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Business leaders and CEOs cite quality as the most important factor in the long-term profitability and success of their firms. The key to foreign competition the concept of value, which is producing quality products at competitive prices.
properly within an expected time frame. Conformance. The degree to which a product meets preestablished standards. Durability. How long the product lasts; its life span before replacement. Serviceability. The ease of getting repairs, the speed of repairs, and the courtesy and competence of the repair person. Aesthetics. How product looks, feels, sounds, smells, or tastes. Safety. Assurance that the customer will not suffer injury or harm from a product. Other Perceptions. Subjective perceptions based on a brand name, advertising, and the like.
Producers Perspective
Consumers Perspective
Production
Marketing
W. Edwards Deming
changed the focus of quality assurance from the technical aspects to more of a managerial philosophy introduced the use of statistical process control His approach to QM advocates continuous improvement of the production process to achieve conformance to specifications and reduce variability
4.Act
Institutionalize improvement; continue the cycle.
1.Plan Identify the problem and develop the plan for improvement.
Joseph M. Juran
focused on strategic quality planning determining the desired product quality level and designing the production process to achieve the quality characteristics of a product. breakthrough solutions
Philip Crosby
identified that cost of poor quality far outweigh the cost of preventing poor quality zero defects
Armand V. Feigenbaum
introduced total quality control to reflect a total commitment effort from management and employees throughout an organization to improve on quality.
7.
8.
Human resources is responsible for hiring employees that have required abilities and skills, and training them for specific job tasks. Management at all levels must implement the product design according to quality specifications, controlling labor, materials, equipment, and processes. Packing, storing, and shipping make sure that highquality products are not damaged en route to the customer. After-sale support (customer service) has the responsibility of providing the customer with good instructions for the products installation and use, with personal assistance if required.
TQM and Customer Satisfaction An important component of any TQM program is the companys ability to measure customer satisfaction. TQM programs require some form of measurement system be place to answer these questions and provide data about the customers level of satisfaction. The most widely used means for measuring customer satisfaction is the customer survey.
Strategic planning also includes a set of programs, or operational plans and policies, to achieve the companys goals. Establishing goals without telling employees how to achieve them will be fruitless. Strategic quality planning includes a mechanism for feedback to adjust, update, and make corrections in the strategic plan Strong leadership is a key to successfully integrating quality into a companys strategic plan. However, strong leadership is not only about making the decision that quality will be an important component of a companys strategy but it is also about creating a company environment that is conducive to quality management.
6. Aesthetics: How the Web site looks. 7. Privacy and Security: does the user feel secure that
the information provided to complete s business transaction is secure, and that any personal information provided will remain private? 8. Domain name: The Web sites unique URL address on the Internet. 9. Human backup: Access via phone or e-mail should be easy to identify, and should exhibit the same quality characteristics as any service. 10. Transaction reliability: The product or service that the customer acquires needs to be delivered in a timely manner and be of good quality when delivered, the payment or billing process must be prompt, secure and error-free.
Appraisal Costs are the costs of measuring, testing, and analyzing materials, parts, products, and the productive process to ensure that product quality specifications are being met.
Examples: Inspection and testing: The costs of testing and inspecting materials, parts, and the product at various stages and at the end of the process. Test equipment costs: The costs of maintaining equipment used in testing the quality characteristics of products. Operator costs: The costs of the time spent by operators to gather data for testing product quality, to make equipment adjustments to maintain quality, and to stop work to assess quality.
External failure costs are incurred after the customer has received a poor-quality product and are primarily related to customer service. Examples: Customer complaint costs: The costs of investigating and satisfactorily responding to a customer complaint resulting from a poor-quality product. Product return costs: The costs of handling and replacing poorquality products returned by the customer. Warranty claims costs: The costs of complying with product warranties. Product liability costs: The litigation costs resulting from product liability and customer injury. Lost sales costs: The costs incurred because customers are dissatisfied with poor-quality products and do not make additional purchases.
base
(100)
$810,400(100)
4,360,000
= 18.58
Productivity is a measure of a companys effectiveness in converting inputs into outputs. It is broadly defined as, Productivity = output/input where, o output is the final product from a service or production process o inputs are the parts, material, labor, capital, and so on that go into the production process.
