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LESSON 8: QUALITY MANAGEMENT AND
INTERNATIONAL STANDARDS
QUALITY AND STRATEGY
An operations manager’s objective is to build a total quality management system that identi 9 ies and satis 9 ies customer needs. Managing quality supports differentiation strategy, low cost leadership strategy and response strategy. Quality helps 9 irms increase sales and reduce costs.Building a quality organization is a demanding task. QUALITY de+inition: The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs. IMPLICATIONS OF QUALITY:
- Company reputation: -Perception of new products -Perception of Employment practices u Supplier relations
- Product liability -Reduce risk
- Global implications -Improved ability to compete
Costs of quality
Prevention cost: cost associated with reducing the potential for defective parts. Eg: training Appraisal cost: cost related to evaluating products, parts, and services. Eg: testing Internal failure: costs that result from producing defective parts or service before delivery. Eg. Rework External costs: costs that occur after delivery of defective parts or services. Eg. Returned goods.
Ethics and quality management
- 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 must be considered
INTERNATIONAL QUALITY STANDARDS
ISO 9000 series (Europe/EC)
- Common quality standards for products sold in Europe (even if made in U.S.)
- International Organization for Standardisation
- World uniting around a single standard
- 2008 update places greater emphasis on leadership and customer requirements and satisfaction
- Establish quality procedures, detailed documentation, work instructions and recordkeeping.
ISO 14000 series (Europe/EC)
- Continuing developing it with environmental standards: Environmental management, auditing, performance evaluation, labeling and life cycle assessment.
ISO 14000 Environmental Standard
- Environmental management
- Auditing
- Performance evaluation
- Labeling
- Life cycle assessment
- Positive public image and reduced exposure to liability
- Systematic approach to pollution prevention
- Compliance with regulatory requirements and opportunities for competitive advantage
- Reduction in multiple audits
TOTAL QUALITY MANAGEMENT
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.
Deming’s Fourteen Points
- Create consistency of purpose
- Lead to promote change
- Build quality into the product; stop depending on inspections
- Build long-term relationships based on performance instead of awarding business on price
- Continuously improve product, quality, and service
- Start training
- Emphasize leadership
- Drive out fear
- Break down barriers between departments
3. Employee empowerment Getting employees involved in product and process improvements. 85% of quality problems are due to process and material. Techniques: - Build communication networks that include employees - Develop open, supportive supervisors u Move responsibility to employees - Build a high-morale organization - Create formal team structures Quality circles: Group of employees who meet regularly to solve problems. Trained in planning, problem solving, and statistical methods. Often led by a facilitator. Very effective when done properly 4. Benchmarking 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 5. Just-in-time (JIT) JIT cuts the cost of quality but improves quality. Better quality means less inventory and better, easier- to-employ JIT system. ‘Pull’ system of production scheduling including supply management. (Production only when signaled). Allows reduced inventory levels, inventory costs money and hides process and material problems. Encourages improved process and product quality. 6. Taguchi concepts Engineering and experimental design methods to improve product and process design. Identify key component and process variables affecting product variation Taguchi Concepts - Quality robustness: Ability to produce products uniformly in adverse manufacturing and environmental conditions. Remove the effects of adverse conditions. Small variations in materials and process do not destroy product quality - Quality loss function: Shows that costs increase as the product moves away from what the customer wants. Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society. Traditional conformance speci 9 ications are too simplistic - Target-oriented quality.
7. Knowledge of TQM tools Tools for Generating Ideas - Check sheets: An organized method of recording data - Scatter diagrams: A graph of the value of one variable vs. another variable. Relationship between two variables. - Cause-and-effect diagrams: A tool that identi 9 ies process elements (causes) that might effect an outcome. Also called Fish- bone chart or Ishikawa diagram. 4 categories that are causes. Tools to Organize the Data - Pareto charts: A graph to identify and plot problems or defects in descending order of frequency
Pareto charts
Flow charts
Statistical process control (SPC)
Uses statistics and control charts to tell when to take corrective action. Drives process improvement. There are four key steps: measure the process, when a change is indicated 9 ind the assignable cause, eliminate or incorporate the cause and restart the revised process.
The objective of a process control system is to provide a statistical signal when assignable causes of variation are present Types of data: Natural Variations
- Also called common causes
- Affect virtually all production processes
- Expected amount of variation
- Output measures follow a probability distribution
- For any distribution there is a measure of central tendency and dispersion
- If the distribution of outputs falls within acceptable limits, the process is said to be “in control” Assignable Variations
- Also called special causes of variation. Generally this is some change in the process
- Variations that can be traced to a speci 9 ic reason
- The objective is to discover when assignable causes are present, Eliminate the bad causes. Incorporate the good causes Samples To measure the process, we take samples and analyze the sample statistics following these steps:
Inspection
Involves examining items to see if an item is good or defective. Detecting a defective product does not correct de 9 icits in process or product and it is expensive. The indues are when to inspect and where in the process to inspect. When and Where to inspect
- At the supplier’s plant while the supplier is producing
- At your facility upon receipt of goodsf rom the supplier
- Before costly or irreversible processes
- During the step-by-step production process
- When production or service is complete
- Before delivery to your customer
- At the point of customer contact Source inspection or source control: The next step in the process is your Customer. Ensure perfect product to your customer
