Lecture Fundamentals of operations management (4/e): Chapter 8 - Davis, Aquilano, Chase

Chapter 6 Quality management, after studying this chapter you will be able to: Introduce those individuals, often referred to as quality gurus, who have played a significant role in the evolution of quality management, and describe their specific contributions; identify the different dimensions of quality as they relate to both good and services; define the various elements that comprise the cost of quality;....

DAVIS F   O   U   R   T   H       E   D   I   T   I   O   N AQUILANO CHASE chapter Quality Management PowerPoint Presentation by Charlie Cook © The McGraw-Hill Companies, Inc., 2003 Chapter Objectives Chapter Objectives • Introduce those individuals, often referred to as quality gurus, who have played a significant role in the evolution of quality management, and describe their specific contributions • Identify the different dimensions of quality as they relate to both good and services • Define the various elements that comprise the cost of quality • Describe the more successful management quality initiatives such as total quality management (TQM) © The McGraw­Hill  and Six Sigma Fundamentals of Operations  Companies, Inc., 2003 Management 4e  6–2 Chapter Objectives (cont’d) Chapter Objectives (cont’d) • Present the various quality awards and recognition that promote and encourage firms to provide high quality goods and services Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 6–3 Managerial Issues Managerial Issues • Defining quality from the customer’s perspective • Constant increases in the level of quality of today’s goods and services • Difficulties encountered in managing service quality • Identifying quality dimensions that are most important to customers • Avoiding the costs of poor quality products and services • Customer loyalty that is increasingly based on quality FundamentalsofOperations Management4e âTheMcGrawưHill Companies,Inc.,2003 64 TheQualityGurus TheQualityGurus ã Quality Gurus –Individuals who have been identified as making a significant contribution to improving the quality of goods and services • Walter A Shewhart • W Edwards Deming • Joseph M Juran • Armand Feigenbaum • Philip Crosby • Genichi Taguchi Fundamentals of Operations  Management4e âTheMcGrawưHill Companies,Inc.,2003 65 TheQualityGurus(contd) TheQualityGurus(contd) ã Walter A Shewhart –Statistician at Bell Laboratories • Developed statistical control process methods to distinguish between random and nonrandom variation in industrial processes to keep processes under control • Developed the “plan-do-check-act” (PDCA) cycle that emphasizes the need for continuous improvement • Strongly influenced Deming and Juran Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 6–6 Shewhart’s Plan­Do­Check­Act (PDCA) Cycle Shewhart’s Plan­Do­Check­Act (PDCA) Cycle Fundamentals of Operations  Management 4e  Source: Mary Walton, Deming Management at Work (New York: Perigree Books, 1991), p 22 © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.2 6–7 The Quality Gurus (cont’d) The Quality Gurus (cont’d) • W Edwards Deming –Advocated Statistical Process Control (SPC) • Methods which signal shifts in a process that will likely lead to products and/or services not meeting customer requirements • Emphasized an overall organizational approach to managing quality • Demonstrated that quality products are less costly than poor quality products • Identified 14 points critical for improving quality The Deming Prize âTheMcGrawưHill ã Highest award for industrial excellence in Japan Fundamentals of Operations  Companies, Inc., 2003 Management 4e  6–8 Deming’s 14­Point Program  for Improving Quality Deming’s 14­Point Program  for Improving Quality Fundamentals of Operations  Management 4e  Source: Mary Walton, Deming Management at Work (New York: Perigree Books, 1991), pp 17–18 © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.3 6–9 The Quality Gurus (cont’d) The Quality Gurus (cont’d) • Joseph M Juran –Emphasized the importance of producing quality products through an approach focused on quality planning, control, and improvement –Defined product quality as “fitness for use” as viewed by the customer in: • Quality of design • Quality of conformance • Availability • Safety • Field use –Categorized the cost of quality as: • Cost of prevention ã Cost of detection/appraisal âTheMcGrawưHill FundamentalsofOperations Companies,Inc.,2003 ã Cost of failure Management 4e  6–10 Six Sigma Six Sigma • Goals of Six Sigma –To reduce process variation to the point where only 3.4 defects per million are produced by a process that involves a high volume of manufactured units or service transactions on a continuous basis –Provide a framework and methodologies to analyze and evaluate business processes and reduce waste • Successful Implementation –Training and selection of the workforce © The McGraw­Hill  Fundamentals of Operations  Companies, Inc., 2003 –Impressive cost savings of program Management 4e  6–28 Quality Performance Levels Quality Performance Levels for Various Processes for Various Processes Fundamentals of Operations  Management 4e  Source: Dave Harold, “Designing for Six Sigma Capability,” Control Engineering, January, 1999 © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.7 