality Management & TQM-modified

Quality Management & TQM-modified