The H & S Motor Company starts production for a particular type of motor with a steel motor housing. The production process begins with 100 motors each day. The percentage of good motors produced each day averages 80% and the percentage of poorquality motors that can be reworked is 50%. The company wants to know the daily product yield and the effect on productivity if the daily percentage of good-quality motors is increased in to 90%. Solution: Yield = (I) (%G) + (I) (1-%G) (%R) Y = 100 (0.80) + 100 (1-0.80) (0.50) Y = 90 motors If a product quality is increased to 90% of good motors, the yield will be Y = 100 (.90) + 100 (1-.90) (.50) Y = 95 motors A 10 percentage-point increase in quality products results in a 5.5 percent increase in productivity output.
(direct manufacturing cost per unit) (input) Product Cost = + (rework cost per unit) (reworked units) yield or, Product Cost = (Kd) (I) + (Kr) (R) Y where, Kd = direct manufacturing cost per unit I = input Kr = rework cost per unit R = reworked units Y = Yield
The H & S Motor Company has a direct manufacturing cost per unit $30, and motors that are of inferior quality can be reworked for $12 per unit. 100 motors are produced daily, 80% (on average) are of good quality and 20% are defective. Of the defective motors, half can be reworked to yield good-quality products. Through its quality-management program, the company has discovered a problem in its production process that, when corrected (at a minimum cost), will increase the good-quality products to 90%. The company wants to assess the impact on the direct cost per unit of improvement in product quality. Solution: The original manufacturing cost per motor is Product Cost = (Kd) (I) + (Kr) (R) Y Product Cost = ($30) (100) + ($12) (10) 90 motors Product Cost = $34.67 per motor The manufacturing cost per motor with the quality improvement is Product Cost = ($30) (100) + ($12)(5) 95 motors Product Cost = $32.21 per motor
To achieve high quality, it is absolutely necessary that management and employees cooperate and that each have an equally strong commitment to quality. Cooperation and commitment are not possible when management dictates quality to employees. Cooperation in a quality-management program is achieved when employees are allowed to participate in the quality-management process- that is, when they are given a voice. In participative problem solving employees are directly involved in the quality management process.
Problem Identification List alternatives Consensus Brainstorming Problem Analysis Cause and Effect Data collection And analysis
Employee Suggestion
The simple suggestion box is an example of a way to include employees in a quality improvement as individuals, not as part of a group. A key to any type of employee suggestion program is a strong commitment and reinforcement from management at all levels. Equally important, employees must be sufficiently trained to identify quality problems so that can make good suggestions.
Pareto Analysis
A diagram for tallying the percentage of defects resulting from different causes to identify major quality problems.
A B C D E
Flow Chart
Step 1 2 3 4 5 Process A diagram of the steps in a process; helps focus on where in a process a quality problem might exist.
Check Sheet
Item 1 2 s Dirt Old 3 4 A fact-finding tool for tallying the number of defects for a list of previously identified problem causes.
Temp . Fault
Histogram
A diagram showing the frequency or data related to a quality problem.
Scatter Diagram
A graph showing the relationship between two variables in a process; identifies a pattern that may cause a quality problem.
Cause-and-Effect Diagram
Measurement Human Machine
Quality Problem
Also called a fishbone diagram; a graph of the causes of a quality problem divided into categories.
Environment
Materials
Process
ISO 9000
ISO is not an acronym for the International Organization for Standardization; it is a word, ISO, derive from the Greek Isos meaning equal. The purpose of ISO is to facilitate global consensus agreements on international quality standards. It has resulted in a system for certifying suppliers to make sure they meet internationally accepted standards for quality management.
ISO 900:2000, Quality Management Systems Fundamentals and Vocabulary, is the starting point for understanding the standards. It defines the fundamental terms and definitions used in the ISO 9000 family of standards, guidelines, and technical reports. ISO 9001:2000, Quality Management Systems Requirements, is the requirement standard a company uses to assess its ability to meet customer and applicable regulatory requirements in order to achieve customer satisfaction. ISO 9001:2000 is the only standard in the ISO 9000 family that carries thirdparty certification. A third-party company called a registrar is the only authorized entity that can award ISO 9000 certification. ISO 9004:2000, Quality Management Systems Guidelines for Performance Improvements, provides detailed guidance to a company for the continual improvement of its quality-management system in order to achieve and sustain customer satisfaction.