6–29 Recognizing and Rewarding Quality Recognizing and Rewarding Quality • Promotion of High Quality Goods and Services –Deming Prize (Japan) –European Quality Award (European Union) –Malcolm Baldrige National Quality Award (MBNQA) (United States) –ISO9000 certification Fundamentals of Operations  Management4e âTheMcGrawưHill Companies,Inc.,2003 630 MalcolmBaldrigeNationalQualityAward MalcolmBaldrigeNationalQualityAward ã Background Established in 1987 to recognize total quality management in American industry • Purpose –Stimulate U.S companies to improve quality and productivity –Establish guidelines and criteria to evaluate quality –Recognize those firms that improve their quality –Provide guidance in how to achieve quality © The McGraw­Hill  Fundamentals of Operations  Companies, Inc., 2003 Management 4e  6–31 Malcolm Baldrige Malcolm Baldrige  National Quality Award Winners  National Quality Award Winners Fundamentals of Operations  Management 4e  Source: National Institute of Science and Technology (NIST) website: www.quality.nist.gov © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.8a 6–32 Malcolm Baldrige Malcolm Baldrige  National Quality Award Winners  National Quality Award Winners Fundamentals of Operations  Management 4e  Source: National Institute of Science and Technology (NIST) website: www.quality.nist.gov © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.8b 6–33 The Integrated Framework The Integrated Framework of the Baldrige Award Criteria of the Baldrige Award Criteria Fundamentals of Operations  Management 4e  Source: 1997 Criteria for Performance Excellence, U.S Dept of Commerce, National Institute of Standards and Technology © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.9 6–34 2001 Award Criteria 2001 Award Criteria—Item Listing —Item Listing Fundamentals of Operations  Management 4e  Source: 2001 Criteria for Performance Excellence, U.S Dept of Commerce, National Institute of Standards and Technology © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.10 6–35 Benefits of the Baldrige Quality Criteria Benefits of the Baldrige Quality Criteria • Baldrige guidelines can be used to: –Help define and design a total quality system –Evaluate ongoing internal relationships among department, divisions, and functional units within an organization –Assess and assist outside suppliers of goods and services to a company –Assess customer satisfaction Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 6–36 ISO 9000 ISO 9000 • The International Organization for Standardization (ISO) • ISO 9000 Series of Quality Standards –An international set of standards for documenting the processes that an organization uses to produce its goods and services ISO 9001:2000 Quality Management Systems: Requirements ISO 9004:2000 Quality Management Systems: Guidelines for Performance Improvement ISO 9000:2000 Quality Management Systems: © The McGraw­Hill  Fundamentals and Standards Fundamentals of Operations  Management 4e  Companies, Inc., 2003 6–37 ISO 9000 (cont’d) ISO 9000 (cont’d) • ISO 9000 Certification –First party certification—A firm audits itself –Second party certification—Customers audit their suppliers –Third party assessment—Company is assessed by outside registrars from ASQ’s Registration Accreditation Board (RAB) –ISO 9000/Q90 Registration Process • Application to registrar • Preliminary assessment • Full audit Fundamentals of Operations  Management4e âTheMcGrawưHill Companies,Inc.,2003 638 EuropeanQualityAward(EQA) EuropeanQualityAward(EQA) ã European Foundation for Quality Management (EFQM) –Stimulate and assist European organizations in quality improvement activities –Support managers in the adoption of TQM • EFQM Excellence Model –A non-prescriptive frame work based on nine criteria that recognizes that there are many approaches to achieving sustainable excellence Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 6–39 Overview of the EFQM Excellence Model Overview of the EFQM Excellence Model Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.11 6–40 Recent Winners of the European Quality Award Recent Winners of the European Quality Award Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.12 6–41 The Deming Prize The Deming Prize • Deming Prize –Initiated by Japan in 1951 to recognize the importance of high quality products –Name after W Edwards Deming –Categories of the Deming Prize: • The Deming Prize for Individuals • The Deming Application Prize • The Quality Control Award for Operations/ Business Units Fundamentals of Operations  Management 4e  © The McGraw­Hill  Companies, Inc., 2003 6–42 ... Japan Fundamentals? ?of? ?Operations? ? Companies, Inc., 2003 Management? ?4e  6? ?8 Deming’s 14­Point Program  for Improving Quality Deming’s 14­Point Program  for Improving Quality Fundamentals? ?of? ?Operations? ?... (Perception of Performance) – (Expectation) © The McGraw­Hill  Fundamentals? ?of? ?Operations? ? Companies, Inc., 2003 Management? ?4e  6–15 The Cost? ?of? ?Quality The Cost? ?of? ?Quality • Cost of Quality –Framework... McGraw-Hill, 1970), p 60 © The McGraw­Hill  Companies, Inc., 2003 Exhibit 6.4 6–17 Two Views? ?of? ?the Cost? ?of? ?Improved Quality  Two Views? ?of? ?the Cost? ?of? ?Improved Quality  Fundamentals? ?of? ?Operations? ?