22 Dec 07

• HMF
 Cost of Quality

• Quality Costs are those categories of

costs that are associated with producing,
identifying, avoiding, or repairing products
that do not meet requirements.
• Quality has dramatic cost implications of;
– Quality control costs
• Prevention costs
• Appraisal costs
– Quality failure costs
• Internal failure costs
• External failure costs
Cost of Quality – 4 Categories

• Early detection/prevention is less costly

Seven Problem Solving Tools

• Cause-and-Effect Diagrams
• Flowcharts
• Checklists
• Control Charts
• Scatter Diagrams
• Pareto Analysis
• Histograms
 Cause-and-Effect Diagrams
• Called Fishbone Diagram
• Focused on solving identified quality problem
 Cause-and-Effect Diagram
(Fishbone)
FACTOR FACTOR
Sub-Factors
Sub-Factors

CONCERN
Sub-Factors

Sub-Factors

FACTOR FACTOR
 Flowcharts
• Used to document the detailed steps in a
process
• Often the first step in Process Re-Engineering
 Checklist

• Simple data check-off sheet designed to identify

type of quality problems at each work station; per
shift, per machine, per operator
 Control Charts

• Important tool used in Statistical Process

Control
• The UCL and LCL are calculated limits used to
show when process is in or out of control
 Scatter Diagrams
• A graph that shows how two variables are
related to one another
• Data can be used in a regression analysis to
establish equation for the relationship
 Pareto Analysis
• Technique that displays the degree of importance for each element
• Named after the 19th century Italian economist
• Often called the 80-20 Rule
• Principle is that quality problems are the result of only a few
problems e.g. 80% of the problems caused by 20% of causes
 Pareto Chart
MAGNITUDE
OF
CONCERN
VITAL FEW

TRIVIAL MANY

A B C D E

CONCERN CATEGORIES
 Histograms
• A chart that shows the frequency distribution of
observed values of a variable like service time
at a bank drive-up window

• Displays whether the distribution is symmetrical

(normal) or skewed
 Ol d v s. TQM
Approach
Quality Element Previous Approach TQM Approach

Definition Product-oriented Customer-oriented

Priorities 2nd to service and cost Equals of service and cost

Decisions Short-term Long-term

Emphasis Detection Prevention
Errors Operations System
Responsibility Quality control Everyone
Problem Solving Managers Teams

Procurement Price Life-cycle costs,partnership

Manager’s Role Plan, assign, control, Delegate, coach, facilitate

and enforce and mentor
 Four Steps to TQM:Kaizen
• Stage 1 : Kaizen

• A system of continuous improvement.

• Develop a process that is visible,
repeatable and measurable.
 Four Steps to TQM:Atarimae
Hinshitsu
• Stage 2 : Atarimae Hinshitsu
• Possible only after Kaizen is reached.
• Addresses intangibles that affect the
processes.
• Work to optimise the environment for
success.
 Four Steps to TQM:Atarimae
Hinshitsu
• Example:
• –We document a process so we can consistently
repeat it (Kaizen)
• Then we find that the company reorganizes so
frequently that we have high staff turnover
• High turnover means that we are constantly
training new people on how to perform the
process. This is Atarimae Hinshitsu.
 Four Steps to TQM: Kansei
• Stage 3: Kansei literally means “the five
senses”.
• It concentrates on the user of the product.
• By examining how a user applies the
product, kansei leads to improvements in
the product itself.
 Four Steps to TQM: Miryokuteki
Hinshitsu
• Stage 4: Miryokuteki Hinshitsu broadens
the management concern past the
immediate product.
• We look for opportunities in related areas
by watching how the product is used in the
workplace.
• Are there other industries/markets for our
software ?
 Steps to Successful TQM
Implementation
1. Build organizational commitment to quality
(Priya, Rohan , Dheeraj and Bikash)
2. Focus on the customer (Rozi,Tiwary)
3. Find ways to measure quality (Komal closing
the window, Tiwary looking outside, Niharika
and Anupama Duo,Pen-drives and increase in
people surfing)
4. Set goals and create incentives (Logical
Deductions and product differentiations)
5. Solicit input from employees (Menal and
Saurabh and Priya)
 Steps to Successful TQM
Implementation
1. Identify defects and trace to source
(Management or the Students)
2. Introduce just-in-time (JIT) inventory
systems ( Time Management in class)
3. Work closely with suppliers(Raswinder)
4. Design for ease of production (lectures
availability)
5. Break down barriers between functions
(Tiwary and Bikash)